USDJPY Buy Trade-How To Make 700 Pips With 21 Pip SL?

In this post we are going to discuss a recent USDJPY buy trade that is 700 pips in profit. If you have been following our previous posts than you must by now know that we believe in risk management more than profit taking. When you have a winner, let it run. Did you read the post on how a Japanese Day Trader made $34 Million in 1 day?  When you have a winning trade, don’t panic and let it run. This is precisely what took place in this USDJPY buy trade. Take a look at the following screenshot!

USDJPY Buy Trade

Do you remember the US Presidential Election Day? The two big black candles that you are seeing on the left of the above screenshot are the ones that were made when Trump started to win. In the beginning market was expecting Donald Trump to lose. So when Trump won, USDJPY fell like a stone for 8 hours. Then it suddenly changed it mind and started rising and it is rising even after 2 weeks.

This is how trends start in the market. Big trends start on some fundamental change in the market. Donald Trump is the fundamental change that is driving the above uptrend. Now you don’t need to enter at the very bottom. Just let the market turn. This is precisely what we did. If you try to catch the bottom or the top, you will only get your fingers burnt. Watch this 1 hour webinar recording on the only candlestick pattern you will ever need to become successful.

We waited for the market to decide the direction. Do you observe one thing in the above chart? Price is above the red line which is EMA21 which means that uptrend is very strong. The red arrow in the above chart shows the entry. Entry price is 106.538 and the stop loss is at 106.320. We have closed the trade for a profit of 700 pips. Price right now is hovering around 113.900.

So it was a huge trade. The reward to risk was 33:1. So if you have a $10K account and if you had opened the trade with 1 standard lot, your risk would have been $210. This comes out to be 2.1% risk. You make $33K from this trade. This trade lasted 10 days. This is what swing trading is all about. Looking for high quality trades. You focus more on quality than quantity. You are not a scalper looking for 20-30 pips. You are a swing trader who is looking for catching the big moves in the market.

When trading the first thing that you should focus on is risk management. Your stop loss should not be more than 20 pips. We don’t use a stop loss bigger than 15-20 pips. We have written this rule in stone in  our book of trading. Take profit can depend on market. But stop loss is firmly in our control. If you can catch the big moves in the market, you will always make more than what you lose. Did you download your this month copy of Traders World Magazine? So make sure that you also follow risk management strictly. Always make sure your entries are with a small stop loss. Use H4 timeframe for making the entries. Candlestick signals on H4 are much more reliable as compared to the candlestick signals on H1, M30 and M15.

If you want to take your trading to the next higher level, you should learn how to analyze the market on daily basis using R. R is a powerful machine learning and data analysis language. You can download R software FREE from its website. If you want you can take a look at our Machine Learning Using R For Traders Course. There are a number of machine learning algorithms that you can use to predict the market direction.

About The Author


I have done masters from Harvard University. I am interested in day trading currencies, options and stocks.