Welcome to the blog! All of the Yen pairs only have 1 directional movement:
Straight up with no stop! Or at least for now.
It will / has to stop at some point in the future of course. That said, the impulsiveness and strength of the upside is very powerful.
Let us review the current situations for all our stakeholders: traders who want to go long, traders who want to go short, and traders who are already in longs 🙂
Already in trades
For those of you who took a a bit more risk and anticipated a bounce off the bottoms to the upside: great job! Make sure to lock in profit and hang in there for more. Read here the analysis I wrote yesterday before the big jump up on the EURJPY.
Although the upside looks strong, don’t forget that this up move could still be a correction of the down side. Also, even if the trend is changing and the Yen pairs continue the upside, some type of correction before continuation is likely. Always remember, the market mostly moves in waves! The exception is of course today, when it actually behaved like a rocket 🙂
For those not in any trade
My best Forex trading advice currently is: wait, wait, wait 🙂 Sit on your hands and go walk the dog, but don’t push the bottom… at least for now.
Of course the move is powerful and strong and if you missed the upside, you are counting and calculating how many pips profit the upside had to offer.
These kinds of trading emotions are normal and typical for all Forex traders. That is why it is so important to have discipline and patience to achieve Forex trading success.
Without it any Forex trader is doomed. Even if a trader has the best trading plan and Forex trading strategy in the world, without the correct trading psychology all can be lost.
Of course I do not know your Forex trading plan and I do not know that Forex technical analysis tools you use, but in general, do not get enticed to take a trade just because the currency is moving without proper planning. It is ok to miss a move. Everyone does. The market moves so much every day, there will be a new Forex trading opportunity if we preserve our capital.
Ok enough side on the psychology part 🙂
Maybe you have heard of the saying: a very quick move is often a false move, a slow move is a true move.
In this regard, the currency moved up so much I would not like to go long nor short right now.
1) The long side has already moved hundreds of pips. Could it move up a few more? It certainly can, but the trading is risky because a trader is exposing themselves to the possibility of a correction. In my opinion the upside, despite the huge impulse, is not worth the risk – at the moment;
2) The downside is very iffy because who wants to fight such an up move. Especially with NFP tomorrow. Even though the down move might be tempting because everyone is expecting a retrace of the up move, traders must be careful with anticipating a downside turn too early.
My Forex trading plan is very simple: waiting game. Wait for a new currency structure to unfold, wait for new price action signals and wait for new candle stick patterns to develop and then make a decision to look for long or short entries.
Of course it depends. If you have a strategy that is intended to capitalize on these types of Forex movements, then please don’t let me stop you. I don’t. My trading is geared towards catching ends of corrections which turn into impulses at key Fib levels.
My point is simple: if you don’t have a clear trading plan for these types of moves, don’t regret missing those pips and don’t be lured into attempting a trade just because of our own trading psychology messing around with us. Be patient and disciplined and we will be winners in this game called Forex trading.
What is your opinion on the Yen?
Are you looking for longs? And from where?
Are you looking for shorts? From which level?
Or are you waiting on the sidelines?
Let us know with a comment down below! Thanks!
As always, good trading!
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