Logical Forex Scalping & Trading

I don’t normally trade this time of day. However, I just can’t pass up a good trade. I actually “broke one of my rules”, in that I was working on something else and not fully engaged in trading. I had my chart up, though. I almost always have my chart up.

So, I noticed an interesting continuation pattern. Several of them, in fact. Price had been going down for a while, then entered a “rest period” of consolidation for a while, and then started it’s downward move again.

Here is the context of the market activity…

### EUR/JPY Zoomed Out

Something I found interesting was how strongly price was reacting around the Logical Forex Magnets. That gave me a clue that any move continuing past that lowest Magnet Line could be a equally powerful one.

*** TRADE #1

There was actually a fairly nice trade at that first “weak magnet line” around 5:10am US/Central. I didn’t notice this on my charts at that time as I was away from my trading desk. But, it was a good trade to enter with no hesitation, and if it helps you, I would have exited as soon as price got near that Logical Forex Magnet line.

So, by the time I returned to my desk, I saw this setup…

I wasn’t entirely convinced that this trade would actually work. It is not a “super” high probability trade, so I was ready to bail out quickly. You know how I do that…”in and out quickly, whenever it goes against me”.

So, you’re probably wondering…Why was this not a “super” high probability trade? Two reasons have the biggest impact…the time of day, and the Logical Forex Phase was a bit, well, ILL-logical for how I prefer to trade continuations.

But, the trade setup was good enough. There was a lot of price movement and momentum, I like “decision points” around strong Magnet Lines, and the confluence of signals gave me a “good enough to go”.

And…wow…did price Go! This is when you simply “hold on” and your forex scalping trade turns into a big winner!

Exit #1

Overall, this was a nice, calm “ride”. Price ran rather smoothly on the chart, but more importantly, on my broker trading platform. The price quotes stayed in an almost constant “down” mode. Of course, when price hit that first major “stalling point”, I exited. You’ll notice that stalling point from the longer yellow flat line of the price line (the white line).

The net on this one was roughly 22 pips after spread and commissions. Nice!

Now, here is an interesting note…price continued downward for another 20+ pips. Does it bother me that I “missed out”? Nope. Not in the least. I’ll leave it to you to ponder why. Just read more of the blog postings, and you’ll find out. Hints: I don’t like stress, and ALL profit is great!

So…why didn’t I take the setup at around 4:28am? Well, I wasn’t sitting at my computer then. But, even if I was, notice how differently the Logical Forex WatchDog was behaving at that time. Yes it started signaling “early”, but notice by the time the price is TELLING us what it is doing, the Logical Forex WatchDog has actually been “barking” for quite a while.

Now, compare that to the trade I took. The Logical Forex Flow Lines look differnent, don’t they? (They are similar, but not identical.) And, the WatchDog certainly is behaving differently.

And, what all of this means is…I really do trust the Logical Forex Indicators, but I don’t “enter a trade” just because they are signalling. No…it ALL has to be LOGICAL to me…and if it was as simple as just letting the indicators TELL ME when to trade…I might was well be doing this like an automated trading robot. (No thanks. Not for me. I’ll write more about why robots don’t usually work very well in a future post.)

Always let the Logical Forex Indicators CONFIRM to you that the market makes sense, price is flowing within a structure that makes sense to you, and you can enter without having to predict or hesitate. Yes, you can do it!

There were some fairly bumpy moves on the EURUSD tonight. I started watching a little before 1am US/Central. It was about 20 minutes before I saw a trade that I liked. The EURJPY was also a little bumpy, but the moves were a little smoother once they got started (which is pretty much the norm).

Based on how the market looks, I’m going to make this one trade be the only trade I take. A 20 minute wait for a setup, and a trade that lasted about 2 minutes for about 14 pips net is still a good day, especially with large lots, isn’t it?

I’m too tired to wrestle with myself or the market. Even if I hadn’t taken that nice trade or there weren’t any trade setups that I liked, I would stop now anyway.

You do the same, too, right? When you’re not “quite in sync”, you step away like a professional, and come back later when you AND the market are in sync with each other, and you are both “in the flow”. I thought so.

### EURUSD Context – Zoom Out

*** TRADE #1

The Logical Forex Magnet Lines REALLY helped keep me out of some nasty moments. There was an appearance of a possible Flow Flip immediately before I took the sell, but the Price Flow and Momentum  (price action)  just wasn’t logical given the market structure. And, when price moved, it really took off quickly. A good fill is also a  nice bonus. And, you’ll also notice this was an aggressive trade (for me especially)…another reason I need to stop trading for the day (or at least for a little while). I was “pushing it” and forcing a trade that isn’t normally my preference.

These aggressive trades work fine, I just don’t take them very often, and when I do, it’s usually a sign that I am not “at my best”. Did I ask you if you stop trading when you’re not at YOUR best?

Exit #1

I almost will always get out of a trade when price “stalls”. That will show up in your broker quote panel, and sometimes (as in this case) on the chart with a “flat line”. I don’t care what the market does after I exit. No need to “feel any stress”. Profits are ALWAYS good, especially when they come with no stress.

Well…it was a fascinating (and surprising) day “yesterday” (Thursday July 2) at 4pm US/Central. Both the EUR/USD and the EUR/JPY “took off” and moved a LOT. I wasn’t available to trade then…but it was interesting to see on the Logical Forex Charts. Very pretty…and there were some really nice setups during those fast moves.

But…I’m not concerned about “missing out”. There will be many more “big moves”, and it just makes it that much easier to find my little ole 4 pips.

I’m going to show you two things in this post. One is my single trade for the day. I am done. I’m not going trade the New York session, as it will probably be a “light trading day” due to the holiday weekend. I need some rest, anyway. So, I’m going to show you my only trade “for the day”.

And, I’m going to show you a GREAT example of the market “going crazy”. I’ve talked about this before (many times). It happens. Even though you know your currency pair quite well…and the patterns and signals all say “GO!”…you enter the trade (LOGICALLY!) yet the market goes CRAZY. There is no need to “blame anybody or anything” (including yourself) when this happens. It’s just…the way it is. Just like “real people”, even when you know them well, every now and then, their behavior will surpise you. And…what is the forex market comprised of? Yep. People.

Okay…here was the great trade I had just a few minutes ago. I took the trade on the EUR/JPY, but it was equally well setup on the EUR/USD.

Oh yeah….I’m going to let you in on a little “secret”, too…

### EUR/JPY Context  Zoomed Out

*** TRADE #1

Now, you already know that I’m not too fond of trading just after a big “spike” in price. But, this time, the Logical Forex  Indicators were telling me that this was a clear continuation. You can zoom evern further out on your charts to see this. And, when the price approached the Logical Forex Magnet Line…it blasted through it with huge momentum.

At that moment, I decided to “let it run” and, unless price made a fast move against me, I was going to hold on until price crossed the Logical Forex Groove. I don’t always do this…but it did make sense in this context.

Exit #1

What a ride!

Okay…you wanna to know that  ”secret” I mentioned?

Here it is…

I was reminded that I’m still human with this trade. My heart actually beat two extra pumps in this trade. One was at the flat spot in price. That is where I will normally get out. But…I felt “brave”. In retrospect, it wasn’t all that smart. Why? It increased my stress. I hate stress.

But wait! There’s more!

When price “almost” touched the Logical Forex Groove, I thought about getting out. Heartbeat #2. Ick. But, believe or not, the broker quote panel was giving me some real nice clues that price was going to continue up…this time, and even when price was at the first flat spot during Heartbeat #1.

Then…duh!….I had to “hurry up” and exit the trade so I could get out with my GREEDY profit. I went through all those extra 2 heartbeats for nothing extra. No extra profit. Nope. And…this is why I trade the way I do (normally)…go with the flow, and when price goes against me (or stalls), get out.

More than anything else…this is a clear indication that I need to stop trading. My “bravery” was not “smart-ery”. May the Forex Dieties forgive me.

Now…for an example of….

*** THE MARKET GOING CRAZY! ***

This happened about 8:30pm US/Central. I very rarely trade that time of day. I happened to be sitting at my computer working on other things…but still had the charts up.

Both the EUR/USD and the EUR/JPY had a moment of insanity.

But…was it REALLY all that crazy? You decide…

First of all, let’s just look at the normal chart…pretending that we were considering a trade…

So…that looks like a “potential” sell, right? (Not for me for several reasons…time of day/session, Logical Forex Activity Lines were nasty, it was a VERY aggressive setup, etc.)

But, let’s pretend that we are aggressive, and disregard all of the other reasons that tell us not to trade…and continue building our perspecitve.

I want to get an idea of the Market Structure…what does it look like? Is there an overall pattern to the flow of the currency pair? I zoom out for that…

Do you notice anything? I’m not going to elaborate here (but my Private Workshop clients know EXACTLY what to look for). There is an OBVIOUS CLUE that the market could go either direction here. AND WE MUST WAIT UNTIL PRICE TELLS US WHAT TO DO…no predicting, no hesitation, no stress.

What happened? Assume (for some reason) you decided this was a good trade (yikes!)…and entered…near the red diamond on this chart…

And…what happened?

Now THAT is UGLY!

Yes, an aggressive trader may have been trapped into that trade…but then again, if you’re an aggressive trader who has attended my Private Workshop, you would have entered much earlier and made about 7 pips.

Here is the important thing…Was this REALLY a “crazy move”?…one that would have surprised you? Should it have surpised you?

NO! There are plenty of reasons that we would have never entered that trade. Do you see them? Check the charts very carefully (and review the Online Training Videos).

However, this IS a good example of where the market did “go crazy” in some ways. Who could have “predicted” that big spike in the other direction? NOBODY! And that’s why we trade the way we do with Logical Forex…and understand fully that the trades we take ARE logical and works out to give us profit the majority of the time.

Again…I want to emphasize that I did not take this trade, nor would I have taken this, and I said why above. But for those that did…the market DID “go crazy” a bit…but with more experience and better observation skills of all of the clues, you will see why this was not and was never going to be a good trade.

*** THE MARKET REASSMEBLES ITS BRAIN ***

Within moments, the market “returned to its senses”, and showed a VERY logical trade.

I didn’t take this trade, only because I wasn’t “trading” the time, just obvserving the charts while I was working on other things. But I WOULD have definitely entered this one had I been actively engaged in my dedicated trading seesion. (You do this, too, right? — only trade and nothing else with no interruptions, no checking email, etc..right?)

So…here is the setup… and remember…this was just moments after the market “went crazy”. Remember the context of that zoomed out chart when you consider this too. Do you see the reasons why this is a decent setup (especially for somebody who prefers contination trades)…

*** TRADE EXAMPLE #2

Exit Example #2

Yes, I would have exited at the first place where price ‘went against me”, and netted about 8 pips. Or, as I marked on the chart, one could hold on a bit longer waiting for price to interact more with the Logical Forex Groove before exiting…and pocketed even more pips…but with a few more pounding heartbeats than I would have had.

Okay…I want to almost holler now! The past several posts I have provided some nearly priceless information to you…and I *know* you can take this and use it…immediately…and effectively in your trading and forex scalping.

YOU CAN DO THIS!