Sometimes you have to know when to let go. Here’s why I closed my USD/JPY forex trade.
Just like in love and in life, it’s better to let go than to force something to go your way. That’s what I’m doing with my USD/JPY this week. I think this is a good idea mainly for four reasons:
1. Upcoming FOMC statement. Will Janet Yellen and her gang pave the way for a September rate hike? Will they communicate “cautious optimism?” Or will they keep depending on future data for direction? The highly-awaited event is only a few trading sessions away and speculations are as wide as the sea of Warriors fans celebrating in the streets. Or at least that’s what Cyclopip tells me.
2. My short-term trade is no longer technically valid. As I mentioned on my Watchlist this week, USD/JPY has a pretty good long setup on the 4-hour time frame. My short setup on the 1-hour chart might withstand it if the falling trend line and 100 SMA had actually held. Since they didn’t, I don’t feel as confident on this trade bias anymore.
3. Upcoming FOMC statement. Yes, I think this warrants repeating.
I closed at 123.40, just 10 pips below my open price. I know it isn’t much but I still feel like it was a good trade decision given that my original trade idea was no longer valid.
How about you? Planning on trading the dollar or yen this week?