It came about as a result of the BOJ standing pat on rates. "That's how people trade?" I asked.
As if a greater degree of negative rates was somehow a "stimulus." The whole thing was absurdity to the extreme and completely out of paradigm with the current reality so what was I supposed to do? I simply HAD TO go long USDJPY and I did.
That trade was actually in the money for about 2-3 hours, but then it turned around and we're about 100 pips lower than where I bought in.
Then what did I do? Did I panic? Did I beat myself up? Did I frantically PAY the market to get out and take a loss?
No. That is not the proper mental game and not the proper strategy.
While I believe my reasoning for buying USDJPY was correct (although in the backdrop there is a serious, bearish dollar environment developing now), it is not working out.
What I teach in my Forex course is that we trade according to the principles of MMT. This trade was. (Japan enacting a nearly, $200 billion FISCAL stimulus for the economy and earthquake cleanup and reconstruction. That's bearish for the yen all things equal.)
However, when MMT trades do not work and we are caught with losses (it can happen because sentiment, too, drives markets and when clueless idiots believe something they can push the market like a stampeding herd) my course teaches you the SKILLS to trade out of what is not working.
The best offense is a good defense!
So, that's what I am about to do...trade out of this position that is not working. I am adding another unit of long, USDJPY at 106.89 to lower my average.
And by the way, if you haven't already, BUY MY FOREX COURSE. 25 hours of instruction for $250 bucks. ($10 an hour for those of you who are math-challenged.)
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