2016-03-15_18-33-30eurjpy

 

Dear Traders,

Lets revisit the eurjpy currency pair. Lets concentrate on the daily chart as displayed with the image inserted.

The previous analysis suggested a short trade right from resistance which can be defined as the level 127.720 to 127.000.

Your stop loss might even be at breakeven already where you may try to ride a possible bearish move to the level of support which can be defined as the area of 123.000 to 122.100.

But what if you missed the move? Would you enter a swing trade in “no mens land”? After being one day late on your entry? What if you did not realize to note the bearish engulfing candle?

Would you still take the trade with a wider stop loss?

The thing is I like and advise to trade short only from resistance to have the best possible risk to reward.

If you risk one and get 3 with a 50 % winning percentage then things will work out fine.

Now what I ment with the previous idea is that perhaps instead of entering a swing trade you might trade in direction of a possible double bottom since the 55 day moving average is in control.

But as a Day Trader. You noted that this pair is in a bearish move on the daily chart so you got your direction and you switch to a smaller tineframe and look and trade only short setups.

Any smaller time frame will do where you plot your support and resistance levels with a tighter stop but always in direction of the daily timeframe.

Trading with the trend will make it easier to catch the bigger moves.

I hope this insight helped.

Wishing you the Best of Pips

4 thoughts on “Trading in direction of a daily time frame”

  1. Tyler Lund says:

    Thanks Nuno

    1. Nuno Lampreia – Forex.Today says:

      Hello Tyler,
      Thanks and keep up the good work with your analysis…
      Cheers

  2. bethsold1 says:

    good trade setup

    1. Nuno Lampreia – Forex.Today says:

      My pleasure it is good to be of service
      Cheers

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