Logical Forex Scalping & Trading

I hope you have been carefully reviewing the trade examples I have been posting recently. Do you see some common things that happen regularly, both with the market AND with how I trade it?

What time is it?

What happens to price around a Magnet Line most of the time?

What do the other Logical Forex Indicators tell you?

Why would I have confidence to hold on to a trade longer than my usual 4 pips or so?

I assure you…these questions can be answered on your own if you REALLY study these blog postings…the Online Training Videos (and the new Written Supplement)…and, of course, in amazing detail in the Private Workshop. In fact, anybody who has taken the Logical Forex One-on-One Private Workshop with me can see things in these charts that other traders simply can’t see. They have a BIG advantage over everybody.

This is going to be my only trade “for the day”. It was completely stress free.

Carefully compare this trade example with all the others. Use your detective skills…and notice the obvious…and I’ll help you see the “less obvious” in a Private Workshop.

*** TRADE #1

Price did it’s little dance at a Logical Forex Magnet Line…except it was more of a Limbo Dance instead of it’s regular Foxtrot. Be patient…let price dance…and then TRY the trade….

Exit #1

So, why didn’t I get out at the little “flat spot” in price? Well…it’s one of those discretionary parts of trading. Perhaps the “right thing” to do would have been to exit there, especially with that nearby Logical Forex Magnet.  Notice that the “flat spot” in price was EXACTLY on that nearby magnet. At that moment, I decided to exit immediately if price went against me…(wait…that’s the thing I always do)…and price continued in my favor…so I stayed in.

Yes, I *do* normally get out on those “flat spots” when price stalls, but remember…what you and I see on the broker quote panel is NOT conveyed in these static charts.

I’m done for the day. This was about a 13 pip net after spreads and commissions.

I have been ridiculously busy the past week or so. As you saw from my previous post, this has been a challenge to my trading effectiveness.

To compensate for this, being so busy and distracted, I have been extremely cautious in my trade selections. In addition, I have been even MORE cautious to NOT trade when I felt “out of sync”…when the market didn’t “make sense” to me or even if “I didn’t make sense to me”. If either wasn’t “making sense”, I simply haven’t traded.

It has been a while since I have posted a “morning trade”. A “morning trade” for me is US/Central time. Remember, the best times to trade are at market opens and market closes. I hope you really pay attention to that.

I am going to show you some “trap trades”, and, ask you some questions to see how you might have traded some of these potential setups. Find these forex scalping setups on your own charts, and then “single step” through each trade using the right arrow key on your keyboard.

So…I got finished with some of my regular “business duties”…things related to running the Logical Forex business…and started looking at my charts around 8:10am US/Central. No, while I was working on my “business duties”, I wasn’t looking at the charts. But, of course, when it was time to for me to begin my trading period, I closed my “business duties” windows (email, etc)  and turned off the phone…opened my charts, and fully focused on my trading. You do that, too, right?….focus EXCLUSIVELY on your trading when you are trading?

I opened both the EUR/USD and the EUR/JPY to see what the market flow and structure looked like. It was just after a US News Release at 8:00am, so I wasn’t very excited about trading the EUR/USD.

Then, when I opened my EUR/JPY chart…

### EUR/JPY Zoom Out for Market Flow and Structure

It is obvious price has been flirting with finding a bottom, and the Magnet Lines demonstrate this nicely.

However, remember….Logical Forex Magnet Lines are NOT simple support and resistance lines. Price can go ANY direction at ANY time, and we use our Logical Forex Indicators to help us “see into the market”, but NEVER to predict! We want Price to TELL us where it is going, and, if “everything makes sense”, then we trade without hesitating.

*** TRADE #1

Do you know your currency pair? I mean…do you REALLY know it’s personality…how it moves…when it might take little “jumps” in price? If you do know these things, you will find your trading to be much easier and much more successful. It will allow you to essentially “know” (without predicting!) what the most likely behavior of your currency pair will be. You want to know your currency pair behavior patterns like you know your best friend or your spouse.

And, that is why I could enter like I did here on the EUR/JPY. The little “dance” around the Logical Forex Magnet Line happens ALL the time.

Now, I’m going to tell you that when I entered here, this was a bit more aggressive than usual for me. I suppose it is still me being a bit more busy and distracted than usual. But the trade setup was “good enough” for me to TRY.

Isn’t that really all we do as forex traders…”try” a trade? Since we NEVER *know* the outcome, ALL we can do is enter the trade, and then deal with the results. EVERY trade is ONLY a “probability”. Really understanding this is CRITICAL to your trading success. One of the best books on this is Trading In The Zone. I recommend that you completely immerse yourself in this book. Read it several times.

Anyway…the trade setup was good enough to “try”. I consider this one a “medium probability setup”. (Check the rest of the blog for “high probability” setups.) The reason why it is only a “medium”? Well, those Magnet Lines are VERY powerful, and there is still a rather substantial chance that price could bounce off the Magnet Lines…like two magnets repelling each other.

Exit #1

Normally, you know that I prefer to exit at “flat spots” in the Price (represented by the White Line). Well, it doesn’t show up on this static chart image…but the price was still moving nicely on the broker quote panel. By “moving” I mean there were several transactions (trade executions by other traders) that were reflected in the quote panel as many quick “fractional pip” prices. In other words, price was “moving” in some sense, in that there WERE transactions, but it was very rapid and at the same price point. This is different from when price “stalls”…where traders basically “stop trading” for a moment.

So, I let the price continue down, and exited at the place where price “went against me”.

*** TRADE #2 (Take it?)

Now, it’s your turn.

What are you going to do at the pink arrow? Is it a good Sell setup?

Notice (at a minimum) these things…the Logical Forex Phase…the Logical Forex Watchdog…the overall market flow and structure (from the zoom out view above)…and anything else you may notice…

What do these things tell you? What are you going to do?

I will tell you what I’m going to do….NO MATTER WHAT HAPPENS to the price…I am going to….

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Stay Out.

Because of my conservative nature, there are things that tell me that I don’t want to enter. But do NOT let that stop you from entering! If you like the trade…take it! Remember…”in and out quickly, whenever it goes against me”.

Exit #2

If you decided to take this trade, and exited at the next pink arrow…congratulations! I am truly happy for you! You did well. Although this wasn’t a very high probability trade…EVERY trade is just a representation of probability and the outcome is uncertain. The difference between you and me is…you were willing to TRY the trade, but I wasn’t…only because of what I saw in the Phase and the WatchDog, and a few other things…and because of my more conservative nature.

How does it make me FEEL when this happens…when I “miss” a trade?

Well…did I REALLY “miss a trade”? No! You simply took a trade that I didn’t. (Remember that previous trade was very profitable!) The market moves whether I am “in a trade or not”. I’m not ALWAYS watching the market, and it moves ‘without me”, right? Why would it bother me any more that it moved “now” without me?

Do you know there is a specific source for you having those feelings about “missing a trade”? Do you know what it is?

It’s simple. Because of the way you have most likely been trained, you are sensitive to “missing trades”…because…you have always had to “wait for the close of a candle” or “wait until your lower timeframe chart must be going in the same direction as the higher timeframe chart”..or some other  ”mostly artificial” limitation. These “waiting periods” are PAINFUL…and especially so when the happen when you’re not “watchin the market”. Ouch!

THERE IS ABSOLUTELY NO NEED TO THINK THIS WAY when using Logical Forex!!!

We are trading with The Flow and within a good market structure. We don’t have “mostly artificial” limitations. We simply look at the charts, make sure it all “makes sense” and there is good price flow…and we trade without predicting or hesitating.

Do you see how POWERFUL this is?

Do you understand how now there is no reason to “wait” for all sorts of dis-associated things to line up on different chart views and dozens of unrelated indicators?

Do you really, deeply, feel how much Logical Forex FREES you to trade with the Flow and ENJOY your trading?

*** TRADE #3

Yes, this trade is also a little more aggressive for me than usual, as all of the Logical Forex Flow Lines are not yet all on the same side of the Spine. But, as I’ve said before, there is some level of discretion that you will ALWAYS apply to ANY circumstance in trading…and even in your life. This was one of those times. I am only going to TRY the trade.

Exit #3

Price moved very quickly…and I exited when price stalled. Yes, this time, my broker quote panel was basically “stitting still”, so I exited.

Well…after this trade…I am “done for the day”. However, I still had my charts running as I was preparing this post, and I saw some excellent examples of some “trap trades” and some “good trades” I want to show you. Ready?

### Market Flow andStructure for EUR/JPY

The current market flow has strong clues (some which you might only know about if you have experienced a One-on-One Private Forex Workshop with me).

*** TRADE #4 (Take it?)

What are you going to do at the pink arrow?

It’s your call. Pay attention to everything you already know, and what we have talked about in this post.

What would I do?

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There is NO way I will enter here.

Exit #4

If you did enter, especially on this kind of setup…remember…”in and out quickly, whenever it goes against me.”

Okay…what about now?

*** TRADE #5 (Take it?)

Carefully look at all of the indicators. Did you take it?

What if we add some more context? What if you had waited…been patient…LET PRICE TELL YOU WHAT IT IS DOING…

Did you notice how closely together those Magnet Lines are? Is this a regular pattern you have seen, especially when the market is changing directions (the Flow Flip)? Are you patient? Will you let price do it’s “little dance” around the Magnet Lines, knowing that is a common behavior (and you know because you know your currency pair like your best friend or your spouse)?  What else do you see? What else have you seen before?

Yes, that is a long paragraph above. Read it again. And again. And then review this entire posting again. There is “gold” in there.

Exit #5

There are 3 different exit points on this trade (maybe 4), depending your trading style. I would have likely gotten out at the first downard pink arrow.

Do you see why some traders would “hold on” longer, and exit at the other points?

Just from this one example chart…do you see how there aren’t really any “rules” than one can apply to EVERY trading situation? Since we are all different in our personalities, our approaches to decisions, what we can and can’t see (that others can and can’t see), and so on…it is critical that you make Logical Forex sink deeply into your brain. BY this I mean that you practice, use Market Replay, and trade regularly.

Really make Logical Forex become a “part” of your “whole” being.

You will be able to “trade in the flow”…without predicting…without hesitating…and truly without stress.

YOU CAN DO IT! — How many times am I going to say that? Until you believe it!

Read this post several times. Then read it again. Then, watch the Online Training Videos again. Then practice some more. You are probably very close to your “Aha!” experience.

Go! Enjoy! Have fun!

Do you know when NOT to trade?

Well…I just determined the perfect scenario when NOT to trade.

I have spent the last 3 hours trying to get my microphone working in Skype. The microphone works just fine with EVERY other application. I have never been a fan of Skype for exactly this reason…it never is something I can rely on, it seems. And, the only reason I’m using it is because I have a trader with whom I’m doing a workshop in a few hours…and the ONLY way we can communicate is with Skype or something similar.

So, why do you get that story?

Because…well…it’s been a trading session that reminds me that there are times that are simply NOT good to trade.

Yes, the market must be logical and make sense. But, that’s not enough. *I* also have to “make sense”. It’s never a good idea to trade when tired, sick, distracted…or especially *frustrated*.

So, I started looking at my charts about 12:45am US/Central. I watched a moderatly good trade setup on the EUR/USD around 12:50am.

The setup didn’t quite fit my normal criteria, such as me preferring to see all of the same colored flow lines all on the same side of the solid black line. But, I was still “tempted”.

And, that’s “warning sign” #1…”Don’t trade, Greg!”.

I ignored it.

Remember….I was still in a frustrated stupor from wrestling with Skype. And, that kind of frustration will often cause me to be MUCH too aggressive. Uh oh.

So, thinking frustrated stupor thoughts…I turned my attention to the EUR/JPY. Why? Well…it *always* moves. I’ll be able to FIND a trade there sooner than the EUR/USD.

Warning sign #2. What kind of thinking was THAT?!

Already “hyped up” and more aggressive than normal, I turn my attention to a currency pair, the EUR/JPY, that requires the UTMOST patience to WAIT for good setups…my normal conservative trading style, waiting for everything to “line up” and make sense.

Did I pay attention to Warning sign #2? Nope.

This is looking grim for me.

So, here is the “big picture”. It looks moderately okay…but certainly not as “pretty” as the previous zoomed out chart images I’ve posted recently.

### EUR/JPY Zoom Out Market Structure

*** TRADE #1

From the zoomed out view, the highest probability trade was most likely to setup for a sell.

At least I was patient enough to do that.

Just barely, though.

You’ll see that I was obviously trading MUCH more aggressively than normal. Do you notice that the Logical Forex Flow Lines aren’t like I normally prefer them? You’re right…they’re not.

In fact, it’s just not a pretty picture at all…certainly not like the other charts I usually post. Sigh.

Ahh, yes, but my frustrated stupor won out….and I entered the trade.

Oh my.

I’ll say it again…this is a great example of…me being too tired, and too frustrated about “other stuff”…I should not have entered here because my “tolerances” were all wrong.

But, was I “right”? I mean…ultimately…did the trade work out? Did it move like most of the trades I enter?

Yes it did. But, did I take advanage of it?

Nope. My aggression ALSO caused me to bail out in a really stupid place. There was absolutely no reason to exit at the place I did. Yes, I made a few pips, and that was nice. But, if I was going to exit because the price stalled or went against me, I should have exited just a few moments prior to when I did.

But…what was I thinking when I exited where I did?

I dunno.

Exit #1

Do you see where the REAL exit points are?

Yep…near the Logical Forex Magnet Line, or for the brave, when price went back stronger against the position, most clearly shown as it crossing back over the Logical Forex Groove.

So, why am I showing you this?

Because I want you to realize that we are ALL going to have “off days” and even “bad days”…and it’s up to our own self control to be able to STOP trading…or better yet…to never trade at all when our minds aren’t right.

Clearly my mind wasn’t right…even though I still pulled a few pips profit from the trade. And, maybe worse, between my own growling and barking, I felt stress. Wow. Warning Sign with Flashing Lights. That only means one thing…STOP TRADING and do something else. I know what “somethinge else” won’t be…fooling around with Skype.

But, do you know what the BEST part of all this is?

Yep, you guessed it…I’m simply going to hit my “mental reset button” and come back later…when both the market AND me a “right, logical, have a nice flow and structure”. That might be in 10 minutes, or 10 hours, or 10 days…I’ll know when the right time is…just like you know yourself, too.