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!
Weekly Watch: May 20 to 24, 2013
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