In June 2016 we set out with the goal of designing and creating a commercial expert advisor which would be profitable, robust with longevity. During the early development stage, we identified the GBP/JPY as our forex pair of interest. Why I hear you ask? Because no other Forex pair moves quite like it... highly volatile with no liquidity issues the pair is perfect for various trading strategies. Once the pair was identified we set to work, hundreds of hours of price analysis ensued. Identifying unique price movements, optimising entry and exit levels, technical indicators implemented... the result? An Expert Advisor we're proud of.
About GBP/JPY Strategy
Nicknamed "The Dragon", the GBP/JPY has a reputation within the Forex world of wreaking havoc, burning those who trade it. Dragon Forex, instead of fearing the Dragon, have tamed it, and are now confident Dragon riders. We have embraced the strong follow through moves that this pair creates and have distilled the hundreds of hours of analysis into a trend following Expert Advisor. The Expert Advisor operates on two time-frames, hourly (H1) and 4-hourly (H4) on MetaTrader 4. The major advantage of running on two time-frames is for diversification purposes and results will show why we've found this approach to be optimal.
The British Pound (GBP) against the Japanese Yen (JPY) pair denotes how many Yen are needed to purchase one Pound Sterling. GBP/JPY is a pair widely followed by scalpers and forex day traders. Day traders love the wide and volatile swings the pair tends to make on a day by day basis. There is enough liquidity in the pair for scalpers to quickly get into and out of trades. Additionally, forex technical analysis, such as support and resistance trading, tends to work well due to the amount of volume and forex transactions that takes place in the GBP/JPY.
This volume and liquidity carves technical patterns that short-term traders closely follow. GBP/JPY is also a widely followed market for the medium-term and longer-term traders. Since the JPY is historically a low yielding currency, it is often used as a funding currency of a trade. Additionally, with the United Kingdom being one of the larger economies in Europe, the Pound-Yen pair carry trade can be viewed as a proxy for worldwide economic health.
On the other hand, when the markets experience severe risk aversion, this pair has been a proxy for market 'risk-off' moves as the carry trade gets reversed. As a result, GBP/JPY has seen strong trends develop that can be in excess of thousands of pips.
Dragon Forex uses a price action based system where a favourable risk to reward ratio is set by default at 1:1.22 for hourly strategy and 1:2.7 for 4-hourly strategy.
Dragon Forex Expert takes advantage of this highly volatile pair - GBP/JPY, detecting early trend on both hourly and 4-hourly bars allowing move to instinctively follow through.
Dragon Forex Expert demonstrates robust performance in backtesting over a 6 year period without setting alterations, clearly indicating a system that performs in all market conditions.