A subtle reminder for those of you who have been with me for a while – and an important post for newcomers. In considering the fundamentals “first” – please take note of the date of the original post. Nearly a full month of downward action in the Yen, and well into the trade. 600 pips in USD/JPY alone – and equally large moves in AUD/JPY.
Nice. Time for a breather or stay long? How do you decide after moves like these?
Sitting out a day never hurts (as I am currently doing) in that……forex levels/prices almost always retrace/hang around at least 12-24 hours or even more before making any kind of “massive” move. If you’ve got some horizontal lines of support and resistance on your charts (which you should!) you will likely have already identified areas where price may stall or even reverse.
With the JPY pairs I would be close to saying we are pushing our luck at these levels so….other strategies might include much smaller orders with a tighter stop – with the though in mind “if she goes a lil higher great….and if not – Im not gonna lose much”.
I am 100% cash – 100% out of the market.
Thx. After a move like this how do find areas of resistance? Previous weekly highs? Or monthly highs? For example if I look at eur/yen the previous weekly highs last year around 111 or so then one more year back at 121? Is that what you are looking at?
Looking pretty close to what I have yes…..remember “draw lines of support and resistance with a crayon…not a laser pointer”.
I’d be looking at 123 area…as well 114 below.
So….It’s a tough spot for sure – as if you arent already deep in the trade…it gets harder and harder to plan an entry. Now go down a couple time frames to 4h and then 1h and find similar areas of support and resistance….and possibly ( if you are nimble ) looks to trade from those.