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NZDJPY
By Laetitia Vaval | January 17, 2008
I finally entered a new trade this week. I had not traded nor updated this blog in quite a while for the a few simple reasons. To be honest, I felt a bit discouraged by the last loosing trade i had entered. I really felt like it would be “impossible”to win back the money I had lost. I also felt like I hadn’t found a good enough opportunity to enter a trade. It is true that at first, my instinctive desire was to rush into a trade to try to win back the money I had lost, but I soon realized that doing so would only result in further losses.
Therefore, I decided to take “some time off” and focus on finding my next trade. I also realized - by looking at my trading report - that there are certain currencies that I trade better than other and that I should focus on those specific pairs (I noticed that the best currency I have traded so far is the yen). For instance, despite having the feeling of knowing the EURUSD pair the best ( and reading so much about it), it is the currency pair that I have traded the worst since my account was set up. So, I decided to stay away from the EURUSD despite it being quite an attractive pair. On Monday, the Euro broke records high and it was said that the Euro would reach 1.50 and above. Had I not decided to stay away from the pair, I would have gotten long at around 1.48. About 24 hours later, the Euro dropped about 200 pips. This is certainly just a short-term reversal but given my trading style I would have probably gotten shaken out and lost another 200 pips.
So instead of focusing on the majors, I decided to focus on some exotic pairs. After extensively reading the dailyfx website, I found a good trading opportunity in the NZDJPY. According to Jamie’s elliot wave analysis the pair has the potential to drop below 70: “This means that wave C is underway now, which will probably be violent and fast — and has the potential to drop below 70. Strategy – Bearish against 86.18, target below 70.” (http://www.dailyfx.com/story/currency_crosses/currency_crosses/Yen_Crosses_Break_Down____1200413848881.html)
I shorted 3 lots. I sold the two first lots for 83.74 and 83.05 on Monday. The next morning each lot was up by about 185pips and 110 pips so I decided to add a third lot since the trade was playing out as planned. I shorted a third lot at 81.80. I set my stop price for all 3 lots at 85.50. In the past 24 hours, the pair has traded back up to slightly above 83.00 but is now back down to about 82. All together I’m up 277 pips right now. As Jamie wrote this trade should play out quite rapidly, so I’m hoping to be in it for only a few days. This is a carry trade and the interest rate differential is not in my favor, I’ve already lost 26 dollars on interest rates and have only had this trade for 48 hours.
noneTopics: Wall Street Warrior |
March 1st, 2008 at 4:16 am
Hi Laetitia,
Thought you were great on WSW.
You have many fans at EliteTrader.com.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=115264
March 9th, 2008 at 5:26 pm
Trying to win your money back is complete emotional attachment. The opportunity of the current trade does not care what your P and L for the week is. All I am saying is keep every trade separate from all the others. BE IN THE PRESENT. You know that you can trade profitably. LOSING is a part of trading. Success in trading is most dependent on our psychology. Don’t be affected by losing trades. They are a part of the game. Dwelling on them prevents you from seeing the current reality.
May 14th, 2008 at 8:13 pm
Hi Laetitia!!!!
Do you still trade? or have you fallen by the way side?
james
July 1st, 2008 at 10:40 pm
Hey Laetitia,
At first I found it interesting that the currency you are the most familiar with ended up being the one you made the worst trades with. I think sometimes emotional familiarity with a stock or a commodity can cloud your judgement and not allow you to act in a rational manner. I’m not surprised that your doing well with a currency that you have no familiarity with. You are able to see a short term trend or opportunity and act on it, as you said, in a very clear manner.
Take care,
Patrick