Comments on today’s USD/JPY

…I wanted to offer up my two cents here to the discussion already started.

http://forums.babypips.com/forextown/26554-usd-jpy-going-up-again.html

A few things about any set up…to me describing a set up has to start with the market cycle on a particular time frame. It’s not enough to trade — for example — the USD/JPY.

Which timeframe?

What type of set up?

Is it a trend follow or a reversal or momentum play?

Be specific.

So here’s two set ups. If someone told me they were usually risk averse or a short term player…the 15 minute chart is a good place to start.

This timeframe is heading higher in a 12 to 2 o’clock Wave angle, it’s an uptrend and therefore a trend follow until or unless the Wave angle levels out or prices trade down through the bottom of the Wave.

The entry would be off the top line of the Wave (34ema high).

7-13-2009 1-34-29 PM.gif

The USD/JPY or any pair for that matter cannot and should not be summed up by the direction of a single timeframe. Here’s a look at the 180 minute chart. Notice that this trend is DOWN!

The bounce that has caused an uptrend on the 15 has created a correction to the bottom line of the Wave on the 240.

7-13-2009 1-34-46 PM.gif

Here’s where your own overall opinion of the trend and risk tolerance comes in. The daily chart is heading lower and for many traders the direction of this chart is like a filter. Since prices are below the Wave and the Wave is starting to angle at a 4 to 6 o’clock angle then the “overall” opinion of the USD/JPY could be considered bearish.

7-13-2009 2-03-54 PM.gif

There are a number of individual things to consider to help you make the choice between long or short term intraday timeframe set ups.

What I wanted to share here was the fact that simply taking a trade in pair without thinking about the exisitng trend (or lack of) and the timeframe of that trend will always leads to uncertainty and that’s never good for a trader!

and again here’s the original thread…

http://forums.babypips.com/forextown/26554-usd-jpy-going-up-again.html

Oh and I did have an earlier update from today about Summer Dolrums and a great Swing Trading instructional video….

  • degamer12

    Really thanks for this excellent explanation. I see now that I have to re-look at my trading plan. This was the first time I traded with real money so I didn’t quiet stick to my trading plan, I think because of the nerves. I’ll stay in DEMO mode for some time just to be 100% confident on my system. Really thanks for this explanation.

    Bob

  • degamer12

    Really thanks for this excellent explanation. I see now that I have to re-look at my trading plan. This was the first time I traded with real money so I didn’t quiet stick to my trading plan, I think because of the nerves. I’ll stay in DEMO mode for some time just to be 100% confident on my system. Really thanks for this explanation.

    Bob

  • jeantradestoo

    Thanks for the example, it is so much better to visualize the concepts when you have a currency pair as an example!
    Keep up the good work hehe

  • jeantradestoo

    Thanks for the example, it is so much better to visualize the concepts when you have a currency pair as an example!
    Keep up the good work hehe

  • iotiyo

    will someone please tell how to calculate exit points using the ABCD or the Gartley pattern,I was following the USDJPY and i noticed that i managed to locate the ABCD pattern with points A=94.77,B=93.75,C=94.38 and i figured point D would be around 93.09 which i noticed was correct but i don’t know after i enter at point D then how long can i stay in this trade?

  • iotiyo

    will someone please tell how to calculate exit points using the ABCD or the Gartley pattern,I was following the USDJPY and i noticed that i managed to locate the ABCD pattern with points A=94.77,B=93.75,C=94.38 and i figured point D would be around 93.09 which i noticed was correct but i don’t know after i enter at point D then how long can i stay in this trade?