The global macro picture looks squared away: swap dealers are short CAD and long Yen; institutional managers are actively buying Yen contracts. Bond activity indicates risk-off verifying ¥ long positioning. Retail positioning is not optimal and BoJ numbers are due out this week so a wide stop.
The charts show good CCI Divergence on the daily and weekly. Stop is set north of ¥92. Position size is a full bell.
Update: 10/01, order triggered; 10/18, closed at +2.4% of margin;
Similar global macro factors with institutional managers actively closing their euro shorts. CCI divergence on the weekly; stop-loss is set above the weekly high. A correlated trade so I will be trailing the stop on this pair if it triggers. Risk taken is a 2/3 bell.
Update: 10/01, order triggered; 10/18, stopped out, -1.94% loss on equity
Trader Error: this trade was held too long, I was away from my laptop and missed the profit target on the morning of 10/16.
Sails are up on this short trade due to global macro and technical confluence.
On the macro side, the COT report shows swap dealers are stretched long the GBP-USD contract and institutional managers are actively taking profit on their euro long positions. Also, the economic calendar lists favorable winds for the big island pound. However, BoE pirate meeting ahead so I will be keeping a weather-eye and trailing stops.
The weekly shows good CCI divergence and a pair of tweezer tops on the four-hour chart. Order triggered on the second pair of tweezer tops. Lot size is a full bell with a stopper knot set at .9241.
Order triggered at 0.9180
Update: 09/10/2017, 2/3 of trade bulletproofed at 0.9175 & 1/3 of position set to scale-out at 0.9127 –tracking the 4-hour, later trailed to 0.9095.
Update: 09/11/17, closed out 1/3 of position at 0.9095. Managing remainder of position on the daily chart.
Update: 09/18/17, entire position closed; gain on trade +43% of margin
Good CCI divergence on the charts. The economic calendar shows good numbers on the GBP. I expect a DXY pullback. However the economic calendar lists pirate activity this week so will keep my position size 33% of normal with a wide stop.
Update: position open, currently below the 1.185 stop-loss
Position stopped out; risk capped at -7.6% of equity
Daily high-test and double top off the 50 ema. I expect the GBP and USD to apply downward pressure on the Euro. NOK is a commodity currency. Position sizing will be halved due to correlation with EUR/$ short.
Update: position open, currently below the 9.366 stop-loss
Position closed, 08-24-2017: closed out on 200 ema bounce; gain on trade +23.1% of required margin.
Update: took a minor short on AUD/JPY at 87.3; closed position early due to change in retail positioning; gain on trade +15.4% of required margin.
Fed rhetoric is that rate hikes are not likely to happen in the relative future (relative to what exactly?). This is the type of FedSpeak that throws an anchor around the dollar. The dollar losing value buoyed up commodity prices resulting in higher demand for the commodity currencies (aud, cad, nok, nzd, etc…). I will be keeping an eye out for the wave two pullback.
I always stay port-side with conservative lot sizing and wide stops when I see a pirate get-together listed on the economic calendar.
Apply risk management to your alternative investments.
I expect the easterly winds to push down the AUD/JPY this week. The Reserve Bank of Australia (recent dovish rhetoric) did not hike rates recently. Also the Chinese slowdown is putting overall downward pressure on commodity currencies.
However, I always rely on charts for navigable water, such as:
a weekly high-test with cci divergence
daily decelleration with cci divergence
top of a head & shoulders pattern on the daily chart
The Japenese Yen, a safe-haven (funding) currency, may rise above the AUD a bit this week to offset the expected decrease in the DXY. I will be on the lookout for an updraft to the DXY to signal a flattening or decreasing of the Yen.
Use wide stops, in this case above JPY89. Cap risk at a predetermined limit that does not change unless something outside of emotion justifies the change. My target holding period is no more than 10 days, depending on the Winds.
trade closed: stopped out at JPY89.2 risk capped at -1.9% of equity.
High probabilility of the DXY rebounding off 93, good probability of weekend gap in price action to fall, good CCI divergence on daily & weekly. Conservative lot size and wide stop due to Fed meeting this week. Stop loss set above USD00.75
trade closed:stopped out at USD.755 risk capped at -1.1% of equity.