A Beautiful Trade On CADJPY

Forex Analysis #3

Hey there, TraderSaan is here. Today I am going to share one of my trades which has been taken on CADJPY on 15th March. I am actually a swing trader, meaning I hold my position for 2-3 days or more. So I usually trade at the timframe of 4 hour (H4), 1 hour(H1), or occasionally at 30 miniutes (M30). And one more thing is that I analyze the chart in tradingview and take trade in MT4.

My Approach

Fundamental Analysis

• I am fundamentally bullish in CAD after the Russia - Ukraine war has started, as the price of @oil is super increasing beacuse of supply issues. Here is the Canadian Dollar Index, it's pretty moving to the upside.

• As the oil is in hastag demand and supply is less, so the trade balance is surplused in Canada because of its more exports than imports. That's the reason we see a big upside rally in CAD index(CXY).

CXY H4 chart. Price is aggressively moving upward direction.

Image source: tradingview, prepared by me

• On the other hand, JPY is very weak these days, as BOJ is not concern about rate hike ( previous rate is -0.1%) even in the last month of financial year. Inspite of being safe asset, JPY is heavily selling off.
You can visit my previous post which is all about JPY's free fall. Link is down below.
https://steemit.com/trading/@sanjibmondal99/jpy-is-in-free-fall-why

JXY chart in H4 timeframe, price is in free fall.

Image source: tradingview, prepared by me

Technical Analysis & My Strategy

Well, firstly lets talk about my "Breakout-Pullback" strategy. Here I am going to show a demonstration of this strategy. In the image below, price was once in the Support & Resistance zone and after some back & forth plays, price has broken the resistance zone with an impulsive move upside, that's what we call a BREAKOUT. And then price has come back down to resistance zone, that's what we call a PULLBACK. So when the pullback move has happened completely, I put a BUY order there with the tight Stop Loss(SL) below the ressistance zone or below the recent swing low and my Target Profit(TP) is opened, i.e., I have no fixed TP, as I consider that breakout as an indication of uptrend. So I want to simply let 'my profit run and cut losses'.

My breakout-pullback setup demonstration.

Image source: tradingview, prepared by me

Now here is the real trade I have taken with this setup in CADJPY. Price had broken the resistance zone and made a pullback to the broken resistance zone. And I have taken a BUY trade around at 91.75 with a tight 40 pips Stop Loss. And My target profit was open. And this trade is running beautifully till now with floating profit of 193 USD.

My running trade in MT4

Image source: MT4, prepared by me

This is the beauty of trial stop loss( price is going towards my favour, I move my SL to book some profit, that's called trial stop loss). I can catch the big move by trailing SL and my current Risk to Reward ratio is about 1:15, that's pretty high.

This is where I took my original trade by the Breakout-Pullback setup.

Image source: tradingview, prepared by me

CADJPY trade, view in MT4 chart

Image source: MT4, prepared by me.

Strategy: Breakout-pullback setup.

In general, I take a trade when my fundamental and technical analysis say the same thing. As follows:

Case I
Fundamental = buy, Tchnical = sell, that implies Not To Trade

Case II
Fundamental =sell, Technical = buy, that implies Not To Trade

Case III
Fundamental = buy, Technical = buy, that implies Jump In For Buying

Case IV
Fundamental = sell, Technical = sell, that implies Jump In For Selling

Disclaimer: This is not any financial advise or trading mantra. My purpose is to help traders to learn. This post is made for completely educational purpose. Hope it helps.

Thank you very much if you make it to the end. Happy trade.