I’ve mentioned that I had a few longer-term Binary Positions that are running and I thought I’d update you on a position that closed out last night.
After many years in decline the USDJPY trend broke with a strong move north from the end of January. People far smarter than I can explain why it happened. All I know is that after 6 weeks of moving north it ran out of steam around early March. After a such a strong move on the weekly chart I expected there to be a reaction. I missed an opportunity for a normal short entry off the daily chart on the 21st March and had just put the currency on the back burner of my watch-list.
At the start of April I felt that the retrace / reverse would go much further and I used a Binary Option No Touch Barrier Trade as I believed that price was unlikely to get towards a level of 84.50 before the end of April. This is the line we can see at Point 1. I took it on April 9th with a close of April 30th.
Despite having a bullish reversal candle pattern (one of my own) on the week of 15th April I decided to stay with the trade and it played out in my favour. So you might say, nice work, well-done, profit in the bank. Alas, no.
So yes, I did make profit from this trade….but I’m not really happy with myself over the trade. I was late to the party (about 3 weeks to late!) and as such my reward to risk was woeful…in principle I look to achieve a minimum of 20% profit on my trades as this keeps my overall expectancy on the right side of the line. Whilst Binary Options on FX markets are a relatively new addition to my arsenal I should still know better than taking low reward trades.
As an aside I also have a quarter sized No Touch Barrier position on for 79.50 on USDJPY which expires on 15th May (the line you can see at point 2)…….I’m not expecting that to play out in my favour but I’ll keep you posted.
So profit from this trade….whilst the analysis was good….the execution was poor in terms of reward to risk achieved.
We live and learn.