In a bearish trade setup on GBP/JPY with a 150-pip profit target and a 50-pip stop loss, you’re aiming for a reward-to-risk ratio of 3:1. This means that for every 50 pips you risk, you’re potentially gaining 150 pips, which is a favorable setup.
Here’s a detailed breakdown of this trade idea:
1. Setting the Profit Target (150 Pips)
A 150-pip profit target is quite common in GBP/JPY due to its volatility. This target should be set near a significant support level or other technical factors such as:
A previous major swing low.
A Fibonacci extension level (like the 127.2% or 161.8%).
A psychological level or round number (e.g., 180.00, 179.50).
GBP/JPY often moves in wide ranges, so a 150-pip move in a single trading day or session is realistic, especially if the market is trending strongly.
2. Defining the Stop Loss (50 Pips)
A 50-pip stop loss should ideally be placed above a significant resistance level:
A recent swing high.
Above a key moving average (such as the 50 or 100 MA on the 1H or 4H chart).
Above a Fibonacci retracement level (such as the 38.2% or 50% retracement of the latest downtrend).
You want to make sure the stop isn’t too tight, giving the trade some room to breathe, but also protecting you in case of a reversal.
Here’s a detailed breakdown of this trade idea:
1. Setting the Profit Target (150 Pips)
A 150-pip profit target is quite common in GBP/JPY due to its volatility. This target should be set near a significant support level or other technical factors such as:
A previous major swing low.
A Fibonacci extension level (like the 127.2% or 161.8%).
A psychological level or round number (e.g., 180.00, 179.50).
GBP/JPY often moves in wide ranges, so a 150-pip move in a single trading day or session is realistic, especially if the market is trending strongly.
2. Defining the Stop Loss (50 Pips)
A 50-pip stop loss should ideally be placed above a significant resistance level:
A recent swing high.
Above a key moving average (such as the 50 or 100 MA on the 1H or 4H chart).
Above a Fibonacci retracement level (such as the 38.2% or 50% retracement of the latest downtrend).
You want to make sure the stop isn’t too tight, giving the trade some room to breathe, but also protecting you in case of a reversal.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.