USDJPY 12-3-06

12-3-06

USDJPY

The last email was on 11-30-06 due to the snow storm. Here is what it said to do and what happened:

11-30-06

"USDJPY

The short trade was finally entered at 1.1650 and the first target was reached at 1.1610. Let's move the stop loss on the other two contracts to 1.1630. This should be safe in case the USDJPY tries to rally past 1.1620. If it does rally past 1.1620, it will try to absorb the supply at 1.1650 again. If the area of supply at 1.1620 turns the USDJPY lower, take a profit at 1.1578 and move the stop loss to 1.1610 on the last contract."

The short trade was exited on 11-30-06 at the 1.1578 profit target and closed at the 1.1610 trailing stop. The USDJPY rallied up to the 1.1637 breakdown line on 12-1-06 and collapsed down to 1.1500.

I would be interested in shorting the breakdown area of supply at 1.1606 if the USDJPY can rally up there. My first target will be 1.1535 and the second target is 1.1500. Move the stop loss to entry after the first target is reached, and to 1.1551 if the second target is reached. Watch out for currency funds booking profits. Use a 10 pip stop loss after entry, and try to enter with sell stops once the price touches the breakdown line.