AUD:JPY Potential “Box Trade” short entry

AUD:JPY Potential “Box Trade” short entry

Finally found time to have a quick run through my charts looking for something interesting but have been met with disappointment. There just doesn’t appear to be any tempting low risk / high probability setups presenting themselves right now.

So, I’m going to focus on one to watch for the future.

AUD:JPY is trading a choppy up trend on the weekly chart, having twice been rejected from the 2007 high – 2009 low 61.8% fib retracement level.

After forming a choppy triangle at it’s 2011 highs on the daily chart, AUD:JPY broke down in August in an attempt to retest the “Tsunami” price extremes as did most Yen pairs.

My long standing fundamental view is that JPY will continue to strengthen against most major pairs, but this is a discussion for another time.

The 4 hourly chart shows a potential setup  I’ve had great success with on a number of FX pairs. I call this the “Box Trade”.

Box Trades are simply a retest of a previous trading range that broke out in force either to the upside or the down side.

This potential AUD:JPY example clearly shows a price area we need to watch for signs of weakness with a view to entering a swing short:

This will likely take some time to play out, but certainly one for the watchlist and one I’ll revisit if and when the setup starts to look more interesting.

In the meantime, here’s a completed example of a previous Box Trade I took earlier this year on USD:CHF 4 hourly chart:

Entered trade 1st April 2011:

Updated 4 hourly chart from 8th April 2011:

And here was the result of that trade, this time shown on the daily chart as the breakdown really gathered momentum:

  • Carol
    Posted at 15:14h, 07 September

    Very nice, i suggest webmaster can set up a forum, so that we can talk and communicate.

    • Index Trader
      Posted at 18:06h, 07 September


      Thank you for your comment.

      I may consider this in the longer term but probably on a small basis and aimed towards Non-UK readers.

      In the meantime I have a Moderated forum on the ADVFN Free BB under the FX epic with the main emphasis on day trading, though swing trading is covered. I ‘m presently in discussion with ADVFN to establish a direct link from this site to the FX Forum hosted by them.

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    Posted at 18:35h, 22 September

    […] set-up went according to plan, and I was disappointed to have missed out on the failure of the AUD JPY Box Trade to achieve my desired entry level, instead, selling off from the 61.8% Fibonacci level. I watched […]

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