The Kijun-sen (Base Line) is the dynamic midpoint of the highest high and lowest low over the last 26 periods — functionally equivalent to a dynamic 50% Fibonacci retracement of the current trend. Price in a strong trend always wants to return to the Kijun. When price is far from the Kijun, the trend is overextended. When it reverts to the Kijun, the highest probability entry in that trend direction appears.
Kijun = dynamic 50% Fibonacci retracement of the current trend; the mean that price always reverts to
In uptrends: every significant Higher Low occurs AT or near the Kijun; set bids there for long entries
In downtrends: every significant Lower High occurs AT or near the Kijun; set asks there for short entries
The longer price goes without touching the Kijun, the more overextended the trend and the stronger the eventual mean reversion
CRITICAL: Kijun bounces ONLY work in trending markets — completely ineffective in ranging or flat markets
Hit rate documented at approximately 72% on this setup from the instructor's journal — high but not 100%
Lesson
Trading Kijun Bounces — Entry, Stop, and Target
The Kijun bounce is mechanically simple: in an uptrend, identify the current Kijun price, set limit bids at or slightly below it, and wait for price to revert. When it does, the Kijun acts as support. Stop goes just below the recent swing low with buffer. Target is the prior resistance or next key level. The setup typically delivers 2+ R in strong trends.
Entry: set limit bids AT or slightly below the Kijun level; do not chase with market orders
Stop: below the most recent swing low with a buffer to survive wicks; the Kijun should hold as support
Target: prior resistance (for longs); prior support (for shorts); trailing stop at each swing high in a strong uptrend
Example: impulse up from $7,380 to $10,584; Kijun = ~$8,940 (dynamic 50% of the range); bids set at $8,940 → 2+ R setup
Pattern recognition: in a strong uptrend, each major Higher Low should sit at or very close to the Kijun
Warning sign: if price breaks through the Kijun without reversing and closes below it in an uptrend = trend weakening; stop out
Patience required: in strong trends the reversion to the Kijun can take many candles; set the limit and walk away
Check Yourself
Price is in a clear strong uptrend, making consistent Higher Highs and Higher Lows. After a large impulse move up, price pulls back toward the Kijun-sen level. According to the Kijun bounce strategy, what is the highest probability trade setup?
Long — set limit bids at or near the Kijun level; in a strong uptrend the Kijun acts as dynamic 50% Fibonacci support and each major Higher Low occurs there; stop below the most recent swing low with buffer; target prior resistance for 2+ R
Short — price pulling back to the Kijun means the uptrend is weakening; the Kijun is a mean reversion target which once reached signals the trend has exhausted and a reversal is more likely than continuation
No trade — Kijun bounces are only valid in downtrends as rejection setups; in uptrends the Kijun acts as resistance and price typically fails to bounce from it
Answer it (with a live chart) in the interactive lesson.
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