Greetings, one and all! Tonight I've entered a long order on GBP/JPY, betting that the pair will move higher. Let's get down to business and take a look at the charts...
On the daily chart, I see that we've made a higher high after a prolonged downtrend. After making the higher high, GBP/JPY has retraced a bit, and today we saw a pin bar form on the daily, which may turn out to be a new higher low.
If we zoom in to the 4 hour chart, we see a bit more. The 4 hour candlesticks that make up the pin bar on the daily chart make up a bullish piercing line pattern immediately followed by a bullish engulfing pattern on the 4 hour chart. Also, the bullish piercing line pattern occurs right at the rising trendline on the 4 hour chart serving as support.
So, there are enough reasons here for me to put some money on the line and see if I'm right. I'll place my entry order above the high for the day, and I'll place my stop just below the low for the day and the rising trendline on the 4 hour chart. As always, though, I could be wrong!
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Long Entry: 130.05
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Initial Stoploss: 126.99
Edit 2/15/09 6:50 PM: Well, GBP/JPY moved in my favor enough for me to move my stop to just over breakeven, but I was then stopped out on the gap down over the weekend. At least I didn’t lose anything on the trade, though - preservation of capital is key!
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