Trading Reversals Is Not Easy. Our USD/JPY Account Is Bleeding Cash

USD/JPY Exchange Rate (2020 - 2021)

When trading reversals, you simply have to have your position opened before things start happening. Otherwise, you will never be quick enough to open a profitable position. Unfortunately, this type of strategy means, your account will bleed money when things do not go as expected. A trader may be forced to double down multiple times, which means that - first, the initial investment needs to be a very small amount, and second, an appropriate risk management strategy needs to be applied. In other words, you always need to know, how much you can lose when the deal goes south.

As we explained in our previous article, we expect a major reversal of the 1-year-old USD/JPY trend. 

Our USD/JPY Strategy - Finding An Optimal Entry For A Big Short

The reversal, as usual, will come as a reaction to some unimportant news. But the news itself will not be the reason, the USD/JPY rate will drop because it has to.  

As of November 24, 2021, we have lost 4% of our initial USD/JPY investment and we keep shorting the pair from the higher positions. In fact, what we are waiting for is any news that could lower confidence in the US dollar. Due to the serious USD/JPY overvaluation, the market may overreact, and a sharp drop is extremely likely. 

Our fund will start showing profits after a 200 - 300 pip drop, and this has to happen sooner or later. The rate cannot rise forever, especially in this macro economical conditions.

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