The Pound/Yen pair has been trading in a range, back and forth over its 800 simple moving average on the hour chart. As a rule, currencies which hover around the 800 sma are gathering their energy for a move in one direction or the other. I've put the high line of the range at 131.48 and the low end at 129.62. I'll buy or sell a break out either way on the hour chart. These types of trades call for a different stop loss strategy than my usual channel trades (where I use the other side of the channel). I'll get out if the pair closes more than 10 pips inside the channel line. That means that if its a sell trade, I'll get out if the next hour bar closes at 129.73 or higher. I won't risk more than the channel width at any rate so I'll put stop order in at the other channel line just in case the worst happens. This type of trade may have several moves in and out of the channel range. Staying with it is important what usually happens is that sooner or later there will be a big move up or down and you may have to weather several small losses in order to score one big win.
On the buy side the first profit target should be around 134.00 (a recent high) with an ultimate target of 137.00. On the sell side the first profit target will be around 127.00 with a secondary move to 125.00 or lower. I'll keep you posted.
Happy Trading!
On the buy side the first profit target should be around 134.00 (a recent high) with an ultimate target of 137.00. On the sell side the first profit target will be around 127.00 with a secondary move to 125.00 or lower. I'll keep you posted.
Happy Trading!
