What’s more annoying than being on the wrong side of a weekend gap? Why, the gap not filling, of course! After days of trading without USD/JPY closing its weekend gap, I’ve chosen to trade another day by closing this position.
Last week I told you guys that I put a short USD/JPY order at 110.00 because it lined up nicely with the falling trend line, Fibonacci retracement, and SMAs on the 4-hour time frame.
Fundamentally, I was also crossing my fingers that adjustments from Fed rate hike expectations and weaker-than-expected U.S. reports would keep the Greenback’s momentum going for the next couple of days or weeks.
Unfortunately (for my trade, at least), France’s weekend elections put investors in such a good mood that the yen gapped lower across the board.
The gap triggered my order, which I guess wasn’t a bad thing. What’s bad is that my order got triggered just as the dollar’s selloff and the yen’s strength was petering out.
I waited and see if the dollar’s selloff would pick up again. I was really tempted to take my position around 109.80 when the pair hit a previous resistance area of interest, but decided to grin and bear it until Trump announces his tax plans and the BOJ publishes its monetary policy decision.
When USD/JPY STILL didn’t move lower after the events, I decided to cut my losses and just enter another position. For now, my original trade idea had been invalidated and the trade warranted closing.
I ended up closing the trade at 111.25 and got away with a 125-pip loss (-0.12%) instead of the full 0.25% risk that I originally planned.
Guess I’ll have to enter a trend at an earlier point next time!
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.