USD/JPY Plunged 300 pips

I was away for two days and couldn't believe the Dow plunged 500 points and USD/JPY 300 pips in one day. In such a dollar-bearish day, trend is probably your best friend of the day. Always expect the unexpected and don't fight the trend. I learnt this lesson sometimes ago.


Tomorrow should be another interesting technical day. Trade safe everyone !

No Nonsense

A Latest Forex Trading Video by FX Bootcamp
A combination use of Fibonacci retracement, pivot lines and moving averages proves useful.

The Week of the Carry Traders
A good summary of the week's action focusing on the latest fundamental situations.

Dollar Runs Risk Of Big Swings With Packed Calendar Next Week
No doubt about that, a packed calendar week ahead, see for yourself here.

Forex Trading and Borrowed money
A honest disclosure of a very personal experience with an invaluable piece of advice.

Chart of the Week

What's Next? (2)

2. Keeping a daily journal

Let be honest. I was completely lost and bruised in the past 2 months (Dec, Jan). I was totally out of focused and was unable to follow my trading plan and rules which had brought me some success in the past (i.e. Aug' 06 +622 pips, Sept' 06 +687 pips, Oct' 06 +451 pips, and up to first three weeks of Nov'06 +678 pips). Then, everything just went pear shape, so quick so fast that you just couldn't cope and you finally lost your plot. Eventually, I had to give back some of my hard-earned fortune back to the market and I subsequently lost my interests in blogging. This is completely fair and justified because, on hindsight, I know that only the fittest, the toughest and the greatest could consistently perform no matter of what market condition. They are the ones who survive indefinitely and are the ones who ultimately leap the benefits for being on top of this game.

This week, everything seems back to the old (winning) routine. I started reporting my thoughts and daily trades again since last Sunday (first What's next? post). By doing just that, I had the chance to review my performance and to regroup my thoughts. This week, I made 218 pips.

Thanks for the motivation, Forexreader.

This blog is not much to write home about but the guy is good for beginners who'd like to assimilate as many strategies as possible before they begin their own trading activities. The blog basically attempts to find the right mix between fundamentals and advanced technical tips.

You made me realised again of what my strength and core strategy are about. I know that I'm way off being the top forex bloggers, but I'm determined to keep this blog going.

Another Day Another Issue (Over Cautious)

Sigh...I was fully geared up this morning with two trades (USD/CHF and USD/JPY shorts at 1.2395 and 121.45, both with promising price targets). I assumed today to be a great technical day since there was no major new releases on the fundamental side. I purposely avoided the GBP/USD trade. However, I paid a heavy price for being OVER CAUTIOUS and slightly impatient with the choppy price action during the morning session. And I got a little nervous over some -10 pips drawdown. What was I thinking then? I misread the price action and at the end, I exited my USD/CHF short even for -10 pips loss before taking my lunch. The USD/CHF started to weaken during my lunch break, I was there but not determined enough to pull the short trigger again. The outcome could be very different for today if I had settled my mind and went for the killer move.

At least, I still received a consolation prize for holding on to the USD/JPY short, which yielded a +39 pips profit. Most importantly, I learnt a great lesson today. In order to be successful and at the top of this game, not only you need to become technically sound in chart analysis, you also need to acquire/maintain a right mental attitude. I need to practise stronger belief and confidence in the system and myself too.

I think it's done for the day, +29 pips.

Afternoon Session (Do Not Follow Your Heart, Just Follow the System)

Besides FX, I, sometimes, also trade Dow, gold and oil futures. I was holding a short Dow contract just now but I missed out at least 50 points gain because I was thinking small. Small is just not good enough. Follow your intuition is not professional too.

Occasionally, I found myself booking my profits way too early. Why don’t I just let my technical charts do the job and show me the exit? I need to calm my excitement and let my winner run its course.

Back to FX, after waiting patiently for a few hours, finally I put some trades in at around 2pm. One good thing I found about trading the smaller time frame (such as 3, 5 and 15 min) is that you are able to evaluate the internal price movement for every hour. This can lead you to a different picture a few hours later. For example, the dollar was bullish in the morning session. As the day waned, it changed to neutral and there were signs of weakness at the start of afternoon session. I took the opportunity, this time, to buy EUR/USD and to sell USD/CHF at 1.3102 and 1.2421. End results are promising +28 and +26 pips.

And I could not believe my eyes that GBP/USD had turned out to be the biggest winner in this session.

That’s it, done for the day +115 pips (I report FX results in this blog only).

Morning Session (Booking Profits)

Yesterday afternoon, I cut my losses and repositioned all my trades after the release of US CPI report (due to the fundamental and technical outlooks), but there was again no follow through action. I held both GBP/USD and EUR/USD shorts at 1.9538 and 1.3133 respectively and also a long USD/CHF trade at 1.2396. In the evening, I exited the short GBP/USD position for a 17 pip profit. Hence, the end result for yesterday is only 3 pips on the positive side .

Finally this morning, we got the breakthrough (a much-delayed price action) and they all nearly hit my targets. I couldn't wait much longer and decided to close the remaining two trades for some profits: EUR/USD for +33 pips and USD/CHF for +28 pips.

I am now waiting for the dust to settle and try to pick up some technical analysis.

Morning Session (It's All About Timing)

This time, my timing was way off. I know there will be an important release (BOE MPC minutes) at 9.30 am. I pulled my short trigger way to soon (just before 8 am) at 1.9558 and had to suffer an unnecessary drawdown (~35 pips). Eventually I had to settled for a 4 pip loss due to mental exhaustion and fear. This type of play/setup, which I should have avoided in the first place on hindsight, was way too risky and not worthwhile. Next time around, I MUST wait and see (with eagle eyes) till the last 15 - 20 minutes before the news is due. By doing just that, I will have a better chance to survive.

My selection of trades was also wrong. I got a nice long USD/JPY setup but I didn't take it. I should stick to the low volatility play instead the one that swings wildly just like the GBP/USD beast.

I will probably take a few hours off to clear my mind.

Off Timing

My timing is slightly off today. I only picked up several small moves instead of the larger moves. For example, I started the day shorting GBP/USD at 1.9508 and could only manage to grab 10 pips. I had to cover quickly as I sensed a possible reversal. And I was right. I missed a big up move as I was not committed to pull the buy trigger.

In the afternoon, I shorted USD/CHF at1.2369 and still there was no follow through selling. End result +4 pips.

On a positive side, I had a long USD/CAD position at 1.1657 during lunch hour which at least gave me a quick +24 pips.

Done for the day +38 pips.

Done for the day +33 pips

I setup a short USD/JPY position at 119.58 during lunch time but it did not yield any positive result (-6 pips instead) after holding it for more than 1 hour. Meanwhile, I missed a chance to long GBP/USD at around 3.30 pm due to my other job interests.

I quite like my new daytrading approach. From now on, timing is everything. It is my AIM to get the best return out of the market using shortest time possible (1 - 3 hours max) and less risk exposure (15 - 20 pips).

Morning Trades

I got little frustrated this morning as I sold EUR/USD at 1.3148 this morning but didn't get the follow through action. The price moved back up and I had to cover for a mere 1 pip profit. I want to be on the safe side and don't want to be caught out. I've promised myself to stick to my trading rules .

I turned my attention to GBP/USD and I have noticed a price pullback from the 1.9502 level. I picked my best spot to short, i.e. 1.9521 and decided to risk only 15 pips. I had no clue this was coming (comments from BOE). Hence, I got excited and booked my profit far too soon at 1.9483 for 38 pips. On hindsight, I should have let the winner to run a little longer.

Anyway, a good start to the week.

What's Next?

1. Reading the News

Let do the basics again. What kind of news can make the forex price to tick, to swing, to change its direction or to drop/rise further? Timing is of great importance if you are a daytrader and choose to trade the intraday price movement.

It is my wish to become an excellent intraday technical analyst. From now on, it is my aim to use less time, less effort and less risk to yield better and more promising results.

19 Feb Economic Releases

0:01 GBP Rightmove House Prices (MoM) (FEB)
0:01 GBP Rightmove House Prices (YoY) (FEB)
5:30 JPY Nationwide Department Store Sales (YoY) (JAN)
5:30 JPY Tokyo Department Store Sales (YoY) (JAN)
13:30 CAD International Securities Transactions (DEC)
13:30 CAD Wholesale Inventories (DEC)
13:30 CAD Wholesale Sales (MoM) (DEC)