Partner Center Find a Broker

Trade Closed: 2013-11-18 21:30 ET

USD/JPY pulled back at the start of this week’s trading, which was enough to trigger my trailed stop at 99.95.

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

USD/JPY forex trade review
USD/JPY forex trade review

It looks like traders did take the broken resistance as a buying opportunity, and after the market pull back as low as 99.10, the pair rallied higher to break the major psychological handle of 100.00 and then some.  The pair topped out around 100.44 on Friday, at which time I trailed my stop to 99.95  to lock in further profits into the weekend.

Unfortunately for USD/JPY bulls, there was give back as soon as trading opened up this week, enough to take me out of my trade at my 99.95 stop.

Total: +38 pips/ +0.21% gain

It was a textbook trade through out, but there is one or two things I would do differently if put in a similar situation in the future: trail the stop tighter or take profit on Monday.  It was almost obvious that the momentum higher wasn’t there in Europe and Asia, and since we’re going to get a monetary policy statement from Japan on Wednesday, it was prudent to take off those Yen shorts–that’s probably why we saw broad Yen buying this week.  Also, I gave back over half of my profit, which is not good trading practice I think; still got a lot of work to do on my stop placement and trade management.

So, it’s a new week in the markets with lots of volatility expected thanks to all of the tier 1 events on the calendar this week.  Stay tuned by following me on Twitter and Facebook!

Trade Idea: 2013-11-13 02:20 ET

Good morning!  I decided to go long USD/JPY again on a simple forex technical setup for a swing play.  Will we see 100.00 and beyond by the end of the week?

USD/JPY 1hr forex chart
USD/JPY 1hr forex chart

This is mainly a technical trade setup, but I still have the same long-term fundamental buy bias on the pair on a possible Taper from the FOMC in 2014 (dollar bullish) and the Bank of Japan holding on to quantitative easing measures for the foreseeable future (yen bearish). This week we do have economic data points from the US, but they’re mainly tier 2 events in my opinion and shouldn’t have a huge effect on the broad sentiment (unless we see an outsized surprise). We do have Prelim GDP from Japan coming up this week, but this data point has been trending mostly weaker-than-expected for the majority of this year’s releases; the probability is that it may help push the pair higher.

So at the moment, I think the upcoming data is likely to make an argument for a further move higher, which is why I’m anticipating by buying on the break-and-retest now. My stop is below this week’s lows around 98.90 and my target to adjust is first the 100.00 handle and then the September highs around 100.60 as it may be the next major resistance area. Here’s what I am doing:

Long half position USD/JPY at market (99.57), stop at 98.70, soft profit target at 100.60

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t follow what I do. Risk Disclosure.

I’m only risking 0.50% of my account on this one, and with this trade structure, I have a potential reward-to-risk ratio of about 1.18:1, but I may add/trail stop & hold if we see a strong break of the 100.00 handle or if the story remains the same if the market reaches my target.

Of course, I can be totally wrong or anything can happen in the currency markets (like the outcome of this week’s testimony from Janet Yellen), so if the story changes I’ll be sure to reassess and adjust quickly if necessary. Stay tuned by following me on Twitter and Facebook!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.