Bank of Japan provides a “Massive-Move-Friday”

Resumed live trading today (after getting my cast off yesterday and the hospital keeping my crutches!).

Huge overnight news that the Bank of Japan unexpectantly increased its QE by 10 trillion/month (from 70 to 80).  This took place around 4/5am GMT.  This caused a surge in equity markets globally, as well massive Yen weakness across the board.  USDJPY eventually reached a high of 112.50 by the early afternoon, up more than 300 pips.  This led to general dollar strength, which then caused gold and oil to fall.  Shortly after the BOJ announcement, the Japanese also announced that they would increase the Japanese Government Pension Fund’s allocation to Japanese equities and away from foreign bonds.  This added to the strength in equities.  The Nikkei closed up 5% for the session.  The S&P rallied to 2,020 and the Dow to 17,300 something.  Massive moves in the market.

I proceeed to hit three losses with attempted longs in USDJPY (x1) and DAX (x2).  I used my new position management approach, which effectively resulted in aggressive management today.  I lost 1.46R across the three trades – in each case price would have gone on to hit my full stops.  Three consecutive strikes spelled an out for me, so that was my trading finished for the day.  Thus, none of my setups worked today.  Well, either that, or I didn’t apply it very well.  Here’s some charts for your entertainment.

usdjpy oct31 dax oct31

At the end of the day I had a 2hr skype call with my trading coach to talk through the analysis of the October trades and to discuss my suggestions to the position management approach.  Very helpful to talk these things through with a trading mentor.

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