NEWS / Foreign Exchange

Crying Wolf

I have been apprehensive about selling any Yen cross pair as of late. My leading opinions do not count as much as certain price configurations do.
The Japanese currency's rebound of late February - early March - via the crosses - might just have failed to compromise the Yen carry-trade environment.

The EUR/JPY has nowadays been hovering actually above the level I shorted on February 16th.
Then, ironically, had I shorted the AUD/JPY in late February at around 96, I would have gathered about 700 pips of profit in early March, yet almost zero reward today.
So - I guess - in the Yen crosses nowadays, one may hardly resist the temptation of taking quick profits.

This reminds me of January 3rd, this year. I have some regret that I did not sell any of the Yen crosses dealable with my model account's broker on that day. I know I should have put on at least one short position, most probably in the AUD/JPY - the right signal was right there, daily chart wise, on January 3rd.
I have not brought up any self-criticism in this regard so far just because I also know I would not have taken profit on January 8th - that would have been an almost 200-pip reward at the expense of about 50 pips in the risk. I would have stayed for longer, instead, inherently doomed to being stopped out on January 18th.

Remarkable market movements are exceptions often preceded by 'crying wolf' sequences. Nevertheless, I think, the big money is made rather out of pain than comfort.