We were just points away from our bids being filled on the USD/JPY gap-fill long play last night. It seems tragic to miss 100 points trades like this by only a few points, but we are level traders, and level traders make the market to come to us, and not us to the market. By dictating to the market the exact price we are willing to enter a trade we minimize our stop size and become more planned in our analysis and trading. The same will go for today's trade idea.

Price moved sharply lower from the 118.40 high on November 17 in a 5-wave impulse move lower (not shown) to last night's 115.35 gap low area. The market open lower last night and then shorts and new longs came in and began to lightly buy the market. The move fed on itself and squeezed higher in a single wave push to fill the gap at 115.80, and then unfolded in a full 5-wave sequence to the 116.40 high. Considering we saw 5 waves lower from 10 days ago, we can call last night's minor 5 waves up corrective wave A. Corrective wave B is expected to complete after 3 waves lower before another 5 higher unfold completing the A-B-C- correction.

The end of the B wave correction will likely end at the 1.0 projection of the distance of wave A projected down from B, which equals 115.82. 61.8% retracement of last night's up move comes in at 115.76. So we a solid buy zone of 115.75 that should spark another 5 waves up to finish our C wave.

Enough, what's the trade plan you say! Ok, well I'm bidding for 115.85 and 115.75 with stops under 115.55. Because we are trading this market against the trend, I will try to book profits into momentum a little more quickly than we would while trend trading.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.