VIDEO: A follow-up to the GBPJPY trade idea. Did the anticipation work?

Yesterday, Greg Michalowski of ForexLive.com looked at the GBPJPY GBP/JPY Understanding GBP/JPY: A Comprehensive GuideThe GBP/JPY is the currency pair encompassing the British pound of the United Kingdom (symbol £, code GBP), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how much Japanese yen is needed in order to purchase one British pound. For example, when the GBP/JPY is trading at 165.00, it means 1 British pound is equivalent to 165 Japanese yen. The British pound (GBP) is the world’s fourth most traded currency, whilst the Japane Understanding GBP/JPY: A Comprehensive GuideThe GBP/JPY is the currency pair encompassing the British pound of the United Kingdom (symbol £, code GBP), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how much Japanese yen is needed in order to purchase one British pound. For example, when the GBP/JPY is trading at 165.00, it means 1 British pound is equivalent to 165 Japanese yen. The British pound (GBP) is the world’s fourth most traded currency, whilst the Japane Read this Term. The hourly chart showed 6 separate tests of the 200 hour MA and support buyers leaning.

With 6 separate tests, traders who are looking for more downside in the pair, can anticipate a break below with momentum. Moreover, risk could be defined and limited on the break.

There was indeed a break of the 200 hour MA in the trading day today, but the momentum stalled a short time later. If the trade was done, the traders might have been stopped out on the failure.

However, that does not cancel the 200 hour MA as a risk and bias defining level. True to that idea, the next break did not rebound back above the MA but instead moved down to the next key target.

The lesson is sometimes trades work out perfectly. Other times, a small loss is the result. However, don't give up on the good ideas that are well supported technically. The very next trade may be the big winner.

Here is the video from yesterday: