All Trade Ideas and trading scenarios found on FX360.com are hypothetical. FX360.com has not placed these Ideas in a live trading environment. Forex Trading involves high risks, with the potential for substantial losses that exceed your initial deposit and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

Update: GBP/JPY Short Opportunity at 148.92

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

Last updated 12/30/2009 8:05 PM EST (GMT -5) 23 Comments

• Share this:

Bradley W. Gareiss

Technical Analyst, GFT

A bearish Gartley/double top has completed on the GBP/JPY 4hr Chart.  The pattern has excellent price symmetry and solid time symmetry.  The pattern entered just above the bearish trend line drawn on the Weekly Chart.  There could be some concern that there is a long bar near the completion of the trade.  However, this bar looks longer than it is because the holidays have caused very low volatility over the past week.  Also, the pair decelerated after the long bar before entering.  On the other hand, it would not be necessarily wrong to perceive this as a long bar situation.  Also, if you have not entered, it is is possible to enter if the pair rises back to 148.92 before hitting T1 (147.19).

We have sold (and can still sell) the GBP/JPY if it rises to148.92 (Point D).  Point D is located at the convergence of the following points:

Remember, it is possible to still enter this trade as long as the pair does not drop to T1 (147.19) before entering.  Also, if the trade has stopped out, obviously we would not be looking to enter the trade anymore.

GBP/JPY

• • 
    
  • Weekly Chart - Trade entered near bearish trend line.
  • 
    
  • 4hr Chart - Bearish Gartley; sell at 148.92.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

• Share this:

Comments (23)

m.hollingshaw

December 30, 2009 at 08:14 PM ET

I read some of the news things about a strong upside resistance in the GBP at 1.61/20/40 and was wondering, if that level is broken, it may very well continue further thus driving this trade (of which I'm a part) to stop out. Do you think these kinds of connections are of merit? Also, at what point would we be looking to move the stop loss up to break even and more abstractly, how do you normally determine that point?

bgareiss

December 30, 2009 at 08:23 PM ET

Other than the news that is coming out at 2 am eastern time (GB Nationwide HPI), I am not sure what you are referencing. Regardless, the only thing I would worry about would this news announcement. Who knows what the news will turn out to be or how large the resulting move will be? However, I am always cautious around these announcements. Although every case is different, I would probably stay in this trade if I was already in it. However, if you have not entered the trade, I would be very cautious above entering the trade just before (1-2 hours) the announcement. Also, I don't move my stop until the pair has has reached T1 (or 90% of the way to T1). Moving stops early will really mess with your head. Brad

m.hollingshaw

December 30, 2009 at 08:41 PM ET

Thank you. I was referencing that announcement at 2.00. I have been reading your articles and they have begun to save me from quite a lot of loss. I had not realise the amount that psychology played in trading but you are right. Though I don't like technical trading, your psychology and trading strategy development articles have helped me immensely. A sort of follow up question, if a trade reaches T1, and you move your stop to 0, how do you decide whether or not to finally relent at T1. Put another way, once at T1 how do you decide whether or not to stay in for T2?

bgareiss

December 30, 2009 at 08:45 PM ET

Traders can use the targets however they like, but once I move the stop the to break even, I would either let it his T2 or the stop. The more you try to intervene with a position, the worst off you are because most people have a very difficult time objectively viewing the market with a position on. It also isn't necessarily a bad thing to just take the whole position off at T1. As long as you are consistent with your approach, that is the important thing. Brad

Vespones

December 31, 2009 at 06:59 AM ET

Another fantastic trade to get stopped the day after entering ?

margaret

December 31, 2009 at 08:17 AM ET

Well Brad, that was another disaster. Have taken your recent trading advice to the letter, and the result has been massive losses.

Piotr

December 31, 2009 at 08:50 AM ET

Maybe you needn't have entered such a thin market. Chill it out. More luck in 2010 :)

bgareiss

December 31, 2009 at 01:09 PM ET

Hey margaret, I think you are newer. You should only be risking 1-3% for each trade, regardless of how many pips are between the entry and the stop. No trade should ever be a disaster. Brad

Vespones

December 31, 2009 at 08:59 AM ET

if you look at the weekly chart, this pair didn´t complete a double top, but a doble bottom at around 140 , and consolidation was to break the downside trend line . Also if consider that Yen is bearish, thin market just jumped the pair flawlessly

Semaj

December 31, 2009 at 09:23 AM ET

This trade was against larger time frame momentum after a daily wedge bullish breakout. Kathy even posted a chart in an article about 147.50 resistance to watch for a breakout. Another thing to do to see this trade had LOW probability of winning would be to look at how strong the GBP has been, ie eur/gbp, & how weak the jpy is across the board. I also believe those hourly long bars were a caution sign. I'll be waiting for a healthy pullback to catch the retest of recent high that will be made, much safer to trade with momentum of a larger degree. Just some thoughts ;) Happy New Yaer all !

converteds

December 31, 2009 at 09:46 AM ET

Vespones and Semaj, your lucid analysis would have provided excellent material to think about BEFORE the trade ;=)

Posting after the outcome as a riposte to the original poster adds precisely nothing to this debate. Why not post this analysis before the event and actually make a difference. Anyone can come up with analysis that corroborates the result of a trade after the trade.

Personally, I have nothing further to add after the result of this trade except that I didn't take the trade myself. Not because of any further insight that I did not have the courage to post before the trade, but because the original strategy clearly states that if there are long bars towards the entry then exercise caution. Purely for this reason, I didnt enter

Semaj

December 31, 2009 at 10:11 AM ET

My lucid analysis may help others to think for themselves in the future when poor setups develop such as this one did. My point is to not just take a trade because someone posts a setup without looking at other dynamics in the market. For all the reasons I described I did not take this setup and I am waiting for an opportunity. I am not in a debate here, just trying to offer some insight and I believe we can all agree hind sight in trading is a perfect 20/20.

alexjbrandt

December 31, 2009 at 10:38 AM ET

hey, thats my favorite motto! "Hindsight is 2020"

bgareiss

December 31, 2009 at 01:13 PM ET

Skipping this trade due to that bar is not a bad thing. The reality is that on the website we have to take the trade when in doubt. If not, it could appear that we were cherry picking trades. This one obviously could have gone either way regardless. We are working on some ways to provide more regular updates that will make it easier to track these types of developments. I am making no promises and not offering a time line of course. Brad

Piotr

December 31, 2009 at 10:06 AM ET

I didn't take the trade because it's the year end fixing time. Outside of this, the RSI was, and still is, too well directed. The pair is on the upside and will hit 150.50/70 before it turns down. Happy New Year !

Vespones

December 31, 2009 at 11:13 AM ET

Converteds, I posted before to get stopped .

My complaint is that Brad sent out lastly poor analysis and wrong trades.

He says : There could be some concern that there is a long bar near the completion of the trade. However, this bar looks longer than it is because the holidays have caused very low volatility over the past week.

So how can we trust in a detailed analysis based in a thin volatile market ?

Semaj

December 31, 2009 at 12:11 PM ET

For anyone wanting to get short & fight momentum in gbp/jpy we most likely have just seen Wave 5 complete on smaller time frames along with the 200 ema resistance on a daily chart and the R2 daily pivot point resistance as well. Don't get greedy though, 149.75ish is a safe target being a 38.2 fib of the 15 min trend of today. Not for everyone. Good luck :)

Piotr

December 31, 2009 at 01:46 PM ET

It looks like the RSI is posting a bearish divergence, but I'd wait for confirmation. 149.75 is a safe target indeed. The pair may drop to 149.35 in extension.

FXDragon

December 31, 2009 at 09:55 PM ET

Expecting a short term sell next week until Friday.

fxpro888

January 02, 2010 at 01:51 AM ET

I took the trade and i got stopped out. I took 30 pips loss including spread. this trade seemed as good as any. i dont blame brad I think the trade was valid. the market just ran on new years eve. oh well. now, it may be even a better trade. looking for shorts again for sure. i urge brad, and any one else, to re-assess the trade. if the trade was worth taking the first time its worth taking again (if the conditions setup right).

margaret

January 05, 2010 at 12:37 PM ET

Looks like you were right FXpro88. If the GBP?JPY breaks through 136.035 Brads T2 could have been realised. Nevermind Brad, the trade was posted on the wrong day.

margaret

January 05, 2010 at 12:43 PM ET

sorry typing error meant if GBP/JPY breaks through 146.03

bgareiss

January 05, 2010 at 02:48 PM ET

I'm glad it worked out for you. Personally, once I am stopped out on an idea, I go to the next idea unless there is a major mistake I made the first time. The reason is that my emotions could get the best of me and I would rather move on the next trade than lose twice on the same setup. Obviously everyone's mind works differently though, that's just me. Brad

Add Your Comment

Please login to post a comment or sign up for an FX360® account.

Loading...