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Trade Closed: 2013-05-22 23:40

Just when I thought I was gonna head home with a win, a sudden turn of momentum wiped out my GBP/JPY trade!


First up, lemme give you step-by-step recap of what happened.

I bought GBP/JPY at 155.34. Support at the 38.2% Fib was holding nicely, and we saw a slight bullish divergence forming as well. Fundamentally, I knew that U.K. retail sales were coming up, but I didn’t think it would drastically affect pound trading. Instead, I thought the focus would be on the BOE meeting minutes, and with the BOE sounding more optimistic in recent weeks, I thought we’d hear some hawkishness.

Furthermore, I was expecting traders to sell the yen following the BOJ statement, hoping that policymakers would give us an indication that the BOJ wasn’t done yet.

I placed my stop at 154.60, just below the 50.0% Fib and former resistance, and my profit target at the top of the range at around 156.50.

Price initially went my way for a while, but as it turns out, traders weren’t too impressed with the BOJ rate statement. Soon enough, the yen staged a late rally, as yen crosses traded lower late in the NY session.

Eventually, GBP/JPY dropped to as low as 154.55, stopping me out in the process.

Stopped out at 154.60: -74 pips / -0.50%

To be honest, I didn’t think I’d get stopped out before putting up my post. What’s more disappointing was that I was actually up a decent amount of pips before the sudden turn of events.

I can’t cry over spilled milk though – this happens all the time in the forex markets! Just gotta keep the faith and bounce back on my next trade!

Risk Disclosure
Weekly Watch: May 20 to 24, 2013
Q1 2013 Trading Performance
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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.