Pick of the Day: USD/JPY – Close Trade

Close Trade: 2008-11-04 10:40

Greetings! With the US elections wrapping up, bringing a bit more certainty to the environment, and a continued reduction in interbank borrowing has brought a bit of risk appetite back to the markets. It seems sentiment is shifting, changing my view, so I’d like to cut my losses here.

Close trade at market (99.75)

Total: -125 pips/ -0.625% loss

So, a small loss, but from here we may see continued risk appetite push carry trades and higher yielding currencies higher. This may lead into an opportunity to short into the upcoming rate decisions, but that’s for another post to discuss. Stay tuned!

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Trade Update: 2008-11-03 17:20

Shortly after I posted my trade idea, USD/JPY rallied higher during the Asian session on a return of risk appetite and triggered my short entry orders at 98.50 along the way. It didn’t stop there though, but fortunately it found enough sellers to push it back down around 99.00. It looks like it’ll hang around this area for a bit, especially as we head into the US Presidential election tomorrow. Afterwards, focus will return to the economy and the credit markets, and if we continue to see a drop in interbank borrowing costs, this may further risk appetites.

It looks like the pair has yet to break the falling trendline and until it does, I’m still going to hold onto my short position. Stay tuned for updates!

Trade Idea: 2008-11-02 18:05

PoD Chart

What’s Up! After a bit of correction, it looks like USD/JPY is giving a possible short opportunity right out of the gates. Let’s take a look shall we….

Another simple setup using trendlines. The pair is still in a downtrend and after hitting lows around 91, the pair has retraced back up to a previous support area and falling trendline. It looks like the retracement has run out of steam (as indicated by stochastics), and the bulls and bears have decided to battle it out here as the pair consolidates. The sellers may win this battle out at the resistance areas and we may see a return to the overall downtrend. I am going to short in this area.

Short USD/JPY at 98.50, stop at 100.50, pt1 at 96.50, pt2 at 91.00

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

Stay tuned for updates and adjustments!

12 comments

  1. Aaron

    Hi Pipcrawler.

    I have a question. How do you take your two profit margins. Do you have just one trade operating and when it gets to 96.5 do you move your stop loss to there and then move your profit target to 91.00??? Or do you have two trades going with different profit targets, but say for example only each trade is half a LOT. Thanks. Aaron

    Reply
  2. Aaron

    Hi Pipcrawler.

    I have a question. How do you take your two profit margins. Do you have just one trade operating and when it gets to 96.5 do you move your stop loss to there and then move your profit target to 91.00??? Or do you have two trades going with different profit targets, but say for example only each trade is half a LOT. Thanks. Aaron

    Reply
  3. Helltopia

    Looks like its gunning for the 100 mark atm, think we should watch what happens then… I think it will fall again, but ive been wrong before.
    Any takes?
    Aaron – I think Pipcrawler trades with two lots (baskets), one that aim at P1 and one that aims at P2. When P1 is hit, lot one is taken out (profit) and lot2 is adjustet so that stop loss is moved to break even or better.
    Thats how I trade it anyhows :)

    Reply
  4. PipcrawlerPipcrawler

    Thanks for the comments. Aaron – I usually set multiple orders with the same entry points and stops, but different profit targets. If a trade goes against me then, I’m taken out by my stops. If it goes my way, then a part of my trade is closed automatically, and all I have to do is adjust my stops from there… I hope this helps!

    Reply
  5. therbcoe

    Hi Crawler – I have a couple technical setup questions for you:

    1) Looking at the rigtmost endpoint of the red line segment (representing the trendline), it intersects with the support line at around 20:00 on the 11/2 (I think).
    Does that mean that this is essentially the “expiration date” of this technical setup …
    Or am I just having post tramatic stress flashbacks from 11th grade honors geometry?

    2) Is PT2 based on the most recent swing low of about 91.00 (occuring in the |20:00 22| block.

    Thanks Blue Brothah!
    RBCOE

    Reply
  6. Helltopia

    Looks like its gunning for the 100 mark atm, think we should watch what happens then… I think it will fall again, but ive been wrong before.
    Any takes?
    Aaron – I think Pipcrawler trades with two lots (baskets), one that aim at P1 and one that aims at P2. When P1 is hit, lot one is taken out (profit) and lot2 is adjustet so that stop loss is moved to break even or better.
    Thats how I trade it anyhows :)

    Reply
  7. PipcrawlerPipcrawler

    Thanks for the comments. Aaron – I usually set multiple orders with the same entry points and stops, but different profit targets. If a trade goes against me then, I’m taken out by my stops. If it goes my way, then a part of my trade is closed automatically, and all I have to do is adjust my stops from there… I hope this helps!

    Reply
  8. therbcoe

    Hi Crawler – I have a couple technical setup questions for you:

    1) Looking at the rigtmost endpoint of the red line segment (representing the trendline), it intersects with the support line at around 20:00 on the 11/2 (I think).
    Does that mean that this is essentially the “expiration date” of this technical setup …
    Or am I just having post tramatic stress flashbacks from 11th grade honors geometry?

    2) Is PT2 based on the most recent swing low of about 91.00 (occuring in the |20:00 22| block.

    Thanks Blue Brothah!

    RBCOE

    Reply
  9. PipcrawlerPipcrawler

    greetings therbcoe 1) I don’t really use time stops, so no it doesn’t mean its an expiration date…just your post tramatic stress flashbacks… haha 2) Yes, I am targeting the previous low.

    Reply
  10. PipcrawlerPipcrawler

    greetings therbcoe 1) I don’t really use time stops, so no it doesn’t mean its an expiration date…just your post tramatic stress flashbacks… haha 2) Yes, I am targeting the previous low.

    Reply

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