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Forex Swing Trading Setup EUR/JPY 14/06/2011

Hey everyone, sorry it’s been a few days since I have been able to update the recent trades section. Monday we had two trades. One was a break even short trade on the USD/CHF, and the other was a long trade on the GBP/USD that was closed for -10 when it looked like there wasn’t going to be any follow through. This day trade would have stopped us out and therefore we saved ourselves 10 pips by getting out of this one which brought out total to +75 pips for the month. Now lets cover what happened Tuesday in the forex trading room.

We had 3 day trading opportunities on Tuesday. The first was a short on the USD/CHF that ended up -10 pips. After this trade we had another setup on the USD/CHF which netted us +20 pips, bring the daily total to +10 pips after the second trade. The final trade of the day was on the EUR/JPY. I don’t trade the Yen crosses as much as the other three (GBP/USD, EUR/USD, and USD/CHF) however the fundamentals as well as the technical’s were setting up perfectly!

First we are all aware of the Greek debt crisis. We have seen the Euro continuing to gain strength in spite of this. If you all remember when the whole world wide crisis started equities were rallying while the world was crumbling. Similarly the EURO has been shooting up with the EURO zone in big trouble. Look at what happened to equities….they crashed eventually,and as I mentioned in the trading room on Tuesday the same will happen to the EURO eventually….the only question is when. We got the setup to go short on the EUR/JPY as shown above in the chart, and with the Greek crisis coming more to the fore we decided to hold this trade in case the EURO started that crash we were expecting, and this is exactly what happened! Additionally when there is a major economic crisis we all know the Yen strengthens. Therefore with the EURO weakening and the Yen possibly strengthening, we decided to short the EUR/JPY.

Let’s walk through this setup a little more in depth as far as the technical are concerned. The trading strategy that we used with this setup was the standard confirmation entry. Additionally the rest of the Yen crosses were all setting up to go short giving confirmation entries as well which provided the¬†market correlation we always look for. The first candle in this setup came into some smaller resistance but did not close above it thus giving us a reversal candle at resistance. The second candle closed below the body of the reversal candlestick, which told us the forex market was moving down. The first two candles gave us the direction, and as always we took the entry when the third candle pulled back into the body of the reversal candlestick.

We had a -40 pip stop on this position when we left the forex room, and we left the take profit open. The reason I left the take profit open was in order to fully take advantage of the Greek debt crisis if the EURO started to finally sell off. This is exactly what has started to happen! We had an entry of 116.43 and currently as of writing this the EUR/JPY trade is up +160 pips and still running. The take profit is still open and we are adjusting it each day in the forex room. Currently the stop is at 115.53 which locks in at least +90 pips. Currently we are at +85 pips for the month, but that does not include this day trade. I will update the pip count after this trade is closed. I hope trading is going good for everyone, and I will see you all tomorrow with the next trade update!


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