How to trade this plan
1. Support and resistance zones shown in green and pink with arrows indicating direction. Bulls buy at support and bears sell at resistance.
2. Keep in mind that when price breaks through support the level will be tested in future as resistance – this is called role reversal.
3. Market direction indicated by 21 and 55. Take note of where the 21 is in relation to the 55 and where price is in relation to the 21. Also take note of the width between the two moving averages. If price is below the 21 you may consider looking for selling opportunities. If the 21 is dynamic resistance then if price falls from the 21 it predicts a lower low – the opposite applies when the 21 is dynamic support. If the 55 is dynamic resistance then if price falls from the 55 it predicts a double bottom – the opposite applies when the 55 is dynamic support.
4. Direction of price is indicated by 5 and 8 MA’s and stochastic cycles. Remember that when you line up higher and lower time frames, price is going in the same direction. The goal is to line up market and price while using support and resistance as your leading indicator.
5. Pay attention to reversal patterns on higher time frames when in a trending market – a reversal pattern could mean the end of a trend. Keep in mind that a reversal pattern that is not at support or resistance is meaningless.
6. Pay attention to reversal patterns on lower time frames when confirming your entry and if you want additional confirmation wait for a 5 8 cross on M5 or M1 before entering your trade.
7. Remember – we sell high at resistance and buy low at support.

Note:
a. Please read Kate’s post on Forex Major Currencies Outlook everyday so you are up to date with the latest news
b. Please be aware of risk events for the day by using a fundamental news release calendar
c. Watch Wayne’s webinar daily at 13:30 SAST or catch the recording on the forex.today Youtube channel

CADJPY Daily

CADJPY H4

CADJPY H1

2 thoughts on “CADJPY 170816”

  1. mcgoda says:

    Morning Ryan, at times i become confused, with the trade setup above, i see on H1 it is overbought, meaning i can be ready to sell it with 15 n 5 min confirmation but as for H4 and D1 it is still going up(stochastics), so in this regard what is the best advisable thing to do? thanks

    1. Ryan Gandalf van Jaarsveld says:

      Support and resistance leads your trade plan – then you identify market and price giving you a bias. If you want to be extra cautious and wait for stochastics to line up you can though the market buys at support and sells at resistance – stochastic only follows price action. Having said that, the likelihood of price falling with an overbought stochastic is definitely high. Therefore if you are a bull wait for support and then drop into a lower time frame and look for confirmation that support is in play. I do this by looking for a higher high and then buying the higher low.

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