The GBPJPY has been stepping downward within a larger range-bound container, all clearly visible on the daily chart. The bearish price action has guided price back to the bottom of the range support. Last session the market made that final move down to test the actual range bottom where we seen a significant increase in buying activity.
The test of the support level prompted strong bullish price action which forced the market to close back up near it’s open price, creating a long lower rejection tail end the end of close. This bullish rejection candle signal is a classic ‘range bottom buy signal’. We’re also noticing price extended away from its mean value, which puts tension on the market to ‘slingshot’ back to find value again.
At the time of this writing – during the Asian session, the market is now offering retracement entry opportunities. A chance at a good entry price on the trade and a great way to maximize your risk reward.
Trade Progression
The GBPJPY market responded really well to this range buy signal. The retracement entry was respected almost to the pip, and it was upwards and onwards from there. The market has now rallied to hit a massive 1:6 risk return ratio. Think about that for a second, if you have had a Forex trading losing streak, this one trade would have made up for 6 losers in one swift go.
War room traders enjoyed the benefits of this simple, straight forward price action setup…
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