Trade of the Week – USDJPY

Last week’s trading session marked a turning point for the USD/JPY when the YEN broke its yearly trading range between 114ish and 108ish and sold off sharply to 105ish.
Part of trading is recognizing when a symbol is trending or range bound.

Once you can identity the character of the symbol you can then trade accordingly. In the case of range bound trading it’s almost a giveaway in the sense that, as long as your trading the upper limit and lower limits you have increased your probability of success exponentially.

With this said, the range is not going to stay in a range forever in this case between 114 & 108.

However, a trader that has followed the path of the symbol can see when the symbol is about to breakout because the symbol starts changing its character.

In this case the JPY the trade started making lower highs in the upper range and stared the down trend which capitulated in the lower range developing a bear flag at 110. Which was the best short entry or adding to the short position trade from 114ish level.

The downward momentum coupled with the cross the board weakening of the USD only increased the velocity to break 108 all the way down to 105 a total of a 1,000 pips from December 2017.

All the above is possible because the trader followed the path and read the tape, did not over analyze and kept it simple!