USD/JPY: Going to keep stopping everyone out

The market is very bullish USD/JPY but the market is also quite long USD/JPY! Risk averse sentiment returns on a semi-regular basis and this sends the Yen crosses tumbling at unexpected times, just like we saw with EUR/JPY in early European trade yesterday. I’m leaving USD/JPY alone as I think it will keep stopping out both the bulls and the bears and I’d trade it with a very short-term bias, jumping onto moves just as they look likely to be starting.

A strong view in USD/JPY could be an expensive indulgence in coming weeks!

I’d hazard a guess at a 97/101 range in coming days which suggests that selling rallies from current levels is the preferred strategy.

  1. Agree here, Sean. I sold the 100.70 level and did nicely. I think we’re going to break lower in coming week. Could definitely go below 97 🙂 Momentum seems to be overbought and just about ready to give in to the sellers… and we have come close to the bottom of the major bull channel that usd-jpy fell off of.

  2. Hi Sean, got stopped out of UJ short at 99.94 before watching it falling to 99.30 the next day 🙁 Any advice on handling these painful losses? Or just sucking it up and moving on is the name of the game?

  3. Yes Gus, only remedy is to forget about it and move on. Best to reduce position sizes if you are having a rough trading period and keep small until yu start seeing the moves more clearly.

  4. Thanks Sean 🙂 Do you think survival in the forex world means keeping your stops tight and hoping the next dice throw goes your way?

  5. Gus, I’ll throw in my 2 cents. I’m still sort of struggling as a trader but I shouldn’t be at all. I usually see the big moves coming before they happen. My problem has been blowing out accounts from not managing money properly. Also trading too much intraday. Best advice I could give you would be to look for bigger moves in markets. Don’t make your stops too tight. Make sure it makes sense from a risk/reward perspective. You’ll usually want at least 2:1.. For example shorting USD/JPY at 100.70 with a 101.10 stop loss and a profit target of at least 99.90.

    Now, if you can make plays like that and catch 300-500+ pip moves, then you’re really in good shape.

  6. Hi Gus, Charles makes a lot of sense. I would also add that its a long-term plan, not get-rich-quick as many would claim. Every trader is different and will operate best with different strategies so you need to find what works best for you

  7. Charles, same here also a struggling trader. I actually had the same plan like the one you described. I went in at 99.94 looking for 99, hoping that 100 would provide the strong barrier. Even after 100 got broken, I stayed with the trade since that might have been just another stophunt. I waited until after London close before finally cutting it since there was no retrace. If I may know, why you picked 100.70 as entry level instead of 99.90?

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