Trade Adjustment: 2013-11-29 3:30 ET
My trade has been triggered and the market has nicely rolled higher. After finally getting a decent pullback on the move, I’ve decided to pump up my position a little bit but tighten up before the week’s close.
I’ve been trailing my stop this entire week, and originally, I wanted to close out this trade to avoid weekend risk and then re-assess on Monday. But I thought the pullback today might be an opportunity to get a little bit bigger in this trade to maximize my profit.
Since there have been little or no retracements since the rally started around 159.00, I think 167.00 could possibly draw in more buyers quickly, as well as keep me safe from triggering my tightly adjusted stop. Here’s what I did:
Added another third position at 167.00. Move full position stop to 166.50; Locked in +250 pips on first position.
So, if the market continues lower today to hit 166.50, I’ll have a net gain of 200 pips (+250 pips 1st position; -50 pips 2nd position), which is not a bad way to close out the week. If it doesn’t and the market continues on higher to then that’s awesome as well. I’ve got 169.00 in sight as the next major resistance level, and then 180.00 after that. But for now, I’m glad to lock in profits and make it a stress free trade.
I don’t foresee another update on this trade in to the close for the week, so if I don’t see ya again, have a great weekend!
Trade Idea: 2013-11-26 1:15
It’s a new week and maybe I’ve got another shot at jumping in the Sterling rally against the Japanese Yen. Is the pullback we’re seeing another signal for the bulls?
My bullish Sterling bias hasn’t changed since my last trade idea, as well as my bearish yen bias, and this time I’m not going to let a shallow retracement keep me from playing guppy to the upside. But I’m being conservative about it by scaling in to a long position; gonna nibble a bit at current levels, with another nibble around the 50% Fib retracement level and bottom WATR area.
Now, I don’t have a Japanese monetary policy statement this week to kick off a 500 pip rally, but 200 pips is not out of the realm of possibility given guppy’s normal volatility range behavior. My stop will be pretty tight at 100 pips below my second entry, but I think the trend will keep me safe unless the story changes. Here’s what I’m doing:
Long 1/3 position of GBP/JPY at 164.00, stop at 162.00, profit target at 166.00
Long 1/3 position of GBP/JPY at 163.00, stop at 162.00, profit target at 166.00
With this forex trade structure, my average entry is 163.50, and if both positions are triggered, it’s a potential 2.5:1 return-on-risk with only 0.66% risk. Of course, I could be totally wrong with this trade, but if not and the market moves higher in my favor I may add another third of a full position to my trade.
This week has a few potential catalysts to spark volatility, mainly for the British Pound (Inflation report & quarterly GDP revision). I think both has the potential to be bullish for Sterling given the recent positive data for jobs and PMI’s. If that’s the scenario, should be a great week…and if not…well that’s why I always use a stop! Limit risk always! Stay tuned!