[B]Student’s Question:[/B]
Using the three usd/jpy charts, daily, 4 hour and 1 hour, I would enter at 89.9 with a stop at 90.15 and a close at 89.00. Is this using the support and resistance system properly?
[B]Instructor’s Response:
[/B]
Yes…you definitely have the right idea on this.
See the charts below for a visual on this. The first chart is a Daily on the USDJPY, the second is a 4 hour chart and the third is a 1 hour.
Since the pair is in a downtrend on the Daily chart we know that we want to short the pair. Then we would go to a lower time frame chart (your choice of the 1 hour and the 4 hour is fine) to “fine tune” our entry in that direction.
You noticed on the 1 hour chart that the pair is at the top of its descending trading channel and that would be a good area to sell the pair into the direction of the Daily trend.
Nice job on the Risk Reward Ratio as well. Risking 25 pips to gain 90 is a 1:3.6 RRR and that is commendable.
Good work on using Multiple Time Frame analysis on this trade. Here is a little more on that process from the Instructor’s Trading Tips area of Daily FX…
http://forexforums.dailyfx.com/dailyfx-course-instructor-trading-tips/23989-post-day-4.html
