The CADJPY pair has bounced higher and switched to a bullish structure against the April 12 2024 low. Looking at the 1 hour chart below, we could expect for CADJPY to dip lower below the equilibrium level and tap into either the 4 hour IFVG/Inversion Fair Value Gap (Blue) or the 4 hour FVG/Fair Value Gap (Purple) or the 4 hour Demand Zone (Green) where price can get a reaction bounce higher. The pair can get a reaction from any of these zones so we advise switching to a smaller time frame (5M or 15M). On the smaller time frame wait to get confirmation that the pair is ready to reverse higher by watching to see a MSS/Market Structure Shift pattern form. Only take an entry when you see smaller time frame MSS pattern form inside any of the 4 hour zones (Blue, Purple, Green). Switching down to the smaller time frame will also give the trade a even better risk to reward ratio with tighter stops. If price continues below the invalidation level without providing an entry pattern then we will remain on the sidelines and continue to search for the next trading opportunity.
CADJPY 1 Hour Chart April 15 2024
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on social media for updates and questions> @AidanFX
A trader should always have multiple strategies all lined up before entering a trade. Never trade off one simple strategy. When multiple strategies all line up it allows a trader to see a clearer trade setup.
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