USDJPY targets, invalidation levels and how to use the Muffett 1 hour time cycle to frame trades:

‘To avoid pain, they avoid pleasure. To avoid death, they avoid life’ - Osho

This is the monthly chart of USDJPY. Using algorithmic concepts we are going to frame potential moves in USDJPY in the coming months. We accept when we are wrong. But our current bias is bearish and we are of the view that the price will go to 152. Many reasons are behind this premise. One we have clear government intervention and also we are seing evidence of carry trade unwind in the forex market. Watch the price action in AUDJPY and GBPJPY, the main pairs that are used for carry trades. Finally the market does not go up in one direction forever. We will have retracements. In technical analysis terms, it is widely accepted that when price retraces below teh 50% level, then if you are bullish then we can look for longs.

so our 50% level is 152.66. However at Muffett investments, we give importance to liquidity. this will be clear on the daily chart. There a algorithmic signposts which suggests that price will take out the lows around 152 on the daily chart. What happens here will determine the ultimate direction of USDJPY. so we will be watching this level (if this prediction comes to pass) closely to determine the next move.

Here is the daily chart. We have marked the lows of Q1 and Q2 lows which are liquidity targets. The q1 low coincides with the 4 standard deviation projection and this coincides with the 50% level on the monthly chart and also coincides with the liqudity levels. Combined this with the carry trade unwind we are seeing in AUDJPY and GBPJPY, there is a good chance that price will take out the Q1 low.

Again this does not mean that price will continue lower. the price can bounce around stopping out shorts as the market makers do not want retail traders to participate in this. So we have to choose our places to take trades which give us an edge. That edge is 2 things. We look for AMD patternes on lower time frames, and then we look for liquidity purges in the opposite side liqudity ( Because we are bearish, we enter shorts after buyside liquidity is taken).

Using Muffett’s 1 hour time cycle to frame trades:

The Muffett time cycle indicator is free on tradingview. It is Muffett’s contribution to the trading community. IT boxes the Asian range and then boxes each hour of the london and New york session. The aim is to identify liquidity above and below each hourly range. We look for purges of sessional liqudiity ( asian highs and lows and London highs and lows). These become more likely when we see consolidation. This is where all the positions are being built. we have marked the unpurged asian low and there is an unpurged asian low from last friday. Both are liquidity targets.

What do we look for? we are looking to see which side is going to be taken first and then we fade the move. As the higher time frame is bearishly positioned, we want the asian high to be purged fisrt without liqudity being taken. The green line is the Q2 low. So if we have purge of asian low without price going into the support zone marked, then we look for shorts in the lower timeframes with defined risk reward ratio. When we do this in lower timeframes, the stoplosses can be kept low and we get to have 1:3 to 1;4 risk reward trades. All we need is a few trades in a month to get positive retuns monthly. We will be showcasing this in our multistrategy portfolio.

This is the third attempt to demonstrate the multistrategy. We have looked at our previous failures. We have implemented an AI agent though which the trades will be routed through a demo account in IBKR. It will limit forex and index trades to 2 trades a day and will lock trading if the portfolio loses 2%. This will control risk of the leveraged Forex and index trades. We have created a new mulitstrategy portfolio, which you can follow everyday updated around 9 pm. This portfolio has been started today.

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May the Peace of the Lord be with you all.