Orders Cancelled: 2012-11-08 02:20
Ay caramba! Here we go again! I missed another beautiful winner because I set my entry orders just a few pips out of the market’s reach. Dang!
EUR/JPY was all over the place after the U.S. announced that Obama was re-elected. What started out as a risk-on rally turned into a risk-off blood bath as the markets reacted to growth fears. This led EUR/JPY, which is considered a barometer of risk, to fall all the way down past the previous week low and bottom WATR… way past my profit target!
Since the market already made its full move, my trade idea was invalidated and I ended up cancelling my orders.
What. A. Bummer.
This is the second winner in a row that I missed out on, and I’m starting to get annoyed. Hopefully, this doesn’t turn into a habit!
Trade Idea: 2012-11-07 02:40
However, it seems to me that the bears could gain the upper hand soon, as price is slowly approaching a falling trend line!
Not only that, but the trend line coincides nicely with the 103.50 MiPs, which was an area of interest last week.
For one, there is still a cloud of uncertainty surrounding the euro zone. Greece still has to vote on new austerity measures before it can receive the next tranche of bailout funds. If that doesn’t get approved, then there’s a good chance that there will be a delay in aid from the Troika.
Second, while the Bank of Japan did expand its asset purchase facility, it was much less than what the market was speculating. I think that this has made some traders less convinced that the BOJ will do whatever it takes to weaken the yen, and we could potentially see a stronger yen in the coming weeks.
The major event risk for my trade this week will be the ECB rate decision, which comes out tomorrow. Like many other analysts, I doubt we’ll see a rate cut and instead, could continue to hear more cautious statements about the state of the economy.
That said, here’s how I’m setting up this sneaky setup:
I’ve placed my stop at 104.10, to give my trade a lil’ room to breathe. With the ECB rate statement around the corner, there’s no telling what type of liquidity we’ll see in the markets. With the potential of some wacky moves, I’ll be risking just 0.50% of my account on the trade. As for my take profit, I’m aiming for the previous lows around 102.30. If all goes to according to plan, I’ll be taking home a sweet 2:1 winner!
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