There were a couple of scenarios that I saw playing out this morning in equities, so I looked at the charts in both directions. Futures were showing a good-sized gap-down, so either A) they’d open lower and continue down, or B) open lower, but rally back up to yesterday’s highs.
Going through the baskets, I looked at each currency with both scenarios in mind. NZD had pushed above a trend-line that had held up for a few months, and was holding on to those gains, and despite equities being weak yesterday, JPY was sitting right on top of some support and looks weak.
When equities opened, they did indeed push up, but not very convincingly, and NZD/JPY was in a very pretty base and heading upward. The breakout level that I actually wanted was yesterday’s highs, but that was about 5 pips away from the day’s highs so far, so I set and entry order a couple of pips outside of that level, and my stop below the base.
It’s also worth noting that I don’t love the R:R (though it is above 1.5), and there is some resistance before my target, but I plan to be more aggressive with profit taking, and will probably move my stop to break even before 1R.
Entry – 70.69
Price was heading upward when I set the entry order, so not too long after setting that, my entry was triggered.
| Entry Order Level |
|---|
| 70.69 |
| Stop Loss Level |
| 70.15 |
| Target Level |
| 71.5 |
Exit – 70.13
I didn’t plan on holding this position for this long, especially because I knew things would reverse at some point — this was a risk-on trade, and I knew they’d shift to risk-off this week. Regardless, I was still in the trade so I trusted my analysis and stayed in it.
After almost 3 days, it happened. Equities dropped pretty sharply, taking JPY up with it, and stopping me out for a loss. Next time, if I know I’m doing a short-term trade, and I’m holding for longer than a day or so, I’ll cut my losses.
