USD / Yen - Evolving Head and shoulders - SHORT
Updated
We have a far from perfect Head and Shoulders pattern (when is it ever perfect) developing on this pair and if it doesn't break below the open price at 109.8 (50% fib ) then we're going higher, but we're divergent on 4H and at a point of major resistance, so there is more than a 50% probability we could track down the proposed right shoulder.
If and it's always a big if, we then break the neckline (200ema), the proposed target will be established, the distance from the head to the right shoulder, transposed below the neckline @109 another major support and fib level.
I had exactly this scenario on GBP / NZD and it was my most profitable pair this year, but this is the US$ / Yen and we're selling the $, so it's something to monitor carefully.
If and it's always a big if, we then break the neckline (200ema), the proposed target will be established, the distance from the head to the right shoulder, transposed below the neckline @109 another major support and fib level.
I had exactly this scenario on GBP / NZD and it was my most profitable pair this year, but this is the US$ / Yen and we're selling the $, so it's something to monitor carefully.
Note
The H&S is now an invalid pattern..... no trade entered.Note
There is actually a H&S pattern evolving on the daily as well, lets see if this breaks the right shoulder high.Note
Testing the resistance level above the right shoulder, break that and it's invalid and no trade, the pair will then move up to 111.4 Note
If you're making lots of trades per day and risking more than a few % of your trading account on each trade, and trading lots of the same pairs all the time, your not trading, your gambling and badly. That maximum I ever trade is 5% of my entire trading account and that's to the top of my stop loss and that's only if the set-up is a 5 star, I may do that once a week if I'm lucky, it's normally closer to 1-3% Don't trade to just be in the market in the hope of catching a move down or up, against this is gambling and not trading. Set your position size based on where the stops are relative to the previous structure.
If you're a total beginner trading with real money just following other traders, firstly you are crazy, secondly, I wouldn't trade more than 0.25% in that instance, if I was happy just following others, always do your own analysis and within your own trading plan / account management.
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