Trade style (free portion) and Jackson Hole outlook
USD/JPY is following a very clean trajectory.
The trend is stable enough to enter positions without much thought, as it consistently performs a strong roll reversal after breaking through short-term horizontal levels and makes new highs.
After the jobs data, breaking the high, 137 yen has finally come into view(I was saying around 137 and 131, so it was a bit scary actually)
In the near term, focus on the 135.5 yen roll reversal.
It will come down to how we judge the short-term pullbacks.
① First, touch the horizontal
② Check whether it breaks the short-term resistance.
③ Confirm the support before the horizontal touch
④ Enter a position by setting risk to the most recent low from that support.
Reward is the most recent high. (Half-profit target)
Basically, repeat this process.
This time is very clean, so it’s easy to explain, but it’s a characteristic move when the trend is solid. It’s good to have this in your repertoire for anytime.
People who enter at step ① tend to lose in the long run.
It’s moving nicely by coincidence, but the trend isn’t confirmed, so
Conditions aren’t met, one bounce is attempted and then stops out in relief.
After that, repeating the same against resistance expands losses and leads to exit.
The importance of waiting and, in a sense, properlytaking on risk(by delaying entry rather than bottom entry) makes trading more stable.
By the way, if you’re willing to absorb total loss and bet with leverage, then the approach is different and this does not apply.
The basic trend awareness and pullback judgment are analyzed by looking at higher timeframes, but entry timing and the dynamics at the horizontal edge are better understood by drilling down to lower resolution timeframes to improve accuracy.
When I say to focus on horizontal levels, I’m referring to this kind of movement.
This is also basic on higher timeframes.
① Look at the horizontal
② Check for a short-termbreak above resistance
It may be difficult to determine where to set resistance
It usually stops once, so you can take your time deciding.
③ Look at the support
④ Set the risk-reward
⑤ Wait
Note after entrycreate a trendline at the first pullback low, and it should not break.
Since this is the high of the first stage, this is the low point at that time.
At this point, raise the stop to 132.5.
The losing pattern is this.
A high is lowered, and the trendline is broken.
However, since the stop rate is above the entry price, it should mostly finish in the positive.
The stress accumulates, though.
Then, it’s just a matter of repeating.
What’s important is to grasp the fundamentals to improve win rate.
If you rely only on technicals, your win rate will be quite inconsistent.
