I always start with the day chart and look at the overall trend direction.
As you can see we are in a downward trend. I have a pretty big flag trendwall drawn on the bottom side. Where the two trendwall lines intersect we call a "Treasure Map" trade. X marks the spot. Often times when we have this there is a HUGE reversal in the market. So it was not only a "Treasure Map" trade but a trendwall bounce, double confirmation for me to short the pair.
So now that I know we are looking for sells, I want to drill down to a smaller chart to get a good entry. I like the 30min chart.
Now that I know shorts are in store. I wait for supports to be broken on the 30min chart and get in. I use parallelograms to determine targets and I stay in the trade until I have hit 1:1, 2:1 or 3:1 return ratios based on my stop. (I'll have to talk about that at a later time).
So we see see our supports were at 82.00, 81.46, 80.80, 80.02 and 79.65. So we have 5 opportunities to get in and short the pair. I caught 4 of them I think. As you can see those same areas became relevant again as the market came back up. Once the market gets back up to 82.40 area, I will be looking to short the pair again as it will be another day trendwall bounce.
Let me know with an email or a comment on if I have to go over what support and resistance is. Im assuming those reading my blog know, but there could be newbies that don't. I will write a blog about that next week sometime I guess.
I only wrote this blog about the AUDJPY, but the GBPJPY and EURJPY looked exactly the same. So I had about 3-4 entries running on those pairs also as they broke out.
I never TP'ed. I let the market stop me out. As new resistances where created, I would move my stop to that area. I do that because if I do get stopped out, then I know the market is ready to go the other way and sell are no longer in favor.
Hope this helps. It may be a lil advanced for some and many to beginner for others. But I like to keep my trades simple. I have to so my 9 year old can understand what Im doing. He will be a great trader in another year or so. He is already understanding the basics and he can most importantly FOLLOW RULES!!!!
Have a good weekend all. I know I will. :)
Pip T
