Direct from the desk of Dane Williams.
When GBP/JPY rejected daily resistance yesterday, we gave the following trading scenarios:
"If you're conservative, place your stops above the higher time frame zone. If you're aggressive, place your stops above the intraday zone."
Today's blog is going to focus on how if you took the aggressive trading route, you would have already pocketed an easy 1:3 risk:reward trade off your short.
GBP/JPY Aggressive Short
After price looked like holding higher time frame resistance, we had zoomed into an intraday hourly chart to look for a possible short entry.
After grabbing the handy MT4 Fibonacci hack that we've used before and dragging it onto yesterday's GBP/JPY short setup with an aggressive stop, you get the following:
GBP/JPY Hourly:
You can see we used the first hourly candle that found support as our entry when it was retested yesterday as resistance, using it to clearly manage our risk on an aggressive entry.
The 1:3 target is perfect for an aggressive trading strategy like this because it allows you to run at under a 50% win rate while still making money and gives you enough time to decide whether to keep trades open to catch big multiples during high momentum moves.
This one is looking like it might have a bit more in it, so we'll leave it for now and see how things end up playing out.
If this one drops 300 pips, then it will also pay from a conservative trader's point of view and I'll write another follow up blog showing that.
Best of probabilities to you,
Dane.
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