Update: Short-Term GBP/JPY Buy In Progress...

Last updated 11/19/2009 2:13 PM EST (GMT -5) 4 Comments

FX360 Technical Analyst Staff

Technical Analyst, GFT

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Last Updated: 10 min ago

The bullish butterfly pattern highlighted in last week's " Solid Short-Term GBP-JPY Buy Emerging... " technical feature has come to fruition triggering our current long position from 147.80. This pattern took a while longer to complete than expected, and prices have moved somewhat rapidly into pattern completion both may which be a slight cause for concern. More conservative traders may look to move stops to break-even at this point (assuming entry at 147.80 or better), or to hold off on establishing a new long position until a near term uptrend is established with higher significant highs (peaks) on shorter time frames (15mins, for example) and look then to buy pull backs. There is still room down to around 147.0 based on slightly longer-term bullish Gartley pattern, so we will hold our original exits for now, look to move stops to break-even at T1, and reassess price action to determine whether to take profits at that point or look for T2.

* for original ("before") chart, click here .

Comments (4)

pipster
November 20, 2009 at 07:38 AM ET
The yen is very bullish, except against the US, but other currencies have broken down. This trade is stopped out, probably the BOJ speech overnight.
Semaj
November 20, 2009 at 10:22 PM ET
For me if anyone was to take this trade you are against the trend. Price is below both the daily & 4 hour 200 EMA. In addition there is a technical breakout to the downside out of a triange trap on a daily chart. Combine these with B & K's sell zone indicator in the 1 SD Bollinger on a daily chart and momentum is clearly to the downside at this point in time.
DP
November 22, 2009 at 07:14 AM ET
All valid insights however it is also always easier to pick holes in a trade logic with the benefit of hindsight. When using the criteria Roger employs for this trading method I think the length of the bars going into the trade entry were probably the true tell tale sign that this trade was becoming unstable as he suggests.

It is only really relevant to use the indicators being employed in a particular trading technique when reviewing how a trade went wrong otherwise you just confuse the issue. There is always an indicator of one type or another that justifies not taking a trade however you can only maximise your control of potential trades by using the same methods of measurement otherwise you will never have any consistency.

B&K are using a different trading strategy so it doesn't make sense to compare the the results of one with the logic of the other.

Nice day for bears though!
Semaj
November 22, 2009 at 08:35 AM ET
I had been watching that price trap on the daily triangle for quite a while and I went short off a 15 min retacement after the breakdown and made my pips. That was my trade plan along with the negative 200 EMA if the breakout was to the downside ONLY, not a hindsight review of what happened after the chart was built but instead my bias was set before hand. When price broke thru the 1st SD BB it was simply an added cofirmation of the breakout of the range.

I respect the technical analysis @ FX360 when it aligns with the big players in this market and that bias to me is seen in the 200 EMA on larger time frames. I agree with your point of indicators in hindsight for reasons for or against a trade since they are lagging be default. There are ways though to use them as leading indicators on 2 time frames when combining analysis with S&R, divergence, & fib levels which are the popular leading indicators available.

Thanks for the feedback & good luck in trading :)

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