We use cookies to improve site performance and enhance your user experience. If you'd like to disable cookies on this device, please see our cookie management page.
If you close this message or continue to use this site, you consent to our use of cookies on this devise in accordance with our cookie policy, unless you disable them.


Dollar's eastern promise

At the start of 2011, I wrote here about how the US dollar/Japanese yen had been my trade of the year in 2010 - and how I was looking for further opportunities in the current year. A lot has happened since I wrote that, with the terrible earthquake and nuclear crisis in Japan initially sending the yen to a new all-time high against the dollar. So, I thought I ought to revisit what I wrote back then.

Just to recap, the USD/JPY rate closed below its 12-week low in late June 2010, which was a classic sign of a new downtrend developing. I took advantage by placing a fixed-odds 'will be lower than' bet. Every Monday, I opened a fresh position speculating the week's closing price would be lower than whatever the week's opening price was. I planned to keep doing this until the price closed above its 10-week exponential moving average.

This resulted in 13 winning trades and seven losing trades between June and the end of November. Every winner returned more than 100 per cent. I have since been waiting on the sidelines to start trading this rate again, only this time buying dollars and selling yen.

In the last week of March, I finally got the price action I was waiting for: a weekly close above the 12-week high. On Monday 4 April, I placed this fixed-odds trade: 'USD/JPY to finish higher than ¥84.18 in four days' time. I was right and my return was 105 per cent.

I feel there is more to come here. The fundamentals as they appear to me back up the case for a weaker yen. The US economy is gradually turning the corner and so the authorities should shortly end their money-printing campaign, which has driven down the dollar. At the same time, the Japanese are likely to engage in more money-printing as the country tries to rebuild after the nuclear crisis.

I shall be placing this fixed-odds trade every Monday so long as the conditions still warrant. I will only take the bet so long as BetOnMarkets offer me a greater than 100 per cent return potential and I will never stake more than 5 per cent of my trading account in one go.

Jon McFarlane is a full-time trader who also runs www.systemsfortraders.com, the leading site for reviewing trading systems available to the general public. Read his latest review at

visible-status-Public story-url-USDJPY_TradingProducts_130411.xml

By Jon McFarlane,
13 April 2011

Print this article

Advertiser reports

Register today and get...

Register today and get...
Please note terms & conditions apply