Cross-Eyeing: AUD/JPY Triangle Break – Trade Closed

Trade Triggered: 2011-06-01 01:25

AUD/JPY 4-hour chart

Well that sucked! After making a clean break of the triangle, AUD/JPY came back down to reverse all of its gains within just a few hours. I guess it was only a matter of time before the disappointing current account and private sector net borrowing data that Australia rolled out yesterday eventually caught up with the Aussie.

But the worst part about AUD/JPY is that it popped right back up! Today’s GDP data had the pair scrambling back up to retest yesterday’s highs!

Dang… It’s almost as though it only fell just to stop me out! As you can see, the pair barely dipped low enough to hit my stop loss at 86.50. !@#$%^&*! Quite frustrating, I have to admit, as that’s the second time in recent memory that AUD/JPY dealt my account a blow.

So here’s what happened:

P/L: -60 pips/ -1.0%.

Not the best way to end the month, but I suppose there were really things I could’ve improved on with this trade. For instance, my stop wasn’t really ideally placed anymore. It would’ve been better (read safer) to place it a safe distance below the triangle’s falling resistance line.

Actually, when I had first spotted the setup, I DID place my stop well below the falling resistance. Only problem was that it took a while for the breakout to happen, so by the time it did break out, the trend line had shifted below my stop. My mistake was that I failed to make the proper adjustments. Lesson learned!

On another note, I entered I also long EUR/JPY trade yesterday… but I’ll let y’all know about that in an update tomorrow! I’ll keep you guys posted via Facebook and Twitter in the meantime!

Peace out for now, homies!

Trade Triggered: 2011-05-31 03:16

AUD/JPY 4-hour chart

We finally got a break on AUD/JPY this morning, thanks to yen weakness across the board. Once news hit everyone’s iPads that Moody’s was putting Japan on downgrade watch, everyone and his grandmother started shorting the yen! This was the trigger needed to push AUD/JPY out of that symmetrical triangle I pointed out last week.

We also got news from the euro zone that European nations may just give Greece a couple more euros to help it get out of their rut. I think that this news could help spark some risk taking in the markets, which should help out my trade a bit.

Looking ahead, I’ve gotta keep my eye on tomorrow’s Australian GDP report and Thursday’s retail sales report. Expectations are that the Australian economy contracted by 0.3% last quarter, thanks to the natural disasters that hit country earlier this year. Now, I don’t know if the markets have priced this in yet, so I’m gonna stay on my toes and adjust quickly. I might just take profits later today if I think the move is exhausted.

Trade Idea: 2011-05-26 03:35

It’s been a while since I last played AUD/JPY! Let’s see if it’ll treat me right this time!

So far this week, risk aversion hasn’t been as harsh as it was in the last couple of weeks. We’ve actually been seeing nice, decent-sized rallies across the boards, and even commodities are starting to bounce back.

Last time I checked, gold was back above 1,500.00 and on its way to retest 1,550.00. Knowing what we know about the Aussie and its relationship with gold, I think we could see further gains in AUD/JPY in the coming days.

Earlier today, Aussie bulls got riled up again after Australia’s private capital expenditures showed a 3.4% rise (versus 2.8% forecast) in Q1 2010. I believe this is the sort of thing that could lead to an extended bullish move on AUD/JPY.

So fundies are a go, how about technicals?

AUD/JPY 4-hour chart

As my brother from another mother, Big Pippin, pointed out in today’s Daily Chart Art, AUD/JPY has been trading in a symmetrical triangle. What I plan to do is catch it if it breaks upwards. As you can see, it might not be long until that happens!

I set a buy stop just above the falling resistance at 87.10. With an initial stop of 60 pips, I’m hoping to bag a nice reward-to-risk ratio by setting my profit targets at 88.00 and 89.00. If all goes according to plan, I’mma walk away with an average of 140 pips, which gives me a solid 2.3:1 RR.

Buy AUD/JPY at 87.10, stop loss at 86.50, profit target 1 at 88.00, profit target 2 at 89.00.

If y’all have any comments or suggestions as to how I should play this, don’t be shy to hit me up with some comments! Peace!

  • Terenacious

    However my personal problem with going long is that the 4 hour is sitting under the 200MA which has been a previous support/resistance otherwise i like !

    • cyclopip

      The 200SMA? I understand why you’re hesitating… but hey, you gotta risk it to get the biscuit!

      You can also consider straddling the triangle. That way, no matter which way it breaks (and it will EVENTUALLY), you’ll catch the move! I may just set orders for a downside break if the falling resistance holds and price turns back down.

      • Terenacious

        yup sorry 200SMA, I agree u gotta take the risk to get that reward ūüôā i also did bear in mind u do not employ the 200SMA which is at the end of the day a resistance/support just like the rest of the swing highs/lows, and if anything a break up through ur specified levels may be accelerated by a furher break through the 200SMA. Cool thanks for the feedback keeps me thinking straight ūüôā u guys r just an¬†inexhaustible¬†amount on knowledge! Thanks

        • cyclopip

          Good luck with you trades Terenacious! Looks like the triangle is still holding – this only means that once it breaks, the move is gonna be stronger! Ha!

          • Terenacious

            Thanks Cyclo! i be going long this pair let us know if u set for a break for the bottom(incase :)) … nice to see where i might be making errors thanks!¬†

  • Steve44MCaUSAFX

    Looks like it turned out to be a Fakeout.  Had trigger set at 87.218.
    Sure as could be.  Just hit it, then turned around.
    (Sometimes you could swear it out to get ya… lol)
    Firgured 87.21 was high enough to ensure it wasn’t a fakeout.
    Hit my SL at 86.918 and lost 37 bucks.
    Was  Asleep so I had no way to stop the bleeding early !  
    So much for sticking to your trading plan…. Like the books say…¬†

  • MedicalChew

    I was in this trade too, but I stopped the hurt at half loss

  • Jess Laventall

    I thought it was a sound trade idea. Would have been painful for me too, but I set my SL below the trading range of the previous day (5/30) at around 86.30. My sense was that if the trade was really going to tank, it would have to at least breach that level.

    Though I’m just trading on a demo account, I’m sure it would’ve been a real nail biter watching the AUD/JPY trade all over the place with real funds in play. This one I stuck with it until it rose to 87.22.¬†
    Lessons learned: Stick with it, don’t expect such clean breakouts, set wide enough stop levels and watch the news closely (preferably¬†before you trade)