Hello.
Let's map out the trading scenarios for the week ahead.
I publish these "Trade Scenarios" posts on Sundays.
Then, on Saturdays, I publish a "Weekly Trade Report" reviewing how the market actually moved over the past week and where trading opportunities emerged based on those scenarios.
The report is available exclusively to newsletter subscribers, so if you're interested, please sign up for my newsletter.
(It's free.)
By reading these reports alongside the Trade Scenarios posts, you can get a practical look at the consistent process behind my trading—how I plan ahead, what I wait for, and how I execute.
My trading focuses on buying pullbacks and selling rallies on the 4h timeframe.
For more details on my strategy for buying pullbacks and selling rallies, please read my previous blog post on Dow Theory and multi-timeframe analysis.
Please note that this report does not provide buy or sell instructions or trading signals, nor does it guarantee future profits.
It is provided for educational purposes only.
Please trade at your own risk.
A scenario is not a prediction.
Rather than predicting what will happen, it's a plan built around "If this happens, I'll do that."
I don't try to predict the market, and that's not what these scenarios are intended to do, so please keep that in mind.
These posts are not intended to tell you when to buy or sell, nor do they provide trading signals.
They do not guarantee future profits and are provided solely for educational purposes, using my own thinking and the process that follows from it as examples.
I cannot take responsibility for any outcomes of your trades, so please trade at your own risk.
Let's start with USDJPY.
(The lines I've drawn on the charts represent price movements on different timeframes: orange for daily, red for 4h, blue for 1h, and green for 15m.)
USDJPY
Daily
Within the sell-the-rally area of the weekly downtrend (light blue), price on the daily chart has also broken below the most recent low and is now forming a lower high (orange).
My main focus on the 4h chart is also on short setups, but I need to prepare scenarios for buying as well, depending on how conditions develop.
4h
My primary plan is to look for a lower high on the 4h chart and consider selling if a suitable entry appears on a lower timeframe, targeting the decline from a daily sell-the-rally setup.
However, the most recent low is supported by the pink line, a level price has reacted to repeatedly in the past, so caution is needed.
I'll look for a short setup at as high a price as possible, around levels such as the red line, and assess whether the entry offers a favorable risk-reward ratio.
By the time that structure develops, however, it may also look as though a higher low is forming on the daily chart.
4h
In that case, a new daily trendline could be drawn through the higher lows.
Price action in this area could become choppy, so I would stay out if those conditions develop.
4h
There is also another level just below price that the market has been respecting (blue), so the clearest opportunity to sell may come after price breaks below this blue line and then forms a lower high with the line acting as resistance.
The broader context in USDJPY favors selling, but I need to account for all of these factors.
I'll therefore update the scenarios as price action develops once the week begins.
4h
On the long side, conditions remain unsuitable for buying.
Price is currently in a daily sell-the-rally area, with the daily MA acting as resistance just overhead.
There is also a strong resistance level (blue), along with an overhead trendline connecting the daily lower highs.
I would consider buying if price breaks above those levels and forms a higher low on the 4h chart while a higher low is also taking shape on the daily chart, as shown here.
Whether that happens during the coming week remains to be seen.
Now let's move on to EURUSD.
EURUSD
Daily
The daily chart is in a downtrend, but price is making progressively smaller extensions to new lows and showing signs of stabilizing.
At first glance, the chart favors selling, but several nearby levels warrant attention, so as with USDJPY, I need to consider both short and long scenarios carefully.
4h
On the 4h chart, price has broken above the most recent high and formed a higher low, invalidating the downtrend.
However, that does not mean I can buy straight away.
As we saw earlier, a lower high is forming within the daily downtrend, and there are sellers looking to sell the rally.
Price is being capped by the daily MA and supported by the 4h MA, so I will not trade in the area between them (the purple rectangle).
4h
For example, if price first breaks above the daily MA and then forms a higher low with the blue line acting as support, as shown here, I would consider buying.
I will also update the EURUSD scenarios as price action develops once the week begins.
That's all for now.
These are just examples of scenarios I've developed from the current charts.
In practice, once the week begins, I update my scenarios in real time as the price action develops.
Both USDJPY and EURUSD remain difficult to trade in the current environment.
But that difficulty comes from "trying to find a way to trade."
If you have defined what you need to do from the outset, there is nothing "difficult" about it.
Identifying where the risks lie and building scenarios around them is a skill in its own right—and a very important one.
Choosing to stay out after assessing those risks is also a vital part of a trader's job.
Even if that means going several weeks without a trading opportunity, it does not mean you haven't been doing your job.
It means you have been doing exactly what your job as a trader requires.
It is a mistake to try to avoid necessary losses, but unnecessary losses must be rigorously avoided.
In other words, keep following your rules.
The key is to let the chart dictate your actions and wait for as long as it takes, rather than trade to suit your own wishes.
The scenarios I share on this blog cover only USDJPY and EURUSD, but I will also include useful examples from other currency pairs in the Saturday trade reports when they arise.
The Saturday trade reports are available exclusively to newsletter subscribers, so if you're interested, please sign up for my newsletter.
You can read my previous blog posts here.
These trading scenarios are simply my own plans.
If you haven't yet established your own trading approach, I hope they can serve as a useful reference as you develop your strategy.
But if you already have a well-defined approach, please don't let my trading plans distract you from your own.
Stay committed to following your own rules.
Thank you for reading all the way to the end.