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Trade Closed: 2011-09-06 03:33

EUR/JPY 1-hour chart

This time around, EUR/JPY didn’t play nicely! Unlike my previous EUR/JPY day trade, this range-play didn’t pay off.

The funny thing is, I was actually right about the range between 111.00 and 110.00. Price stayed and respected these two major psychological handles for a while. It turned just below 111.00, and so I thought I could catch it on a bounce off 110.00. Sadly, I thought wrong!

Though 110.00 held as support for a while (price stalled there for a good 6 hours or so!), it was eventually overcome by euro bearishness. Wanna take a guess as to why it dropped? Yeah, that’s right, the same reason the euro’s always falling: euro debt crisis concerns! Sheesh. I wonder when the markets will ever get sick of that story.

In any case, it was just too much for the euro to bear, so price broke down support at the PWL/110.00 handle and headed straight for my stop.

This is what it dealt me:

Trade closed at 110.45: -1.00% / -55 pips

As much as it hurts to see my account take a hit, I can’t say I have regrets. It seemed like a valid setup until the very end. We just gotta take these losses in stride. As I had tweeted right after I got stopped out, “We live to trade another day!”

If you have any trade ideas this week, throw them my way. Peace and thanks for following, brothas!

Trade Idea: 2011-09-01 01:51

EUR/JPY 1-hour chart

Don’t you just love it when price reacts to those horizontal levels? Over the past few weeks, we’ve seen price react to psychological round figures, with price finding good support in the area of 110.00. Meanwhile, the 111.00 price level (which was the basis of my EUR/JPY trade last week) remains a clear area of interest.

I was actually planning to short at 111.00 earlier today, but price has already retraced after spiking up. Currently, the pair is right smack in the middle of no man’s land. I think the best thing to do right now is to sit my big green butt on my Lazyboy and wait to see if price can test either the 110.00 or 111.00 price levels.

Now, being the diligent one-eyed trader that I am, I took a look at the BabyPips.com economic calendar to see if we had any serious news coming out from the euro zone or Japan. It turns out that we don’t have any hardcore data on deck for the rest of the week aside from the NFP report which is gonna be released at 12:30 pm GMT on Friday.

Until then, I’m guessing that we’ll see more range-bound behavior and that EUR/JPY will simply within a 100-pip range.

I don’t really have any fundamental bias, so this is more of a technical play. Besides, it’s just a day trade and I can adjust on the fly. I’m looking to either go short at 111.00, or go long at 110.00 with 55 pip stops. I just don’t see price breaking far off from these levels.

Long at 110.00, stop at 109.45, take profit at 111.00.

OR

Short at 111.00, stop at 111.55, take profit at 110.00.

Chances are I won’t be able to catch a full 100-pip move, but I do think there is very good chance to grab about 50 pips, giving me at least a 1:1 reward-to-risk ratio. I can live with that!

What do you think about this setup? Will you join me on this trade? Lemme know by hitting the comment box below! You can also hit me up on Twitter or on Facebook!

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