I think that the first thing you need in order to trade the G/J is to be aware of this simple relationship:
Price of G/J = U/J x G/U.
This works for all the J crosses too:
E/J = U/J x E/U, etc.
Everyone should sit down themselves and play with the permutations, but here's a couple:
Trade a $+ NFP-U/J and G/U will move inversely as they do most of the time anyway. However you WILL LOSE on the G/J if let's say the $ gains 100 pips against the G, but only 40 on J.
If G/U and U/J lose and gain the same # of pips-you'll get less pips on the G/J then you would have trading the G or J.
If U/J gains more then the G/U drops-you'll get more pips trading the G/J then then G or J.
Look at the daily charts for FEB 27-you'll see the G/U and U/J moved together (down). That's rare and that's why G/J lost a much bigger # of pips then either-simple arithmatic. When the markets crashed-they sold the $ vs Yen and bought the $ vs GBP.
So if you want the big pips on the G/J-you need to trade when for example the BoJ looks to be raising rates at the same time that the BoE looks to be holding or cutting-like a day when Tokyo CPI is up and UK CPI is down. Here's an example:
Tokyp CPI comes put strong and U/J goes from 118.50 to 117.75
UK CPI comes out weak and G/U goes from 1.9650 to 1.9600
G/J start of day price 118.5 x 1.9650 = 232.85
G/J end of day price 117.75 x 1.9600 = 230.79
Difference = -206 pips for the G/J
That's how it's done.
Price of G/J = U/J x G/U.
This works for all the J crosses too:
E/J = U/J x E/U, etc.
Everyone should sit down themselves and play with the permutations, but here's a couple:
Trade a $+ NFP-U/J and G/U will move inversely as they do most of the time anyway. However you WILL LOSE on the G/J if let's say the $ gains 100 pips against the G, but only 40 on J.
If G/U and U/J lose and gain the same # of pips-you'll get less pips on the G/J then you would have trading the G or J.
If U/J gains more then the G/U drops-you'll get more pips trading the G/J then then G or J.
Look at the daily charts for FEB 27-you'll see the G/U and U/J moved together (down). That's rare and that's why G/J lost a much bigger # of pips then either-simple arithmatic. When the markets crashed-they sold the $ vs Yen and bought the $ vs GBP.
So if you want the big pips on the G/J-you need to trade when for example the BoJ looks to be raising rates at the same time that the BoE looks to be holding or cutting-like a day when Tokyo CPI is up and UK CPI is down. Here's an example:
Tokyp CPI comes put strong and U/J goes from 118.50 to 117.75
UK CPI comes out weak and G/U goes from 1.9650 to 1.9600
G/J start of day price 118.5 x 1.9650 = 232.85
G/J end of day price 117.75 x 1.9600 = 230.79
Difference = -206 pips for the G/J
That's how it's done.