USD/JPY tends to react at the xxx.00 and xxx.50 levels. But you only enter on a clear confirmation candle.
The core setup
USD/JPY often reacts at round numbers like xxx.00 or xxx.50. Half the market is watching those levels, so you regularly get a bounce or a clean break through them.
How to enter
A touch of the round number is not an entry. You want a pin bar, an engulfing, an inside bar, or another clear confirmation candle on M1-M5. If the M15 trend backs your direction, the trade is cleaner.
Managing the trade
The stop usually sits just past the round number, around 5-6 pips, for a total stop of roughly 8-12 pips. Target the next round number or the nearest swing, typically 10-15 pips.
When to skip it
Skip it if price slams into the round number with no candle pausing there. Skip it around BOJ or major USD news, when USD/JPY can run in a straight line with no pullback.
The setup isn't complicated, but it lives or dies on confirmation. Newer traders should drill it on chart replay to kill the habit of catching a falling knife.
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Publishing note: This content is not investment advice. Always test on demo and take responsibility for your own risk management.