[TW] 6-13-2011 - AUD/JPY short by Justin Pipper

Trading Discussion
1

[B]Long or Short:[/B] Short

[B]Entry Point:[/B] Short at 86.00
[B]
Stop loss:[/B] 86.40 (above 50% Fibonacci, channel, and 100 SMA)

[B]Profit target:[/B] 84.50 (previous low)

[B]Risk Percentage:[/B] 1.0%

[B]Reward-to-risk Ratio:[/B] 3.75:1

[B]Tools used:[/B] 100 SMA, 200 SMA, Fibonacci

[B]Trade Rationale:[/B]

AUD/JPY has been falling along a 1-hr channel since mid-April, and I don’t see any major reason for the pair to behave otherwise in the next couple of days. Australia posted weak economic data last week, while the yen gained across the board.

I’m shorting at 86.00 because it’s near the 50% Fibonacci resistance, as well as the 100 and 200 SMA. The good thing about this trade setup is that it allows for a tight stop. If price climbs above 86.00, it means that the pair is above the 100 SMA and the channel.

[B]Trade Adjustment:[/B]

I’ll cancel my trade if I don’t get triggered by early next week. If I get triggered and the pair goes down, I will move my stop to break even once it reaches 85.00. Lastly, I plan on closing the trade early if my trade gets triggered on a strong upward movement (though it’s unlikely in the 3rd week of the month)

2

Hi

Interesting trade idéa. Call myself newbe, but have to ask one some questions. Looks like we have a strong support where price is now. Why not go long here. Gives tight SL and really good R:R if we reach all the way up to 86. Say a risk around 30pips and a win on around 140pips.
Between what levels have you put fib?

3

Hey stencool!

Going long is also a good idea. You’re still playing the channel anyway. I just didn’t want to risk going long on the Aussie since the yen was so strong last week, while the Aussie lost against most of its counterparts on weak Australian economic data. It’s more of a fundamentals thing, really.

What levels are you looking at for your stop loss and profit targets? :smiley:

4

Hi Justin Pipper :slight_smile:

That is were I might be loosing. Bad reading fundamental data. I was looking at i this way.

audjpy.jpg700×525 63.8 KB

This is a daily chart but says the same as 4h.
Support around 84.50. Bullish divergence.
Buy now at 84.80
SL at 84.10
Target at your 86
Risk:Reward -> 70:120

Had better R:R before price moved up.
First time I post my idéa here so I hope it is not to messy :slight_smile:

5

Of course it is best if you are icecold and can wait it down to 84.50 and buy there. Better R:R

6

Hi
Did not take my long setup :frowning: but did go short now according to your setup at 85,92