4-17-2007 Daily Trading Lesson

 

AUD/JPY Correction Looks Imminent

Well I was on a nice little run but they all have to end eventually. I was recently stopped out on my EUR/JPY fade for a loss of 106 pips per lot. I will still be keeping a close eye on the pair for a potential longer term swing setup if there is a trendline break or MACD cross as this uptrend is overdue for some sort of intermediate correction as it has put in 5 consecutive higher lows over the past couple months since the big selloff.

As for my other JPY fade, please refer to the chart below. As of right now it is under by about 120 pips per lot. In hindsight, I think I was over-anxioius to get on board this trade and missed a much better entry has I simply waited for price to cross above the first FFF Fade zone. All the conditions that originially caused me to enter this trade are still present (The MACD Divergence, Slowing ADX, Reversing RSI, & Overextended Price) so I am optimistic that price will at least fall back to my entry level where I will scratch at least half of the trade.

After that, we’ll just have to wait and see how things are looking. Either way this should serve as a good lesson for me in how NOT to become over-exposed in one direction of a particular currency (in this case, having 4 open shorts on the Yen accross 2 pairs).

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