Japanese Denim With Money Tucked in 'em

'Fear Keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse his natural impulses. Instead of hoping he must fear; instead of fearing je must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may be a big profit.'

--Larry Livingston , Reminiscences of a Stock Operator

Alas, intervention from Japan. I have been patiently waiting for this move, and it came sooner than I anticipated. In case you were hiding under a rock somewhere:

The yen tumbled from a 15-year high versus the dollar after Japan intervened for the first time since 2004 to curb gains that threaten an export-led recovery. Japan’s currency slid the most since December after Finance Minister Yoshihiko Noda said the nation unilaterally sold yen.

Six Questions for Yoshihiko Noda:
1. WiIll G-7 countries accept this policy and help Japan with coordinated intervention?
2. How Much Yen will the BoJ sell? (rumors circulating say 1 T Yen for today)
3. How much USD will be purchased in comparison to EUR?
4. Will traders test 'the line in the sand', a USD/JPY rate of 82.00?
5. WiIll Naoto Kan remain PM through 2010 and into 2011?
6. WIll potential 'QE 2' from The U.S. FED derail any unilateral intervention?

On Monday I was able to get long at an average price of Y83.36. Last night I pyramided and thus was able to get the maximum profits out of my trade. I exited the position around Y85.30. Recently I have tried various new trading strategies to get the most of my profitable positions. See Edwin Lefevre's Reminiscences of a Stock Operator to understand pyramiding better. Currently, I maintain no open position in the pair. I am uncomfortable with all of the fundamental uncertainty of 'unilateral intervention' as I adressed in my questions above. I will enjoy my profits and take the rest of the day to spend with family.



Check out my fellow trader's blog: http://blog.thelordoftrading.com/ . He had success trading this pair today as well. In addition, please utilize the forum on his site. It is packed with all sorts of trading goodies.

Patrick M. Ambrus
Twitter: AnalyzeCapital

Sources: Bloomberg.com