This is the USD/JPY daily chart.
During the October period last year, the 50 SMA went quite flat before resuming the downtrend. It is considered a new downtrend after October.
This chart looks like a potential good rubber band trade setup:
- We are still trend-trading; 50 SMA is angling down so we are in a downtrend and we are looking to short the market at cycle high, above the 50 SMA, thus a rubber band trade.
- There is a cluster of resistance at about 106 - 107. The price is currently at 103.66 as we speak.
- We have a possible cycle high; stockastic has created a hook down; no mini-divergence though.
- There is a complex A-B-C-D-E retrace pattern against the 50 SMA; a high probability scenario
- There is a 5"wave" count on the momentum; a high probability scenario setup also.
All looks perfect but the long-term (3 X Daily chart) is filtering the trade out. MOM (fast MACD) is pointing downwards. I am waiting for it to turn up. The long-term chart filtering or the fractal energy is preventing me from pulling the trigger.
I did not take a position with the USD/JPY pairing.
The long-term chart (3-day chart in my case) that filter out the trade. MOM (which is a fast MACD) is still angling up as indicated by the blue arrow:
Anyway, I would have been stopped out even if I enter into it:
I will wait for my next trade.