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Before I spill the beans on this awesome EUR/JPY setup from last week, I suggest you go through my introductory post on the Weekly Winner.

This will give you a better understanding of my trading framework and help you follow along.

Done? Alright, let’s go!

EUR/JPY Price Action Review

EUR/JPY Hourly Chart

As I had expected, EUR/JPY traded pretty steadily at the start of the week. For the most part, it stayed between 106.30 and 105.00 ahead of the big EU summit.

Sure, the reports released during those days helped the pair zig-zag along with the charts, but I wouldn’t exactly describe them as big market-movers.

It seemed like everyone was hesitant to commit to a euro position early in the week.

Traders had their eyes locked on the upcoming EU summit, and judging by price action, it seemed as though they were expecting it to rock the markets. And boy, did the EU summit deliver!

Following the announcement that the EU had finally come up with a rescue package, a very strong risk rally ensued. I’m talking major pippage, man! And of course, this was reflected on EUR/JPY.

After all, it is considered by many as a barometer of risk. With risk-taking in full swing, the pair managed to break through the intraweek range and tap the 108.00 major psychological handle, just a few pips above the PWH. At the end of the week, it closed over 150 pips above its opening price.

All we needed to do to bag a 14:1 winner was to go long in the area of 105.00 and the PWL, which was a critical support zone in the previous week.

This setup was pretty obvious now that I look back on it. It makes me want to pull my horn out now that I see it!

Anyway, the best way to attack this setup was to go with a 50-pip stop-trail-add strategy.

Had we gone with an initial 50-pip stop, while adding to our position and moving our stop higher every 50 pips, we could’ve made mad money! We could’ve opened up to 7 positions had we started buying at 105.00.

If we had allowed the market to stop us out at around 107.50, near the PWH and WATR, we would’ve bagged a solid 14:1 winner! Crazy, right?

With such a huge reward-to-risk ratio, this trade just goes to show that a single trade can make your week, month, or even year!

So did any you guys catch this big winner?

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.