I thought I would post the quick gbp/jpy short I took with a picture of the chart I used to base the trade on. Here you can see the sharp "long-term" 5-minute trend was broken at 6:20 am (8:20 EST) at a price of 228.53 ish. I did not take the trade at that moment, but waited until it bounced back up to that area once again. I took the short @ 2.2849.
Since the overall trend has been up on longer time-frames (see my earlier post on the 60minute chart), I took this as a QUICK and painless short. I used a very close 7 pip 2.2856 stop-loss at 2.2856. I tripled the potential loss of 7 pips to give me a 21 pip profit target of 2.2828. I got out of 80% of the trade there, which took roughly 15 minutes. I have left the remaining 20% of the trade on and will use a break-even stop loss on those minis.
Since it is FOMC Tuesday tomorrow, I am very happy to get anything out of the market. I expect it to be slow today. I will use my discretion to get out of my remaining 20% of this trade during the next few hours.
This is a great example of a good profit/loss ratio. 3/1 is really the minimum you should be going for. Taking a trade against the current major trend is very risky.
That is all for now.
Andy
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