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Trade Closed: 2008-09-12 00:44

My trade was closed at the end of the US trading session as USD/JPY rallied throughout the day. The pair hit its low of the day just above 106.00 before buyers bought back in on speculation on a possible Lehman sale, bringing the pair back above 107.00 – my adjusted stop.

1st Half: +75 pips
2nd Half: +100 pips
Total: +0.875% gain

I still like a short on this pair and it looks like another lower “high” is being formed on the charts, but I think I’ll stay out for now as we head into potentially volatile news events and the weekend. Stay tuned as I may have new charts to look at to get ready for next week! USD/JPY Forums
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Trade Update: 2008-09-11 10:13

After nearly stopping out on my remaining position during yesterday’s US session, USD/JPY fell once again throughout today’s Asia and European trading session as traders price in further risk aversion.

This morning, we saw continued weakness in US data as the US trade deficit widens and weekly jobless claims continue to come in above estimates.

I still like this trade, but it looks like we may have a bit of trouble seeing 106.00 before the end of the European/US overlap. So, I am going to adjust my stop to lock in more profits and go for further profits ahead of major data on Friday.

Adjusting stop on remaining position to 107.00 to lock in profits. Adjust target to 105.00.

We have one more day of data to get through before the end of the week. Tomorrow’s US PPI and Retail Sales may give this trade a boost as energy and commodity prices continue to fall and consumers continue to cut back on their spending. Let’s hope that this be the case and see if there’s more pips to be had. Stay tuned!

Trade Adjustment: 2008-09-09 11:13

USD/JPY traveled lower throughout the Asia and European trading session, closing the gap as it made a low for the day around 107.26. It has been a roller coaster since then as the pair shot back up to 108.10 and then back down to the day’s lows as US equities opened up for the day.

With the pair trading near the lows of the day, I am going to make a few adjustments:

Close half position at market (107.25), to lock in some profit on the close of the gap. Adjust stop loss on remaining position to breakeven at 108.00. My take profit on the remain position will be 106.00.

This week’s moves were pretty big, so I think we may see a bit of consolidation. I still see a downward bias as I think risk aversion will continue to play on global slowdown. I will continue to watch this position, so stay tuned!

Trade Idea: 2008-09-08

PoD Chart

I’d like to start the week off by taking another look at USD/JPY. This weekend’s events created an event we do not see to often in currency trading – the gap!

In my experience, the weekend gap tends to fill itself back up over the course of the next day or so. We can see after the gap, the pair found resistance at the falling trendline, showing sellers are in control of this pair for the time being. And with the fill being in the direction of the overall trend, I like it even better this time around.

I would like to short USD/JPY based on this idea, and that this initial reaction by traders on the US government taking control of Fannie and Freddie may be short term.

Short USD/JPY at 108.00, stop at 109.00, pt1 at 107.00, pt2 at 106.00

Remember to never risk more than 1% of a trading account on any single trade. Always adjust position sizes accordingly.

Stay tuned!

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