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USD/JPY Discussion

  • #82,821
  • May 27, 2020 4:17pm May 27, 2020 4:17pm
Quoting OBsayMkMoney
Thursday is looking good for a spike and reverse. Important USD news in the morning, and also jpy at night. If BOJ is still crippling their currency, and the US is in the midst of it's issues. Down US market, up Asian? Either way. Watch thursday. Fundamentals give price action excuses to run. {image} Spikes happen between 85 and 93% in my experience. I have alerts for the such. At 95%+ We range briefly then boom. {image}
This is what I like to see someone stacking a fundamental reasons why a hedge fund should go short/long etc...
And backed up with statistics.
Look ahead, Macro=Direction, Levels & Structure = Entry
  • #82,822
  • May 28, 2020 9:27am May 28, 2020 9:27am
Just putting my thoughts on paper......

This morning the Dow was positive by 180 and ranged there. News came out at 8:30 EST and it popped to 240, and has been slow melting it's way towards negative. Currently at +55. The US premarket trade saw some USD/JPY volatility at around 7:45-8:15 am just before the numbers. No price didn't go nuclear, it did however move erratically. Post news has however been rather muted. If the Dow goes red UJ could get that pop we are looking for. If it pops UJ should do the opposite as it has, and 108 on the UJ has held ready to be tested another time. Perhaps tonight during BOJ news.
1hr Bullish cup and handle formation is still in effect. Price has not broken the 50% that would negate it. That level being 107.6 area (Yesterday's low). If we burn that, we may drink from the bottom on the cup.

Disclaimer. I am new to the Cup and handle pattern, and am only stating what I have read.

Dow now at +39, VIX is on the move
Don't compare your trades to others. Most often the masses are the asses
  • #82,823
  • May 28, 2020 6:35pm May 28, 2020 6:35pm
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Don't compare your trades to others. Most often the masses are the asses
  • #82,824
  • May 28, 2020 11:53pm May 28, 2020 11:53pm
Oops! Got taken out by another engulfing candle, almost a day later. This time it was indeed a prelude to a decline!
Should have grabbed the 20 pips profit from fading the first engulfer and ran, lol!

Yes it did look like the price was forming a cup & handle pattern, but I don't use such patterns personally.
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  • #82,825
  • May 29, 2020 12:01am May 29, 2020 12:01am
I used to have some books on patterns, and there was also one that had some historical statistical analysis of success rates. I don't remember the names of the books though. I used to have almost all of them and now I got none

If I remember correctly, the cup & handle is supposed to be a long term accumulation pattern, so something that you'd want to see form over a long period after a decline
  • #82,826
  • May 29, 2020 12:09am May 29, 2020 12:09am
#USDJPY / H4 & H1
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  • #82,827
  • May 29, 2020 2:13am May 29, 2020 2:13am
Bought again.

It is trying to break last week's low but more likely to bounce back. Good place for a punt with small SL, putting limited capital at risk for potentially nice reward
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  • #82,828
  • May 29, 2020 8:38am May 29, 2020 8:38am
Quoting tehnoob
Oops! Got taken out by another engulfing candle, almost a day later. This time it was indeed a prelude to a decline! Should have grabbed the 20 pips profit from fading the first engulfer and ran, lol! Yes it did look like the price was forming a cup & handle pattern, but I don't use such patterns personally. {image}
Your "last candle is "engulfine" system is helping me a lot. For me it may be the piece I was missing. I often got into trades at the edge going the wrong way. For me it has helped me define the edges because it makes perfect sense. A full candle represents orders filled. The less tail, the more orders actually got filled. Who else has the power to fill ALL orders in a candle other than big shops. The only pattern I ever put much stock in is the Head and Shoulders one. The chart performed perfectly though. The pattern stop failed, and sure enough we went down. Using your system though, it was somewhat telegraphed. Pulling up a 4hr there was a nice engulfing candle May 19th at noon showing the end of the run. I am still running it through the mill, but this may be what I needed, or at least something to work into the system. Appreciate your input. Thanks man
Don't compare your trades to others. Most often the masses are the asses
  • #82,829
  • May 29, 2020 9:13am May 29, 2020 9:13am
Quoting OBsayMkMoney
{quote} Your "last candle is "engulfine" system is helping me a lot. For me it may be the piece I was missing. I often got into trades at the edge going the wrong way. For me it has helped me define the edges because it makes perfect sense. A full candle represents orders filled. The less tail, the more orders actually got filled. Who else has the power to fill ALL orders in a candle other than big shops. The only pattern I ever put much stock in is the Head and Shoulders one. The chart performed perfectly though. The pattern stop failed, and sure...
Good to hear it helps. In general, I love big long full candles at the tails of trends. They gotta be big though. Bger than all the candles before them. They signal potential exhaustion. I go looking for them. Real engulfing candles are rare. What you mostly get is the called "bullish/bearish outside candle". But for the way I tend to use them, as exhaustion signals or candles to be faded, any of them types will do me just fine. And other factors matter a lot when you see them: do they finish forming at a critical point of price/time? Like, did the candle form just as NY open? Was the price gunning for an interesting level that hadn't been touched for the whole week/month?
You will find your style. In the trading game there are so many ways to skin the proverbial cat.

Head n SHoulders are so rare. People tend to see them all the time, I see them on newsletters etc. And 95% of what they show is not a head n shoulders pattern. The human eye and brain are so attuned to seeing patterns, that sometimes they see one when none exists.

I remember a huge head n shoulders pattern on the daily and the weekly charts on the yen, especially the GBP/JPY, years ago. Maybe 10? Maybe 15 years ago? I remember watching it form, week after week, and wondering should I trade it, how? It's so huge, it can't be real.

Well it worked that time and the pay off for those who took it the traditional way was huge. I wasn't one of them! Perhaps that's why I remember it, lol
  • #82,830
  • May 29, 2020 9:17am May 29, 2020 9:17am
The long punt at London open on USDJPY has worked well so far. I just bought it because price was at the low of the currently, narrow, multi-day range
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  • #82,831
  • May 29, 2020 9:21am May 29, 2020 9:21am
But what I am REALLY looking for is this:


They say history does not repeat itself, but SOMETIMES

it rhymes




Are we rhyming now?
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  • #82,832
  • May 29, 2020 9:29am May 29, 2020 9:29am
Quoting tehnoob
But what I am REALLY looking for is this: They say history does not repeat itself, but SOMETIMES it rhymes Are we rhyming now? {image}

So you would be expecting it to jump to the 109-110 range based off of the set up?
  • #82,833
  • May 29, 2020 9:43am May 29, 2020 9:43am
Quoting tehnoob
Bought again. It is trying to break last week's low but more likely to bounce back. Good place for a punt with small SL, putting limited capital at risk for potentially nice reward {image}

Yep.. once again... the one hour showed it. Bearish engulfing to the area.
Don't compare your trades to others. Most often the masses are the asses
  • #82,834
  • May 29, 2020 9:45am May 29, 2020 9:45am
Quoting krdb11
{quote} So you would be expecting it to jump to the 109-110 range based off of the set up?
yes, I would be willing to take a long near the bottom of that narrow range (like the one taken earlier today) and risk some capital in the expectation of some sort of spike repeating itself.

I've had my eyes on that prior incident for 3 trading weeks now. That's why I have been saying here all these days that it was likely to move in a narrow range for several days and then spike up by 200-250 pips

The market will replay such isolated past vignettes of price movement all the time! Never exactly the same. Never at the same level. Sometimes in the opposite direction (like the same pattern but looked at through a mirror). This is what my best trades tend to come from. I love looking for them on larger timeframes, daily, weekly, monthly.

If this plays out as I think the market suggests, it will be like poetry in charts, no?
  • #82,835
  • May 29, 2020 9:51am May 29, 2020 9:51am
Quoting OBsayMkMoney
{quote} Yep.. once again... the one hour showed it. Bearish engulfing to the area.
On my hourly charts, It didn't paint a bearish engulfing. And if it had, I wouldn't rush to fade it just because of the candle.

I took the trade long because of where the price had dived, and mostly because it offered a good risk -reward for the potential spike up trade that I just posted in the daily timeframes. That's why I was looking for an opportunity to buy at those levels. The fact that it was trying to reach last week's low was just an extra hint that, in this narrow range and given the Tokyo session was ending, it was a good idea to fade that drop
  • #82,836
  • May 29, 2020 9:58am May 29, 2020 9:58am
Quoting tehnoob
{quote} yes, I would be willing to take a long near the bottom of that narrow range (like the one taken earlier today) and risk some capital in the expectation of some sort of spike repeating itself. I've had my eyes on that prior incident for 3 trading weeks now. That's why I have been saying here all these days that it was likely to move in a narrow range for several days and then spike up by 200-250 pips The market will replay such isolated past vignettes of price movement all the time! Never exactly the same. Never at the same level. Sometimes...

Great advice! Thank you. Would it be rash to buy into it before market close for the weekend? (Still relatively new to this)
  • #82,837
  • May 29, 2020 10:04am May 29, 2020 10:04am
You will laugh, but for months now my big set up idea is that the markets (and not just them) are sort of replaying on the monthlies a vignette of action that is

12 years old, and on a larger scale, one that is 99 years old.

But I can't explain why I had that idea. I am just a crazy fish. And it alone is not a trade. But it set ups your mind for what is possible, so when you see parts of that vignette actually begin to repeat themselves, your conviction that you may be on to something, grows.

Or your paranoia! Lol
  • #82,838
  • May 29, 2020 10:10am May 29, 2020 10:10am
With all being said.... This is an interesting move north. Let's review. Thursday Morning the US had bad Economic news. The chart languished all day until the Japanese news came out yesterday evening, and... It was good for JPY. So Bad, US news nothing. Good Jpy news later.. Movement.
Fast forward to today. More Economic news. More of it bad, and the chart shows a parabolic 1hr candle. Powell is on deck to speak though, so let's see what he does to the market. 1hr candle showed the end of the run down, but perhaps a revisit to it's lows? One would almost think Powell has bad news.
Don't compare your trades to others. Most often the masses are the asses
  • #82,839
  • May 29, 2020 10:24am May 29, 2020 10:24am
Quoting tehnoob
You will laugh, but for months now my big set up idea is that the markets (and not just them) are sort of replaying on the monthlies a vignette of action that is 12 years old, and on a larger scale, one that is 99 years old. But I can't explain why I had that idea. I am just a crazy fish. And it alone is not a trade. But it set ups your mind for what is possible, so when you see parts of that vignette actually begin to repeat themselves, your conviction that you may be on to something, grows. Or your paranoia! Lol

I have found that the very things we laugh about become reality. We laughed at the chinese for wearing masks a few years ago.. Now look at us. As a black man we laughed at women with weaves in the 90's. Now? Everywhere! I recently walked past my Dow chart and laughed to myself saying "this looks like it is going to 19000". Days later? BOOM. I believe we are all tied together on some level, and those crazy thoughts we get? Well those are the thoughts of someone planning just what you think crazy. I JUST had this same conversation with myself regarding things that when you look a the chart seem unfathomable. If you thought it... it is possible
Don't compare your trades to others. Most often the masses are the asses
  • #82,840
  • May 29, 2020 10:33am May 29, 2020 10:33am
Quoting krdb11
{quote} Great advice! Thank you. Would it be rash to buy into it before market close for the weekend? (Still relatively new to this)
Well it depends how much you're willing to trade and potentially lose.

I was willing to risk buying at the bottom of the last few days' range because

- I like buying near the bottom of ranges, expecting them to hold
- I could place a very small stop-loss (just a few pips, a bit below the low of last week) while still using enough leverage to make decent $ either at the top of the range of, even better after a potential spike.

If I were to buy now, I'd be doing to in the expectation of a spike up/bullish breakout from the range, but my stop loss would have to be at the same level as before, only now that's more than 65 pips or 70 pips. For me personally, that's too big a stop loss for my usual position size.

I can and do accept such stop losses occasionally, but If I do, I reduce my position size so that the % of capital I am risking with such SLoss is no more than the % of capital I would risk with my standard position and a 15 pips stop loss.
That's why personally I prefer to look for prices where I think I can use small stop losses and aim for a good risk/potential reward.

Everything begins with how much you are comfortably willing to risk, which means to potentially lose.
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