One of the things I have often found helpful in my own “discovery and application” phase of learning is…understanding why a professional trader did NOT take a trade.
Well…I’m going to give you some examples. It has not been an easy time to trade the past hour or so. It’s been “more possible” for an aggressive trader to take more trades than I have, but as you already know, I strongly prefer those Super High Probability Setups.
First, let’s look at the context of the EUR/USD market around 1am US/Central time.
### EUR/USD Context – zoomed out
When I look at this chart, it appears like the market is thinking about changing direction. As always, I am NOT GOING TO PREDICT what the market “might” do. I simply observe the flow, and when the flow and structure of the market is logical and the Logical Forex Indicators are also “logical”, then I’ll trade.
Not much looks logical here.
Look carefully. What do you see? Anything? Nothing? Real structure and flow? Spikes? Nervous uncertain market?
So…now…I’m going to show you in the next chart the “normal zoom level”…and I want you to answer this (QUICKLY! NO HESITATION!)..
Will you enter the trade where the Pink Oval is drawn?
What is your decision? STOP ANALYZING NOW! Choose! Are you going to enter? Or will you wait?
Here’s what I’m going to do…
I am NOT going to enter. Why? Look at those Logical Forex Activity Lines? Is there really any “momentum” and movement in the market? Is it safe to trade then?
What else? I *really* don’t like those big “jumps” or “spikes” in the price flow. That could happen just as easily when I enter…just as price has just PROVEN it will do in just the past few minutes leading up to this decision point.
Here is what happened…
I’m not too surprised that price “jumped” here a bit, are you? So, if you decided to enter…where did you get out? (QUICK! NO HESITATION! NO PREDICTION! NO “RELIGIOUS TRADING”!)
Had I entered that trade, I would have IMMEDIATELY exited when price headed back down against me. I would certainly have lost no more than a pip or two, and I might have even had a break even trade, depending on when exactly I clicked to exit…and the broker filled my order.
Now…do you see how this really is a NO STRESS way of trading? I’m in and out so quickly, I don’t have time to be stressed. Either way…whether I entered this trade or not, I’m now observing the charts, calmly and without predicting, and getting ready for the next opportunity.
Okay…here is a “next opportunity”…just a few moments later…
What are you going to do, where the Pink Oval is with the Green Up Arrow? Are you going to buy? Sit out? (QUICK! NO HESITATION!)
What did you choose? Are you in? Did you stay out of this trade?
Do you have any idea what I did on this one?
Nothing. I did nothing. I didn’t enter the trade. Do you know why? Well, the market conditions really haven’t changed much.
But, there IS a difference with this trade. SOME Logical Forex traders WILL take this trade. There are some very visible reasons that make this a POSSIBLE trade. It’s not a High Probability trade, but those who are more aggressive than I am would take this trade…and it would be a valid trade! Now, that doesn’t mean it’s going to “work”…but…these aggressive traders are even FASTER at exiting trades that go against them than I am!
So, what happened?
Now remember…I did NOT enter this trade…but some of my more aggressive traders certainly might have entered. And, there are two reasonable exit points, depending on their strategy and how they want to handle their trades. I’ve marked each exit point with a Red down arrow. Do you see why these are exit points? I’ll tell you…one is exiting when the price “goes the other way”…remember…quickly in and out with no prediction or hesitation…and the other exit point could be “holding on” until price interacts with the Logical Forex Groove…the dotted black line.
Now, if you have access to the Logical Forex Indicators, and are viewing your chart around this time period, you may be wondering a few things. You see, the charts will show you some “nice moves” as it moved upwards fairly quickly. There are definitely valid trades there for people who prefer a little different style than me…and it’s EXACTLY these kinds of things that you and I will determine in your Private One-on-One Forex Workshop. I work with you to help you tailor a specific way to trade *logically*…that fits your goals, your needs, your personality, your trading capital, and more. But for *me*, I am SUPER CONSERVATIVE, and I only want to trade those Super High Probability trades. (More on that in just a moment.)
So, at this point, I decided to look at the EUR/JPY. I don’t “change currencies” very often when I trade…but, I did in this case to show you a few differences. When you are getting started with Logical Forex (or ANY trading method) you MUST *truly get to know* your chosen currency pair very well…and that means trading your chose pair almost exclusively. Doing this will help you be able to “know what that pair is thinking”…as you will begin to know it like your spouse or your best friend. Then, you can “add” more currency pairs as you gain experience, but even then…I only trade two pairs…EUR/USD and EUR/JPY. You can trade whatever you prefer…but those are my favorites.
This next chart is for the EUR/JPY at roughly the same “hour long trading session”.
Do you see how price has been flowing in a clear direction? Do you see that there is a real market structure?
How about that Logical Forex Magnet Line…the bright red horizontal line? Do you think that has an impact on my trading decision?
Yes…it certianly does!
Now, when I see a “big move” in price like this, I am EXTRA cautious about entering a trade. Why? Well, at SOME point, price MUST change direction and “re-balance”. So, very often after a price move like this, I’ll just wait for the market to change direction, and trade a “Flow Flip”. (You’ll find dozens of examples of those trades posted in this blog…as they are my favorite trade.)
But, this time…there was a BIG clue (Logical Forex Phase) that this was a REASONABLE trade. I wouldn’t classify it as a SUPER High Probability trade…mostly because it’s an “old move”…price has moved a lot in a short time period…but it is DEFINITELY a High Probability trade setup!
And, you know what that means, right? No prediction! No hesitation! Low Risk! High Probaibilty! No stress!
QUICKLY! ENTER THE TRADE…and be ready to exit just as fast as you entered. Yep, that’s exactly what I did!
Here is what happened…
WOW! That was a FAST move! Price kept it’s steep downard momentum, and I stayed in the trade until…NO HESITATION….NO PREDICTION…price changed direction, and I exited!
That was a FAST, NO STRESS trade that gave me a net of about 16 pips after spread and commission. I was in that trade about 20 seconds or so.
Do you see how ENJOYABLE trading this way can be for you? Logical Forex can truly open your eyes to a much more fun and consistently profitable method of trading than you might have ever imagined before. It really isn’t possible for me to express to you how much fun I have doing this…and how much fun it is to share this with YOU…the indicators, the online training videos, the workshops…I have a very sincere desire to help you accomplish what you want to do.
If you’re struggling and frustrated, I have been where you are. I know *exactly* how it feels…and I know how it feels “on the other side”…and THAT is what motivates me to help you move to the next level in your trading life…and your “regular life”, too.
I hope this has helped you. I now have to go re-groove my fingertips. I believe I have typed so much, I have made my fingerprints fall off.