With the choppy forex market we’ve seen all summer, I’ve decided to lock in a little bit of profit on my short AUD/JPY by trailing my stop. Here are my adjustments.
Original Trade Idea: Forex Trade Idea: AUD/JPY Short
The previous resistance area around 92.00 worked like a charm at drawing enough sellers to hold it. Now with risk aversion taking hold thanks to global growth fears, the market in AUD/JPY has been in a downslide as forex traders sell the Australia dollar because of its commodities connection and buying up the Japanese yen because of its “safe haven” status.
I think we’re probably in the first stages of this move into risk aversion, so it’s likely that the short-term move is to the downside. But with such a choppy market, I’m going to go ahead and make adjustments to lock in a small profit, create a risk-free trade, and set a hard take profit level on my AUD/JPY short position:
Adjust stop from 95.50 to 91.50. Take profit now at 89.50.
That’ll give me a small gain of 0.17% if my target is hit, but like I said, the market has been super choppy this summer. In those conditions, it makes sense to stay small and take profits quickly until we do get a story that gives us the trend we’re looking for. That’s it for now as it’s up to the market on this trade. And for my AUD/NZD short position, it’s already in profit and I’ll leave it alone for now as the Kiwi seems to be benefiting against the Aussie in this risk off environment. Stay tuned for updates and adjustments!