USDJPY: Spring Break! – Trade Closed

Trade Closed: 2010-04-04 22:55

PoD Chart

Whee! Thanks to the positive US non-farm payrolls report last week, my second profit target on my long USDJPY trade finally got hit. To think I’ve been holding on to this trade for almost a couple of weeks now and, to be honest, I’ve been thinking of closing early and locking in profits. Then again, I kept reminding myself to stay patient and wait for the trade to pan out. After all, I did move my stop to breakeven so what have I got to lose?

Fortunately, the reported improvement in the US jobs market allowed the USDJPY to bust out of its consolidation and rally to the 94.70 area. I could’ve made more pips if I set my profit targets a bit higher but hey, I’m pretty happy with my risk-reward ratio. The gain on this trade almost makes up for my last two losing trades. Isn’t risk management just awesome?

Closed 1st half at 92.10: +85 pips
Closed 2nd half at 93.70: +245 pips
Total: +1.65% Gain

So far this year, I’ve been doing pretty well. Hopefully I can continue this good performance. Check my stats out for yourself at MeetPips.com!

Trade Adjustment: 2010-03-24 22:25

PoD Chart

And breakout it did! The USDJPY found itself rallying furiously in yesterday’s trading session when news that Portugal’s credit rating was downgraded by Fitch. Needless to say, my first profit target got hit. 🙂

Now that all the commotion is over, I think it’s time for me to do some trade adjustments to avoid losing profits. I’m going to move the stop loss on my second position to break-even in order to create a risk-free trade. If price heads up, then good for me. If it doesn’t, then my profits are protected.

Trade Idea: 2010-03-23 23:07

PoD Chart

Taking a page out of Big Pippin’s play book today, I see that the USDJPY has formed a bullish pennant that is sitting right under a downtrend line on its daily chart. The pair has been stuck in a range for over ten days now – I’m looking forward to a breakout! No, not pimples – from the pennant!

Looking at the BabyPips.com Economic Calendar, I noticed that there’s a bunch of top-tier reports from the US today. And that means plenty of catalysts for a possible breakout! The durable goods orders report, which could print a 0.8% increase, is due today. The core version of the report could post a 0.6% uptick, a rebound over the previously seen 1.0% decline.

Meanwhile, new home sales for February could land at 318K, up from the 309K reported in January. If these reports come in line with expectations, the US dollar could end up as the more preferred lower-yielder than the Japanese yen.

Besides, didn’t the BOJ just announce an expansion of their lending program last week? I read that they doubled the size of their lending program from ¥10 trillion to ¥20 trillion, possibly to ward off the ongoing problem of deflation. Either the central bank is giving in to the pressure of the Japanese government’s Ministry of Finance or deflation keeps getting worse… or both. In any case, it’s not looking too good for the yen.

My guts tell me that the pair is gonna head north, especially if it is able to move past the downtrend resistance.

I’m going to place a long order at 91.25 which is just above the downtrend line and March’s high of 91.10. My profit targets will be former highs at 92.10 and 93.70. I’m also setting a 100-pip stop loss, putting it at 90.25, so that in case the price action initially moves against the trade, the downtrend line and the 91.00 handle will still be there to hopefully halt it from moving lower.

Again, here’s my plan:

Long USDJPY at 91.25, stop loss at 90.25, take profit at 92.10 and 93.70

It’s been pretty crazy here at the coffee shop – all the kiddos are out of school and getting ready for spring break! Gotta stay on my toes and remember all those lattes, frappuccinos and espressos! I’ll try to squeeze in some time during my breaks to update my blogs! By the way, you can also follow me on MeetPips.com!

  • GeorgeC

    Well – if you did place that long, you must be rolling in the cash right now 🙂

    I’m rather glad I got out on Monday after sticking with the pair for about a week expecting it to head to 87 by resuming its long-term downdward trend. Good thing I did, too!

  • GeorgeC

    Well – if you did place that long, you must be rolling in the cash right now 🙂

    I’m rather glad I got out on Monday after sticking with the pair for about a week expecting it to head to 87 by resuming its long-term downdward trend. Good thing I did, too!

  • gh0stJPY

    yup i 2nd that lol!

    “The USD/JPY has been a direct beneficiary from today’s developments in the EU, sending the currency pair flying towards its February highs. The USD/JPY broke through some key downtrend lines in the process, including our top tier running through previous 2010 highs, indicating the USD/JPY could be heading towards the 93.75 level over the medium-term“, the FastBrokers Research Team said.

  • Onepipatatime

    Another nice trade there Huck. Well done. It’s got some fairly strong resistance to get through before your second take profit, but it’ll be interesting to see how it goes.

  • Synergistik

    Price hit your first profit target. Congrats! This is a great example, for me as a newbie, of how technical setups and fundamental analysis can make for a great profitable trade setup.

    I love spring break. All the college kiddies are gone, and I have the university all to myself!

  • gh0stJPY

    yup i 2nd that lol!

    “The USD/JPY has been a direct beneficiary from today’s developments in the EU, sending the currency pair flying towards its February highs. The USD/JPY broke through some key downtrend lines in the process, including our top tier running through previous 2010 highs, indicating the USD/JPY could be heading towards the 93.75 level over the medium-term“, the FastBrokers Research Team said.

  • Onepipatatime

    Another nice trade there Huck. Well done. It’s got some fairly strong resistance to get through before your second take profit, but it’ll be interesting to see how it goes.

  • Synergistik

    Price hit your first profit target. Congrats! This is a great example, for me as a newbie, of how technical setups and fundamental analysis can make for a great profitable trade setup.

    I love spring break. All the college kiddies are gone, and I have the university all to myself!

  • Huck

    Thanks for the feedback guys!

    @Synergistik I am also a firm believer of discretionary analysis… Using fundamentals to determine direction and technicals to find those nice entry points! 🙂

  • Huck

    Thanks for the feedback guys!

    @Synergistik I am also a firm believer of discretionary analysis… Using fundamentals to determine direction and technicals to find those nice entry points! 🙂