Stopped out on a pullback! This pair popped slightly higher when North Korea seemed to back down on its missile threat, hitting my adjusted SL in the process.
NZD/JPY Trade Idea
In my latest trade update, I mentioned that I rolled my stop loss down to entry in order to reduce my exposure to event risk. At that time, I was worried that New Zealand retail sales and a potential return in risk-taking over the weekend might lead to a gap higher for NZD/JPY.
New Zealand’s quarterly retail sales figures printed stronger spending activity for Q2 and allowed the pair to climb back above the 80.00 handle. The rally gained momentum during the week when North Korean leader Kim Jong Un reportedly said that he will wait for the U.S. to make a move before launching any missile strikes.
This was interpreted by most market participants as a sign of easing up on their threats, which means that they might not push through on their plan to attack Guam anytime soon. This forced the lower-yielding yen to return its recent risk-off gains, pushing NZD/JPY back above the short-term falling trend line and to my stop.A part of me wishes that I had set my stop a little wider to give more leeway for this correction, but I’m also thinking that I was lucky to get out early. After all, this upside break could be indicative of further rallies underway.
Here’s what I ended up with:
P/L: 0 pips / 0%
I’m not too disappointed with how this turned out, but I do wish I had been able to lock in even just a few pips on the trade. Still, I’m gonna give myself a small pat on the back for making risk adjustments on account of short-term market developments. ‘Til my next play!
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