FXEZ's E/J Gravy Train

I'd like to use this space to post a few observations on how I approach the EUR/JPY pair. I like the E/J because it has a combination of trendiness, positive interest and low spreads that is hard to beat. I'm not sure how many others are following this thread but this can be a place for discussing trading this pair.

Here is my basic strategy:

The weekly chart determines the trend, and to some extent the daily chart. Pullbacks against the trend create entry points. I take multiple small positions and scale in to diversify entry points and to take advantage of the normal back and forth movement that happens within a given trend. I exit to bank profits when the market has extended in my favor, or when the trend has changed to cut losses short.

One thing I've learned about this market is that it can have significant pullbacks while still maintaining the trend intact so identifying and trading in the direction of the trend and keeping position size small is crucial to successfully ride out those pullbacks.

My current outlook is the trend is up and this overnight session's down move is providing an opportunity to scale in long. I'm currently long 7 positions which are down about 30 pips as I type this, and patiently waiting for the move to the upside to resume. I'm a bit position heavy as I reloaded after the 65 pip up move, so I may look to take off a couple of positions as opportunity provides itself.

Hey FXEZ,

I just started trading E/J exclusively, and I've been looking for a place for discussion of trades. Hope you don't mind if I join

Below is my trading session so far, and as I see it now, it may take a little while for that uptrend of yours to take over, and by this SERIOUSLY, I mean 5-15 minutes (until the 24 WMA slopes up for me that is)

It appears to be swinging up now actually as I type, may enter very soon

EDIT: LONG @ 157.74

You have any targets?

Hey Kharvell, nice to see you here in the thread. Welcome! Looks like there's just enough room to squeeze you in. I'm also exclusively trading EJ.

E/J seems to be building a base. It looks like a wedge anyway, depending on which way it breaks. On the way back down from the 91 pip rise I dumped just slightly positive and have now reloaded with just 2 lots at an average of 157.715. More of a risk control measure than anything as I had too many lots for my comfort level in case we get another leg down and I can catch some more bargains and need more ammo. 159.66 is the obvious first target but nothing is really jumping out at me.

There should be support above 156.55 all the way up to 157. We shall see...

Currently holding 5 lots long at an average price of 157.329. Looks like it's basing on support. Could get interesting with 8:30 news around the corner.

Anybody else trading EUR/JPY? If so, which way are you looking?

I have started concentrating on EJ past few weeks, exactly for the reasons you mentioned.

I see the overall downtrend continuing after it turned back from 158.92 area.
However, 8.30 news can set the tone for a big upward move.

Do you use any specific trading techniques for this pair

Thanks

I'm kicking myself for exiting too early (twice), when the average position peaked above B/E. So rather than sitting on a nice open (100+pip) gain with a good sized position, I'm flat and just slightly ahead for my troubles. I'll blame it on lack of sleep affecting my judgement.

That aside, I'm still thinking based on my weekly analysis, that the long direction should reassert itself but am hoping for a pullback before that happens so I can get in at a better average price or get in at all. It looks like the launch sequence may already be underway.

Yes I identify the weekly trend using daily and weekly charts, and attempt to scale in (on pullbacks) in that direction. I bank profits when new highs in an uptrend are reached or new lows in a downtrend are reached, and bail out when I identify a change in trend.

Looks like the objective was reached at 159.6. I'm no longer adding to longs at these levels and am looking to scale into shorts on rallies below that level.

Resting buy order hit at 158.19. Forgot to cancel. Tide also seems to be turning back up. Might let it ride to see where it goes.

You mean you didn't catch the train down south?

Sad but true. You should have blown the whistle for me or something! I did catch a couple of micro shorts but didn't hold for the plunge. I had 40 pips on that filled errant long too LOL. Was able to get out +5 after adding 3 more scales (down south). I've been up all night and am dead tired, so I think I'll quit before I can get myself into any more trouble. Good trading - hope you bagged some pips Kharvell!

Question for kharvell if I am not imposing to much. What are you looking for on your one minute chart to happen to make you enter or exit. How do you use the BB. (I think I saw on your chart, 12 WMA, 12 WMA, BB 10, 1.) Thank you in advance.

Kharvell,

Your graph looks so simple and clean indicating the move downwards.
In your practice, when do you recognize this is indeed downward move, without risking much and take advantage.

Being a novice, I sit in front of the charts and stare for hours only to watch going up and down, as the US news came out and the big shots spoke, before I realize, it has gone far down.


I know this turns out to be a basic question on trading method, appreciate your response.

Thanks

Weekly direction seems still unclear, given the lax holiday movement. Price didn't push up quite enough over the weekly close to indicate an up market, and currently is straddling the weekly close. I'm going to wait to see which way it breaks before committing to a direction.

Looks like I can officially call the weekly bias down on EJ, so looking to scale em in that direction on pullups.

Was able to catch several scalps to the downside on the previous overnight session. The day session caught a couple of positions in the hole but I was able to increase my spacing on the first add from 50 to 75 and ended up with 5 positions with room for 2 more at the top. Just bailed with net 17 pips @157.942 at 23:05 Eastern on the 5 positions and may reevaluate the weekly trend around the European open. I feel like I need a break. I tend to favor clearing out of larger positions over the possibility of making larger gains by holding big positions. It may be a flaw that reduces my overall returns, but it's biased toward risk reduction. If the weekly close is a pivot at 157.74, it seems right in the middle (56%) of the 158.67-156.57 current weekly range.

In my studies of this type of week the best strategy seems to be to continue to play the short side above and the long side below rather than plan on a trend or continuation. Weeks like this often have the big trend late in the week (thurs-friday) and since we have NFP on Friday, that's a likely scenario.

I debated posting account details but since I'm virtually anonymous, I don't really have anything to lose. I'm trading a small account with this strategy on O&A. The week started with ~$501, and I'm currently at ~$547 and flat. Hopefully posting occasional account updates won't interfere with my mental focus. Last week I started at ~$296, and that amount rose to $501. I'm using 2.5K lot sizes (last week was using 2K lot sizes and was arguably way oversizing it), adding the first round on a 50 pip move and each 25 pips thereafter in the direction of the weekly trend as I interpret it based on the weekly and daily charts.

I may start posting on some of the breakouts I take on the various opens later.

Note: the white line in the middle of the chart is the previous weekly close.

FXEZ,
Enjoyed reading your thread.

I also trade euro/jpy. I trade breakouts on 5 min charts.
I was able to catch the downward move at midnight NY time for +40 pips.
The pair is still trending down as I am writing this post. There were many opportunities to enter on pullbacks in last couple of hours.

Playing 3:00 AM move to upside - no confirmation yet but U/J looks bullish.

2 positions avg price 157.255 long.