Yuppy (EURJPY) 010916

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. Remember – we enter on the second chance on the 5 minute chart.
7. I have added a summary under the H1 chart indicating observations and trade plan.

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

EURJPY Daily

EURJPY H4

EURJPY H1

A trend is your friend until the end - a reversal pattern indicates the end of a trend. New monthly pivots indicate that this pair is at MM3 - note that this is the high for yesterday and that on H4 we are above WR2. As long as we continue making higher highs I will continue buying at higher lows. However, should we be concerned about a double top at DM3? Well maybe not concerned though maybe aware that price could get to DM3, which is also MM3 and the top for yesterday and bears could decide this is where they want to sell while bulls stand back and let them do so. Being ultra conservative, should price fall at from DM3 then I'll trade according to the red lines and if it breaks DM3 then I'll trade according to the green lines. X marks the entry point.

2 thoughts on “Yuppy (EURJPY) 010916”

  1. Miles says:

    Thank you for sharing your thought process and trade plan. Very interesting! Keep up the great work!

    1. My pleasure buddy!! Thanks for the feedback!!

Leave a Reply