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Best Practice: Trading the BM on NZDJPY

Big Picture (WK)

Look at Support levels on NZDJPY using WK chart

Look at Support levels on NZDJPY using WK chart

  • Currently price is supported by previous year (2013) high

Zooming In (H4)

Big Move on NZDJPY H4 charts

Big Move on NZDJPY H4 charts

  • Following a Big Move, price is now retracing to previous support levels.

So what now?

NZDJPY showing both Up or Down possibilities

NZDJPY showing both Up or Down possibilities

  • If you’re looking to trade with the trend and trade inline with the BM, then you would have to wait for point 4 to form.
  • If you’re of a contrarian nature and don’t mind a counter trend trade and the risk, then there might be a opportunity to trade down to the support.

Update 26 March 2014 (by Jerome)

Question:

  • Referring to previous blog post on NZDJPY. Regarding the downflow, why is it that we need to wait for a new point 4? Why can’t we take the point “3?” as point 4 and already WR and short?
NZDJPY showing both Up or Down possibilities
NZDJPY showing both Up or Down possibilities

Answer:

  • Actually the diagram I posted did not exactly mean that we’re waiting for another point4. Just that the point 4 was not yet confirmed as a point 4 is only confirmed upon a WR trigger. Also as this is a counter trend trade, a convincing close needs to happen preferably on H4.
  • Price has found it difficult to close convincingly below the previously mentioned pt2.
  • If price is to head lower, it must clear the immediate support zones first.
NZDJPY immediate support zones
NZDJPY immediate support zones
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Last time, many things that I wanted were just dreams, now I see them as possibilities. I’m looking forward to own pent-house suite in Manhattan overlooking Central Park because forex trading with Tflow® makes it possible. Find me on Google+

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