Archive for October, 2011

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What is your Forex Scalping Edge?

Friday, October 14th, 2011

Despite everything we think we may know about forex, scalping, or forex trading in general, we really never know how a trade will turn out. Scalping forex on a consistently profitable basis is all about tilting the odds of trading success as much in our favor as possible.  I am a big believer that true professionals need to know what their trading edge is. What is it that gives you an edge? Do you even have one? I sure have mine.

Logical Forex Scalpers have several edges. One is our laser-focus on two and only two currency pairs – the EURUSD and the EURJPY. Rather than dabbling in countless currency pairs, we get married to only these two. Knowing them as well as our spouse or our best friend, we really start to understand their personality, their subtle nuances, and even how they think. By recognizing consistent patterns, we are able to leverage this knowledge into successful scalping.

Another edge that Logical Forex provides is the ability to see the markets’ true decision points. Rather than fight the true leaders of the forex market (the large banks and other institutional traders) we only jump onto a trade once these market leaders advertise which way they intend to take the market. We wait patiently until it is very clear what they are going to do – and then we try the trade. Once you combine the power of the Logical Forex Magnet Lines with what your broker quote panel is telling you, then you truly have an edge that puts you in the top tier of forex scalpers.

### EUR / JPY MARKET STRUCTURE

Market Structure of EUR/JPY

NOTE: Remember that you can click the chart images to enlarge them in a new browser window. Just close that window to return here.

It seems most of my trades this week have been with the EURJPY. That happens sometimes. I simply evaluate the market structure, make my decision on which currency I want to focus on, and don’t jump back and forth between the two.During my available trading time today, I could see that the EURJPY did a strong move up and was making its’ descent back down. I liked the flow and symmetry that I was seeing in price.

***TRADE #1

Reversal Time for EUR/JPY

Price had made a nice Flow Flip and then proceeded to move down. You can see that price started to tighten up a bit (notice all the stacking yellow) as it started to interact with a Magnet Line. You can see that the magnet dance was quite tight, and did poke through the Magnet Line at roughly 8:43am US/Eastern (New York). If I were looking at the Magnet Lines as mere Support and Resistance (don’t do it!) then I would have likely hit the sell button immediately. That would have been costly, as you can see that price pulled back almost immediately by 5 pips + spread + commissions. Ouch!

What just happened there was the big boys cleared out a bunch of stops before announcing their true intentions – continuing the downward flow of price.

You will notice that I entered at the red arrow. The reason for this is that (a) price went through the Magnet line after its’ dance and (b) MOST IMPORTANTLY – the sell price on the broker quote panel started to pick up speed and start flashing – announcing something exciting was going on. This is the announcement of the markets’ intentions. It doesn’t tell me how far they may take the market down, but it does tell me in real-time that it is in fact going lower.

So, I jumped on the train along with the big players.

SCALPING EXIT

Exit for EUR/JPY Scalp

You can see that price moved pretty fast – down. I should point out that I do not watch the chart once I am in a trade.It can never update as fast as the broker quote panel. Once the panel started to slow down, it was clear it was time to exit. My exit in fact occurred as price started to pull back a little.I intentionally showed what happened to price over the following several minutes – it continued to go down. Do I care? Nope. I got my pips – quickly, with no stress!

If you truly want to have a forex scalping edge, it’s time to stop dabbling with every scalping system that comes along and start focusing on one. You can get your trading edge with Logical Forex. I like my edge. I believe you will like yours, too.

-Scott

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Forex Scalping Jitters

Wednesday, October 12th, 2011

Today was full of jittery price movements. Much of the movement I didn’t particularly care for. I really only like to trade when the flow of price is something I am used to seeing, and not something wild that needs to be tamed. That’s just not my preferred trading style.

For my available trading time(s) today, this is really the only trade I was remotely comfortable with taking. Even so, I did proceed with caution.

### EUR / JPY MARKET STRUCTURE

EUR/JPY Market Structure

You can see that the market had experienced a significant move up. Knowing my currency pair as well as I do, it was evident to me that the market needed to take a breather, and likely start a descent back down. Once I saw the Spine rounding out and the beginnings of a sustained Flow Flip, I started to pay a bit more attention.

***TRADE #1

EUR/JPY Fast Scalping

This trade occurred just as the NY Session was starting to pick up some steam. As mentioned, I am not a huge fan of the price jitters that I was seeing leading up to this trade. When you see these big swings up and down in forex scalping, it normally means BEWARE. At a minimum, you should consider trading smaller lot sizes and definitely be prepared for a deep pull-back of price before it moves in your favor. That being said, I did like the tight Magnet Line Dance (you will find that a tight dance is often quite high on my list) so I did decide to try the trade.

SCALP EXIT

Exit Jittery Trade with Profit

Fortunately, I didn’t experience any pull back in price at all. In fact, price was a very fast mover.

Part of the analysis I have done on Magnet Lines is when there are two Magnet Lines in close proximity, there is often a power-move through the second. I was prepared to accept a pull-back to that Magnet Line, but would have been out had price pulled above the second Magnet Line. Fortunately, that did not happen and I was able to click out of the trade with a nice profit.

Are you prepared for true forex scalping success?

We often get questions on how many trades Logical Forex gets in a day, how many pips one can make, and on and on. Some people are frustrated by our response – which is that the market doesn’t owe you anything. If you pull pips out of the market, it is because the market conditions were right. Some days there are more opportunities than others. Some days it is better to just sit on the sidelines. Not losing money is a good thing.

I wish I remember where I read this, but this is a quote I have written down and often try to remind myself of:

“Do not trade to make money; make the trade that will not lose money. All of the setups look different from that perspective.”

If anybody has seen that before and knows where it is from, please let me know. I think it is a fantastic way of looking at things and I’d love to give proper credit to whoever said it.

Did YOU have the jitters today? Would YOU have taken the above trade, or sat on the sidelines? What did you like or dislike about the trade? I’d love to hear from you.

-Scott

 

 

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Forex Scalping on a Friday

Friday, October 7th, 2011

 

NOTE from Greg: Scott is joining me in posting trade examples and other important forex trading tricks, including your “mental perspectives”. As I’ve mentioned before, Scott has more than a decade of direct experience in the financial markets, and is a professional trainer. You’ll particularly enjoy his insights, since, like you, he was new to Logical Forex several years ago, and has been extremely committed to himself… and me too. I have dedicated nearly countless hours to bring him to a Master Level as a forex scalper and forex trader. You’ll notice he approaches things a bit differently than me sometimes. You’re going to enjoy Scott… and you may have already had some interactions with him so you know he is a great person to be around. Enjoy. -Greg

 

 

I’d like to say an official hello to all of our longtime, recent, and soon-to-be Logical Forex clients. As Greg has explained in recent posts, there are a lot of exciting things going on with Logical Forex. And, the market is ripe for some high-probability scalping trades.

Now, let’s look at  a trade from a Friday near the London Close…

### EUR / JPY MARKET STRUCTURE

EUR/JPY Friday London Close - Market Structure

When I zoomed out on the chart, the market structure was telling me it was at a critical decision point. That certainly caused me to take a closer look.

***TRADE #1

EUR/JPY forex scalp near London Close

Now, this was an interesting time for a set-up — just past noon U.S. Eastern Time — right after the European market closed out its’ books. It is not my ‘typical’ trading time, but the market activity (as represented by the Logical Forex Activity Lines) was looking good. Price was interacting exactly as I like it with the Logical Forex Magnet Lines, market flow looked good, the Watchdog was firing, and the broker quote panel started to light up. Yes, I was ready to try the trade. Remember, there are no certainties in Forex; we simply want to stack the odds in our favor.

EUR/JPY London Close Scalping Exit

 

As you can see, I got out as soon as price went against me. Overall, it was an easy, stress-free trade. That’s how all  of your trading can be with Logical Forex.

Is there any reason why you cannot consistently trade this way every single day? Remember, it’s not about making many trades over the course of the day. It’s about patiently waiting during your available trading window for those high-probability scalping trades and then trying the trade when everything is – well – LOGICAL.

There really isn’t a more fun way of forex scalping that I have ever found. In fact, I rarely even do any other kind of forex trading. Logical Forex is that powerful, and I will continue sharing my own experiences with it, here on the blog, and as your personal Forex Mentor, too.

-Scott

 

 

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