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  • Writer's pictureVasily Trader

Profitable Trend-Following Strategy For Trading USDJPY, EURJPY, GBPJPY Currency Pairs

trading strategy for trading usdjpy, eurjpy, gbpjpy

Yen pairs are unstoppable.

USDJPY, GBPJPY, EURJPY are trading in a strong bullish trend for years.

In this article, I prepared for you the only breakout trading strategy you need to follow the trend on these pairs, and make nice money.

The strategy that I will teach you will be based on 5 important steps.

1. Trend Analysis on a Daily

Make sure that the market is bullish on a daily time frame.

The price should strictly set new higher highs and higher lows.

trend analysis with price action

Above, you can see a classic structure of a bullish trend.

Even though, YEN pairs are bullish for many years, occasionally it may start correctional movement or consolidation.

If so, you should patiently wait for a completion of a correction/consolidation and a clear resumption of a bullish trend.

usdjpy trend analysis

For example, even though USDJPY is trading in a global bullish trend, for quite a long period of time the market was trading in a minor bearish trend and correcting.

During such stages, we should strictly wait for a completion of such a correction.

2. Identify the Last Higher High on a Daily and Wait for Its Bullish Breakout

The last higher high in a bullish trend is a strong resistance.

Its bullish breakout is a significant sign of strength of the buyers and indicates a highly probable bullish trend continuation.

trend continuation signal

To confirm the violation, you should strictly wait for a daily candle close above that.

After a confirmed breakout, the broken structure with a high probability will turn into support.

Keep reading, because as an example of an application of that trading strategy, I will show you a real trade that I took with my students on EURJPY pair.

3. Wait for a Retest

Let the market retest the broken structure because it will provide the area from where we will look for a signal to buy.

forex trend strategy

4. Wait for a Confirmation on a 4h/1h Time Frames

After a test of a broken structure, analyze the intraday price action and look for any bullish price action pattern:

  • double bottom,

  • inverted head and shoulders pattern,

  • range,

  • ascending triangle,

  • bullish flag

If the pattern is a horizontal-neckline based like double bottom, inverted head and shoulders pattern, range, ascending triangle, wait for a bullish breakout of the neckline of the pattern, it will give you a signal to buy.

best confirmation patterns

If the pattern is a trend line based like a bullish flag, wait for a bullish breakout of that and a candle close above.

best bullish price action pattern

5. Trade

forex trend following trading strategy

Buy aggressively or on a retest after a neckline/trend line breakout.

I prefer a retest entry because it provides better reward to risk ratio.

Stop loss will lie below the lows of the pattern.

Take profit will be based on the closest psychological level - round number based level.

Trading Example

eurjpy trend analysis

EURJPY is trading in a strong bullish trend on a daily.

The price successfully violated the resistance based on the last higher high.

eurjpy breakout trading strategy

Retesting the broken structure, the price formed a horizontal range on an hourly time frame.

Our confirmed bullish signal is a breakout - an hourly candle close above the resistance of the range.

eurjpy trend continuation strategy

Long trade was opened on a retest of a broken neckline of the range.

Stop loss was below the lows.

Take profit was the closest psychological level.

eurjpy profitable trade

The market rapidly reached the target and good profit was made.

This strategy has a phenomenal accuracy on YEN pairs.

Since covid we made a lot of money with my students, following that strategy.

Try it by your own and follow a bullish rally on USDJPY, EURJPY, GBPJPY easily.


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