USDJPY Forex strategy execution

Dear students, in this lecture I will explain how the strategy on USDJPY works and what is the execution, where exactly you need to enter if you are trading it manually.

So what we said, we have the MACD on H1 and the MACD on M30.

And then we have the Ichimoku and the Williams Percent Range on M5.

Now, this M30 and H1, we use it again for confirmation just like with the GBPUSD.

And actually, this is just for the 2 strategies.

For the rest, they are on one and the same timeframe so there are no such confirmations but for these strategies, we are using the longer timeframe.

Now, with the GBPUSD strategy, I said that we are looking to trade with the direction of the trend, with the direction of the higher timeframe on M30 and H1.

While on USDJPY, it's a different case.

Now, on USDJPY on H1, the MACD allows us to trade long, to buy, when the MACD line is lower than the signal line.

So pretty much that is the opposite thing.

We can buy when the MACD line is below the signal line.

And on M30, we can buy when the MACD line is below the 0 line, which is the line right over here where the MACD becomes negative and positive.

This is the 0 line.

It's pretty much the opposite thing.

And what is the idea? Very simple, with the USDJPY, we are looking to buy on M5 when the price is cheap on the higher timeframes and we are looking to sell when the price is expensive.

OK? So when the MACD is above the signal line, the price gets expensive.

We want to sell it when it is expensive and we want to buy it when it is cheap.

So the difference is that the GBPUSD strategy follows the trend, and the USDJPY strategy is more of a range strategy or more of a strategy that aims to buy, one more time, when the price is cheap and sell when the price is expensive.

And you will see how that works.

Now, let me arrange the charts so they will be more visual again.

Here is the H1 chart, then I will have the M30 right over here just like I did for the GBPUSD.

And the M5, I will place it right over here.

Let me move to the end.

I just press the End button on my keyboard to go to the end.

You can see that at the current moment I don't have confirmation to trade because on H1 I have the MACD below the signal line which means that I am allowed to buy.

But on M30, the MACD line is above the 0 line.

So these 2, they don't confirm each other.

At this moment, I should not be looking at all at M5 because there is no confirmation.

Now, what is the entry condition on M5? Let me make it bigger.

We are looking to buy when the price crosses the Kijun-sen line or this is the blue line upwards.

OK? When it crosses upwards we are looking to buy.

But we need to have the confirmation that the Williams Percent Range changes its direction upwards at the same time.

OK? So, for example, if the price crosses the Kijun-sen at this moment over here, we need to see that the Williams Percent Range changes its direction upward.

Meaning that it was going down and it's changing the direction upwards just like over here, over here, here.

Let's see at this recent moment when the price broke here the Kijun-sen.

You can see that I don't have such a reversal in the Williams Percent Range.

It comes a little bit later, over here.

OK? You can see it goes down and it goes up, and this is for the second break.

And that would be a great entry but as we said, we don't have the confirmation from M30 because it's above the 0 line.

Alright? So this is when we are looking to buy.

When we are looking to sell, we need to see the price crossing the Kijun-sen or the blue line downwards and at the same time we need to see that the Williams Percent Range changes its direction downwards.

Alright? These are the 2 rules that need to happen, the 2 events that need to happen at the same time on M5 in order to enter on the market.

Now, let's see where we have confirmation from H1 and M30, and we will have a look at an example.

So I will make it just this way, it will be more visual for H1 and M30.

OK? Here it is.

So let's have a look when we can buy or sell on M5, confirming on M30 and H1.

OK? For example, you can see on M30, all that period the MACD line is below the 0 line which means that it allows us to buy.

And when the price is above the 0 line, it gives us the confirmation to sell.

OK? For example, you can see right over here, what is that? 24th of January, after that long period, we have the MACD above the 0 line which gives confirmation to sell.

Let's have a look if we have the same thing on H1.

One more time, this is 24th of January, I think.

Yeah.

Let me take the vertical line.

Right over here, I will move it right here.

OK? From 10:30 on the 24th of January.

Let's see, I think it's exactly right here, this one, but not over the MACD.

I will place it over the chart.

You can place lines over the MACD as well but I prefer it to be over the chart.

So you can see that the confirmation for MACD starts when the MACD line crosses the 0 line upwards, but for H1, the confirmation to sell starts from right over here.

OK? When the MACD line is above the signal line, until this moment.

Let me grab one more vertical line, and it is until right over here.

OK? The previous one or even this one.

Until over here actually, this one over here.

OK? This is where the MACD line crosses the signal line downwards.

So you can see that the period that we are allowed to sell on H1 is much longer, this is when the MACD is above the signal line.

But on M30, it's much shorter when the MACD line is above the 0 line.

So here we are not looking at all the signal line, just the MACD.

OK? When it's above the 0 line, we have the confirmation to sell.

OK? Now, let's have a look what we have on M5.

We said this is starting from 10:30 on the 24th of January, 10:30, 24th of January.

Let me zoom out and I will go back to 24th of January, 24th of January.

Where is it? Right over here.

OK? I skipped it.

24th, 10:30.

Alright, here it is.

Here is a vertical line.

I will place it on 10:30 so we know after what time we are allowed to sell.

Now, we said that on M5 we are looking to sell when the price crosses the Kijun-sen downwards, I will make it bigger.

And at the same time, we want to see the Williams Percent Range changing its direction downwards.

Alright, in this example, we have confirmation after 10:30 on the 24th.

And you can see that the first cross came right at this moment.

OK? But at this moment, the Williams Percent Range is just going downwards.

There is no change in the direction.

Alright? Then the price goes up, you can see at this moment it went above the Kijun-sen, above the blue line, and then it went below on this bar which is a cross.

We consider this as a cross because it went above then it went below.

Even a very small distance, still it's a cross.

OK, now, on this line, what you see is exactly what we need to have as confirmation.

The Williams Percent Range changes its direction downward.

So if you follow the crosshair, the price is going up, it goes above the blue line.

And at this moment, the Williams Percent Range is going up.

When the price goes down on the next candle below the blue line, you can see that the Williams Percent Range changes its direction.

And this is the first entry we can have right over here.

I will place a horizontal line as well, exactly when it's crossing the blue line.

Let me make it red just because it's a sell signal.

OK? Here it is.

And now for this strategy, what I have is Stop Loss of 70 pips and Take Profit of 80 pips.

In the previous lecture, you will get the sheet with the setup.

So Stop Loss is 70 pips or 700 points, Take Profit 80 pips.

OK? So Stop Loss is 70 pips.

Let's place the Stop Loss and the Take Profit so we will see what happened after that.

I will change the parameters, entry, 109.

58 plus 70 pips.

That would be 110.

28.

OK? I click on OK and it went above on the right spot.

And as Take Profit, we said we have 80 pips.

So I will place another line.

Let's make this one green since it's a Take Profit.

OK? And as parameters, what I will have, 109.

30 minus 80 pips.

That would be 108.

50.

OK? Not going into the details because I don't want to use the calculator now but here they are.

OK, this is the Stop Loss and this is the Take Profit.

Let's zoom out a little bit.

OK? So you see where is the entry, it's right at this moment.

The price went a little bit on a negative, then it went to a positive going down.

And let's see what happens after that.

The Take Profit is still far away, price goes sideways.

Let's zoom out.

This is M5, guys, so keep in mind it's a lot of bars, it's a lot of data that we have but I just want to see what happened, the price here went towards the Take Profit.

Now, it's a personal choice if you want to take the profit a little bit earlier or not.

Now, if you're in front of the screen, I would suggest you take the profit if you see that you are getting very close because sometimes you will notice that the price goes towards the Take Profit and then reverses and might hit the Stop Loss.

Personally, what I do if I see the price going close to the Take Profit and it has less than 10 pips to reach the Take Profit, I close it and I take the profit.

This is if I'm in front of the screen and if I see it.

But the idea of the Take Profit and the Stop Loss is not to touch it.

Yeah, you can see what happened.

The price went up and then it went down, and it hit right over here the Take Profit.

OK? So having a Take Profit and the Stop Loss eliminates the emotions.

Let me zoom it a little bit to see where was the entry, here it is.

Many times when you enter, you will see the price going against you and people start to feel fear that they will lose and they hurry to close the trade.

But there is the Stop Loss and as I said, with these strategies, the Stop Loss and the Take Profit are at these places for a reason based on a lot of statistics and algorithms that I have used to see which are the right levels.

So try to avoid the emotions.

Personally, when I trade manually, I place the Stop Loss, I place the Take Profit, and I just leave the trade and I don't look at it.

OK? Anyway, you will start to feel a lot of emotions.

Fear when the price goes to a loss.

Even fear when the price goes to a profit, you will feel afraid not to lose your profit.

So, for example, if right here you have $40 but your Take Profit is at 80, people feel fear that they will lose their profit and they hurry to close the trade.

But as you can see, price goes sideways for a couple of days and then it hits the Take Profit in this example.

OK? So the idea of Stop Loss and Take Profit is to avoid the emotions.

Alright? So this is the strategy with the Ichimoku and the Williams Percent Range.

Pretty interesting strategy.

You will need some time to get used to the indicator if you're using it for the first time.

But with this strategy, we are using just the blue line.

OK? Thank you for watching, if you have questions let me know.

Cheers.

.