Paper trade: Closed all CADJPY long @ 88.40 for +152 pips

CAD/JPY reached my target of 88.00 last Friday. It broke through 88.00 nicely and tested 88.50 on Tokyo open just now. I decided to book my profit in the demo account on this CAD/JPY long position entered at 86.88 and 87.87. See Figure 1 for the 3-hour chart with the entries and exits marked.

Main reason for my cold feet is that there’s a lot of resistance on CAD/JPY above 88.50, all the way to 90.70, from the daily chart (not shown). I couldn’t tell if CAD/JPY will continue pushing upward or retrace. So I’m booking my profit now to observe the price action from the sideline. This position has turned out +40 pips more than I expected, so I’m trying not to be too greedy in this volatile time.

The net profit on this paper trade amounts to +0.3% of my demo account. The yellow triangle in Figure 1 shows my exit. I risked 0.1% on the initial entry (first blue triangle). Then added 70% more to the position above a weak resistance level (second blue triangle) and moved the stop on the initial size to breakeven.

CAD/JPY, 3-hour

Paper trade: Long CADJPY @ 86.88, Stop 86.10, Target 88.0

I entered CADJPY long at market for 86.88 just now. This is a continuation of my previous USDCAD short position. However, USDJPY is on a run upward so I’m switching to go long on the loonie with yen instead.

Figure 1 shows the daily chart of CADJPY. Notice the imminent MACD bullish crossover and the already in-play stochastic upturn. I like it.

My stop loss level is set at 86.10. It’s the high of a previous peak on February 3, two weeks ago. My target is the round number 88 resistance. 88.0 has been an important price level for CADJPY for the past few months. So I’m setting my sight there.

CADJPY, daily

Figure 2 shows my timing for this entry. CADJPY is noticeably meeting some resistance at 87.50. 87.50 is also the 61.8% Fibonacci level of a recent down move. This is a cause for concern on my long position as we could very well retrace here. However, the bullishness of CADJPY is apparent in Figure 2. Prices have consistently been bought for the past few days right on the short term moving average (teal line). Furthermore, the intermediate term moving average (orange line) is about to cross the long term moving average (red line) as I enter this position.

Lastly, gold price has taken a dive from 1130 to 1100. Meanwhile, crude oil price is holding the 77 support nicely. Thus, this confirm my previous view that oil has better upside than gold in the intermediate term. Which is why I’ve been trading the loonie these past weeks.

For this particular CADJPY trade, I have another buy order waiting above current support level to add to my long position. Let’s see if CADJPY can break decisively to the upside in the next 24 hours as US and Canadian data comes out.

CADJPY, 4-hour

Paper trade: GBPJPY @ 145.24, Stop 144.70, Target 148

Update: I’ve switched over to long EURJPY @ 125.40 as EURGBP’s downtrend seem to be running out of steam. Moreover, EURJPY looks better on the daily chart with a clear support and an oversold reading.

I’m back in my long GBPJPY play at 145.24. The currency pair is breaking an hourly resistance since consolidating around 145. I had a low ball offer at 144.20 since taking my profit last night at 146.42. But that bid for never filled. So I’m re-entering on a short-term breakout. For this entry, I am risking 0.1% of my account.

This re-entry is a tough decision. Almost all the respectable pros that I follow on Twitter are on the other side of this trade via other currency pairs. However, my long setup is valid as long as GBPJPY is above 144 level. So I’ll take this trade until proven otherwise. Although I must admit that my confidence in this trade is very low.

I also considered long CADJPY instead as it seems to offer more upside potential. However, as I’ve been following the GBPJPY pair this week, I’ll stick with my plan.

I also have a limit order to add more at 145.81 as you can see in Figure 1 below.

GBP/JPY, 3-hour

Paper trade: Closed GBPJPY @ 146.42 for +140 pips

Just closed my GBPJPY long at 146.42 for around +140 pips average gain, or 0.4% in the account balance. Damn good for a 24 hours holding. Obama just finished his State of The Union address at the moment. I am not impressed. Still all talk of change but nothing concrete yet. Anyway, that’s beside the point in this trade log.

146.50 price level for GBPJPY is the 10 day moving average. It has also been a strong support back in late December. This should be a good resistance level. My guess is that GBPJPY should stall, or even retrace, here for a while. Thus I’m taking profit at this price as shown in Figure 1 (yellow triangle).

I still believe my bullish setup from yesterday is still good. So I’ll be watching this pair for a re-entry.

Update: I re-entered at 145.24 the next day.

GBPJPY, 3-hour

Paper Trade: Long GBPJPY @ 144.24, Stop 143.60, Target 148

My previous short-side setup on GBP/JPY played out beautifully. Yet I wasn’t able to ride it down because I got stopped out on a stop-hunt counter-move before the dive, see Fig. 1. Now that GBP/JPY has reached its other end. I am betting for it to go reverse with a long position. I expect this move to be more fierce with more upside potential as it’s in the direction of the long term up trend. Some people are calling the top has been printed in the markets and the wind is now blowing the other way. I am not one to guess what the market is about to do. So it’s business as usual until the trendline is broken.

What I really like about this setup is that GBP/JPY is testing a double trendline cross on the weekly, Fig. 2. Secondly, the 3-hour chart of Figure 1 is showing a RSI positive divergence on this test of the long term support. I am quite confident of this setup. However, I am not confident about the timing as GBP/JPY is known to be a wild horse and volatility could very well stop me out, like last time.

With British preliminary GDP number coming out in about 6 hours, it might have been wiser to wait until the after that to enter. On top of that, the markets have been on a stall for the last few days waiting for data in the next 48 hours. End-of-week volatility this week is expected to be significant.

Anyway, I’ve put in a position already and will just let it run. This a small initial position with 0.1% of my account at risk. I have also placed limit orders above resistances to add to this position. We’ll how this turns out soon enough.

Lastly, even though I said I’ve been cut off from trading at my day job. It doesn’t mean I’m completely out of the game. I just have to adapt my manual trading strategy while my automated system is still in development. Basically meaning that I’ll trade with a slower timeframe for longer-term moves. All the better, as longer term moves are generally less deceptive.

Update: I closed this at 146.42 for +140 pips gain the next day.

GBP/JPY, 3-hour

GBP/JPY, weekly