GBP/JPY: Winning Strategies

Trading Discussion Currencies
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Note: as of August 25, this thread has been expanded to include all JPY crosses, although primary focus should still be on the G-Y.

[B]This thread is also not about ‘scalping’ the guppy, it is focused on how to master the larger movements for 200-1000 or more pip gains. [/B]

Trading the GBP/JPY or “Guppy” successfully may well be the Holy Grail of Forex trading. With spectacular moves of 500 pips up or down several times a month, 100+ pip a day moves not uncommon, if you can stay on her good side (and she is most likely female, due to her capricious nature :D) then your account balance will soon go into orbit.

Trade her incorrectly and your new best friend may be your begging bowl. :eek:

So this thread is for those who – for better or worse – are determined to unlock the secrets of consistently successful guppy trades. All are invited to share & compare indicators that work … or that definitely do not work.

So far, I have found only candles (price action) fibonacci retracements and trend lines. She chomps through s/r levels as if they were invisible, other indicators like stochs, macd, etc are way too lagging for her ligntening-like moves. (Although I may have recently encountered a stochs setup that [I]could[/I] help predict her next direction, more on that later)

I’m convinced there is a strategy to trading her successfully & consistently. I am better now than I was 2 months ago, much better than 4 months ago! I lose less money when I am wrong & profits are more consistent.

Jeb, who runs the thread next door on tech analysis of the guppy … he’s the ones whose charts look like electrical blueprints for the New York subway system … works with Elliott waves & s/r levels. So far it looks like he spends most of his time re-drawing his lines after she pulls something totally unpredictable, which happens about 6 times a day…

Rrram runs the GBP/JPY Equity Building thread under Holy Grails/Free Trading Systems … if you are not acquainted with his thread, I suggest you check it out, especially the early posts when he explains what he does.
Basically he only buys, never shorts and does not use stops. He figures during times of drawdown, the carry trade interest will still be building equity.
I tried this strategy in a $500k demo account. I did not trade anything else and only bought every Guppy pullback, multiple positions in groups of 5 lots each and took profit on some positions at +20, +30, letting others ride.

The $500k account went to over $1 million in less than 8 weeks.
Clearly there is some merit to this approach … but I think the key is having enough capital to pull it off.

Anyway I hope to attract people interested in serious guppy discussion, and hopefully when she is starting one of her spectacular moves, people can be here live to analyze in real time.

[B]Note to newbies:[/B] do NOT trade the guppy except in a demo account until you feel you are VERY experienced. She can wipe out real accounts faster than you can blink :eek:

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yaaaa for you.

any other pointless points you would like to make.

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It looks like the village troll has found a new thread.

“Pointless”, takes one to know one. Pointless and rude is all you are around here.

Why don’t you go get bent.

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Time, I think, we deal with you Abner.

You have insulted Tonymand, Daydreamer65, Yarcoffin, Mytwopips and others who I cannot recall just now.

Fools like you need to be given the flick.

You will not dare post on a high end forex forum because they have zero tolerance for your rubbish.

One post there and you would be off the forum and your post off as well.

Babypips has been too fair to you just now.

Take notice that I have decided to take action against you.

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Is that a mid 90’s Mustang. I can’t tell because the pic is so small.

Is that a sign of wealth where you’re from?

You can’t give those pieces of $hi away around here. You have to pay for them to be hauled off.

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Never put someone on my Ignore list before…handy feature!

Now all his “points” are rather “mute” :stuck_out_tongue:

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Geez, only open for business less than an hour & a ****roach managed to crawl in - (note to self: must remember to plug those holes that lead to the sewer pipes).
EDIT: great, BP censored the first part of the insect name … you know the kind of roach I mean :smiley:

Thanks tymen for coming to the rescue … and anyone who has not read Tymen’s thread:
http://forums.babypips.com/newbie-island/10812-joy-candlestick-trading-learning-experience.html
It is required reading for newbies & pros alike to gain a thorough understanding of certain high probability candle patterns.

Anyway … to get started… while prowling the BP forum the other day I came across a very interesting thread in the Holy Grails section called Ingots Rainbows. Ingot says he invented the “rainbows” … I first encountered them about 4 years ago while trading equities.

However … what was even more interesting was Ingot mentioned a colleague who had devised a really unusual way of using stochastics. Long story short, I have been playing with this in relation to the guppy for the past couple of days and am very intrigued with the correlations I am finding.

Templates attached for both the original rainbow + mtf stochs and a second one I made up, based on another idea, which is to be used on the 4 hour. This one is a 1 +5 ma plus the mtf stochs and by clicking the candle button, you can toggle candlesticks on & off the chart.

These are for position trading … which with our guppy can be a matter of hours if she makes one of her rocket moves. With other pairs, the rainbow + stochs chart can be used for position trades of up to a month, or even longer.

The “ingots rainbow” template is for 1h, 4h, daily and weekly tf. Don’t try it on any smaller tf’s.
The other template I think works best on the 4 hour.

Now, once you have the templates up … if you go to the other “forum-that-shall-not-be-named” and do a search for spudfyre you will find the original explanatory threads. Or you can just follow my condensed version here:

You think of the stochs as a rope, combed threads, and fishnet threads.
The 14, 3, 3 stoch is yellow, the lower ones are aquamarine, the higher ones are red.
When you see them tangled, like a fishnet, stay away.
When you see them join tight, forming a “rope”, this is a go sign, up or down.

Think of the yellow as a wall … when the aquamarine ones hit the wall they should not cross it, but bang against it and follow it … this is the strongest sign, going up or down they stay to the left of the yellow.

When the rope comes to an end and the threads fan out, if they stay in order so you could pull a comb through them, you can stay in the trade based on other factors … but when you see the fishnet or when the yellow stochs changes direction, get out.

Put the chart up & play with it for a bit … you will quickly see what I mean. You can easily see ‘rope’ signals just before some of her spectacular moves up or down. Reading these signals correctly as they occur in real time could get you into these moves reasonably early on.

And from what I am seeing, when the rope forms, the probability of successfull outcome goes way up.

I’ll await further comments … we may be on to something here :cool:

Now where did I put that ****roach spray?

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OK, NOW the templates are attached…

Rainbows.zip (1.66 KB)

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Thank you for that plug 4xStar. :slight_smile: :slight_smile:

Be at peace regarding Abner.

Discipline is under way!!

Being a retired school teacher, I know how to deal with recalcitrant students!! :smiley: :smiley:

Your post count is increasing nicely.

I think that after some 500 posts, traders on this forum have had a fill of their questions answered and they start to trend to a new mentality of answering the questions of other traders.

I see (having been here a while now), that many posters become helpful after a while by setting up a thread of particular interest to them.
They maintain this thread and it grows - and people learn.
The poster’s own post count also grows.
It is like becoming a kind of specialist in a particular area of forex.
And that is wonderful.
This could well happen to you!

I remember a trader Bazooko.
He is not here anymore (a real pity), he achieved a high rank on this forum.

He set up a most interesting thread where he would simply toss a coin to decide whether to trade long or short on a particular pair.
He traded daily using this approach and posted the results.
In the thread, he basically proved that it did not matter which way you traded!! - as long as your money management was properly done!!

His posts are still recorded on this forum, of course.

There are others I have seen with very interesting threads :

Pipgod, who understood leverage better than everyone else on this forum combined!
and
Elang who produced some spectacular results inventing some specialist EMA trading.
and lots more good things.

There are special benefits for us who have been here for a longer time!!

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YW, your thread is one of the most useful on this forum, methinks :slight_smile:

I remember a trader Bazooko.
He is not here anymore (a real pity), he achieved a high rank on this forum.

He set up a most interesting thread where he would simply toss a coin to decide whether to trade long or short on a particular pair.
He traded daily using this approach and posted the results.
In the thread, he basically proved that it did not matter which way you traded!! - as long as your money management was properly done!!

Amazing! I shall definitely look up his posts.
I will look up Pipgod & Elang as well.

Thanks for your good insights, as always. :):slight_smile:

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Our guppy is looking very tired, her 5ma has been cris-crossing the 50ma on the hourly chart for hours now, each rise is a bit less than the one before…
Jeb next door is calling for a retracement as low as 209.42.
Could she go that low?

Or is this just another one of her fakeouts before the next move up to 216 and beyond.

On that 4 hour template I just shared, it looks like a stochs “rope” may be forming pointing down … but still too early to tell.

Anyone know for sure?? :eek::cool::smiley: Post it here quick!

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Tymen,
What ever became of the Pipgod / Certicex stink? I thought it was nothing, but then both were gone afterwards.

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She is looking very tired, on the 4 hour she broke through the bottom of a support line I drew at 213.66, now she is hugging it, just barely.

At this point I think it is best to stay away until after the NFP announcement tomorrow … that may jar her one way or the other & if it is down, we could expect major downside. I am short the GBP/CHF right now but will most likely not short the guppy … instead I will wait at the bottom of the hill for her to finish her tumble then catch a ride back up :smiley:
That is the plan, at least for now.

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It is 8:30 am GMT, and she is down around 212.12, Jeb’s target calls for 209.50 ish if she didn’t make a triple bottom at 213.22 which she obviously did not.
Seems hard to think she could fall another 300 pips … but then this is the guppy we are talking about :eek:

Look at the 4 hour on the template I gave you below … look when the gold line crossed down through the red line and the stochs were starting to form the “rope” … that looks like an early notice of things to come … right?

I’m keeping an eye on those colorful charts :cool:

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The last I remember was a confirmation from Elang that the law courts were looking into an allegation that they were promoting false systems.
The allegations were genuine and I remember one person posting the same message all over the forum in such a way that no-one else could post.
This message was a claim that both Pipgod and Cericex were spammers, just out to sell systems that did not work.

Pipgod denied the claims.

Both disappeared from this forum after that.

Nevertheless, Pipgod did prove his incredible understanding of leverage in a thread where he took complete control of a discussion of leverage by posing questions to Rhodytrader and others.

I learnt a lot from reading that thread.
It may be worth digging it up again and re-posting it because many people ask about leverage.
This thread would solve their problems.

Some of the material on this thread posted in the early days is far superior to much of the material posted nowadays.

[B]My apologies to 4xStar for digressing on your excellent thread.[/B]

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That’s OK … I would love to see the information on that thread as leverage is still a concept that I am struggling with. I understand it in theory, but not at the “gut” level where I think it needs to be digested. :slight_smile: If you could find it & let me know, I can start a new thread to paste it … or if you prefer to do that yourself, go for it … thanks!

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Well, how schizophrenic was that? At 0830 EDT she goes from 212.60 to 213.05 to 212.12 within a few seconds … just to show she can!

Overall direction looks up from here, but I don’t think it is full recovery, may be just a bounce before another downdraft.

NFP was a bit better than expected, unemployment a tad worse … nothing really even tradeable but the pairs were in such anticipation of it, they (over) reacted anyway. So much for that.

Her high of that bounce was the .382 retracement from her overnight low … I suspect she will test that level again but if it fails, then our friend Jeb may be right about the 209’s.

Just a guess. If Andrew drops in he will have better than a “guess” to offer :wink:

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I’ve been doing some light scalping most of the morning, every time she hits the teens, I buy and sell when she is in the 40’s …
direction is still unclear to me, I would hope for a bounce to 213 so I can unload one position I hold at 212.93 (too high!) but I just don’t think she is headed back north from here without another major dip first.
Not sure what would be the catalyst for that though.

Stochs rope is still tight on the 4 hour. I am watching that.

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Thanks Tymen.:slight_smile:

Now back to our regurly scheduled program.

She came back to life and nose dived today.

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Actually the close was not too bad … once again we are left with complete ambiguity. I have 2 positions at 212.93 and 212.77, any others I get will have to be spaced 100 pips apart since there is some consensus that she could go as low as 209.42 which is also the 200 ema on the daily.

There are also some murmurings about the pound … that it could take a plunge soon, one source says as low as the 1.70’s :eek:

Keep your powder dry & your (mental) stops in place. :wink: Let’s see what next week brings.