GBP/JPY is very popular currency pair among traders. What is the best GBP JPY trading strategy? I try to answer that question in this guide.

Why GBP/JPY is popular

It is popular because you can find here strong trends. Not only on longer time frames but also on lower ones. If you are a trend trader or swing trader, this is something you look for. Make sure that your forex broker has good spreads for that pair – this will lower costs of trading.

Why GBP/JPY has a bad opinion

It may look that this pair is easy to trade, but it is not. There are moments when you can see strong rapid moves which will stop you out in a matter of seconds.

There is another problem. Yes, trends can be strong here, same with the daily range. Because of that, you may need to set a wider stop loss. That means that your possible loss can be quite large.

Suggestions – how to trade GBP/JPY

You should trade here with smaller positions. That way you will be able to set wider stop losses.

Always check news and economic data – for example here. Remember, it is pound so everything is possible here because of Brexit.

GBP/JPY trading strategies

Best time frame

The time frame depends on your trading style.

I don’t like a 1m chart – moves are too fast here for me.

I like to trade any time frame between 5m and 1h. Most times it will be 15m TF. Why? Because you can find here good trending moves and react quickly if something is changing.

Also trading on higher time frames like 4h or daily can work. Trends can be really strong here. Problem is that when you enter a position, your stop loss must be wider.

If you haven’t trade this pair before, try 1h or 4h time frames. Here you will catch some good, strong trends.

Fibonacci

As you know, I am a Fibonacci trader. My perfect market is one with trend and many swings. And you can find all of that here:

gbpjpy-1h-fibonacci

On the example, you can see nice ABCD pattern and almost 200 pips move. All on 1h chart. There are many opportunities like this when you trade GBP/JPY.

Trailing stop loss

If you want to catch trends, then trailing stop loss strategy can be a right choice here:

gbpjpy-1h-trailing-stop

Trends on GBP/JPY can last for a while, thanks to that your profit can be big.

Pivot Points

Do you want to catch swing moves? Try Pivot Points and GBPJPY:

gbpjpy-1h-pivot-points

Above you can see daily pivot points in action. That is the same story with weekly pivot points if you prefer to catch longer moves:

gbpjpy-1h-pivot-points-weekly

Ichimoku

Ichimoku Kinko Hyo is a japanese technique. It works great on trending pairs and especially on yen pairs. If you are a trend trader, try Ichimoku with GBPJPY:

gbpjpy-ichimoku

Summary

I like this pair. It is not that easy to trade as it may look at first. The crucial thing is a proper money management.

Strong trend moves give you many opportunities to make money with swing or trend trading strategies.