Understanding the Market Condition : Nikkei JPN225 Scalp Trade Example :
Well its my first time trading the Nikkei, ! but its on a demo account , but i'd like to share the chart and why i took it
First I look at the big picture - 4hr chart
During the Asian Session, the Nikkei jumped very aggressively and jumped and stayed above an important level of 15000.
- As price approaches a fib retrace level of 61.8, its an area i will look for clues if market will take a pause
- Drawing in fib extensions, i saw a 127.20 fib ext level just above 61.8
- When market got there, i zoomed in a 5 min chart and see it bounced from there, so i just took a short trade there
Why was i confident?
- The time of the market was nearing Asian Lunch time where Hong Kong share market takes an hour lunch break and sharemaket takes a pause. - So the market condition should slow down, and earlier traders who got in the long of the nikkei most likely close their positions. -
- So understanding the market conditions is very important.
- Market went in my way, then i closed my order once price has stalled and performing 5min pin candles, and also the time is when every trader gets back from lunch, and market could resume its bullish momentum.
End result
- I got 700points from initial 400 risk. so nearly a 1:2 risk reward.
- As you can see, market is starting to pick up its momentum and if i were to kept my short opened and be greedy, my profits became negative!
More advanced tip:
At the same time , you could have traded a yen pair, say USDJPY, and could have went short, with the same result - (Nikkei and Yen Correlated)
At the same time , you could have traded a yen pair, say USDJPY, and could have went short, with the same result - (Nikkei and Yen Correlated)
Happy Trading!
