About Pick of the Day

Pick of the Day Author

At the end of each trading day, I will find what I believe is the best looking short term trade setup for the upcoming trading day. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. Trades will be posted by 1 am ET, Monday through Thursday evening.

Read First: Trade Rules!!

Latest Posts

May 2008

S M T W T F S
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Pick of the Day: USD/JPY

Posted 04:03 13 May 2008 by Pipcrawler

PoD Chart

After retracing from last week's downtrend, it appears the move lower may resume after finding resistance at 104.00.

I used a simple Fibonacci tool on the pair and it looks like the retracement got no higher than the 50% retracement level. Stochastics also show the the pair is at short term overbought levels giving us another indication that the pair may resume lower.

I am hoping that volatility will take the pair slightly higher for a better price to jump in. I'd like to short just below the 38% Fibonacci retracement level.

Short USD/JPY at 103.70, stop at 104.20, pt1 at 103.20, pt2 at 102.60

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Stay tuned...good luck and good trading!

On a side note: Check out FreshPips.com! This is a new "Forex News" site where users can submit news from around the net and vote on which may be the most helpful in Forex trading. I think it's a great idea and hopefully we can get it going! So, sign up today!

Comments Comments (7) | Email to a friend Email to a friend | Printer friendly version Printer friendly version

Comments (7)

pip, this is a bad trade. the stop loss has been hit. that is -50pips.not a good trade
demontez | Posted 08:34 13 May 2008
Pip, when you carried out this analysis, did you take into cognizance, the core retail news in the US as well as retail sales data.The result of this fundamental news have outweighed the analysis. hence the reason for the close out of the stop loss on this trade.
demontez | Posted 08:44 13 May 2008
I know nobody asked for it, but here is my 2ยข anyway. The dollar bulls are back - hence any shorting of the dollar must be executed with surgical precision. But why try juggling with razor blades? Be very careful shorting the dollar. When the market responds positively to negative numbers...
enochbenjamin | Posted 10:56 13 May 2008
thanks for the comments demotez. I respect your opinion, but in my opinion this trade was fine. I saw a familiar chart setup, made a plan, and executed. Unfortunately, it ended in a loss, but that's fine, losses happen in trading which is why I stress money management.
Pipcrawler | Posted 11:04 13 May 2008
And yes I was aware of today's US retail numbers, but that was not the only event that pushed USD/JPY higher. The pair rose on a different number of events that was foreseeable (US retail sales), and unforeseeable (weakness in commodities and unexpected positive earnings from a major financial institution). This sparked off risk appetites in the usual carry trades as evident by price action in the majors (small USD movement) and the Yen and Swiss crosses (bullish across the board). As traders, it is impossible to see every upcoming event, let alone try to predict the outcome and market reaction. All we can do is plan our best for the worst and best case scenario.
Pipcrawler | Posted 11:14 13 May 2008
Thanks pip for the response. My instinct told me to go long on this trade when i saw it break your entry point and retraced back down. Infact the formation of the chart holds a strong bullish stance. I don't see any retracement soon until it hit the 105.50 level if not higher. I agree with enochbejamin that the bulls are out to play on any USD pair in favour of the dollar.Anyway i will take my losses on this trade with a braveheart. Live to fight another day. keep up the good work.
demontez | Posted 11:35 13 May 2008
Hi, 105.50 provided a good resistance? Maybe we can short it at current price of 104.60 as there was a weaker IP data as well. What do u think?
jamesbond007700 | Posted 12:32 15 May 2008

Post a Comment

You are not signed in. You need to have a user name to post comments. Please sign in. If you don't have one yet, please register. It's free!

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

"Anyone who lives within their means suffers from a lack of imagination."
Oscar Wilde
Clicky Web Analytics