Tuesday, October 14, 2008

Trying something a little different

This time I am going to try and 'stack' on some free trades. The idea is Long USD/JPY as equities snap back from these panic lows. It's possible we'll see some recovery for a few weeks, which should drag this pair higher.
The first entry point is just over last hour's high at 102.69. That hour drew a long downward pointing 'tail' in the context of a short-term uptrend. Its high is a high-probability place for a long. The tail is nearly 100 pips long, so I'm using 100 pips as my initial stop size.
In order to stack on some free trades, I'll be selling half of this position once it is 100 pips in the green, thereby allowing me to leave the stop where it is and making the trade risk-free. Then I'll look for another entry point to do the same thing.

Pending order(1): Long 3870 USD/JPY at 102.69
Pending order(2): Short 1935 USD/JPY at 103.69
Initial stop: 101.69
Initial exposure: 100 pips, $38.70 or 14.33%


Current closed equity: $270.00
Current position: flat
Current exposure: 0

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