Instrument: USDJPY
Trade Type: Short
Entry Price: 149.113/147.895
Stop Loss: 149.351/148.145
Take Profit: 147.613/147.395
Risk-Reward ratio: 1:6/1:2
Outcome: Profitable
Entry/Analysis
This morning, I carefully considered executing a short trade on USDJPY but initially hesitated due to the price action observed the day before. On Wednesday evening, price action had shown a clear rejection off a well-established resistance zone, which initially suggested a bearish setup. However, the subsequent bullish push deeper into the zone created some uncertainty about whether the rejection was strong enough to confirm a reversal or merely a liquidity grab before a continued push higher.
Despite the bullish attempt, price struggled to maintain upward momentum and began stalling around the 0.5 retracement level — a key Fibonacci level that often indicates potential reversal points. This loss of bullish momentum became more evident as price action formed wicks and smaller-bodied candles, suggesting indecision and exhaustion from the bulls.
A significant confluence that supported my short bias was the fact that price was trading below the 200 EMA on both the 4-hour and 1-hour timeframes, reinforcing the broader downtrend structure. Additionally, the short bias aligned with the lower-traded percentage, adding further confirmation that the overall market sentiment was skewed toward bearish pressure.
All these technical confirmations increased my confidence in the setup, and I executed my first short position at 149.113.
Exit/Outcome
The trade played out quickly and decisively. Within the first hour of opening the trade, the Japanese yen gained significant strength, driving the pair lower and validating the bearish setup. Price action broke through a key support level with strong momentum, confirming that the bearish pressure was substantial and sustainable.
Following the breakdown, price staged a minor retest of the broken support zone — a textbook continuation setup. Recognizing the opportunity, I decided to execute a second short trade at 147.895 with a tighter hold time objective, aiming to capitalize on the continuation of bearish momentum.
Both trades were held for approximately three hours, with both positions reaching their respective take profit levels. The clean price action, along with the structural weakness, confirmed that I had executed high-probability trades in alignment with the broader market conditions. The outcome was highly profitable, reinforcing the validity of my technical analysis and execution strategy.
Psychology
These trades provided valuable lessons in managing the emotional balance between greed and fear. Initially, I felt hesitation about executing the first trade due to the conflicting signals from the previous day’s price action. However, sticking to my trading plan and focusing on the broader confluence of bearish signals helped me overcome this doubt and trust the setup.
Once the trades were active and moving in my favor, the temptation to close early out of fear of reversal crept in. However, by maintaining discipline and focusing on the technical structure — especially the momentum shift and price stalling around the 0.5 retracement level — I resisted the urge to close prematurely. Holding the trades to their intended profit targets allowed me to maximize the return and build confidence in my ability to manage trades more effectively.
At the same time, I was mindful not to push the trade beyond reasonable limits. After the strong breakdown and subsequent retest, I recognized that momentum could begin to fade, which led me to secure profits rather than overextend the position. This balance between holding for profits and knowing when to exit is a critical aspect of consistent profitability, and this trade reinforced the importance of that psychological discipline.
Mastering the emotional control of not closing too early or holding too long will be essential as I continue refining my execution. Each trade, whether successful or not, serves as a stepping stone toward becoming a more balanced and consistently profitable trader.
Overall Trade Score:
Execution- 3/3
Psychology- 3/3
Overall Score- 6/6 (A+)
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