Just as stated yesterday, I’m going to have a closer look at one of the Yen trades taken on Thursday. This will also explain some principles behind one of the strategies used by me for trading on intermediate time frames. This trade was not covered by me before it happened, I took a testing position in EUR-JPY, which was closed for 80 something pips loss on Wednesday, I think. GBP-JPY is a cross that people love and hate at the same time, yet keep trading it. Potential for profit is great, but so are the risks. In my opinion it doesn’t chart too well and is not as “predictable” as some other crosses. I trade it extensively intraday, so here is a rare look at the beast’ intermediate trend price swings.
All JPY crosses started to turn south in the middle of the week before, about 10 days ago. It started slowly, but gathered speed and early this week we were in a fast sell off. Clear cut down trend was established.  Since no trend lasts forever, I started to look for signs of turning. By Wednesday, the trend on on 1H charts lasted a long time, in terms of number of bars (candles), about 100 hundred. Correction could be expected, maybe even turn around. You never know for sure which one. Both go in opposite direction and this is all what is important at this point.

Price was moving down establishing minor lower highs in the process, market as “A” amd “B” on the chart, with “B” being most recent. Sign of possible turn came when high “B” was taken out at “C”. This is when I took a loosing test trade in EUR-JPY. Most other Yen crosses went on to undercut lows once again, but GBP-JPY didn’t make a new low, indicating strength in GBP. The beast moved in a sideways fashion for a bout a day and I placed a buy just above the high at “C” or 132.22, with 134.00 objective. At this time my trades in NZD-JPY and EUR-JPY were turning around and I decided to put buy orders in all yen pairs at the same spot as here. The fact that GBP-JPY didn’t make a new low, made it particularly attractive for a buy. It increased probability for a successful upside move. Once the trade was triggered it took only few hours to reach the objective. Week of waiting, but it worked out great, with 178 pips profit.
This can be done on any time frame, the difference would be waiting time and frequency of trades. And, of course profit or loss potential.

Mike K.