Weekly Swing Trading Round-Up 22nd April 2012 And CAD:JPY Analysis

Weekly Swing Trading Round-Up 22nd April 2012 And CAD:JPY Analysis

I’m really sorry to say that yet another Week has passed with very little in the way of updates from me. I’m starting to become unsure as to why I’m not seeing the trading opportunities that were plentiful throughout January to March. I’ve started to question whether I’m lacking in confidence, missing good set-ups, or there just isn’t anything that can be deemed high probability. There have been a lot of moves that looked obvious after the event, but picking the good ones before the event has been particularly difficult and hence I’ve barely collected any pips all Month.

Only 3 trades were taken over the last Week, a DOW short from 13,010 which wasn’t intended to be a swing trade but ended up as a 3 day hold and delivered a 186 points profit, a Cable short that was stopped out for a 35 pip loss, and finally another attempt at shorting CAD:JPY which has remained a favourite for me over the last couple of Months and goes into the Weekend showing +18 pips profit.

So, with very little else to discuss right now, I’ll go over a brief update on CAD:JPY and the very simple, yet not really reassuring, reasoning for this trade.

To gain an idea of the bigger picture previous CAD:JPY analysis is well worth a visit and can be found here here and here.

The 4 hourly chart shows a potentially bullish ‘W’ pattern though I woudn’t say it’ss a confirmed bullish pattern at this stage whilst price remains within a falling channel. As with any bullish pattern, for as long as the trend is down and the pattern falls within the confines of a falling channel or falling wedge, then that pattern cannot be traded as bullish until a confirmed breakout has taken place. Therefore, my short entry was based on the channel resistance using a parallel line to the channel underside which coincided with the 4 hourly 200 MA and the 50% fib retracement level from the highs to the recent swing low (fib not shown on chart):

The Daily chart doesn’t add any real value to the 4 hourly chart above, but it does show MACD having crossed positively which looks corrective but needs to be kept in check as there’s plenty of upside room for an impulsive rally. I’ve also annotated the channel onto the Daily chart as a reference point:

In the short term I don’t have a great deal of confidence in this trade particularly as signals are fairly mixed across other Yen pairs but in the longer term I’d expect to see an eventual retest of the 2012 lows. The question is, am I willing to run wide stops for this trade ahead of a potentially large move down or will I run tight stops and base the trade around the annotated channel? In all honesty at this stage with so much Market indecision across so many Markets, I’ll probably stick with the latter plan for now.

 

3 Comments
  • RS2OOO
    Posted at 18:08h, 23 April

    I don’t think I was expecting CAD:JPY to sell off as quickly as it did today, therefore I chose to close half the position for a gain of 102 points. (Friday’s entry was 82.36, and half position covered at 81.34)

    When I close the 2nd half of the position I’ll post the aggregate gain/loss in the trades log.

  • RS2OOO
    Posted at 21:44h, 24 April

    2nd half of CAD:JPY stopped out at breakeven to give an aggregate overall profit of 51 points on the position.

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