EUR/JPY Short Trade from 01/18/2008

Hello,
today it is Saturday and the FX market is closed. Let us review a profitable trade from Friday the 18th January 2008. I short EUR/JPY.

As you can see on the chart EUR/JPY was in a uptrend. The Stochastic shows us a beautiful divergence. The Fibonacci Retracements were at 157.30 (23.6%) and 156.97 (38.20%), which were my first target. At 156.97 you can see the up trend line and a support area in combination with the 38.20% retracement and the Stoc. divergence. => Short EUR/JPY with a stop-loss at 157.80.
Lets see what will hapen:

Yes, we have reached our first target! And now? Take profit? The Stochastic is oversold .The candle is large and green. Ok, let us set a stop at the 23.60 % retracement at 157.28.

After a break of the expected support area, we see a bouce back and we were stoped-out. Ok, thats trading! Let's see if this was only volatility. The next candle was red. And the former uptrend will be tested. Let's see what will happen in the next 5 minutes:
we drop out of our up trend. The candle closed below. Short at Market with the open of the next candle. Stop-Loss at our swing high at 157.33/35 and hope! Target next support level at 156.47.


It was right to short the market again! We reached the target after a few candles. I set a new stop-loss at 156.72 (50% retracement). I didn't close the trade because we have a nice downtrend on the 5, 15, 30 and 60 minutes charts and the Sroc. shows divergences.

The downtrend continues. The downtrend were tested about 3 times. The 4th time the trend broke and I close the position with 140 Pips profit!

And now? Will the downtrend continue?
I do not think so, I think we will see a bounce back. Long? I do not want to trade against this trend. A swing to 157.36 (23.6% retracement) is possible. In this area we see the upper downtrend line and the Stoc. is oversold, too. I think it is likely to see an up-swing to 157.36.
Next week we will see. Happy Trading!