The Yen has rallied hard this afternoon. The GBP: JPY sell strategy I posted on Tuesday has hit its target already while yesterday's Aussie Yen triangle set up is well under way.
Here are some thoughts on Aussie: Yen strategy for those following this trade
4 Hour Chart
The strategy approach outlined on the chart involves:
- Selling with a stop entry order set about 30 pips below the triangle support
- Placing an initial stop loss behind resistance back inside the body of the triangle
- A profit target which projects the height of the triangle from where price broke out of the triangle
- Starting to trail the stop lower once price gets 61.8% of the distance towards the target. The stop is moved down behind the high of the latest candle until a there is a candle with a high below this 61.8% level. At that point the stop is left at the 61.8% level. Seeing we have now basically hit 61.8% the stop would be set above the current candle at 99.50 when the next one opens
- Those who don't want to be watching the market every 4 hours to manually trail the stop lower might just use the automatic trailing stop loss function on Tracker using a trail that sets the starting point at around 99.50
