The latest development on yesterday’s NZDJPY breakout is a bullish inside bar which formed today. There are a couple ways this can be viewed as far as an entry strategy. The first is the traditional inside bar entry which consists of a buy stop order above the mother bar.
Of course if the low of the inside bar is broken I’ll most likely move on to other setups.
I’ve outlined a second, more advanced way to enter this setup below. The second strategy will give a better risk to reward ratio, but keep in mind that it also means taking on a bit more risk.
I actually debated (with myself) for a while before deciding to post this. I’ll admit, it’s nothing revolutionary but it certainly does provide a better risk to reward ratio.
The reason I was hesitant to post it is because it does have a downside. Without going into a full-blown lesson, a general rule of thumb is that breakouts on lower time frames are less reliable than those on higher time frames. For example a break of a key level on a weekly chart is much more significant and reliable than a break of a key level on a 1 hour chart.
That said, this entry strategy has its place for someone looking for a more advanced way to enter a setup. However I really can’t recommend it if you’re still getting comfortable trading price action.
The EURCAD bearish pin bar from yesterday appears to have held today and formed an inside bar/pin bar. From here I’d like to see a break of the pin bar nose from yesterday as confirmation that the pair is likely to head lower.
The next key support level doesn’t appear to come in until 1.444.
Last but not least CADJPY – the pair that has figured out that the most efficient way to move from left to right is to go sideways instead of up and down.
Joking aside, this pair has been really choppy lately which is a big red flag for me. However today’s close caught my eye as the market was finally able to conquer the 94 level today. A level that hasn’t seen a daily close since April 6th of this year.
The weekly chart is also starting to look more bullish. Combine that with today’s close and it seems CADJPY wants to retest the bottom of the trend line from April of 2013 (see last chart).
If you intend to trade this pair I recommend doing the following:
Here is the CADJPY trend line from April of 2013.