March 28, 2009

Weekly Trading Update - March 23-27

After a few average trading weeks, this week was a highly profitable one. There were two trades in total - one on the GBP/USD pair and one on the USD/JPY pair.

The first trade was on the USD/JPY pair. This one has been in a strong upwards trend and so I was hoping for a pull-back followed by an upwards EMA crossover on the 4 hour chart, which is exactly what happened on Monday morning (UK time).

After the crossover I waited for a slight pull-back and entered a long position at 96.70. I later closed half the position for 40 points and let the other half run, moving my stop loss to break-even. I was hoping it would have another crack at the 99-100 mark, but would probably have settled for 98.00, but annoyingly the price dropped back just enough to take out my stop loss before resuming it's upward trend (going past the 98.00 level).

So this was really annoying but the following trade on the GBP/USD pair more than made up for this disappointment. Technically speaking I should really have been looking to go long on this pair because the daily Supertrend is indicating an upwards trend, but as I think I mentioned in a recent blog post, I just couldn't see it breaking through the 1.50 level and thought that 1.40 was far more likely to be hit before 1.50.

Anyway I stuck to my convictions and entered as soon as the downwards EMA crossover arrived on the 4 hour chart. I had been waiting for this crossover for several days because there was sure to be a few hundred points to be made when it did finally happen. It looked like it was crossing downwards on Wednesday afternoon / evening but I decided to wait for a more convincing downwards move and this duly arrived on Thursday.

The decisive 4 hour candle was the one from 12.00-1600 (GMT) on Thursday. The price dropped through the 1.45 level, the EMAs finally crossed downwards, and thankfully it subsequently rebounded above the 1.45 level so I could get a decent entry point at 1.4510.

As I say I was looking for a few hundred points and was ultimately targeting the 1.42 level. Because of this I didn't close out the first half of my position until it hit 1.44 (the following morning). I then moved my stop loss to break even and let the other half run.

The price then continued to race downwards and fell below 1.43, at which point I was really tempted to close my position. I was going to move my stop loss to 1.43 and see what happened but I decided to continue to let it run, and to cut a long story story short, I eventually closed out last night at 1.4311, which was still a very healthy profit.

I'm not sure I've done the right thing because with all the weak economic data coming out of the UK this week I think 1.42 or even 1.40 could be hit next week, but as I don't like holding positions over the weekend I decided to play it safe.

Anyway have a good weekend and if you would like to check out my 4 hour trading strategy in more detail, you can do so by filling in the form above and subscribing to my newsletter.



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2 Comments on Weekly Trading Update - March 23-27 »

March 30, 2009

Greg @ 7:15 pm:

Nice trading sir! I see the JPY taking a hit versus the dollar in the coming days, want to call it?

James Woolley @ 8:05 pm:

I'm hoping the USD/JPY will fall to around the 95 level so I can gear up for another long position and yet another attempt at breaking the 100 level.

Long positions are still the order of the day as long as the price remains above 94.32.

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