USDJPY Trading Setup
USDJPY Trading Setup
by: Colibri Trader
Dear traders,
In the past week, I have written about a few possible trading ideas. The latest one was the USDCAD. Although it showed some signs of hesitance, it is again on the right track. If you are in long positions, there are more bullish signs from a price action point of view to consider. The last two candles did engulf the body of the previous candle. This is showing bullishness and is willingness from the market participants to continue the buying in the days to come. I am not considering adding to this position, but the scepticism is washed away.
USDJPY Trading Setup
Today’s trading setup is coming from USDJPY. I have been looking at this pair for some time. If you remember, I covered it in this post talking about a possible reversal at around 112.00. The price is standing at 111.30 at the moment and the daily candle is a small bullish engulfing body. This is possibly the first indication of a minor/major reversal. I would be extra careful when approaching this pair considering the previous downtrend. Still, the signs are there and the lower timeframes are confirming it. For all of you that have taken my trading course, this would be a great place to start looking for fine-tuning a long entry. I will be following the price action at open and possibly looking for a long trade at 111.25. My stop-loss would be placed just under the lows at 110.55. My first target is the level of 112.00. The risk:reward is just 1:1, but this is because of the recent downtrend. If I see a breakout through the 112-barrier, this will free up some space for a larger move up to 115.50.
Happy Trading,
Colibri Trader
Hi Colibri,
Yen currently at 110.46, so happens to be at the tops of May June tops monthly IE strongish support interested to see what p/a happens in this area
Yes, it opened with a bearish gap, which was a negative signal. Pay attention to the daily pin bar formed on the chart. I will be looking for a potential pong entry, since there was not a clear one today.
Hi Colibri,
Nice 4hr engulf all happening at the monthly tops support mentioned.
If price gets past 110.75 evem more confirming as that is initial R
Hi Colibri,
USD/J{Y great call !
Lots of bull engulfing going on, what main factors move the YEN up or down.
As I’ve mentioned I haven’t traded currencies before.
Thanks
Thanks Dan! The Yen is starting to rise! I am looking at the EURUSD for a potential short setup
Hi Colibri,
EURO/USD yes you did say once it hit the 1.085 level to look shorts
By the way smashed it long last DAX session, somethings you said about trend helped 🙂
Glad to hear that! Keep up the good work Dan!
Hi Colibri,
Thank’s … Good selling on the EURO’USD am planning a short once a retrace occurs 1.0833 or 1.0810 look like a good R levels
I’ve been watching it on shorter time frames 5min to 1 hr and observing the price action. Sooo tempting to jump in and grab some pips but I fully understand thats not what’s it about.
Have u entered the EURO short yet ?
Cheers
Hi colibitrader,
USD/JPY
Seems the YEN cannot get bids nor offers ?
I’ve been pouring over this pair today all TF’s and price either moves up from here or down to 106.30 area.
I could see it attracting bids there.
Even though we are in a double bottom appearance I don’t feel the power inIT just yet.
111.83 attracted confirmed selling, this narrow 175 pip range has a palpable feel to it.
Looking at the smaller TF’s 5-15 min it was great trading opp’s 90 pip range easy signals
It has an amazing history of long trending periods but basing for 12-16 months prior before going directional.
What I can see is that extreme patience is needed to get onboard one of these trends, if you manage it could be huge R ratios.
Watching and waiting over and out 🙂
Hi Dan,
I am not very convinced about the USDJPY atm. I want to see the price dipping below 110.00 and check the price action then. It could very easily dip down to 106 as you are saying. Let’s see what the price will bring us:)
Hi colibritrader,
I wanted to share a couple more thoughts about the YEN
At the 110.12 area on daily there was only one bull engulf and on 4 hr it looks like 2 bull engulfs, weak at best.
There are more indecision candles than anything else. (4hr)
Not enough confirmation at this point in time, considering it is in downtrend.
Also the comment about great day trading opp’s was a comment describing that there are no real trades on the longer time frames so resorting to day trading would in fact be looking for pushing trades.
We may in fact move higher from here and I could be be completely wrong but I can only comment with what I see in the present.
Ok just wanted to get that off my chest 🙂
Have a nice day today
I would say exactly the same what I just wrote under your other comment. Waiting for a dip under 110.00 to decide.
Hi colibritrader,
Hope you are well.
I just checked my uSD JPY short from 110.74 currently 126 tips in profit I wasn’t convinced of that double bottom as mentioned in previous posts so I held a short since April 7th and today 110 broke also been long the pound since April 4 both seem to be going good.
“DAX”
I haven’t looked into it yet but I don’t know why the Dax dropped last night and then formed that pin while that pin is quite obvious it seems it’s placement is too late in the trend but I most likely will be intraday trading until some thing confirms
The pin is 177 points in range it really looks out of place where it is there hasn’t been another pin like it for months and months.
All I can say is interesting ?
Thanks for your post 🙂
Hi Dan,
Thanks for checking in:) It was a while. Your words are confirming how important is to have your own opinion and view on the market. We are only humans and cannot be right 100% of the time. What is important is to manage the risk properly and just do the right things. I don’t believe in the ability to predict the market by following technical analysis- what I believe in is doing the right things in the right time and keep on doing them if they are bringing you a positive increase in your equity curve. Good job Dan. Regarding DAX- as I said, it is probably not the best pin bar (just below a major resistance area) and that is why you need to be extra careful with this one. Let’s see the intraday price action and confirm or disprove our scepticism. Keep up the good work!
Hi colibritrader
Yes everyone has an opinion and that’s what makes the market that’s what provides liquidity your point about managing risk is extremely important because you are 100% correct that technical analysis does not always work so if you’re going to do this long term it’s all about managing risk / capital preservation.
I sometimes listen to trading podcasts out of interest and they are always interviewing people that are consistently profitable traders and there seems to be so many of these people who are consistently profitable that it throws the ratio of 95 to 5% completely out, I doubt very much that there are many people who are consistently profitable traders not to say it cannot be achieved but you can cancel out 96% of all day traders because these people are in the market so much that it’s impossible to keep the gains there’s so many idiots spruking trading courses it should be made illegal to sell them, nothing more than scam artists.
I will make one exception “day trading with trend only”, but still increases the chance of getting caught in a normal trend retrace.
Over the weekend I have gone over every single strategy that I’ve tried from the beginning which was 2007/2008 and absolutely nothing works unless someone follows a longer time frame and holds and adds to a position.
The other little known reason this is attarctive is that it eliminates the exorbitant screen time used up day trading watching the screens, getting all emotional and burning out your eye holes.
If you add the hours divided by the profits you would make more money working at Mcdonalds.
It really is all about the waiting for “A” grade setups on monthly weekly daily 4 hour and then adding to once that existing trending position continues.
Scalping day trading re entering on a trend that’s all high risk.
Your euro usd short is a great recent example of adding to a trending position with minimal effort watching the position.
I feel a bit responsible you took that euro/jpy trade as I was the one that mentioned it to you, sorry about that. I will reimberse you promptly !
Dax if this pin bar get negated that would speak volumes as it should be one of the more bullish signals of trend continuation, it did take place at support but that could even be coincidence. As you say T/A doesn’t alway work.
Great to read your articles, they keep me thinking for days
Good thoughts here- I agree that maybe less than 5% of traders are really making money consistently. No wonder this is the hardest profession to master and if someone is looking for a quick and consistent buck- they should really do the McDonalds thing you mentioned;) No shameful job as long as it pays the bills, right? Otherwise, I wanted to recapture the essence of what you just said with a quote that I cannot remember from whom was it, but definitely timely: In trading your focus needs to be figuring out a way to get on the other side of the majority of losing traders. That’s where the money is.
A quick add :
+30 points in DAX session today all based off a buy stop and tp limit order, alway nice when these work out.
Not watching a positon is a bonus. (Buy stop was set at break of 12209)
Add 2:
That pin you discussed could end up being a great signal, lets see what happens.
Hi Dan,
Yes- on a lot of occasions is better not to be glued to the screen. Still be careful- seems like the 12250 level is getting rejections. I would be adding if I see a clear break above it. Let’s see what will happen as you said 🙂
Hello colibritrader,
May I have your input on this pair:
I cannot tell if it is in a confirmed trend change or not (from down turning to up)
Monthly pin is substantial,
Weekly into resistance 111.50,
Daily last 2 days inside with pin preceeding but large engulf as a lead up 4 bars back
I haven’t gone down to 1 hr or 15 min TF’s
The gap has thrown me off a bit, true bullishness or not ?
Perhaps I’m coming across as a bit of a blonde, but this one is puzzling me.
Is it a case of needing more confirmation ? What are your thoughts
Cheers
Hi Dan,
Maybe it is, maybe it is not. My thoughts are as mixed as yours. I think that the pair could go up to at least 118.50, if not higher. Not really trading this one, because I think I am a bit late and we are just under the 112 resistance level. Maybe on a pull-back
Hello colibritrader,
Just to add, I switched to a line chart for 4 hr TF.
It has been making higher lows, but into R now 111.5 to 111.75 creating a consolidation box.
Perhaps but the break up if it happens as short term trend is up.
I’m posting this idea point as a learning exercise. I have no position.
Look forward to your reply
Thank You
Check out my previous reply 🙂
Hi colibrtrader,
YEN looks like it wants to tag 115.00
I think you mentioned 118 ish, why did you quote such a high number much earlier in time?
Why not say 115.00
What would make you think it could run so strong ?
Thank you 🙂
Hello Colibri,
An idea, a possible correlation albeit early.
USDJPY reaching resistance perhaps just as markets turn south.
Of course price action must confirm in the form of a bear engulf or pin @ a key level for the Yen along with the other indicies.
No trades to be taken until confirmation just a heads up
Hi Dan,
I am looking at the USDJPY now. If I see a confirmation, this might turn out to be a good one since it is on a major resistance area. Let’s see what the price action will show us 🙂
Hi colibri,
Based on the bullish rejection and following daily bear engulf candle at resistance.
I think this is a reasonable short opp with low risk.
Thank you
Hi colibri
Jumped in at 113.42 mt4 chart shrt yest p/a seems to be acting right oh well c wat happens.
Odd that S&P and Dow still strong as we speak that is
Hi Colibri,
Yen has hit a strong monthly level dating back to May June 2016 (110.70)
Interesting monthly candles oppossing pins formations
(109.58) Next level down but I don’t think YEN will even get there.
Am short currently from 113.42 but will now have to watch price action for clues that this theory might be coming to fruition.
Will move SL down to 111.40