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USD/JPY: Simple Trading tips for novice traders on May 8th (US session)
May 8, 2024 5:22 pmVideo
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Trade analysis and tips for trading the Japanese yen
The first test of the price at 155.45 in the first half of the day occurred when the MACD indicator had risen significantly from the zero mark, limiting the upward potential of the pair. For this reason, I didn’t immediately buy. After some time, another test at 155.45 occurred, and at this moment, the MACD was starting to rise, confirming the correct entry point for buying the dollar in continuation of the bull market. At the time of writing the review, the pair had risen about 20 points. The upward potential of the dollar is still intact and will likely remain so in the second half of the day, as there are no important US statistics. Figures on changes in wholesale inventories in the US are unlikely to reverse the market, so it’s best to continue to act along the trend. As for the intraday strategy, I plan to act based on the implementation of Scenarios #1 and #2.
Buy signal
Scenario #1: Today, I plan to buy USD/JPY when the entry point reaches around 155.66 (green line on the chart), with the target of rising to the level of 156.15 (thicker green line on the chart). At around 156.15, I will exit purchases and open sales in the opposite direction (targeting a movement of 30–35 points in the opposite direction from the level). Today, one can expect the pair to rise in continuation of the bull market. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the price at 155.35 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal of the market upward. One can expect a rise to the opposite levels of 155.66 and 156.15.
Sell signal
Scenario #1: Today, I plan to sell USD/JPY after the level of 155.35 is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the level of 154.96, where I will exit sales and also immediately open purchases in the opposite direction (targeting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return in the case of weak US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decrease from it.
Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the price at 155.66 when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a reversal of the market downward. One can expect a decline to the opposite levels of 155.35 and 154.96.
On the chart:
Thin green line – entry price, at which the trading instrument can be bought.
Thick green line – the expected price where Take profit can be placed, or profits can be fixed independently, as further growth above this level is unlikely.
Thin red line – entry price at which the trading instrument can be sold.
Thick red line – the expected price where Take profit can be placed or profits can be fixed independently, as further decline below this level is unlikely.
MACD indicator. When entering the market, it’s important to consider overbought and oversold zones.
Important. Beginner traders in the forex market should be very cautious when making entry decisions. It’s best to stay out of the market before important fundamental reports are released to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to place stop orders to avoid losing your entire deposit, especially if you don’t use money management and trade with large volumes.
Remember, for successful trading, you need to have a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
The material has been provided by InstaForex Company – www.instaforex.com
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