Inside technicals and chart patterns by 
I’m not an active GBP/JPY trader mainly because it’s, well, you know, CRAZY! But I’ve been getting to know this pair and studies like the PowerStats have helped.
This is a one month sample so I am looking at the most current volatility characteristics for the pair I hear they call the “twisted sister”. This is a 24 hour clock on Eastern Standard Time and you’ll see that the highest average movement is between 2:00am and 11:00am which is the heart of the Frankfurt/London?New York overlap. So I have a good idea of what to expect in term of pip movement and I know when I will see it. I can also add to this by making sure I keep track of the economic data releases that will push prices towards the upper ranges of probability.
Having said all that, I still need the set up. Here’s a look at the 60 minute GBP/JPY.
There is a channel down pattern which would set up a short off the downtrend line resistance just above 148.80. This short is a trend follow as this time frame is in mark down. The top line of the channel is also lining up with the 34ema low.
“Price movment range” courtesy of PowerStats. Price chart was created with MT4 and the Autochartist Chart Pattern plug-in.
Interesting. I’ve been trading GBPJPY exclusively for several years until recently, now sometimes trade GBPUSD. I like the GBPJPY, it can offer up some great moves, sometimes more frequently than the other currencies. The price movement range graph is nice visual. Thanks for sharing. Cheers
P.S. Additional comment to above. I like to go to longer time frames for additional confirmation on a potential setup. At least for now, the 4 hr chart is suggesting a different scenario than 1 hr chart short setup off the channel top, i.e., a long position. GBPJPY is currently at 149.50.
Regards
always interesting tuning into your comments greg wherever you happen to pop up. As always spot on with that long call.
Hi Greg, I like the GBP/JPY but I also think from the standpoint of each trader’s own risk tolerances — this one definitely takes some getting used to. Like building up to a heavier weight.
I agree about the longer time frames…I can see how it would put you above the short term fray and smooth out the volatility but it also requires more risk appetite.
I try to focus on which time frame has the clearest psychology and which presents an acceptable risk/reward ratio.
Thanks for the great comments. I appreciate it!
Hi Raghee
What do you you look for to determine which time frame has the clearest psychology?
Regards
Jeremy, it’s actually a matter of comparing the time frames you look at and figure out which is the clearest. The is not one time frame is necessarily always going to give that to you. I should add that the daily is probably the most psychologically significant but not necessarily the clearest.
Since I watch the 15, 30, 60, 240, and daily, I compare between those time frames to determine which is the one that tell the best, most clear story.
Hope that helps!