Guppy already broke below that short-term rising trend line I was looking at so I think it’s time to close this trade for now then just consider reentering later on. Before reading on, make sure you review my initial GBP/JPY long setup.
I may have been a bit too impatient in hopping in this long trade since I actually bought at market on a much steeper and shorter-term trend line before waiting for a proper retracement. In hindsight, I probably should’ve stuck to my usual strategy of waiting for a pullback instead of rushing to go long.
Either that or I should’ve started cutting my position when rumors of indecision among the BOJ policy board started swirling. This downplayed the odds of additional BOJ stimulus in this month’s meeting, allowing the yen to keep climbing across the board. To top it off, data from the U.K. hasn’t been so upbeat and it looks like the post-Brexit jitters might start to weigh on economic performance.
I’m still bearish on the yen because of BOJ easing rumors and I’m slightly bullish on the pound because of the latest U.K. PMI readings, but I think I’ll cut my losses on this position for now and wait for the U.K. top-tier events this week to pan out first. If the BOE refrains from adding stimulus, I’ll consider catching another long Guppy setup next week, just before the BOJ delivers its own policy decision.
To be honest, I’m not too happy with how I handled this trade since I rushed into buying at market for fear of missing out on the rally. Fortunately I’ve got a wide stop so I managed to trim my losses to just 160 pips or 0.18%.
As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.