That 400-pip AUDJPY drop and why trading Wave 2 peaks tested my patience

[Marcus Vance 29]

Saw that latest breakdown on AUDJPY dumping 400 pips after tapping out around 112.60, and it brought back some heavy memories. Elliott Wave guys nailed that corrective three-wave structure, but ngl, actually trading a Wave 2 top in real time on a volatile pair like this is pure psychological warfare. Back in the day, I lost count of how many times I got wicked out trying to aggressively front-run what I thought was the end of a corrective rally, only to watch the market run my stops and then dump exactly where I thought it would.

The biggest lesson I took from getting burned on yen crosses is never to short just because a wave looks complete. Wave 2s love to retrace deep, chew people up, and create that massive FOMO trap where retail suddenly thinks we are headed straight to fresh highs. If you try to scalp the exact peak at 112.61 with a razor-thin stop, JPY spreads and random momentum spikes will hunt you down almost every single time. What saved my account over the years was stepping back, waiting for a clear break of the lower-timeframe structure, and sizing way down so I could give the trade enough breathing room without sweating every tick.

Once the flush started, the real battle was just holding through the chop. When a pair moves 400 pips, taking partials around prior liquidity levels keeps your head clear so you do not panic-close the entire position on the first green candle.

Did anyone here actually manage to hold this short all the way down, or did you get shaken out early?

 

[Liam Walker]

Honestly, if you're still obsessing over Elliott Wave counts in a market this volatile, you're just begging to get stopped out. Everyone in this thread is talking about the "logical" drop, but the reality is the market doesn't care about your W2 patience. While you guys are sitting there waiting for the perfect structure to complete, I’m already looking at the long side because the crowd is getting way too bearish. Markets love nothing more than proving the "technical" crowd wrong.

 

[JulianCraft]

@Liam Walker Honestly, man, I think you're walking into a buzzsaw trying to catch the long side here. Look at the macro environment—the Fed is clearly not backing down on rates despite what the hopium crowd wants to believe, and this liquidity drain is going to keep hammering carry trades like the AUDJPY. You can call it technical analysis if you want, but this isn't just about charts, it's about the fact that the cost of capital is staying high and the global economy is looking like a house of cards. Trying to fade a 400-pip move based on "crowd sentiment" when the fundamentals are screaming recession is a quick way to blow an account. Enjoy the bounce if you get one, but I'm staying short and keeping my stops tight.

 

[LeoSterling]

@Liam Walker absolute madman trying to catch a falling knife in this environment. AUDJPY is literally a liquidity vacuum right now, you're just providing exit liquidity for the big boys. @JulianCraft is right, fundamentals are eating your technicals for breakfast. Stop trying to be a hero and just follow the flow before you get absolutely rekt.

 

[EthanCole]

While you guys are sitting there waiting for the perfect structure to complete, I’m already looking at the long side because the crowd is getting way too bearish.

Man, trying to stand in front of that freight train just to fade the crowd sounds exhausting.

I'm with @JulianCraft and @LeoSterling on this one—why force it? Sometimes the best trade on the 4H and Daily charts is just sitting on your hands and watching the carnage from the sidelines. Let the dust settle before you try to be a hero.

 

[Owen Carter 27]

While you guys are sitting there waiting for the perfect structure to complete, I’m already looking at the long side because the crowd is getting way too bearish.

Mate, you love living dangerously, don't you? Trying to catch a falling knife on a pair like AUDJPY just because you think the crowd is wrong is a quick way to zero out.

Look, everyone in here is arguing about Elliott waves and macro fundamentals, but you're all completely ignoring the actual charts. Price smashed right through daily support like it wasn't even there. No magic wave count or Fed speech matters when a big S/R level breaks on strong momentum candles. I'm just sitting on my hands waiting for a proper retest and a clean rejection candle at that broken level before doing anything.

 

[Zakami Ng]

@Owen Carter 27 I’m with you on sitting on hands, but even a retest needs more than just a candle. I’ve been staring at the daily RSI on AJ and it’s finally starting to curl, but we’re still not in oversold territory yet. I’m waiting for a clean bullish divergence to lock in before I even think about touching the long side. If the MACD lines don't cross up on the 4H, I'm just gonna keep watching the carnage. Trying to guess the bottom here while the momentum is this heavy is just begging for a margin call.