Long GBP/JPY Trade Review

It looks like my run is done in GBP/JPY as my tightened stops were triggered to take me completely out of my trade during the Tuesday trading session.  I’m out and now it’s time to review.

Original trade idea: Another Short at GBP/JPY Uptrend? 

GBP/JPY 1 hour forex chart

GBP/JPY 1 hour forex chart

Japanese Yen traders went into sell mode after the Bank of Japan monetary policy meeting last week.  There was no new action taken, which was a cue for traders to press them sell buttons.  On the other side of the currency pair, Sterling has been ripping higher against the majors on the positive data that continues to come out from the UK.  While no rate hikes are expected from the BOE at this time, the outlook still looks rosy in the United Kingdom.  After a massive rally that really started three weeks ago around 158.00 to 159.00, it looks like traders are taking a quick breather.

With the Bank of England monetary policy decision and BOJ Governor Kuroda speaking at the end of this week, I tightened up my adjustments to reduce risk but leave a little bit of room in case we weren’t done seeing shallow retracements.

The one hour chart of lays out the adjustments taken, minus the trailing stops and additional orders that I shared throughout the week on my Twitter and Facebook pages. Again, it was a strong move higher–the type we probably don’t see more than 2 or 3 times a year–and what finally took me out was a bit of risk aversion flows and maybe a bit of exhaustion in the Yen selloff.  I was stopped out of all open positions at 167.50.

1st third position: +460 pips

2nd third position: +50 pips

3rd third position: -50 pips

Total: +460 pips/+0.75% gain

It was a small gain because of the small position sizes and wide stop that I started out with, and my lack of aggressiveness in adding earlier in the trade.  Again, this is the type of move that only happens a few times a year, so I was as ready as I should have been for it.

The only other thing I would have done differently was to take the position off at 169.00.  I had already recognized it as being of potential resistance, but in a move like this, you just gotta keep going with the flow, right? Maybe not as there are times when traders will stop going with the flow, like when major events are coming up on the calendar.

At any rate, I’m happy for the win, but trade management could have been much, much better.

I’m still bullish on the pair, but I’ll sit back for now and wait to see how this week’s events play out.  And maybe, I can jump back in at a better price.  Thanks for checking out my blog!