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Closed Open Orders: 2013-11-19 23:00 ET

The pullback on GBP/JPY was a shallow one as traders went back into bull mode during Wednesday’s US trading session.  Unfortunately, the pullback wasn’t deep enough to trigger my entry orders.

GBP/JPY forex chart review
GBP/JPY forex chart review

As we can see in the zoomed in, 1 hour chart above, the market came in with 5 pips of my entry order before zooming higher by around 130 pips!  So, with the market far from my entry orders, and ahead of some central bank events, I decided to close out my entry order at 160.35.  No trade.  

I’ll continue watching this pair for now and see if we get anything significant from the Bank of England’s meeting minutes (today) and the Bank of Japan’s monetary policy statement (Thursday) before making a new move.  Stay tuned!

Trade Idea: 2013-11-19 04:25 ET

It looks like we’re getting a pullback from last week’s breakout on GBP/JPY. Looking to jump in and see if I can catch the momentum upward!

GBP/JPY 1 hr forex chart
GBP/JPY 1 hr forex chart

As with my EUR/GBP trade that’s still open, I’m still bullish on Sterling in the short-term. I’m going to play this bias against the recent yen weakness as shown in the 1 hour chart above. Thankfully, this week started out with a bit of a pullback on guppy, which means I can play my bias on GBP/JPY at a better price around the WATR/Fibonacci retracement areas. Here’s what I’m doing this week:

Long half position at 160.35, stop at 158.85, profit target at 163.25

Remember to never risk more than 1% on any trade, focus on the process, manage yo risk through correct position sizing, and don’t forget to journal everything you do!

With this forex trade structure, it’s almost a potential 2:1 return-on-risk with only 0.50% risk. Of course, I could be totally wrong with this trade, but if not and the market moves higher in my favor I may add to my position if it goes my way.

This week is full of potential catalysts for both the Yen (BOJ Monetary Policy statement) and the British Pound (BOE meeting minutes) to spark some volatility. I think both will be in favor for a guppy rally because of recent strength in UK data, and the low probability that we’ll see any kind of bond buying reduction from the Bank of Japan. If that’s the scenario, should be a great week…and if not…well that’s why I always use a stop! Limit risk always! Stay tuned!

How do you guys feel about this setup? Let me know in the comment box below!

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