I do lots of Swing trades.  GBPJPY pair is one of my favorite.

Looking at Daily chart, we noticed Bearish divergence on Stochastic.   The price is still riding 21EMA.  So typically I do not consider Short trade yet.  However, I respect Divergences especially on longer timeframe, such as Daily chart.   The price also made Lower High.   That’s another reason why I look for Short trade.

 

 

Looking at H4 chart (below), the price is approaching the resistance.  Since Stochastic is looking up, I suppose the price will go up from here.   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.  I would set it to 195.50.   Yes, Stop Loss is -100 pips.   Too much?   Well, this is Swing Trade.  -100 pips is typical for Swing.   The target should be 184.40 (MM3 -> MM1).   So we are talking about 1000 pips of the profit.

Risk/Reward ratio is 1:10.

Please just be careful about the lot size.  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