Let me say up-front that I have a terrible track record of trying to trade Bank of Japan Interventions. On balance I have lost money!

I only know one person who is good at it and that is my broker www.GrahamParlane.com who has been in the industry for 25 years.

This time however I have been able to take some money out of the market (so far).

It is an extremely difficult exercise in timing, and trying to outguess the BOJ. How far will they push it? How fast will they push it? What level/band will they feel comfortable at? What time of day will they intervene? How much money are they willing to spend?

I got lucky on Thursday and took a short position early in the day and took my profit before the close of trade. A few hours later intervention started, and USD JPY rose over 3 Yen in just a few hours. I wanted to sell again but i was patient. I waited for a number of hours until the price got in to the high 81s.

I knew that before the Japan quake the recent high in USD JPY was 83.27. I felt sure that with USD JPY up over three Yen already, it was very unlikely the BOJ would push it above and beyond the pre-quake high of 83.27 so I was able to take a position with only a 1.53 Yen stop loss.

I got short at 81.78 which fortunately was just 19 points (pips) short of the high of 81.97.

The market closed the week at 80.56.

It is my expectation that the rate will drift (or fall) lower to at least a new low below the 76.29 low set on March 17.

Here is the daily chart, showing an amazing 5.67 Yen range in just TWO days!

[Click the chart to enlarge.]

Your for successful trading,

Oli Hille

Author

“Creating the Perfect Trade”

www.TradingBook.net