USDJPY → Bull Trend Over! Short to 145.000? Short Answer, Yes!USDJPY completed its third leg up in this bull trend then failed to break the Resistance Zone on a second attempt, creating a double top reversal pattern. It followed by breaking the Bull Trend Support line. Should we short?
How do we trade this? 🤔
We have three legs up, failed to break the Resistance Zone on the third leg, then a second attempt, followed by a strong close below the Bull Trend Support line, which is right on the 4HR 30EMA. This is an ideal time to short.
Entering a 1:2 Risk/Reward trade with a 1:1 Take Profit target for half of my position. Once the first take profit is hit, the stop loss moves up to the entry price to lock in profits. The second half will be held to the second take profit of 145.515 or if there is a major reversal signal that is clear.
This analysis works directly off my last one, reference here:
💡 Trade Idea 💡
Short Entry: 147.207
🟥 Stop Loss: 148.055
✅ Take Profit #1: 146.355
✅ Take Profit #2: 145.515
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Double Top Reversal after the third leg up in a bull channel
2. Near a Resistance Zone
3. Broke the Bull Trend Line
4. Gap to 4HR 200EMA and Support Zone
5. RSI at 38.00 and Below the Moving Average Supports a slight pullback and then fall.
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
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