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As I write this Monday morning, the USD/JPY has revisited the 94 level, but is falling away. So far, this seems to confirm strong resistance at this level. I am not short yet, but I am watching it closely. When this thread was started in 2011, buying dips was a good approach. At the current time, I am on board with you on selling strength. I am looking for a return to the monthly average. I won't try to pick the top, but I will try to take something out of the middle of this trend and pick up about 100 pips on the downside.
I am normally skeptical of methods that are complex because all the available information on trading successfully seems to suggest that simple is better and typically more robust. With that said, however, I am always open to improvements. Hurst Cycles do seem to be very interesting. How do I send you a PM?
As it turns out, this trade is now complete! The 20 Day FLD satisfied its targets in one day, its too bad that its a monday and I dont trade Mondays. I could provide several examples to illustrate why it is not a good idea, yet this beautiful short trade that I had been analyzing played out in one day. While I didnt profit from it, I didnt miss it either. What is great is to see how price respects the 20 Day FLD and has steamrolled right through it.
Im a little jealous but my rules have kept me safe more than this gain would have made me feel good for the day!
It is always best to stick with your rules. And I echo your sentiment about Mondays. My problem, however, is that when I miss trades, it seems to lead me to make a host of mistakes. For this reason, I will still trade on Monday, but with reduced positions size. So, I missed out on a big gain because my position size was small, but I did pick up 146 pips in this trade. I did not put a limit at the monthly average even though I expected it to stall at that level. The price steamrolled through this level and I took profit in the rebound off 91. I didn't catch the top or the bottom, nor did I have good size in the trade, but I was able to participate enough to keep me from making mistakes by trying to chase the price or trade countertrend. I see that the price failed at the monthly average last night. Already this morning there is talk about an ineffective BOJ at weakening the Yen. There is also the talk of a reaction to the Italian debacle and a flight to safety (or at least risk reduction which lifts the Yen). So, we will have to wait to see if this is a overreaction to the Italian uncertainty or if this is the resumption of a larger downtrend. I am interested in what your cycles suggest.
As we all know, hind sight is 20/20 vision. I just received and email with these charts and thought I would share what was written about the Yen trade he & I had been discussing. This trade was given out in a timely manner. Just imagine........
WK
"Had you bought a put on this Japanese Yen on top say in Oct 15th 2012, for reason of this being at the all time high and being in a channel for 6 months. Also, this was during the nuclear disaster and they put in a new prime minister who wanted to devaluate their Yen to bringing in more buyers. Then would have sold this option since the market consolidated in Feb. 15th 2013. Here is the info below.
In Oct. 15th 2012 the cost of 118 put was for $400 each. When the market consolidated in Feb 15th 2013 this option became worth $13,687. I highlighted below.
If you would have bought 105 options, this would have cost you $50,000. In Feb 15th 2013, your options would have been worth $1.4 mil."
As you can see, options on currency futures are truly a powerful trading option in the right hands. WK
Timing is everything!
There are many leveraged instruments that enable one to make a bundle in a nice trend. But the real power is in self discipline. If you like to trade options that you hold for several months, then you just need to have the self discipline to do that consistently with appropriate risk management procedures.
