The hardest part of trading is waiting for the right setup. Sometimes it might take days to get the right conditions that make you comfortable in taking a trade. That’s what happened to me during the last trading week of July 2013 with the GBPJPY pair. The Plan My plan for the week (22nd – 26th) was to get a trade with the lowest risk possible and highest reward potential. I am drawn to the Japanese yen pairs because of their high volatility. It was either the GBPJPY or the EURJPY, I chose the GBPJPY because it is more volatile than the EURJPY. The GBPJPY The first thing I noticed about the GBPJPY was the fact that the pair was caught in a range, with resistance around 153.3 and support around 152.4 as you can see from the chart below. My best bet would be to trade a break out from that range. The four-hour chart at the time was not very helpful either, the conclusion was the same, the pair was ranging. On the 24th of July, price broke out of that range and I prepared to launch my long trade. The break out occurred before the U.S session, so I waited for the U.S session to take my trade. Before the U.S markets opened, the pair had dropped back down towards the resistance area and…
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