I am not going to start boring you with my Top 10 greatest trades but most of them have been contrarian in nature. Look to pick bottoms or tops, and if proven right, have a real go. I know there is absolutely no reason in the world to even contemplate buying GBP/JPY, so perhaps that is exactly the time to be doing so.
This is a fairly cheap trade to begin with. Buy dips towards 130.00, keeping positions manageable and stops fairly tight. A clean break below 130, and certainly a break below 127, neutralises the strategy. As can be seen on the attached daily chart, a test and failure to break below 130 will mean that a possible inverse head-and-shoulders formation is in place. Whilst they are not very common, these reversal formations are certainly worth waiting for as the payback when one develops is normally excellent.
I have been trying to come up with some fundamental reasoning to back up such a strategy but I have failed. With the printing presses in the City of London now working overtime, it’s difficult to support a bullish GBP trading strategy on any grounds, apart from technical.