Why I am Selling the NZD/JPY Right Now

Hi everyone!

This analysis will be short and sweet…

I’ve decided to take a NZD/JPY short trade for 3 Reasons:

1.

The NZD/JPY has had strong momentum to the downside the last week and has recently corrected, setting up a Strike Trade.

2.

The correction move was very steep creating open space to the downside. This means we don’t have to target beyond the recent bottom–we can simply use the recent low as a high probability target because we have enough room to do so.

3.

Speaking of room, that room creates an ideal Risk to Reward ratio. Since the correction pattern has been very tight AND moved up to create significant room to the downside, we have an optimal R/R. I have entered this trade with a stop loss of about 29 pips and a target of 66 pips, over a 2:1 even though the target is close by!

Here’s the Trade:

nzdjpy_may_13

 

 

This is an extremely simple trade… To me, this is a no-brainer because it has a great R/R and certainly a good enough probability of working out to make it worth the risk.

Let me know if you have any thoughts or questions and Follow me on Twitter for more trade updates.

 

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NathanTucci

Nathan Tucci has been with Winner's Edge since 2011 as a writer and trader. He specializes in strategy development and enhancement and loves to share what he learns from testing, research and real world experience.
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  • piphunter

    Funny enough the trade hit the stop loss and went in the right direction shortly after that. Looks like a trick from marketmskers, who “knew” where all stops have been located.

  • NathanTucci

    More like 30 hours ;) … By a few pips… then a crash down to my target. The joy of trading

  • http://www.winnersedgetrading.com caseystubbs

    I know that is amazing I got out by a few pips. The market knows how to shake people out. Maybe the market makers are reading this blog…..

  • Jamie B

    Well now I suppose there is no need to speculate! Gotta love it, a stop out then a big move in our direction. The joys of trading Forex! All you can do in this game is see your set-up, trade it and hope for the best.

  • http://www.winnersedgetrading.com caseystubbs

    I just jumped on this short as well I waited for a retrace to get a better R:R

  • http://www.winnersedgetrading.com caseystubbs

    Thanks to everyone that has shared their opinions on this trade. This feedback makes everybody’s trading better. Even if you disagree we want to hear your thoughts on the trades as it makes the posts much better for all.

  • Cyclical Trader

    And just as I stated the price came back up (88.48) before resuming to the downside. But the way the patterns are being formed, it could also turn out to be a triangle breakout to the upside which will take out the stop loss in that case. If it breaks below 88.02, we have a winner. If it goes back to 88.40 levels, then I would get out with the few pips I can.

  • aristides

    Nathan is looking for more than 2:1, so he can get away with less than 50% win rate, which is how this trade looks to me. It gets down to personal preference and experience.

    thank you for sharing your idea Nathan.

    Here’s my daily chart:

  • hara

    So U make a mistake

  • MW

    I respect Nate’s analysis, but there’s simply too much upward pressure. My personal opinion is he’ll be stopped out within 24 hours.

  • Chuks

    Current h1 upwards strongly suggest a bullish trade. My stop is right below the round number. Pretty good trade as per the RR. I will be reaching for 89.50/90.00. We could be seeing a multi year high the way the pair is going now.

  • Graemebo

    fundamentaly I dont see it down.100 per M/A on 8 HR maybe encourages me to think long still

  • chuks

    My price action reading says otherwise. I wonder if my 88.14 long will be spanked. I really see it going up. I will see if it gets taken by tomorrow. Good luck on your short

  • Cyclical Trader

    It is a good trade to the downside. But it is not too late for this action, because price will move up closer to the stop loss area where you can enter the short trade with much more confirmation.