Pick of the Day: USD/JPY – Close Open Orders

Close Open Orders: 2008-10-22 08:28

It looks like I wasn’t able to get in the USD/JPY drop as the pair was not able to rally back up to 102.00. It just dropped like a rock making lows around 98.50 during the morning European trading session. So, it’s time to close my open orders at 102.00 and look for new opportunities to short USD/JPY.

Close open orders. No trade.

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Trade Idea: 2008-10-21 02:08

PoD Chart

What’s Up! I’m taking a look at USD/JPY once again with a simple Fibonacci analysis to find a short opportunity. Ready to rock? Let’s roll!

On the chart, we can pretty much see the pair still in a downtrend, and while it has retraced a bit, this may be another opportunity to short. I used the Fibonacci tool to see that the pair has already reacted to the 61% Fib level, and now the 50% retracement level could be the next point of interest for sellers. Stochastics were in overbought territory and falling lower. Time to swing lower?

Fundamentally, it looks like the credit freeze is beginning to thaw a bit, but traders speculate that the US is most likely in a recession and that further pain will be felt in growth and in jobs. Consumer spending is also likely to fall as a result and more pain for the economy may be in the cards. So, risk aversion may continue to be the main theme as the credit crisis continues to sort itself out, but after such drastic moves over the past few weeks, we may be in for a breather in the markets and some sideways action.

Because the fundamental factors are dominating price action, I look for a short position for now on any rises up to the “sell area” notated on the chart. Here’s my plan:

Short USD/JPY at 102.00, stop at 103.50, pt1 at 100.50, pt2 at 98.00

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

6 comments

  1. PipWolf

    Lucky for me I preempted you a little bit on this one, and got in at 101.74. After you posted, I set my first PT the same as yours. When that was hit, I switched the S/L on my second position to a 100 pip trailing stop and set PT2 to 90.00. Now I’m just letting it ride, currently at +400 pips in addition to the first PT.

    Sorry you missed this one Pipcrawler; I guess I either spotted it a little before you (unlikely) or I jumped the gun and placed a trade that was a little riskier. Either way, it worked out and it was certainly nice to see that we were on the same page with this one.

    Cheers!

    Reply
  2. PipWolf

    Lucky for me I preempted you a little bit on this one, and got in at 101.74. After you posted, I set my first PT the same as yours. When that was hit, I switched the S/L on my second position to a 100 pip trailing stop and set PT2 to 90.00. Now I’m just letting it ride, currently at +400 pips in addition to the first PT.

    Sorry you missed this one Pipcrawler; I guess I either spotted it a little before you (unlikely) or I jumped the gun and placed a trade that was a little riskier. Either way, it worked out and it was certainly nice to see that we were on the same page with this one.

    Cheers!

    Reply

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