Just as we opened the London session today, we immediately found ourselves in a beautiful price trap on the GBP/JPY on a 15m/hourly basis. This trap had a very precise bottom at 157.29, which just so happened to be overlapping our new hourly 21ema, and happening exactly at the London open. Also we were bouncing off a 61.8 Fib zone and 2hr 21ema on the USD/JPY to the upside, and the EUR/GBP was starting to fall off yet another lower high itself, all at the same time. So let’s see, we have correlation telling us likely Japanese Yen weakness, British Pound strength, at a precise trap bottom, solid looking support on the 1 hour chart (21ema) all exactly at the London open. Hmm.. Long GBP/JPY anyone? What was so nice about this entry was it’s risk. The horizontal trap bottom/21ema overlap was so precise at 157.29 that one only needed to wait for any green on a short term chart around that area, we used a 1minute there, and place a buy order on GBP/JPY with a stop as close as 10-15 pips below, targeting a trap projection about 120 pips away. The cool thing with this sort of entry, is the risk vs reward was very much in our favor. Probability favored that even if we were wrong on the trade idea, that we would bounce from our entry certainly far enough to lock in break even, therefore having a zero risk trade! Sure enough, within 5 minutes we were +35 pips locked in break even, the rest is history. I detail this trade entirely in this video, and had you held on until London lunch we did eventually make our target of 120 pips or so before falling 50 pips just after, I suppose we were not the only traders seeing this scenario.

Have a great weekend folks, see you at the Forex and Options Expo in Las Vegas at Caesars Palace Monday morning! Visit our blog at http://blogs.fxstreet.com/fxbootcamp/ for more information.

FXBootcamp London Currency Coach-
Christian Stephens