First, I want to tell you some really “Good Stuff”. It has been a few days since I’ve been able to post anything. Just like with forex trading, your patience will soon be rewarded. I’ll tell you more in an upcoming post.
I was unable to setup the video recorder on this trade. I have found a couple of setups that work quite well. However, I just didn’t want to run the recorder on this trade. You know what that means from my previous posts.
So, I’ll describe the trade to you here. I’ve learned that some of our Logical Forex family, for whom English is not their native language, find that reading text is much easier than listening to me talk. I definitely understand (and sometime I’ll post an interesting aspect of my own life…how my own personal struggles learning foreign languages directly relates to forex trading).
With this trade example, I’ll explain why I was interested in it (of course), and explain why I stayed in at a point when you normally see me “get out quickly”.
Keep in mind that I have the chart sizes a little smaller for this blog posting than what I typically use for trading. These charts are roughly 640×480, where my normal trading charts are around 1024×768. So, if you open your own charts, you’ll be able to see the context a bit better in some cases.
### EUR/JPY Market Context and Structure
Here are some things I want you to notice:
* What is the market structure?
* Is it a good “time” to trade?
For those who have attended a workshop with me (or who soon will have other ways to learn some “insider tips”), you know more of the specifics of what I am seeing.
The big upward move was related to US Home Sales. It’s amazing how much US News can effect other currency pairs. I do NOT let news “push me into a corner” on my trading decisions, but I am ALWAYS aware of it. Do NOT try to “correlate” a move of one currency pair to another. It is not worth your time and effort. Yes, sometimes there is a correlation…but this will often lead you into the nasty world of predicting and over-analyzing. Simply “trade the currency pair you are trading”. Get into the Flow of the market of your currency pair…and stay in complete focus on that pair during the time you have chosen to trade.
*** TRADE #1
The broker panel was quite clear what was happening.
Okay…go ahead and ask…
Why Did I Hold the Trade Through That “Against Me” Move?
Here are some reasons why I might have held on…
1. Price had not crossed the Logical Forex Groove.
No, although I was aware of the Logical Forex Groove, it did not effect my hold/exit choice.
No, although I always like to take all the market will give me, the moment I feel stress of any kind, I exit. ANY profit, even very small profit is a good thing.
3. Hope, Faith, and/or Usually “Being Right”
These are all related to predicting and over-analyzing. Occasionally I’ll have the unfortunate experience of “having flashbacks”, but I rarely do this any more. (You can get here, too!)
4. I need to make $xxx or X pips per day
Take what the market gives you. Period. Full Stop for my British English friends. Some days, the market will be fairly easy to trade. Take it. Some days it will not. Adjust with it. If you need $xxx per day, keep your job. Please. But remember, even a job isn’t a “sure thing” either. All we do in ANY endeavor is “find high probability setups”, “asses the risk” and “take the trade”. That’s true of forex trading…and your job…and your marriage…and all of life. (What is insurance all about?)
All of these previous reasons I might have held on had NOTHING TO DO WITH MY DECISION TO HOLD THE TRADE.
So why did I hold?
1. I know my currency pair and the way it behaves. I know it as well as my spouse or my best friend. EVERYBODY and EVERYTHING has certain ‘behavior patterns”. Know them.
2. The market structure was very clear. We were at distinct and obvious decision points. I must simply “decide” with everybody else…without guessing or predicting or over-analyzing or hesitating…by knowing my currency pair, interpreting the Logical Forex Indicators…and TRUSTING MYSELF TO MAKE A CHOICE AND DEAL WITH WHATEVER THE OUTCOME MAY BE.
3. I am ready for ANY outcome…with no “emotional charge”. I know that it was MY choice…and I can ALWAYS deal with THAT…much better than “blaming the broker” or whatever I might do to try to “run away” from MY choice. I am comfortable in my choices, and am ready to deal with the consequences of my decisions…whether those decisions turn out to be “positive” OR “negative”. Whatever the outcome, I “press reset” in my brain, and get ready for another trade.
Okay…so now, let’s go back and look at the Market Structure.
Carefully consider all that I have written in this post…otherwise, you may want to “see something that doesn’t really exist”.
Remember…I know my currency pair…I’m comfortable with my choices and the outcome…no matter what that may mean…
Notice that yellow line?
Do you see how price and market structure are related? If you know your currency pair, could you “hold” here?
Now…here are some CRITICAL THINGS…
DO NOT DRAW A LINE LIKE THIS ON YOUR CHART!
This line is here just to show you some market structure. You MUST be able to see “structure” like this WITHOUT “drawing lines”.
I guaranty you that with some practice…you WILL see structure like this.
DO NOT TRADE THIS WAY WHEN FIRST TRAINING YOUR BRAIN….
Simply follow “in and out quickly, whenever it goes against me”.
Over time, as you truly begin to know your currency pair and your brain has thoroughly assembled and consumed the patters of the Logical Forex Flow…you WILL see this easily and “automatically”…and this will allow you to “hold” *SOME* trades a bit longer.
But, don’t be fooled into thinking I trade this way “all the time”…like the example I’ve posted here. I do NOT. I trade “in and out quickly, whenever it goes against me” at least 90% of the time. Remember that!
Small pip wins are powerful, with low-to-no stress…and no real “choices” have to be made…simply seeing the setups, and without predicting, over-analyzing or hesitating…you click the button in…then out…and have a profit with no stress. No THAT is how I prefer to trade!
Okay…I’m going back into my cave to complete the additional things that I know will help you be able to trade Logical Forex with even more success. Realize that what I am preparing is not “replacing” ANYTHING. I am ADDING to what we already have…and as you continue developing your Logical Forex trading abilities, the additional things I have planned will help you even more than you might imagine. We’re having fun! We’re going to have even more fun!