Trading USD/JPY.

USD/JPY is traded in amounts denominated by the base currency, the US Dollar. Standard lot sizes are 100,000 units of USD and mini lot sizes are 10,000 units.

Many brokers now offer customizable lot sizes to as low as 1 unit.

The change in the pair’s value is denominated by the counter currency, the Japanese yen.

Take note, for yen pairs, it is the 0.01 decimal place. So, a change in the value of USD/JPY from 95.00 to 95.01 is a move of 1 pip.

As with any currency pair, the change in value is denominated by the counter currency.

The profit and loss are calculated in Japanese yen and then converted to the currency your account is based in.

For one standard lot position size, each pip movement is worth 1,000 JPY.

For one mini lot position size, each pip movement is worth 100 JPY.

For example, if the current exchange rate of USD/JPY is 95.00 and you want to trade one standard lot, then one pip would equate to 10.52 USD.

Margin calculations are based on U.S. dollars.

For instance, with leverage of 100:1, 1,000 USD is what is needed to be set aside in your account to trade 100,000 USD/JPY.

USD/JPY Trading Tactics

USD/JPY tends to follow short to medium-term trends, which could last a few days.

If you are maintaining a swing trade, that is holding a trade for more than a day, you can try to enter on retracements.

Once price begins to consolidate, you can close your position, and wait for another trend to develop.

Take note that when price breaks out, it is likely that you will see a sustained move as traders jump back in on the trend.

Another tip to remember is that Japanese industrial companies normally set their orders at round figures, like 100.00 or 90.50.

You should keep track of whenever the price is near these figures, as they can serve as short-term support and resistance levels.

Finally, you should also keep an eye out for other yen pairs like EUR/JPY and GBP/JPY.

If you see that one of these crosses is about to break a key technical level, it could unleash a fury of JPY buying or selling that will have a massive effect across the board.

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