0. Yesterday Review

Yesterday I posted Long Trade setup for USDJPY, suggesting to buy from Fib382.-61.8% zone.

The result was… from 61.8%.   To be honest, I set BUY-ORDER @ 120.00 since 120.00 (Fib 38.2%) had been functioning as a support.  But it didn’t work out.  The price went down again to Fib61.8%, and bounced up.   Here is another lesson for myself that seeing double buttom or triple buttom is not strong enough to consider as Reversal price actions.

2015-09-03_13-45-20-UJ1

So let’s take a look at the actual price action around Fib61.8% to learn how the reversal price action looks like.

Below is M5 chart.   Down around Fib61.8% area, we see Triple Bottom.  Aggressive traders may try to long from here.  Sometime you may get lucky, but sometime it doesn’t work that way.   The conservative entry would be, to wait to see High-High, then try to Long from the next Higher-Low.

2015-09-03_13-47-22-UJ2

 

This is not the only reversal price actions.  There are 1-2-3 reversal pattern, H&S pattern, etc.  You could also use 5/8 EMA cross…

This is something you have to find out what is the best suited pattern for you to identify the reversal price action.

 

  1. Today’s setup

2015-09-03_13-54-33-UJ3

Looking at the Hourly chart (above), the price has been forming Higher-Highs and Higher-Lows.    Specifically, it just made Higher High (@ 120.70 ish).   So my setup is simple enough, trying to buy from the next Higher Low.

2015-09-03_13-57-22-UJ4

As always, I look for somewhere between Fib38.2-61.8% zone as my BUY zone.   Please notice Fib38.2 area is also Role-Reversal area, that can be considered as Support.

So your job is to identify the reversal price action within this zone.   Remember, the price may just keep dropping.   But if your “Reversal Pattern” recognition is good, you can avoid the losing Trade.

 

One little comment is that, be aware that up in 122.00 area, you have to be careful because this area is the place where Bear would like to sell.

2015-09-03_13-59-44-UJ5

But until 122.0 area, I think it is safe to assume the price would go up.

 

Hope this analysis (+ my losing trade experience) helps you develop your own trade setup.

 

YJ Baik – Forex.Today @ Tokyo

 

 

 

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.