Paper trade: Closed EUR/JPY @ 135.00 (+500.1 pips)
I closed my successful EUR/JPY long just before the weekend with a tight stop. Notice from Figure 1 that EUR/JPY is now in overbought territory. In addition, a negative divergence is developing on the RSI from the recent 2 peaks also at 135.00.
The best thing about this trade was my entry. However, I certainly didn’t chop this setup the best I could. Even though I rode this up for +500 pips, I only had a 50% position size. There were two easily identifiable adding points which I could have taken advantage of.
When EUR/JPY broke above 132.00, which was a clear short-term resistance, a day after my entry I should have added to my position then because of short-term momentum. Another chance came at 132.50 or so. As shown in Figure 2, when the price retested the low end of the channel at 132.50. Both of these opportunities would have survived with my usual stop of 100 pips.
Another disappointment was that my second half of the position was stopped out shortly because I moved my stop up too soon. I was confident enough when I placed the order to enter a full position size. But my over-zealous need to reduce risk got the better of me. I observed on a daily time frame but traded in the 3-hour. To be more accurate in pointing the finger, it was my lack of patience that stopped out my other half of the position.
Anyway, I did rode the wave with a sufficient position size. One thing I just noticed is the T formation in Figure 2. EUR/JPY is back to where it started a month ago. Where it heads now is uncertain. I will keep an eye on this pair and aim to re-enter another long in a few days. The trend is your friend.
EUR/JPY
EUR/JPY, 3-hour
Missed opportunity review: GBP/JPY spiked 500 pips in 24 hours
It looks as though my analysis for GBP/JPY making a reversal was correct. However, my short term entry needed to be improved for me to profit on my intermediate term analysis. In particular, I should have looked at a major short term resistance line instead of an arbitrary weak resisitance line as I did when I entered the long previously. That didn’t go so well as I was stopped out soon afterward when GBP/JPY was consolidating.
In hindsight, if I’m to try for a reversal, at least wait for the price to break a strong short term resistance and then use the recent low as the stop. The preferred resistance line for GBP/JPY in this missed trade can be seen in Fig. 1, which I drew many days ago and also can be seen in my previous entry (Figure 2 on that page, the higher of the 2 lines). New Figure 2 attached below shows the bigger picture of GBP/JPY in a daily chart to see what could have perspired. My target of 148 was spot on too!
GBP/JPY, 3-hour
GBP/JPY
Paper trade: Stopped out GBP/JPY @ 141.70 (-116.10 pips)
Just got back from a long weekend and found that my GBP/JPY long is stopped out for a loss of -$40.63. It looks like the resistance is holding up from the looks of Figure 1. This setup is toasted for now. GBP/JPY 140.00 – 143.00 is the range for the time being. However, I still think 141.70 is an important pivot. I’ll need to wait and see which way does it go though.
On the other hand, my EUR/JPY long is doing well and I’m still riding it. EUR/JPY broke through a previous resistance at 131.50 and shot through 132.00. I have moved my stop up to 131.50 to lock in some profit.
GBP/JPY, 3-hour
Paper trade: 50% long GBP/JPY in @ 142.861, stop 141.16
The strength in my EUR/JPY long gave me confidence in entering this GBP/JPY long trade. I entered on market at 142.861 last night with a 50% position size. The 141.00 support seems to be holding so far, see Fig. 1. Also the RSI have been way oversold (best in my basket of pairs) and it has now broken above the RSI 30 line (Fig. 1).
In the short term, GBP/JPY broke a resistance line at 142.60 when I entered this position. However, it has since retraced back below it to a support from the day before. So there’s no short-term confirmation yet.
Position size: 50%
Entry: 142.861, above short term resistance
Stop: 141.00, below congestion zone of last couple of days
Target: 144.00 and then 148.00
Reward / Risk = 514 / 186 = 2.76 < 3… I’m moving my stop tighter to 141.16, right at the bottom of the congestion range.
new R/R = 514 / 170 = 3
GBP/JPY
GBP/JPY, 3-hour
Paper trade: EUR/JPY long 100% @ 129.99, stop 128.80
I placed this EUR/JPY long order a couple of days ago. It just got triggered overnight in the Pacific market hours. See Figure 1 for my entry chart. Note the following reasons for long EUR/JPY:
- Support trendline coincide with round number 130.00
- RSI in oversold territory and moved up
- EUR/JPY in a trading range with the MA’s oscillating since April
EUR/JPY was testing 131.00 when I placed this order and I didn’t think it would get triggered. I placed a full 100% position in this but 1/2 of my position has a trailing stop of 50 pips and it got run down within a few hours of entry. That 1/2 was out at 129.666 for a loss of 3.33 pips. I’m only left with a 1/2 position in this at the moment.
In hindsight, that trailing stop was too close as the 3-hour ATR is 25-30 pips.
Entry: 129.99, round number support
Stop: 128.80, see Figure 2, just below recent low and support line
Target: 134.00, see Figures 1 and 2. At the bottom range of a congestion zone.
Reward / Risk = 401 / 119 = 3.4 > 3.
EUR/JPY
EUR/JPY, 3-hour
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