A currency can move in one direction in several pairs and present multiple profit scenarios

Now, today is a very good example how traders perceived the opening strength of the Japanese Yen and then sold it off only for it to rise again and fall off as the European session overlapped with the Asian session. As usual the session started in Tokyo with the usual buzz after a few hours of inactivity. Then the wave of emotions built through the day until the point of overlap with Europe.

Since a currency pair is a comparison between the strengths of two different economies you will notice that the JPY was perceived as weakening against several different economies because of fundamental weakness in the Japanese economy and trader anxiety over Japanese bond yields. So as a group the JPY wavered against the four currencies illustrated below - CHF, EUR. GBP, USD.

The lesson to be learn is that once you recognize the shape of the candles and see them time and time again in similar formations then you may choose the relative strength of your position ie. you could enter a single position or escalate to several positions to take advantage of a forthcoming three 15 minute candle bar direction over the next 45 minutes.

For the shorts the charts today on JPY signaled two short moves. As a rule of thumb I make my move on the second candle after the short signal being a Doji or a bearish engulfing candle pattern that engulfs the two previous green candles before the large red signal.

Please study as follows and recognize the two trading windows for 20-30 pips each. The strength of the signal will determine how many positions you open.

Pattern recognition is fundamental to taking quick trades to seize 20-30 pips over a 1 hour intra-day trading horizon.

Happy trading!