David Fuller's view Late this morning, I sold AUD/JPY (weekly & daily) longs at ¥92.32 and ¥92.34 for the September contract against yesterday's Baby Steps purchases at ¥89.64 and ¥90.86, respectively. This afternoon, I repurchased one of these longs at ¥90.88. These prices include spread-bet dealing costs which have increased to between ¥0.10 to ¥0.12.

I will continue to scale-down buy and scale-up take profits, where possible, maintaining that the choppy overall chart action is consistent with base formation development. The risks with this trade are that I could be mistaken about base formation development; the price action is volatile, and I am not using stops. I can live with these risks because I am trading well within my capital, including accrued profits on this Baby Steps operation to date. Also, we know that Japan wants and needs a weaker yen. Volatility is a double-edged sword and works to my advantage provided that USD/JPY does not break down out of its probable base formation.

For new or reviewing subscribers, here is my original Baby Steps article, which is posted in the Forum.


I currently have open position losses in some earlier USD/JPY purchases, with the most expensive of these having been opened at ¥92.95. I have a larger open position loss in AUD/JPY, which I am neither inclined to close nor increase at this time. I will also retain the two trades in UK-listed Japanese ITs, currently showing small losses, although I no longer expect them to perform over the short term. Lastly among current trades, I have a meaningful open position profit at the moment in my German DAX short.