Trading A Divergence Trade (Breakdown) with Pivots and LiquidityTrading divergences was always a problem for me in the past. I did the same thing you did and got it wrong every time. I was trading divergences when i saw them instead of realizing a divergence is a flip of support and resistance levels. I just needed to know where they are.
In this video:
Internal vs External Pivot divergence confirmation:
You can have two types of pivots on your chart. One for long term and one for short term.
Using them to confirm short and long term price action is intuitive as youll be able to see the market squeezing on the short term while knowing where your long term price structure exists.
Price action to Divergence Confirmation:
A divergence on a short term pivot is an indication of short term loss of trend or reversal.
If the short term has no divergence but the long term does, you are about to end up with some pretty large price moves.
Youll be confirming the divergence by looking for highs, lows, and closes moving the wrong way from current price action.
This video will give you a method you can use to draw out your support zone / resistance zone / divergence zone and use them to your advantage.
The "Divergence Zone" that you draw out is the very reason why so many people fail at divergences.
Bare in mind that when you have a divergence, support and resistance are on the WRONG sides as their normally are so you'll learn here how to find those zones as well.
Then in the end of the video ill show you how to use lower timeframes to confirm the new move of the market.
Thanks, everyone. For coming through to the CoffeeShop.
6JM2025 trade ideas
Quotes Dropping? Here’s How to Find Support & Gain Best DealHave you ever found yourself wondering how to make sense of fluctuating quotes?
What if I told you that the powerful key lies in understanding the power of expected range volatility?
Ready? Let me 5 min to introduce you how understanding expected range volatility can give you the edge you need to succeed.
The expected range volatility (ER) provides a framework for understanding how much the asset could move within a specific timeframe. Statistically, price movements within the expected volatility corridor have a 68% probability, based on CME market data and a Nobel Prize-winning calculation formula. This means that traders can rely on these insights as a powerful filter for making more precise entry points into trades.
Key insight: when the market is quiet, and we approach certain price levels, there’s a 68% chance that the price won’t break through those boundaries.
The ER formula is available on the CME exchange's website, and in just a few minutes, you can input the data to get incredible results. It’s truly amazing!
I remember the first time I stumbled upon the ER tool. It felt like finding a gold mine in the trading world! I was amazed that such a powerful resource was available for free, yet it remained unnoticed by 95% of traders.
At that moment, I began to explore the trading community and was shocked to see how underestimated this tool was. I couldn’t find a single author who utilized such valuable data in their analysis.
But once I began to focus on expected range volatility and the data provided by the CME, everything changed. Since that I never make intraday trades without ER data was checked.
Limitations:
• Market Dynamics: Short-term price movements can be unpredictable due to various factors like market sentiment, news, and economic events. The Expected Range provides a statistical estimate but does not guarantee outcomes.
• Assumptions: The formulas assume that price movements follow a log-normal distribution , which may not hold true in all market conditions.
So, what about you? Do you utilizing the power of expected range volatility in your trading strategy? Share your thoughts in the comments below! And if you want make deeper insights , don’t forget to subscribe us.
In the world of trading, knowledge is power.
No Valuable Data - No Edge!🚀💰
JPY Futures: Bulls vs. Bears at 0.00717 – Weekly Decision ZoneJapanese Yen Futures – Weekly Chart Analysis
The Japanese Yen has been climbing steadily after bouncing from a strong demand zone near 0.0062–0.0063, an area where buyers stepped in hard after months of selling. This bounce has created a solid uptrend, breaking previous highs and showing strong bullish momentum.
Right now, price is approaching a key resistance area where sellers took control in the past. This zone has already rejected price once, so we should be watching closely to see if it happens again.
Current Momentum showed us...........
-Strong buying from the demand zone
-Near break above recent highs
-Buyers in control short term
What to Watch Now is............
-Price is near a major supply zone (0.00717) this is where heavy selling occurred before, and sellers may show up again.
-If we see signs of rejection (like long wicks or a sharp drop), we might get a nice pullback
-f price breaks above 0.00717, that would be a strong bullish signal, possibly leading to more upside.
In short
-Short-term trend is Bullish
-Near-term risk possible reversal at resistance
-Trade idea is towait for price reaction at this key level. If rejection shows, short setups could form. If it breaks cleanly, bulls are still in control.
Behind the Curtain: Macro Indicators That Move the Yen1. Introduction
Japanese Yen Futures (6J), traded on the CME, offer traders a window into one of the world’s most strategically important currencies. The yen is not just Japan’s currency—it’s also a barometer for global risk appetite, a funding vehicle for the carry trade, and a defensive asset when markets turn volatile.
But what truly moves Yen Futures?
While many traders fixate on central bank statements and geopolitical news, machine learning tells us that economic indicators quietly—but consistently—steer price action. In this article, we apply a Random Forest Regressor to reveal the top macroeconomic indicators driving 6J Futures across daily, weekly, and monthly timeframes, helping traders of all styles align their strategies with the deeper economic current.
2. Understanding Yen Futures Contracts
Whether you’re trading institutional size or operating with a retail account, CME Group offers flexible exposure to the Japanese yen through two contracts:
o Standard Japanese Yen Futures (6J):
Contract Size: ¥12,500,000
Tick Size: 0.0000005 = $6.25 per tick
Use Case: Institutional hedging, macro speculation, rate differential trading
o Micro JPY/USD Futures (MJY):
Contract Size: ¥1,250,000
Tick Size: 0.000001 = $1.25 per tick
Use Case: Retail-sized access, position scaling, strategy testing
o Margin Requirements:
6J: Approx. $3,300 per contract
MJY: Approx. $330 per contract
Both products offer deep liquidity and near 24-hour access. Traders use them to express views on interest rate divergence, U.S.-Japan trade dynamics, and global macro shifts—all while adjusting risk through contract size.
3. Daily Timeframe: Top Macro Catalysts
Short-term movements in Yen Futures are heavily influenced by U.S. economic data and its impact on yield spreads and capital flow. Machine learning analysis ranks the following three as the most influential for daily returns:
10-Year Treasury Yield: The most sensitive indicator for the yen. Rising U.S. yields widen the U.S.-Japan rate gap, strengthening the dollar and weakening the yen. Drops in yields could create sharp yen rallies.
U.S. Trade Balance: A narrowing trade deficit can support the USD via improved capital flow outlook, pressuring the yen. A wider deficit may signal weakening demand for USD, providing potential support for yen futures.
Durable Goods Orders: A proxy for economic confidence and future investment. Strong orders suggest economic resilience, which tends to benefit the dollar. Weak numbers may point to a slowdown, prompting defensive yen buying.
4. Weekly Timeframe: Intermediate-Term Indicators
Swing traders and macro tacticians often ride trends formed by mid-cycle economic shifts. On a weekly basis, these indicators matter most:
Fed Funds Rate: As the foundation of U.S. interest rates, this policy tool steers the entire FX complex. Hawkish surprises can pressure yen futures; dovish turns could strengthen the yen as yield differentials narrow.
10-Year Treasury Yield (again): While impactful daily, the weekly trend gives traders a clearer view of long-term investor positioning and bond market sentiment. Sustained moves signal deeper macro shifts.
ISM Manufacturing Employment: This labor-market-linked metric reflects production demand. A drop often precedes softening economic growth, which may boost the yen as traders reduce exposure to riskier assets.
5. Monthly Timeframe: Structural Macro Forces
For position traders and macro investors, longer-term flows into the Japanese yen are shaped by broader inflationary trends, liquidity shifts, and housing demand. Machine learning surfaced the following as top monthly influences on Yen Futures:
PPI: Processed Foods and Feeds: A unique upstream inflation gauge. Rising producer prices—especially in essentials like food—can increase expectations for tightening, influencing global yield differentials. For the yen, which thrives when inflation is low, surging PPI may drive USD demand and weaken the yen.
M2 Money Supply: Reflects monetary liquidity. A sharp increase in M2 may spark inflation fears, sending interest rates—and the dollar—higher, pressuring the yen. Conversely, slower M2 growth can support the yen as global liquidity tightens.
Housing Starts: Serves as a growth thermometer. Robust housing data suggests strong domestic demand in the U.S., favoring the dollar over the yen. Weakness in this sector may support yen strength as traders rotate defensively.
6. Trade Style Alignment with Macro Data
Each indicator resonates differently depending on the trading style and timeframe:
Day Traders: React to real-time changes in 10-Year Yields, Durable Goods Orders, and Trade Balance. These traders seek to capitalize on intraday volatility around economic releases that impact yield spreads and risk appetite.
Swing Traders: Position around Fed Funds Rate changes, weekly shifts in Treasury yields, or deteriorating labor signals such as ISM Employment. Weekly data can establish trends that last multiple sessions, making it ideal for this style.
Position Traders: Monitor PPI, M2, and Housing Starts for broader macro shifts. These traders align their exposure with long-term shifts in capital flow and inflation expectations, often holding positions for weeks or more.
Whatever the style, syncing your trading plan with the data release calendar and macro backdrop can improve timing and conviction.
7. Risk Management
The Japanese yen is a globally respected safe-haven currency, and its volatility often spikes during geopolitical stress or liquidity events. Risk must be managed proactively, especially in leveraged futures products.
8. Conclusion
Japanese Yen Futures are a favorite among global macro traders because they reflect interest rate divergence, risk sentiment, and global liquidity flows. While headlines grab attention, data tells the real story.
Stay tuned for the next installment of the "Behind the Curtain" series, where we continue uncovering what really moves the futures markets.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Bullish Intraday Yen TradeA bullish yen futures trade is initiated when there is strong upward momentum in the market, supported by favorable technical indicators and price action. Traders look for signals of a potential reversal or continuation, such as price bouncing off key support or moving averages aligning in a bullish direction. With a clear entry, stop loss, and take profit strategy in place, the trade aims to capitalize on the yen's strengthening against other currencies.
Bullish Yen Futures The Japanese Yen is showing strength as global risk-off sentiment grows, making it a potential safe-haven asset. With solid economic fundamentals in Japan and a divergence in monetary policies, the Yen could see further upside. Technical indicators suggest potential for a breakout, and continued market uncertainty could drive more strength in the Yen. Keep an eye on developments for potential entry points.
Options Blueprint Series [Intermediate]: Optimal Options StrikesI. Introduction
Options on futures offer traders a flexible way to participate in market movements while managing risk effectively. The Japanese Yen Futures (6J) market provides deep liquidity, making it a preferred instrument for options traders. In this article, we will explore how to optimize Bull Call Spreads in Yen Futures (6J) by understanding price equivalency and strike selection.
One of the most critical aspects of trading options on futures is recognizing that continuous futures charts and contract-specific charts display different prices. This discrepancy must be accounted for when setting up trade entries and exits. Additionally, strike price selection significantly impacts the reward-to-risk ratio, breakeven price, and probability of profitability.
By identifying key support and resistance levels (UFO), we will define trade setups that likely align with market structure, targeting precise entry and exit points. We will also compare different Bull Call Spread variations to understand how adjusting the strike selection impacts risk and potential reward.
II. Understanding the Japanese Yen Futures Contract
Before diving into the options strategy, it is essential to understand the specifications of the CME-traded Japanese Yen Futures (6J) contract:
Contract Size: Each futures contract represents 12,500,000 Japanese Yen
Tick Size: 0.0000005 USD per JPY (equivalent to $6.25 per tick)
Trading Hours: Nearly 24-hour trading cycle with short maintenance breaks
Margin Requirements: Currently $2,900 (varies through time).
For this article, we focus on December 2025 Yen Futures (6JZ2025). Since the market price displayed on continuous charts (6J1!) differs from contract-specific charts, we need to establish price equivalencies to align our trade analysis.
III. Price Equivalency Between Continuous and Contract-Specific Futures
Futures traders commonly use continuous charts (such as 6J1!) for analysis, but when trading options, it is crucial to reference the specific futures contract month (such as 6JZ2025). Due to roll adjustments and term structure variations, prices differ between these two charts.
In this setup, we identify key UFO-based support and resistance levels and adjust for contract-specific price equivalency:
Support Level Equivalency: 0.0066325 (6J1!) = 0.0068220 (6JZ2025)
Resistance Level Equivalency: 0.0069875 (6J1!) = 0.0072250 (6JZ2025)
These adjusted price levels ensure that the trade is structured accurately within the December 2025 contract, aligning option strikes with meaningful technical levels.
IV. The Bull Call Spread Strategy on Yen Futures
A Bull Call Spread is a vertical options spread strategy used to express a bullish outlook while reducing cost and limiting risk. This strategy involves:
Buying a lower-strike call (gaining upside exposure)
Selling a higher-strike call (reducing cost in exchange for capping maximum profit)
This setup provides a defined risk-reward structure and is particularly useful when targeting predefined resistance levels. Given that we identified 0.0068220 as support and 0.0072250 as resistance, we will structure multiple Bull Call Spreads to compare strike selection impact.
Now that the trade structure is established, let’s explore how different strike selections affect risk, reward, and breakeven prices.
V. Strike Selection and Its Impact on Risk-Reward Ratios
Selecting the appropriate strike prices is crucial when structuring a Bull Call Spread, as it directly affects the breakeven price, maximum risk, and maximum reward. To illustrate this, we compare three different Bull Call Spread variations using December 2025 Yen Futures (6JZ2025).
1. 0.00680/0.00720 Bull Call Spread
Breakeven: 0.006930
Maximum Risk: -0.00013
Maximum Reward: +0.00027
2. 0.00680/0.00750 Bull Call Spread
Breakeven: 0.0069789
Maximum Risk: -0.00018
Maximum Reward: +0.00052
3. 0.00680/0.00700 Bull Call Spread
Breakeven: 0.006879
Maximum Risk: -0.00008
Maximum Reward: +0.00012
Observing these variations, key insights emerge. The 0.00680/0.00750 spread offers the highest potential reward but comes with the highest breakeven and greater risk. Meanwhile, the 0.00680/0.00700 spread minimizes risk but provides a lower profit potential. Strike selection, therefore, becomes a balance between profitability potential and probability of success.
A wider spread (such as 0.00680/0.00750) has a higher reward-to-risk ratio, but it requires the price to move further before generating profits. Conversely, a narrower spread (like 0.00680/0.00700) has a lower breakeven price, increasing the probability of profitability but limiting potential upside.
VI. Trade Plan for a Bull Call Spread
Based on the analysis of strike selection, a balanced trade plan can be structured using the 0.00680/0.00720 Bull Call Spread, which offers a favorable reward-to-risk ratio while maintaining a reasonable breakeven price.
Market Bias: Bullish, expecting a move toward resistance
Selected Strikes: Long 0.00680 call, short 0.00720 call
Breakeven Price: 0.006930
Target Exit Price: 0.0072250
Maximum Risk: -0.00013
Maximum Reward: +0.00027
Reward-to-Risk Ratio: 2.08:1
This setup capitalizes on the previously identified UFO support to define the entry point, while the UFO resistance provides a target for exit. The breakeven price remains at a reasonable level, ensuring a greater probability of the spread moving into profitability.
VII. Risk Management Considerations
While the Bull Call Spread limits risk compared to outright long calls, proper risk management is still necessary. Traders should consider the following:
Using Stop-Loss Orders: If price breaks below the UFO support level at 0.0068220, traders may exit the position early to avoid excessive losses.
Hedging with Puts: If volatility spikes or market sentiment shifts, a put option or put spread can serve as a hedge against adverse movements.
Position Sizing: Adjusting contract size ensures that total exposure remains within acceptable risk limits based on account size.
Time Decay Considerations: Since time decay negatively impacts long call options, traders should monitor the spread's profitability as expiration approaches and adjust positions accordingly.
By implementing these risk management techniques, traders can optimize their Bull Call Spread strategy while mitigating unnecessary exposure.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Yen Short into LTF Resistance ZoneThe market opened with an initial push higher, reaching into key resistance levels. With price facing rejection at these levels, we anticipate a potential pullback or further downside movement. The setup suggests a bearish outlook as we look to hold positions for a continuation of the downward trend. Keep an eye on how price interacts with resistance, as failure to break through could signal further weakness in the Yen.
Weekly FOREX Forecast Mar 3-7th: USD EUR GBP AUD NZD CAD CHF JPYThis is an FOREX major pairs outlook for the week of Mar 3-7th.
In this video, we will analyze the following futures markets:
USD Index*
EUR
GBP
AUD
NZD
CAD
CHF
JPY
The USD took a bullish turn at the end of last week. It's currency counterparts will likely see some downside this week.
The JPY will be the exception. It tends to out perform the USD in uncertain geo-political environments. If there is a flight to safety, the JPY edges out the USD on the list of safe havens. Look for a strengthening Yen to continue to make gains.
Enjoy!
May profits be upon you.
Leave any questions or comments in the comment section.
I appreciate any feedback from my viewers!
Like and/or subscribe if you want more accurate analysis.
Thank you so much!
Disclaimer:
I do not provide personal investment advice and I am not a qualified licensed investment advisor.
All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies.
I will not and cannot be held liable for any actions you take as a result of anything you read here.
Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this channel, expressed or implied herein, are committed at your own risk, financial or otherwise.
Bullish Yen Trade IdeaThe Japanese Yen has shown signs of strengthening against major currencies, with recent price action indicating a potential bullish reversal. The market has established a solid support zone, and the current setup suggests the Yen could gain further momentum if it breaks through key resistance levels. A confirmed breakout could pave the way for sustained upside movement
THE MAC: 3 WEEKS LATER (PROFITABLE) / FAST ECONOMICSWelcome to THE MAC, where we take a big-picture view of the financial markets, analyzing long-term investment trends, macroeconomic shifts, and strategic positioning for major plays. In today’s episode, we’re diving into gold, bonds, the U.S. dollar, commodities, and global indices to understand where the smart money is flowing for 2025 and beyond.
BULLISH Trendline in the Yen FuturesThe market for Yen futures has been exhibiting a clear upward trajectory, with the price consistently respecting an ascending trend line. This trend line has acted as a support zone, with the price bouncing off it multiple times, indicating strong bullish sentiment. Currently, the price is approaching the trend line once again after a minor pullback.
Bearish 6J1! Correction Looking at the 6J1! chart, we are seeing a potential bearish correction or pullback as price approaches the recently established 1-hour market structure support level. After a strong trend move, this pullback is expected to retest the support zone before continuing with the downward momentum. Keep an eye on price action around this level to confirm whether the support holds, or if further downside is likely. A break below this support could signal a deeper retracement or continuation of the bearish trend. Risk management is key as we await confirmation of the next move.
Weekly FOREX Forecast Feb 24-28thThis is an FX FUTURES outlook for the week of Feb 24-28th.
In this video, we will analyze the following futures markets:
USD Index*
EUR
GBP
AUD
NZD
CAD
CHF
JPY
The USD continues its bearish ways this upcoming weak. It's currency counterparts will likely see some upside this week. Especially the JPY.
Enjoy!
May profits be upon you.
Leave any questions or comments in the comment section.
I appreciate any feedback from my viewers!
Like and/or subscribe if you want more accurate analysis.
Thank you so much!
Disclaimer:
I do not provide personal investment advice and I am not a qualified licensed investment advisor.
All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies.
I will not and cannot be held liable for any actions you take as a result of anything you read here.
Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this channel, expressed or implied herein, are committed at your own risk, financial or otherwise.