FX.co ★ USD/JPY: Simple Trading Tips for Beginner Traders on March 4. Review of Yesterday's Forex Trades

Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 150.83 price level occurred when the MACD indicator had already moved downward from the zero mark, limiting the pair's downward potential. For this reason, I chose not to sell the dollar and missed the subsequent downward movement.

Today, Japan's unemployment rate data was released, showing an increase to 2.5%. However, the USD/JPY pair completely ignored this figure. Additionally, the declines in the monetary base and capital expenditure did not significantly impact the yen.

Contrary to expectations, the yen did not weaken after the release of these reports. Investors focus on other factors that have a greater impact on the currency pair. In particular, close attention is being paid to the differences in monetary policy between the Bank of Japan and its potential future steps regarding interest rate hikes. The central bank governor is scheduled to speak in the second half of the day, which may provide further insights. Although rising unemployment in Japan is a negative economic factor, it has taken a backseat in this context. More significant factors remain macroeconomic conditions and global market sentiment, which drive the currency pair's movement.

For intraday strategy, I will focus more on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today if the price reaches the entry point around 149.69 (green line on the chart), targeting a rise to 150.64 (thicker green line on the chart). Around 150.64, I intend to exit long positions and open short trades in the opposite direction, expecting a 30-35 pip downward movement from this level. It is best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy USD/JPY today if the price tests 149.12 twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 149.69 and 150.64.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after the 149.12 level is updated (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 148.17, where I plan to exit short positions and immediately open long trades in the opposite direction, expecting a 20-25 pip upward movement from this level. Selling pressure could return to the pair at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I also plan to sell USD/JPY today if the price tests 149.69 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected toward the opposite levels of 149.12 and 148.17.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.