It’s unfortunate that we’ve been so patient these days, only to now find the odd “profitable trade” finding itself slightly “back in the red” – with the huge ramp up in both The Nikkei as well SP 500 ( our risk barometers ) on absolutely no news “if not” bad news.
So is forex.
The great news however is…..we’ve “still” not missed a thing! and for those who’ve been slightly “wary” of the current trade environment ( wonderful…as you well should be ) a number of trade opportunities are not only “very much in play” but perhaps even “better looking” than some days or even weeks ago.
Let’s take a quick recap.
Short AUD/JPY here “again” at 95.00 or ( as I often suggest ) several pips lower and allow the market “momentum” come to you.
Aud_JPY_June_03_2014
Re short GBP/JPY here at 171.80 area is the exact same entry we took some days ago then banked 200 pips on it! Exact same thing – right here right now.
With over 900 pips banked in the last 30 days, this is setting up pretty sweet for a complete and total “re run” as markets continue to hang at all time highs.
We’ve got piles of trades in the works now, with the “near to medium term analysis” in the bag.
Come trade with us at www.forexkong.net and get the full run down, weekly reports, daily commentary and real time trade alerts.
The Risk-Off Trade Setup That Changes Everything
Here’s what the market makers don’t want you to see: this massive risk-on surge in equities is running on fumes. The Nikkei and S&P 500 painting new highs while fundamentals scream otherwise? That’s not strength—that’s desperation liquidity finding fewer and fewer places to hide. And when this reverses, the JPY crosses we’ve been positioning in become absolute gold mines.
Why The Yen Cross Strategy Dominates Here
Look, everyone’s chasing the next shiny object while we’re setting up the trades that actually pay. AUD/JPY at 95.00 isn’t just another entry level—it’s a strategic position against the carry trade unwind that’s coming. When risk appetite finally cracks, these high-yielding currencies against the yen don’t just fall, they collapse. The same dynamic that gave us 200 pips on GBP/JPY is setting up again, and the smart money knows it.
The beautiful thing about yen crosses right now is the market’s complete complacency. Traders are so busy chasing momentum that they’re ignoring the fundamental shifts happening underneath. Japan’s monetary policy divergence isn’t going anywhere, but global risk sentiment? That’s hanging by a thread.
Reading The Market’s True Signal
Strip away the noise and focus on what matters: currency flows don’t lie. While equity markets paint pretty pictures, the real story is in cross-currency movements and yield differentials. The fact that we can still get these same entry levels weeks after banking massive profits tells you everything about where we are in this cycle.
This isn’t about being bearish for the sake of it—it’s about recognizing when markets are stretched beyond rational levels. When rally patterns are built on nothing but momentum, they create the exact conditions where disciplined position sizing and patience pay massive dividends.
The Technical Setup That Keeps Delivering
GBP/JPY at 171.80 giving us the exact same setup that delivered 200 pips before? That’s not coincidence—that’s market structure. These levels matter because they represent real institutional flow points where algorithms and human psychology intersect. When you understand this, you stop chasing and start positioning.
The key is recognizing that these aren’t just random price levels. They’re decision points where the market shows its true hand. AUD/JPY holding near 95.00 while global equities surge tells us something important: currency markets are preparing for what comes next, not celebrating what just happened.
Position Sizing and Risk Management Reality
Here’s where most traders blow up: they see 900 pips banked in 30 days and think they need to swing bigger. Wrong move. The reason these trades work is because we’re not betting the farm—we’re systematically harvesting market inefficiencies with proper risk management.
Taking entries “several pips lower” isn’t about being cheap—it’s about letting market momentum confirm our thesis before we commit capital. When you’re dealing with major currency moves, those few pips can mean the difference between riding a winner and getting stopped out on noise.
The current environment rewards patience over aggression. While others chase headlines and momentum, we’re positioning for the inevitable reversion that comes when artificial liquidity meets real economic forces. USD dynamics are shifting, and the yen crosses are where this plays out most dramatically.
Bottom line: this market is giving us gift-wrapped opportunities if we have the discipline to take them. The same levels, the same setups, the same logic that delivered before is sitting right there again. While everyone else is wondering what they missed, we’re loading up for the next leg of what could be the most profitable trading environment we’ve seen in months.
Hey Kong,
Perhaps this question would have been better suited for your previous post but let me ask you this. Regarding low volume and low market volatility, when in the hell do you think this thing could break? I recall in a previous post you were saying a new degree of patience is required for these times, but my thing is, do you think the ECB and the rest of the data this week might trigger some movement for the rest of year?
If not, what do you think will? I mean shit, 2014 looking back at charts has been the most bland year to me by far.
Thanks
I think when the “flood happens” it will be fast and furious yes but then unfortunately and likely….back to more of this.
The turn from “buy to sell” being the biggest hurdle, and yes I believe disapointment / baked cake come Thursday as Draghi’s hands are tied anyway “should” be the pivot.
But you know Rob “even if” this is the case…..I envision we’ll get a large fast move catching “nearly everyone” offside…..then a “wild whipsaw” back to catch everyone on the “otherside” than an extended period of “this” before the next leg down etc…
It will be pretty disheartening to miss this next one and not take full advantage as…..it’s been pretty much 5 months without having to fight / scratch and crawl for every single penny.