Great opportunity today with GBPJPY. Unfortunately, I missed the big move down this morning because sleep is amazing, however, it gave me another opportunity to fade it later in the afternoon.
Price moved into the "oversold" area (noted by the top red line) and I waited to see if price would fold over. I wasn't looking for more than 100 pips on this trade since price had already traveled well over it's 5 day ADR (noted by the ADR levels)
Dropping down to a lower range chart (20R) I looked for my entry. Medium and longer term range charts kept me in the trade until I noticed price was rejecting my target of 100 pips and I began to see compression of the short term Guppy of the medium and lower range chart
EMOTIONS
- Definitely felt greedy, but had the discipline to close my trade, felt nervous as well.
- Battling the greed against what technicals where telling me made me second guess my trade multiple times
RESULTS
With a 15 pip stop loss, the overall trade was a overall a 5:1 RR - not a bad day
KEY TAKEAWAYS
If it was any other opportunity than a fade, I wouldn't have traded this pair today. Price had already moved more than 100% of the 5 day ADR which normally means price will tend to slow down. Given that fades are driven from volume and over extension, a reversion to the mean seemed like a good trade.
Remember, there is an 85% chance for price to hit the 75% range of the ADR. Fit your trades in there