Trade Closed: 2013-02-21 22:20
Looks like I chose the wrong time to sell the yen!
Thanks to Prime Minister Abe’s announcement to postpone his decision with regards to his nomination for the top post at the Bank of Japan, the yen got a nice boost across the charts yesterday. The announcement was somewhat surprising, as it hints that Abe probably hasn’t done enough wheelin’ and dealin’ to put someone in place who will follow through with the government’s plans to stimulate the economy via aggressive monetary policy measures.
In any case, this helped the yen pull off some great wins versus its major counterparts.
Unfortunately, the Aussie was part of that group, and AUD/JPY took a much bigger dip than I anticipated! The pair dropped all the way down to the 95.00 psychological level, clearing my stop and taking out my trade!
Stopped out at 95.40: -60 pips / -0.50%
Tough luck on this trade, but overall, I still think it was a decent setup. Now that the RBA seems less dovish about the state of the economy, we may eventually see AUD/JPY soar to new highs. Should another long setup emerge, I won’t hesitate to pull the trigger on it!
Hope you fellas had better luck trading this week than I did. See y’all on the other side of the weekend!
Trade Idea: 2013-02-20 02:54
How’s it hangin’, fellow cross fanatics?
I hope the markets have been treating you well. As for me, I’ve been chilling on the sidelines, waiting for a setup to materialize. I was starting to lose patience, but then I spotted this setup. Here’s what I’m looking to trade this week:
From a technical standpoint, going long at around 96.00 makes a lot of sense because:
- It’s a hard, round number that’s no stranger to acting as support.
- It intersects almost perfectly with the pair’s rising trend line.
Basically, I want to buy on a pullback because I feel the uptrend will stay intact. Why? For one, it looks as though an ascending channel is forming, and as we learned from the School of Pipsology, such formations usually precede strong bullish moves.
But more importantly, I think the markets will keep yen pairs propped up because I feel that the outlook for BOJ monetary policy remains very dovish (and therefore, bearish for the yen).
Here’s how I set up my trade:
Buy at 96.00, stop loss at 95.40, profit target at 97.00.
All in all, this makes for a cool potential 1.67:1 return on risk. Since I’m risking 0.5%, this could boost my account by 0.83% if all goes well.
What do you guys think? Is this something you’d trade?