Hi traders, Hiro is here.
Today I want to share you guys one of the most recent trades, and explain why I entered it.
In this trade, I use a “trend line-break out strategy” which I use quite often.
My Entry Point
This is 15 minutes chart of USDJPY.
This trade was super easy actually.
I shot some short positions around a red mark as the price was breaking the beautiful trend line like the above picture.
This is 30 minutes chart.
Market situation was a downtrend in the term of Dow Theory.
So, I was not going to have a long position unless the downtrend turns into a range or uptrend by the price updates the latest previous high.
My trade style is trend follow and I do the trade at only where there is a clear trend direction.
Take Profit point was just a green mark. I took all the positions which I had.
Some people may think “You didn’t have to take all positions because the downtrend is still continuing.”
Yes, you are right. Maybe I would think the same way until I watch this price action.
When I looked at the situation in the higher time frame, I could confirm the large pullback momentum starting from the double bottom. (the A point)
If the selling momentum and the ground of Dow theory is still strong enough, the price is easy to be reversed around the middle of the previous wave like ①
But it didn’t reverse and surge up rapidly strongly and that means there were a lot of buyers around the blue box zone.
(I call this price zone “Strong Pirce“. if you want to know about this in detail, please watch this article. →Why I Traded EURAUD? 2 Strong Entry Signs Which You Can Use in Forex Market)
From this information, I could expect that this point is going to be a bottom of the downtrend, and the selling powers are getting weak.
So, right after the price has arrived at the blue box zone,
I started preparing to take profits and observing the price action if there will be any signals which to make a final decision, holding the positions or taking all profits.
Then, the price started making a long lower wick as you can see the picture, which is the signal of a price reversal.
So, I decided to take all the positions thinking there will be some large buying power around there.
Okay, This is how I traded
I really hope this entry explanation will help you to build up an effective trading strategy.
If you want to know more trading strategies and tips, please check other articles on our website.
See you next time!