04 January 2013

USD/JPY : Changing Risk Reward

  • Tale of 2 inverse SHSs. This is the happy one. The other (EUR/USD) is still playing out.
  • Since the very first buy signal at 80.61, we are now 8 big figures higher, and a lot closer to the SHS objective of 92.45.
  • Clearly, risk reward is slowly shifting away from favoring taking very large long USD/JPY risk, even if uptrend remains strong.
  • Have taken off half of my long position at 87.77 and 87.85 today. Happy to let the remainder run with a trailing stop.
  • Until we see this pause and consolidate and form a new base for sensible placement of stop loss, I will not ramp up JPY risk.
  • This USD/JPY trade has rescued me from near account destruction. Margin account has been restored to where it was in Jun12 last year. Slowly slowly making it back.

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