USDJPY Mean Reversion Kumo Bounce (15 Minutes Time Frame)
Updated
Looking at the chart on USDJPY, price has came back to the Ichimoku cloud(kumo) and I am expecting price to bounce off the Kumo, however, I would need some confirmation on the 3 Minutes Time Frame.
The Signal I am looking for is that price would move with Higher Highs and Higher Lows.
To keep things simple, I would think that entering on the 15 Minutes Time Frame would be best, even though we are looking at the 3 Minutes Time Frame for confirmation of trend reversal.
I have been testing mean reversion strategies out and reflecting on how the currency market differs from the stock market.
Some conclusions I made is that, unless if one side of the currency is severely depleting of it's resources or have some serious policy issues (Think JPY carry trade from 2016 to 2024), otherwise, the price would always come back to somewhere in the middle (reasonable price between the two currencies that).
Example would be Sing Dollar against Malaysian Ringgit. When Singapore separated from Malaysia back in 1965 (I wasn't born yet), until 2 decades or so ago, the exchange rate was somewhat 1 to 1. But today, the price sits at about 1 to 3.2ish.
The Malaysian Ringgit has been backsliding against the Singapore Dollar even with their huge population as human resource as well as their export industries. Reason being, they have terrible decision making methods that set the policy of the country.
However, the Malaysian Ringgit has been quite stable even with the currency strength decline, and the people manage, somehow to continue living, by working in Singapore and exchanging SGD for MYR.
It is like a ship.
Even during storms where the waves are 10 stories tall, the ship manages to right itself and prevent the ship from capsizing. Just like the people of Malaysia who make things work for them when the tough gets going.
What I wanna say is that, the mean value of the products will adjust itself and prevent a capsize from occuring. Just like the forex market. Unless if the ship has some big hole or damage that causes water to seep into the ship.
And that is why the forex market ranges most of the time, because they (government, institutions, banks, traders, citizens) right themselves through various methods, to prevent a landslide in their currency which will in turn affect their commoners' lives.
The Signal I am looking for is that price would move with Higher Highs and Higher Lows.
To keep things simple, I would think that entering on the 15 Minutes Time Frame would be best, even though we are looking at the 3 Minutes Time Frame for confirmation of trend reversal.
I have been testing mean reversion strategies out and reflecting on how the currency market differs from the stock market.
Some conclusions I made is that, unless if one side of the currency is severely depleting of it's resources or have some serious policy issues (Think JPY carry trade from 2016 to 2024), otherwise, the price would always come back to somewhere in the middle (reasonable price between the two currencies that).
Example would be Sing Dollar against Malaysian Ringgit. When Singapore separated from Malaysia back in 1965 (I wasn't born yet), until 2 decades or so ago, the exchange rate was somewhat 1 to 1. But today, the price sits at about 1 to 3.2ish.
The Malaysian Ringgit has been backsliding against the Singapore Dollar even with their huge population as human resource as well as their export industries. Reason being, they have terrible decision making methods that set the policy of the country.
However, the Malaysian Ringgit has been quite stable even with the currency strength decline, and the people manage, somehow to continue living, by working in Singapore and exchanging SGD for MYR.
It is like a ship.
Even during storms where the waves are 10 stories tall, the ship manages to right itself and prevent the ship from capsizing. Just like the people of Malaysia who make things work for them when the tough gets going.
What I wanna say is that, the mean value of the products will adjust itself and prevent a capsize from occuring. Just like the forex market. Unless if the ship has some big hole or damage that causes water to seep into the ship.
And that is why the forex market ranges most of the time, because they (government, institutions, banks, traders, citizens) right themselves through various methods, to prevent a landslide in their currency which will in turn affect their commoners' lives.
Trade active
I have entered on a buy trade at 154.937 and my stop loss is at 154.748, and I am going for 1.5R at 155.222.
However, I am learning to embrace taking profits earlier when price is not moving in my intended direction, or shifting my TP lower.
I feel there's still opportunity to enter on the 3 minutes time frame when price comes back to reject the kumo on the 3 minutes time frame if i actually didn't enter on it previously. both of which is fine for now i feel.
Trade closed: stop reached
News occured and I got stopped out. Help!
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