USD/JPY 5-Minute Forex Day Trading Strategy

Taking advantage of every day’s trading opportunities in the forex market is key to the survival of any day trader.

This is inherent in the fact that price patterns are known to re-occur and modeling day trading strategies around this preconception makes a lot of sense.

In a bid to understand such price actions and seize the numerous openings it brings along, the “USD/JPY 5-Minute Forex Day Trading Strategy” comes to the forefront.

It’s a trading strategy that introduces trade setups that makes it possible for any day trader to take profitable actions.

The technique and guidelines that are further described here will help you become profitable and you stand to beat the odds in your favor as you continue to engage the market using this strategy.

Chart Setup

MetaTrader4 Indicators: 3MAFan.ex4 (Colors Width Modified; #0=2, #1=2, #2=2), cci_.ex4 (Inputs Parameter Modified; InpMaPeriod=15)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute

Recommended Trading Sessions: London and New York

Currency Pairs: USD/JPY and any other major currency pair with low spread

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Download the USD/JPY 5-Minute Forex Day Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets put display:

  1. If the blue line of the 3MAFan.ex4Metatrader 4 forex indicator crosses its pale turquoise line in a bottom up manner as shown on Fig. 1.0, price is said to be dragged higher i.e. a trigger to go long on the USD/JPY pair.
  2. If the dark gray line and dodger blue histograms of the cci_.ex4Metatrader 4 forex indicator gets positioned above the zero center level (see Fig. 1.0), the overall market sentiment is said to be bullish, hence a trigger to go long on the designated currency pair.

Stop Loss for Buy Entry: Place stop loss 1-3 pips below short-term support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions takes precedence:

  1. If while a bullish signal is ongoing, the blue line of the 3MAFan.ex4indicator intersects its pale turquoise line, it is a trigger to exit or take profit at once.
  2. If the dark gray line of the cci_.ex4custom indicator breaks below the zero signal level during a bullish trend as illustrated on Fig. 1.0, price is said to be driven lower, hence an exit or take profit will suffice.

Sell Entry Rules

Enter a sell order if the following holds true:

  1. If the blue line of the 3MAFan.ex4Metatrader 4 forex indicator intersects its pale turquoise line in a top downward fashion as depicted on Fig. 1.1, price is said to be pushed lower i.e. a trigger to go short on the USD/JPY forex pair.
  2. If the dark gray line and deep pink histograms of the cci_.ex4Metatrader 4 forex indicator gets aligned below the zero reference level (refer to Fig. 1.1), the general market sentiment is said to be bearish, hence a trigger to go short on the currency pair of focus.

Stop Loss for Sell Entry: Place stop loss 1-3 pips above short-term resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a bearish trend is running, the blue line of the 3MAFan.ex4indicator intersects its pale turquoise line, an exit or take profit is said to be triggered.
  2. If the dark gray line of the cci_.ex4custom indicator surges above the zero signal level while a bearish trend is being monitored as exemplified on Fig. 1.1, price is said to be making a bullish reversal, hence an exit or take profit will do.

Sell Trade Example

Fig. 1.1

Free Download

Download the USD/JPY 5-Minute Forex Day Trading Strategy

About The Trading Indicators

The 3MAFan.ex4 is also known as the 3 Moving Average Fan indicator, which is built on the 5-, 21-, 55- period moving averages, offering traders the ability to determine trend on all timeframes.

The CCI_.ex4 custom indicator on the other hand, is an enhanced version of the traditional “Commodity channel Index.”

It serves the primary function of providing information on overbought/oversold market conditions.

The indicator can also be used to gauge divergences.

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