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
EURJPY Scalping Market Context
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.
EUR/JPY Scalping Setup
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
EURJPY Scalping Setup Exit
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?
Potential EUR/JPY Trade
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….
.
.
.
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
Potential EUR/JPY Trade
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
Fast Move EUR/JPY Scalp
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
Fast Move EUR/JPY Scalp
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
Market Structure 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?)
Potential EUR/JPY Forex Scalper Setup
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?
.
.
.
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.”
Potential EUR/JPY Forex Scalper Setup
Okay…what about now?
*** TRADE #5 (Take it?)
Is This A Good Setup?
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…
Does this EUR/JPY Setup Look Better?
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?
Does this EUR/JPY Setup Look Better?
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!
Great post Greg. It is nice to see you cover some of the setups that are not ‘textbook perfect’.
Greg,
This is not really related to this thread but I wanted to suggest that you do a BLOG on the Flip Flow entry. I am still not sure what the best conditions are for using that approach.
Thx
Thanks Jim!
There is a LOT of valuable information in this post…and…maybe even a few “hidden clues” here and there.
Although all of us are always bserving the markets looking for those “textbook perfect trades”, as I mentioned in the post, all I can do is evaluate the setup, make sure it is “logical”, and then…TRY the trade.
With more experience using Logical Forex, I’ve found that I “stumble into” those “textbook perfect” trades fairly regularly. I believe this happens because I TRY…and over time, it’s the experiences themselves that allow my brain to refine what it is looking for…those things that define a “good setup”…and it’s those “things” that allow me to trade almost “subconciously logical”…without predicting and without hesitation.
When I read what I just wrote…it almost sounds like babble…but if you ponder on it a bit…it really does make sense.
-Greg
Yes, Chris, I will do that.
I have several things planned to post over the next several weeks…and more info on the Flow Flip is “in the plans”.
I can briefly tell you that if you zoom out on a chart, it begins to be fairly obvious when a Flow Flip is likely to happen…and then it’s just a matter of being patient and allowing the flow to actually “flip” into the new direction. Your first “clue” is when you see the Spine begin to form a “mostly rounded shape”, where it looks like price is about to change direction. And, of course, always pay attention to the Logical Forex Flow Lines as they relate to the Spine…and it’s always nice to have a Logical Forex Magnet Line involved, too.
That should get you started.
Do a search for “flip” (without the quotes) using the little search box near the top right side of this page…and see if you can match what I’ve written here with what you are seeing on these existing trade examples. (Not all of the current pages returned by the search actually have a Flow Flip example…they may just be referencing something about a Flow Flip.) Find the example trades on your own charts, then study what you see.
-Greg
for me the post shows clearly how to avoid loosing trades. i think the edge of greg in this thing is his eagerness to exit loosing trades, unlike me who gets married to every damn trade i take. but i need to know whether his platform allows him to zap a position without going thru confirmation.
If I can find a way of quickly dumping a trade om fxcm micro trading station, without going thru confirmation, then i would take all setups where the stuff aligns.
I hope there is a forum for clients where we could share tricks on exiting real quickly on platforms like fxcm. maybe greg needs a seperate page for clients where issues can be discussed mo thoroughly.
Hello, uhm, Jimmy
Yes, exiting quickly and without hesitation is a critical aspect of trading forex trading and ESPECIALLY in forex scalping! The only time you want to be married to “anything” is when you are married to your spouse.
In the FXCM platform, you can setup One Click Trading. They have some good instructions on their web site and their online help manual. I see that you opened a support ticket about this, and I will give you the link in that ticket. The reason I’m not posting the link here is that FXCM is going to be changing a few things on their platform on August 1, so this info could change some…but likely only “some”. The changes FXCM has been talking about so much don’t effect us, as Logical Forex Traders, AT ALL. NONE. ZERO. They will still have “one click trading”, and that’s ALL we EVER use anyway!
And, yes, I’m trying to setup a number of things for all of us Logical Forex Traders. Forums are being considered, as well as several other things. I may be contacting some of you to learn what might help you best. If you have something you would like to tell me now, please just open a support ticket, and share your ideas with me!
-Greg
All US brokers have been advise to cancel stops and limits on their platforms/brokerages. As such, fxcm would discontinue the way we currently put stops and limits on their platform. In fact, due to this issue, I have moved my acct to fxcm uk, on their advice. fxcm uk will still offer the traditional platform with one click trading, stops and limits, while fxcm us will discontinue it.
I think u didnt answer my concern. Maybe its internet speed that makes difference, but when i try to exit positions, I have to go through a confirmation window. When I ask the boys and gals at fxcm hqs, they didnt give me a clearcut answer on how to disable this time wasting confirmation. I simply need to close a position without a confirmation window.
Sorry that I had to post this.
Neither FXCM nor ANY OTHER BROKER has removed the ability to place stops and limits on orders.
The NFA Rule simply refers to FIFO based order fills. Put simply…if you place an order for a Buy, and then place an order for another Buy…THEN when you close ANY position…THE FIRST BUY ORDER is closed. This is true whether you close manually OR if your Take Profit Limit order was filled. Of course, it works in the opposite direction, too, with Stops.
FXCM has REALLY confused everybody with this. Yes, you can still have stops and limits, but they are applied differently now with FXCM…and their platform will change on August 1 to reflect these changes…but you will still be able to set stops and such.
This is NOT confusing to a Logical Forex trader. It has absolutely NO effect on us whatsoever. None.
We enter ONE order. We exit ONE order. We NEVER “add on” to an order. Ever. There is no need for that. “In and out quickly, whenever it goes against me.”
I’m not sure why you think I didn’t answer your question about confirming order closes. First, as promised, I covered it in detail in the support ticket you opened prior to posting here. I guess you may have received my comment response before you checked your support ticket. Second, the order confirmation has nothing to do with your internet speed. It has ONLY to do with setting up One-Click Trading, exactly as I showed in you support ticket.
If anybody else is wondering about how to setup the One-Click method on FXCM, just search for “fxcm one click trading” (without the quotes). As I said, I’m not posting the direct link here because of the certain upcoming change to their platform, and I don’t want to be linking out to “old information” here.
And, yeah, I’m sorry you had to post this, too. There wasn’t any need…and I didn’t have to approve it either.
But, I felt like some clarification for everybody might be helpful. Check your support ticket, “Jimmy”.
-Greg
boss
my beef with the confirmation is still valid. even if u have 1click trading enabled with a 5 pip stop, and the trade goes against u, u want to exit at the best price, for 2 or 3 pips. however, the confirmation slows issues, and the exit comes either at the preset stop in 1click trading or worst than 2. of course 1 needs to give any trade room to breath and thats given by a 5 pip stop. now if i see the trades is going against me, i have to dump it as fast as possible. however, when u click close, it brings a confirmation window and that causes dealys.
on friday, in the us afternoon session from 14h00, i had experimenting to close profitable trades b4 my 9 pip target was hit. and usually it would close at 6.2 pips that i see in the open positions window. howber, my prob is mainly when price goes against me, i want to exit soonest, as u advise. ‘in and out’ quickly. i think now its clear is that the problem is the confirmation window. 1 click trading doesnt solved this, as i need to exit manually b4 stop is hit.
You either have a problem with your FXCM platform, or you don’t have 1-Click Trading setup correctly. I’m pretty sure you haven’t had a chance to actually setup what I sent to you in your support ticket…as the market hasn’t even been open since that ticket was answered…and the post here giving a way to search Google. I’ve been using One-Click trading for years on FXCM Standard and FXCM Microlot for years. It has NEVER popped up a confirmation box.
When you setup One-Click Trading, you can set a default stop and limit, and even a trailing stop. Don’t do it! If you want an “emergency stop”, that’s fine…but on a EUR/USD it really should NOT be less than about 8 pips. If I have a reason to believe that I might want an “emergency stop”, that’s my first clue that I probably don’t want to be trading that time period. And, if I do actually set an “emergency stop”, it is rarely less than 20 pips. If you have your stop set at 5 pips on a EUR/USD, there is a distinct possibility that the natural flow of the market may force your trade to stop out…but more likely…the broker SEES YOUR STOP ORDER and may stop you out “if price gets close”. That is part of the reason we all see different prices on our charts. EVERY broker operates a bit differently, and you have to spend some time and effort with that broker to “learn how they play the game”, and then adapt your own style and settings to be profitable. THEY have the money and the platforms…and can set the rules as they wish. We can choose to trade with any broker…the one who treat us best, AND with whom we can execute our trading style. I *know* FXCM works fine with 1-Click Trading and does NOT popup a confirmation box, and that is part of the reason I use them…regularly for years.
By the way, this setup of “One Click Trading with a default Stop and Limit” is EXACTLY in principle what the “new” FXCM platform will be implementing on August 1…which is called “OCO” or “One Cancel Other” orders. Again, I hve been using this style for years. It’s nothing new, and has been part of FXCM and any other broker’s platform (sometimes with different names) “forever”.
-Greg
Here is a comparison of how different brokers are notifying their customers about the new FIFO rule.
Notice how clear this is, compared to how FXCM has approached it…
====
As of August 2, 2009, First In, First Out (FIFO) execution will be required, which mandates that the first order in must also be the first order closed.
What does this mean for your trading account?
The FIFO (First-in, First-out) method for trading means that the oldest trade of a currency pair will be the first closed, or reduced, when a trade is done in the opposite direction in that same instrument.
You will no longer have the ability to:
* Hedge
* Place stop-loss or limit orders against a particular ticket
* Modify or close a trade that is not the oldest of a particular currency pair
====
Notice that second point about stops and limits. As I’ve said a few times, this ONLY has to do with existing open orders and when you close them.
Most importantly…these changes have NO EFFECT on us as Logical Forex Traders. We simply do NOT “add on” to a position. We are in and out quickly in a single trade execution. And, if we can all get our One-Click trading to work on FXCM, then it will be really easy.
-Greg