Trade Closed: 2008-10-06 17:41
What a day! Traders around the globe sold off carry trades as affects of the credit crisis continues to spread across the globe. EUR/JPY made a low around 135.00 before rallying higher on profit taking.
I adjusted my stop to 138.00 after the pair hit 136.00 during the morning US trading session. After finding buyers at 135.00 the pair managed to make it up to my adjusted stop at 138.00, where my remaining position was closed.
1st Half: +200 pips
2nd: Half: +750 pips
Total: +2.375% gain
So, after a bit of patience, I recovered from my initial loss for a net gain of +1.575%. Not too bad. I still look to short this pair until we see a change in sentiment like a possible rate cut from central banks. Stay tuned!
Stop adjustment: 2008-10-06 10:09
It looks like risk tolerance is in a free fall as carry trades get crushed today, and EUR/JPY trades below 140.00. My second profit target was hit, and as stated in my last update, I’m going to keep the trade open and trail my stop to lock in pips on my remaining positions.
Adjust stop from 145.50 to 142.00 to lock in 350 pips on remaining position.
I have no profit target on this remaining positions as I feel this thing is going to keep on dropping, but if the pair does hit 138.00, I will adjust my stop to 140.00 and trail every 200 pips from there. Stay tuned!
Trade Adjustment: 2008-10-05 21:35
Looks like a great start to my “stop and reverse” trade as EUR/JPY gapped down lower to start the week. My first profit target was hit and half my position was closed. I adjusted my stop on the remaining position to break even at 145.50.
I look to continue to hold this trade and ride it down as I feel we will continue to see more risk aversion as global economic weakness continues to be priced into the markets. If the second profit target is hit I plan to trail my stop and see how far this may go, especially as speculation remains that we may see rate cuts from the ECB. Stay tuned!
Stop and Reverse: 2008-10-02 10:04
It appears that support area did not hold this time around as EUR/JPY broke to the downside. As stated earlier, if the pair did break then I would stop and reverse my position.
Close position at market (145.50). -200 pips/ -0.8% loss.
Shorting EUR/JPY at market (145.50), stop at 147.50, pt1 at 143.50, pt2 at 140.00
Again I am using a widened stop, so I have gone to a much smaller position size. From here it doesn’t look like there are any recent support levels to be aware of, and with the ECB debating an interest rate cut, we could see the Euro continue to fall further in the short term. If we do see rate cuts in the Eurozone, EUR/JPY has much farther to fall. Stay tuned!
Trade Idea: 2008-09-30 14:11
Greetings! The Euro fell across the board today as the credit freeze in the US spreads overseas into financial centers across the globe. This is bringing the pair down to a previous support levels. Will we see buyers jump back in or will traders break the pair lower??
A very simple technical setup today on the four hour chart, and with stochastics indicating the pair may be oversold, we may see a swing back higher in the short term.
This pair has a pretty high daily range of movement, so I plan on using a wide stop, especially with the wild volatility going on in the markets at this time. Because I am using a wider stop, I’m definitely going to ratchet down my position size. Here’s what I’m gonna do:
Long EUR/JPY at 147.50, stop at 145.00, pt1 at 149.00, pt2 at 151.50
Remember to never risk more that 1% of a trading account on any single trade. Adjust position sizes accordingly.
If we do see a strong break of support, I’ll stop and reverse my trade…Stay tuned!