Simple Forex System Trading

Well, I didn’t.  They all happened when I was sleeping.  But if you caught these, good for you.  These were great profitable trades. 

I didn’t enter the market last night because the divergence did not occur. 

Previously

Looks like there may be an opportunity to sell Dollar Yen later.  Right now, it is trading at 96.75.  I will watch this pair for the next few hours to see if the divergence holds.

Update on 7/1/09

Bummer!  This trade is a loss.  Didn’t I say Dollar Yen was crazy before?  Anyway, I bought at 96.15 and placed the take profit at 97.15, and stop loss at 95.15.  The low was at around 95.13.  How lucky of me for my stop loss to get hit!  Just at around the same when I entered the buy order yesterday, Euro Dollar and Pound Dollar both pairs also showed divergence as well.  Why did I decide to trade this crazy Dollar Yen which is totally puzzling me right now?  Why didn’t I just trade EUR/USD or GBP/USD?  Both would have been winners.  Silly silly me!

Divergence is now showing up in the Dollar Yen pair; however, the price now is 96.53, which is well above the low of 96.12.  I’ll watch it for the next few hours to see if it retests the low.  And the Tokyo market is about to open.  We should see some price action in this pair soon.

5/13/09 Update

The divergence appeared at around 7 AM GMT, so I entered a buy limit at 95.70.  I usually think the Dollar Yen pair is insane and I normally don’t trade this pair.  But somehow I changed my mind and thought I’d give it a shot.

The order was never touched.  The price continued to climb higher.  I missed it.  Didn’t I say this pair was insane?  Actually, it behaved very well.  It did exactly what it should be doing.  When the price set lower lows, the Awesome Oscillator did not.  Therefore, the price should rebound.  And it did.

The divergence occurred at around midnight GMT, but I decided not to take any action, because it was the Japanese Yen - Dollar pair.  I rarely trade this pair because by nature, this pair is insane.  Although it could produce a nice 50-pip profit if one did enter the trade - buy at around 97.70 and exit at around 98.20.  However, if I had set it up as the normal 100 pips profit / stop loss targets, I would have probably exited with a 10-pip profit by now because I would move the stop loss to 10 pips above the entry point after I was 40 to 50 pips into the profit zone.