GBPJPY Long- Friday 20th September 2024

Published on 20 September 2024 at 16:25

Instrument: GBPJPY

Trade Type: Long

Timeframe: [4HR]

Entry Price: [189.116]

Stop Loss (SL): [188.450]

Take Profit (TP): [193.116]

Risk-Reward Ratio: 1:6

Outcome: Profit

Entry/Analysis:

I entered a long trade on GBP/JPY at 189.116 after noticing that the price had pulled back to a significant support level, holding just above the 200 EMA on the 4-hour chart. This confluence of dynamic and static support confirmed a strong technical setup. Retail sentiment showed most traders were positioned short, which gave me confidence in a contrarian long position. Additionally, the growing interest rate gap between the hawkish Bank of England and the dovish Bank of Japan bolstered the fundamental case for GBP strength. The widening yield differential, with analysts expecting further rate hikes in the UK, made this trade even more compelling. Despite not usually trading this pair, I took this opportunity to overcome the psychological barrier of hesitation when trades align with my strategy. I set my stop-loss just below support at 188.450 and planning to trail my stop loss This trade is not only technically and fundamentally sound but also represents a step forward in my trading discipline by executing a trade outside my usual comfort zone.

Exit/Outcome:

After holding my long position on GBP/JPY for a week, I was able to move my stop-loss higher as the trend developed favorably, aiming for an increased take-profit target. This morning, however, the price sharply reversed due to the news that Shigeru Ishiba won the leadership race for Japan's ruling Liberal Democratic Party (LDP) and is set to become the next Prime Minister. Markets reacted positively, anticipating a shift in fiscal policy that could favor economic growth, which contributed to a notable strengthening of the Japanese yen. Despite this volatility, I successfully exited the trade with a significant profit, having captured a substantial portion of the upward movement. The outcome of this trade marks not only a financial gain but also a critical learning experience, reinforcing the importance of adhering to my trading plan while remaining responsive to market shifts.

Psychology:

This trade has been my longest hold ever, and it has significantly enhanced my understanding of patience and accuracy in trading. Throughout the week, I remained disciplined, though I faced moments of uncertainty, particularly as the price struggled to break through my anticipated higher levels and retraced, reducing my profits. In those moments, I found myself at risk of losing my nerve, but I consciously reminded myself to adhere to my strategy and avoid fixation on the current price. Recognizing that the market can shift dramatically in either direction at any moment helped me regain my composure. Ultimately, I took a sizable profit while following my trading rules, which was a testament to my growth as a trader. This experience has reinforced the value of emotional regulation and the need to stay grounded amidst market fluctuations.

Trade Rating:

Execution: 3/3

Psychology: 3/3

Overall Trade: 6/6

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