I do lots of Swing trades. Â GBPJPY pair is one of my favorite.
Looking at Daily chart, we noticed Bearish divergence on Stochastic. Â The price is still riding 21EMA. Â So typically I do not consider Short trade yet. Â However, I respect Divergences especially on longer timeframe, such as Daily chart. Â The price also made Lower High. Â That’s another reason why I look for Short trade.
Looking at H4 chart (below), the price is approaching the resistance. Â Since Stochastic is looking up, I suppose the price will go up from here. Â I would like to short this pair at the next down cycle of Stochastic IF THE PRICE MAKES LOWER-HIGH, that means if the price is less than 194.50. Stop Loss should be above the previous high. Â I would set it to 195.50. Â Yes, Stop Loss
is -100 pips. Â Too much? Â Well, this is Swing Trade. Â -100 pips is typical for Swing. Â The target should be 184.40 (MM3 -> MM1). Â So we are talking about 1000 pips of the profit.
Risk/Reward ratio is 1:10.
Please just be careful about the lot size. Â Since SL is -100, please adjust your lot size accordingly.
This will be a trade for next week, and once we enter the trade, we should be in the trade for weeks.
Have a great weekend.
YJ Baik – Forex.Today @ Tokyo