Forex Trade Review: Watching CAD/JPY for the BOC Decision

Why, BOC, why?! Governor Stephen Poloz and his gang of policymakers refrained from cutting interest rates, sending the Loonie higher against its forex peers. Here’s what happened to my CAD/JPY trade:

As I’ve mentioned in my latest update, I planned on adding to my short forex position ahead of the actual event since I’m expecting downbeat remarks from the Canadian central bank. You’d think that with oil prices dropping like a rock, BOC policymakers would be all pessimistic, right?

Wrong!

Not only did the BOC keep rates unchanged at 0.50% but they also said that the risks to their inflation outlook remain balanced. Poloz didn’t even talk about any potential easing measures that they’d be ready to implement in case crude oil falls further. Bah!

Unfortunately, my sell stop order below the previous lows got triggered just before the BOC statement. As you can imagine, the pair rallied all the way back above 81.00 during the not-so-dovish press conference of BOC head Poloz, hitting my adjusted stop loss at 81.20 in the process.

CAD/JPY 1-hour Forex Chart

CAD/JPY 1-hour Forex Chart

Even though I managed to grab 25 pips off my initial position, I wound up losing 170 pips on my second position. Good thing I only risked 0.25% of my account on this one, phew!

Here’s how it turned out:

P/L on first position: +25 pips / +0.03%
P/L on second position: -170 pips / -0.25%

All in all, that’s a 0.22% dent on my account but I’m not too worried because my GBP/AUD short forex trade is still looking pretty good so far. Got any other comdoll setups you’d like to share?

Cheers,

Happy time

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