Trade Closed: NZD/JPY Channel Lower

Trade Closed: NZD/JPY Channel Lower

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Well…that was fast! After adjusting my short position in NZD/JPY yesterday to lock in profits and reduce my risk, the pair dropped like a rock to quickly hit my max target to close me for a very solid two day profit. Here’s a quick review!

NZD/JPY Channel Lower

NZD/JPY 1-Hour Forex Chart
NZD/JPY 1-Hour Forex Chart

It looks like this trade worked out nicely, and in case you missed it on Monday, I decided to scale into a short position on NZD/JPY to play the hugely negative risk environment sparked by the coronavirus pandemic, and the broad trend lower on the lower time frames. I scaled into a short position with an average sell price of 64.56, and on Wednesday, I decided to take some profits off of the table ahead of the NZ GDP event by manually closing half of my position at 62.25 and rolling down the stop on the remaining position to 64.70.

Well almost as expected, sentiment on the global economic outlook continued to worsen (benefiting the yen as usual) through the early Asia session on Thursday, taking cues from the U.S. very rough trading session that saw all assets fall (equities, bonds, gold, etc.). This was enough to push NZD/JPY down further on the session, to quickly hit my limit buy orders at 60.05 to close out my remaining position at my max target. 

Total: +344 pips avg. / +1.98% gain on 1.00% max risk

And it looks like I got out right at the perfect time as sentiment quickly shifted for the remainder of the Asia session and European session, possibly on the announcements from both the Reserve Bank of Australia and European Central Bank of more stimulus efforts coming to support their respective economies. Risk assets rallied, including NZD/JPY which quickly rocketed higher throughout the London and U.S. trading session to retest the 65.00 major psychological handle–what a crazy market we’re in! Overall, this was a great trade that only lasted a few days for a very nice near 2:1 return-on-risk. What more can you ask for?

Anyways, what do you guys think of how I handled  NZD/JPY? Should have I added more and rolled my stop instead? And is this another short opportunity forming at these current levels? Let me know in the comments section below!

  Daily London Session Watchlist: USD/JPY

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