Wednesday, December 3, 2014

3 Dec 2014: USDJPY daytrade #3

This was a wildly speculative trade. ADP NFP numbers had just come out. These are unofficial NFP numbers, but they still have a major impact on the market and foreshadow the official NFP figures that come out on Friday. 

Anyway, the figure was bad and the USDJPY dived. I had been looking for an opportunity to go long on the USDJPY, in line with H1 and H4 bullish momentum. However, I didn't like trading against the NFP release. I saw yesterday's high in conjunction with the 50% retracement level of the major upswing as a good area of support. 

Price quickly fell following the release of the ADP NFP, but then stalled at precisely yesterday's high. As you can see on the chart, price did not fall for two candles. I saw this as a good opportunity for a low-probability, high-reward trade and went long. My reward was 6.5R, so I only needed something like a 15% win probability to make it worthwhile.

Price advanced for a short time and my reward got up to 1.5R. However, I chose not to close it. I didn't enter a low-probability trade against the news for a measly 1.5R. I wanted to be paid off big.

However, the upward movement halted pretty quickly and turned downwards. I was hoping for bearish news traders to be trapped. When this didn't eventuate and I saw that the candle was closing bearish, I closed my trade at breakeven. 

Overall, I think this was a pretty good trade, albeit a little too 'heroic'. I only needed a win probability of 15% to have made it worthwhile. I managed to get out at breakeven due to a well-placed entry.

(click to enlarge)


The bearish news traders did end up getting trapped. My timing was just a bit out. Oh well.

(click to enlarge)

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.