Choosing Yen Cross Trades According to Fundamental Conviction
• Conviction in setups can lead to taking a trade or not, position size, targets and other questions
• Sometimes, conviction can also help us filter which trades connected to a theme are better opportunities
• With risk swooning, we look at which Yen crosses are better suited for different levels of 'fear'
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Conviction is essential in trading. Whether we take a position or not, the size of our exposure, when and where to enter all depend on how certain we are that a setup or theme will play out. One theme that is constantly on the cusp of erupting is risk aversion. The response from risk-sensitive markets like US equities and Yen crosses this past week to the strong NFPs data is a sign that speculative sentiment may soon escalate to a dominant driver. In this weekend Strategy Video, we look at how the conviction level in risk trends can determine which Yen cross could prove a better trade candidate.
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