This analysis will be short and sweet…
I’ve decided to take a NZD/JPY short trade for 3 Reasons:
The NZD/JPY has had strong momentum to the downside the last week and has recently corrected, setting up a Strike Trade.
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.
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:
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.
Winner’s Edge Trading, as seen on: