Not ordinary hedging is used “in this kind of situation”
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Good morning everyone.
Yesterday's USD/JPY showed a price range of about 1 yen.
A while ago, before the U.S.-Japan coordinated intervention, the range was about 50 sen, but once it started moving, volatility increased.
Personally, I think, in FX and other such markets, which tend to be more speculative, there is no need to think about “three months ahead” or “one year from now.”
Today, tonight, what will happen, how it will move within the next three hours, I think it’s normal to trade very short term.
When I write like this, some people imagine trading opportunities that involve repeatedly clicking tonight’s trades, but I don’t think that at all.
Most readers who follow this blog are part-time traders who work for companies.
They work at their jobs in the evening and become traders at night.
With that kind of schedule, they review daytime moves to prepare for what’s ahead.
Is that about right?
I also write in this blog that 90% of trading is waiting and preparation.
To wait means to act when you reach the place you decided on or predicted, so there’s no need to hurry.
This is the basis of my product
The New Millionaire Trader’s Scalping: Volume Plus
This is also something I can say.
Not “unclear parts” or “kind of …”; decide on a specific place, “here.”
After deciding, I confirm it with post-return analysis and then challenge the trades.
That’s the kind of style I think it is.
With those ideas in mind,
I will look at USD/JPY 1-hour and 1-minute charts
The 1-hour yellow horizontal line is around the 50% retracement from the bottom that I wrote about in yesterday’s article.
The 1-minute chart yellow horizontal line is in roughly the same area.
You could draw the 50% line from the 1-hour chart onto the 1-minute chart as well, but this is mainly a big-picture view, so I used the 1-hour Fibonacci to confirm the 50% retracement.
This 50% retracement line was known as of yesterday morning.
Whether the 2-week-long 1-hour range would break up or break down wasn’t known as of yesterday morning, but it ultimately broke upward.
Is the pullback after that break the yellow 50% line?
If you keep that in mind…
This is also hindsight, but generally it fell to about the 50% and then reversed.
Looking at last week's 1-hour chart, there’s about a 10-pip difference, but broadly the price faced resistance at the 50% line and fell.
In other words, it acted as resistance.
It breached that resistance yesterday, but what you should think here is
that resistance and support may swap...
and when resistance and support swap, one of my actions is to consider a long position at the red circle.
However, because this scenario has many downward breaks causing losses, it’s good to try, but keep risk controlled, which leads
to trading in this manner.
From the 1-minute chart to the tip of the wick, about 6 pips, so in hindsight it’s a not-your-ordinary hedging success.
As I always write, what I’m writing here is hindsight.
However, the feeling that you predict the outcome and take a position, and if you fail and lose...
Of course it crosses my mind, but that’s why I think hedging exists.
Turning a bit away from the main topic, I want to say that after returning home it’s important to review today’s charts up to this point and examine them, and since opportunities are not plentiful, you need to be prepared not to miss the chances when they come.
Forex is a tug-of-war among currencies.
Rather than trading while it’s still being pulled, it’s faster and yields quicker results to trade when the pull ends and it snaps back.
I think this is where FX trading sits in the realm of speculation.
In the above chart, the Millionaire Trader users probably waited in the blue square zone.
Whether you take profits on a pullback or go for a breakout, it changes depending on the moment. If you’re selling near the top, you can use the top as a stop-loss, and if it has moved a bit, a breakout short for scalping may be fine.
If you prepare like this, your mind will be clear and there will be no hesitation about future plans.
① FX is a tug-of-war between currencies, and the biggest opportunity comes when the tugging releases its limit.
② Be aware of the switching of support and resistance.
Just being mindful of these two things will change your trading stance.
Even if you adopt a method afterward, there is plenty of time to earn, so don’t panic.
This morning’s decline from 9:00 is reversing from the 50% line as a starting point.
Considering recent volatility and swings, I’ve reaffirmed the advantages of GMO Click Securities’ FX Options.
Trading with smaller capital than FX, aiming for occasionally large returns, and risk is limited to what you bet, making money management easier.
With that, I’ve decided to seal and market a product with the theme of “high leverage.”
I’ll be updating it soon, so if you’re interested, please check the product page.
＊This also includes some logic of the previously limited-time “Reversal-kun.”
Thank you for your continued support today.
For traders who want to succeed in trading as soon as possible, and who think it would be great to earn a living from trading, this is the product I recommend—an independently learned trading technique available here↓