Iím greentunnel, a nobody with passion in forex and investing in general. My experience is limited with a few years and not much success (so, this should be a warning sign for those expecting super star trading, it is not here).
How do I trade?
- I look at market sentiment, and try to guess where market participant wants to bring this market to. Itís all discretionary, using tools like Yahoo Finance, Reuters, Bloomberg, CNBC tv, Forex Factory, etc etc. So no need explanation there, I donít have any exact method, I try quantifying many things like interest rate expectation, equity market, a bit on bond. Ok, Iíll just stop there. Please donít get me wrong, Iím not doing anything fancy and complex, I donít even understand much of the stuff. Just try my best understanding some of the basic situation and in the end, I just guess what could happen, and what has good chance to happen.
- I use some simple tech/chart analysis to find good enough entry to protect me from big drawdowns and losers. Still direction that I choose is based on step 1. I like SMA, use them as ďbouncingĒ levels and I notice where price are cluttering and rushing through. I draw Fib lines once in a while. Basic trend line and channels. I tried some fancy stuff too but just to check my trade or to amuse myself when Iím sitting waiting for a trade idea to come up. OK for those with mechanical trade and tech junkie, I donít mean disrespect; it is just that I have not been able to unlock the way of using these indicators effectively. And as a simple guy, I have only two ďhandsĒ, so I have to choose the tools that Iíll be using, not use them all. In a way, you can say that Iím learning to use new indicators, to fill those long hours and prevent me from triggering unnecessary trades due to boredom.
Price is ranging and may break out of range very soon. Why I pick upside? G/U has lost lots of value since 2.11xx high. And now people are realizing that it is not that bad after all, so push up the price all the way up here ~1.9900. Now I think any upside is going to be very limited for G/U, max to 2.0000-2.0100. U/J however has lots of potential as JPY is not that rock solid either. Much of unwinding has taken place and I donít see more coming up. As price retraces up, more unwinding will happen, I expect that cap to be around 110.00-112.00. And Japan/BOJ wants weak yen and they will help to make it happen. Uncertainty is still there, but people are much more prepared than before, so I donít see many surprises that can push down U/J much.
My target for G/J = G/U 2.0000 x U/J 110.00 = 220.00
Risks are everywhere and if USD gets many surprising bad news, it could be a double whammy as GBP now tend to follow USD bad news. An accelerated down move could be triggered easily. I like 209.20 as it was close to last low of these few days rally up.
Entry: Long GBP/JPY @ 212.20 1 lot.
Initial T/P 220.00, S/L 209.20 (these may change, Iíll post the update).