Wednesday, September 15, 2010

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: . 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


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