Gbp/jpy Cash Machine

Trading Systems Free Forex Trading Systems
1

Hi everyone. I don’t know if this is just me, but almost every morning on the European open at 0700, the GBP starts to rise against the JPY. On the London open it takes off again, slowly climbing to the New York open at 1300, where anything can happen.

Almost every day I have either straddled 30 pips each way at 0800 or just taken a long trade with a 30-pip stop loss. I then follow the price upwards, moving my stop loss in 15-pips behind until I lose my nerve and take the profit!

Spread betting at 50p a point in this way I have been raking the cash in. At the start I turned �27 into �146 in two trading sessions. I know this defies all our sensible money management rules but in the last month I have only suffered three big losses.

Indicators? none - too complicated. I just see how the market has been running, keep an eye on upcoming news (avoid NFP, etc) and wait!

The only useful indicator I use is the parabolic SAR which gives me a good idea when to exit.

It’s also a very good idea to study the overall economy, not just the pair you are trading in and learn how prices react to certain events in different parts of the world.

OK this is working NOW, but markets do change so watch out for the bubble burst!

Anyone else profiting in this way?

Bregards
Paul

2

Hi, are those times GMT times that you mention, I’m just trying to figure out so I can have a look at it, I’m GMT+2.

thanks
Sean

3

Hi Paul,

I use the very same trading scenario for GBP/USD. It has worked well for us. Would you like to discuss this in further detail?

Pipsqueak
:slight_smile:

4

Hi Sean, Pipsqueak.

Sorry, the times are now in GMT as we have just changed from Summer time in the UK.

I like the GBP/JPY because, I am told, the 8-pip spread discourages scalpers and this pair are always on the move. Historically, it can move 500 or 600 pips in a day! The trick, of course, is to get in at the start and ride with it.

Unfortunately it can have some wild retracements which will hit your stops, only to turn round again in what would have been your direction.

Quite simply I watch the London open at 0800 GMTfor a few minutes. If fairly quiet then enter a straddle trade; i.e BUY with a 30 pip stop loss AND SELL with a 30 pip stop loss. If the price shoots off in a particilar direction at 0800. GO WITH IT.

I have lost a lot of money by watching the chart all day and exiting trades too early, remember it costs you 8 pips to get back in again! It needs great discipline to put your trade on, switch the computer off and come back to it at the end of the day - 1700 GMT in my case. You will either lose small (30 pips) or win BIG if you have caught a 500 pip move.

For example if I had gone SHORT at 0800 on Friday 9th November - THREE DAYS AGO! - writing this on Monday 12th November at 1640 I would at this moment have been 1,200 pips in credit!!! But I don’t have the nerve to leave trades open all weekend.

Anyway, there’s no crystal ball and we all know that we can make money fairly easily in the markets but it is 100 times EASIER to lose it all again!

Best of luck
Keep battling

PAUL

5

I too trade this pair and find great success with it. Also use the same technique for the eur/jpy and gbp/usd… usually dont enter a trade till 3 a.m. -3:05 a.m. EST…:smiley:

check it out…

6

Glad to hear it, dirtygringo.

Yesterday the GBP made an excellent downward trend against the JPY from about 0900 GMT and was undisturbed due to the US holiday. Pity I missed it due to other commitments!

Today from 0800 GMT the GBP/JPY has been very unpredictable, ranging from here to there like a drunken sailor. I found it too hard to follow and switched to the mighty Eurodollar pair instead.

I think the GBP/JPY is an excellent training ground, requiring great concentration because trading the Eurodollar was then so much easier, being more sedate and with a much lower loss rate!

Time to leave the Yen alone for now, but will keep watching for the big swings!

Come on guys/gals, any more straddle traders???

7

I have tried to use it for the GBP/USD pair but did not get much success with it. But when I used it EUR/JPY is was better. This surprised me but I didn’t get too much into it.

8

Hi Paul!

I trade straddles exclusively for the simple reason that there is no way to effectively determine future market direction. A straddle WILL get you into almost every trade except for very narrow ranging markets. Having said that, every straddle needs to be adjusted to the currency pair and the trading time frame.

Would you be so kind as to share your EUR/USD method?

Many thanks for all your help,
Bob in Wisconsin

9

Yes, it is vital to know the currency pair you are dealing with when setting up a straddle trade. For example, 20 pips each way on the EUR/USD might not work too well on the GBP/JPY because of the much greater price movement in terms of pips.

Of course there is a certain amount of luck involved with any pair. No matter what your analysis, it can still go wrong. I find it extremely helpful to keep an eye on the fundamentals and upcoming news releases to try and determine the likely effect of prices.

Another example, on Monday there was panic selling of the GBP/JPY, dropping to around 224.59 so a good assumption would be that it might start to recover, which it has done and is currently at 232.11, a gain of 752 pips in two days!

It is all down to reading the markets and working out where the opportunities are and very carefully entering the best trades you can find.

Latest EUR/USD trade:

Yesterday, after a downturn in price (13th /1650GMT) entered a straddle at
14595, 20 pips each way and left overnight. This morning (14/0800GMT) price was at 14647 so closed trade at a gain of 52 pips, minus the 20 pip straddle loss leaves a profit of 32 pips.

I simply have no success with technical analysis mumbo-jumbo and find reading the markets the only way to have a reasonable chance of success.

PS
Take a look at the charts and see what happened to the GBP today 14th Nov between 1035 and 1135 GMT. Following the release of the Bank of England inflation report, the GBP fell dramatically. What a perfect straddle opportunity across the markets at 1028GMT!

I made an easy 100 pips off the GBP/JPY

I’m afraid this is where technical analysis flies out of the window and a lot of professional traders will agree!

[B]ANYONE INTERESTED IN A GLOBAL, FUNDAMENTAL/NEWS/STRADDLE TRADING GROUP? Watch this space![/B]

Good Luck!

PAUL

10

Fellas,
watch the gbp/usd , the eur/jpy, and the gbp/jpy very closely between 3 a.m.-5 a.m. est.

For me, this is my money maker. Almost always get at minimum 50 pips. normally get 100 from atleist one of the pairs.

check it out;)

11

where should one go to read any news?
where do u go, if u don’t mind sharing. I have been playing deo for about 6 months with the gbp/jpy pair and whenever there is a sudden gush of up or down jumps, they come out no where and that always throws me off. I have been using the rsi and stochastics to find out where to enter and stop and always seem to see when it starts to turn. just the sudden jumps throws me off. I started to looik into fib points to know when they should start but that doesn’t catches it all.

thanx in advance.

12

Subscribe to at least one reputable news service. I use trade the news

13

@paul what you are saying is actually the truth i have studied the gbpjpy charts for months now and found out that it just trend once it starts moving it keeps going .anyway when do u want to start the group you talked about i mean the straddle/fundamental news group i would really love to be part ofthat when can start it out by sharing trading ideas each day or weekly we can always meet in a chat room like yahoo or msn lets start the trend here firstpaul please send me a mail or just send an instant messeage tome on <[email protected]> or my yahoo id leekola
thanks would look forward to getting your mail.anyone with interest too can notify too.:slight_smile:

14

Thanks for you input, everyone.

Of course, no-one actually knows what the news will be before economic data is released but research is vital to give you a good idea of what might be coming. This is what the analysts try and do and there is a lot of info out there with the various banks and forex dealers. Just type “forex news” into your search engine and you will see what I mean.

Personally, living in the UK, I have a good feel on what is happening. For instance we are now feeling the credit crunch. Fuel prices have gone up, we had poor weather this summer, result? UK consumer spending was surprisingly down for October so the GBP suffered.

Inflation here is under control so the Bank of England hinted that there might be interest rate cuts on the horizon, result? GBP collapsed.

This is the kind of thing that gives you the edge when getting a feel for the markets and why I suggested we team together so someone living in the USA, Japan, or wherever will have their own economic feel for where they are.

Consequently this information can be pooled together to give some idea where the markets might be heading which I have found to be more successful than charts telling me [I]what has happened in the past[/I].

A good idea I have seen used is a checklist for each pair of currencies, for example the USD. How is inflation, consumer spending, the economy against, say, the GBP. What are economics like in the UK. What’s going on politically, etc.?

I have read a good number of books written by professional traders and hedge fund managers and this is the way they make millions. Most of them only use charts to see roughly what the prices have been doing.

They also wisely advise against day-trading, which is where the eager beginner will start and lose all his money. It is possible to make money here but even easier to give it all back and you are unable to leave the computer all day.

Get your information, look at news and events, make your judgement and look for[I] that [/I]trade.

I have tried tech. analysis until my eyes glazed over. I have looked at fibonacci, trying to relate prices to the way plants grow and have looked at the stars, but nothing seemed any better than a coin-flip!

So let’s get together and at least try and tame that massive, supercomputer beast, the Forex market!

You may contact me direct on e-mail [email protected]

15

as I have followed recently for GBP/JPY, the pair seems coupling well with US equity market-DJI. during 9:30AM to 4:00PM ET, the pair followed the stock market.

16

in your 30 pip s/l, what is your exit of profit? in the straddle trade you may end up big loss if you do not set the exit of profit.

17

Once the trade is going my way, I move the stop-loss to the break-even point as soon as possible and then watch the behaviour of the price. If it continues steadily in the right direction I will follow the price with the-stop loss, usually staying 15 or so pips behind. Then if the price does turn against me, most of the profit is intact.

It is simply too unpredictable to set an exit price as time again I have missed this by a couple of pips and found all my profits gone when the market has retraced.

Unfortunately, this is the way day trading goes. You really are tied to the computer so I’m looking at longer-term trades at the moment where you can at least leave them alone for a while and get on with your life.

ALWAYS be aware of news releases or that nice little trade you have been following might suddenly be wiped out before your eyes!

Paul

18

hah this is exactly what I do with my technique GBP/JPY i was able to get 500+ pips in a day and a half. dont forget about your spreads and comissions if u have any from MBT etc.

-ForeX Capitalist

19

Absolutely. I trade by spread-betting with IG Index in the UK to conveniently avoid any tax liabilities.

On each trade I only pay the spread, this being 8 pips on the GBP/JPY pair.

20

Hey, guys,

it’s great idea to have a community of day traders, especialy with gbp/jpy. unfotunatelly, i live in Lithuania, Baltic States, so i do not have intuition on biggest markets, i must analyze all economic indicators.
And i would like to ask a question - is here a person, who tried to scalp with this pair?