Fib retracement. USD/JPY to correct and then resume uptrend.
First time implementing the Fibonacci retracement. With the currency light on volume at its highest peak to date and the possibility of it being overbought, we are looking to short the currency pair. From what I've read on technical analysis and specifically volume and open interest is that short sellers and long buyers play a vital role.
For example, in a previous chart I mapped out a inverse h+s formation would was corrected. Once the neckline was breached buying pressure began to rise. With short sellers positions being on the wrong side of the market they will see this look to sell their positions ASAP. This add to the price pressure that is already high from long positions and others coming in later to buy long. When all short positions are sold and buying decreases, long positions begin to load off their positions for a profit and trading volume becomes light. This where the reversal occurs. Again longs who came in late are caught on the wrong side the market and the short positions begin to create pressure and a correction.
For this trade, we are looking at the 32% retracement line for our 1st TP and then the 50% retracement line for our 2nd TP. You will need 2 positions open. So half your usually trade position.
The pink rectangle is the resistance zone.
The green rectangle is the support zone.
This is new to me and maybe incorrect. I'm learning and will learn from my failures or use my wins as knowledge for future trades.
For example, in a previous chart I mapped out a inverse h+s formation would was corrected. Once the neckline was breached buying pressure began to rise. With short sellers positions being on the wrong side of the market they will see this look to sell their positions ASAP. This add to the price pressure that is already high from long positions and others coming in later to buy long. When all short positions are sold and buying decreases, long positions begin to load off their positions for a profit and trading volume becomes light. This where the reversal occurs. Again longs who came in late are caught on the wrong side the market and the short positions begin to create pressure and a correction.
For this trade, we are looking at the 32% retracement line for our 1st TP and then the 50% retracement line for our 2nd TP. You will need 2 positions open. So half your usually trade position.
The pink rectangle is the resistance zone.
The green rectangle is the support zone.
This is new to me and maybe incorrect. I'm learning and will learn from my failures or use my wins as knowledge for future trades.