Is Forex Scalping like a Video Game?

 

Back when I was a child, I loved playing video games. My favorites were Donkey Kong, Ms. Pac Man, and Galaga. I used to spend more hours than I should have at the arcade — putting quarter after quarter into those machines. It sure does bring back memories. One of the things that I could always count on is for Mario to jump every time I pressed the jump button – or Ms. Pac Man to move left, right, up, or down whenever I directed her path. My video game characters responded just as I wanted – every single time.

Is forex scalping like the video games I used to play a long time ago? There are buy and sell buttons. But do they always respond exactly as expected? Do we always get a fill at the exact price we want?

In terms of the buy and sell buttons always responding, they should always respond to your request. In fact, we go into some depth in the Premium Videos as well as Mentoring to make sure you have your trading environment set up optimally – so the broker quote panel will respond as expected.

Regarding price fills, however, anybody who has done forex scalping knows that we don’t always get the exact fill that we want. This is our trading reality. It’s not a video game. Why is it, do you think, that fills sometimes aren’t what we expected? Consider the fact that trillions of dollars are being transferred back and forth in this global trading exchange known as forex. Imagine all that has to occur to make this happen. You are connected to your broker through the Internet, your broker is connected to various banks, sometimes orders need to get bundled together, and all this has to happen in mere nano-seconds. When you think about it, it’s truly impressive what happens. Certainly way more impressive than getting a cartoon character to jump when we press a button!

Now, there are better brokers for the type of scalping trading that we do – and we will freely offer up the names of our preferred brokers upon request. Just set up a support ticket. While we cannot expect our forex broker software to be as responsive as our favorite video game, we can do everything in our power to get the most responsive experience available. Even if you are not forex scalping with Logical Forex, any forex scalping needs to be done through the right type of broker.

 

*** EURUSD MARKET STRUCTURE ***

Forex Scalping

Market Structure - Click to Enlarge

 

Market structure showed that the USD was very weak against the EUR – as represented by a huge run up over the course of the day. Price was starting to interact around a decision point where I anticipated that something could happen – causing me to take a closer look.

 

*** EUR/USD TRADE ***

Scalp Forex

EURUSD Scalping Short - Click to Enlarge

 

This setup caught my eye as price was starting its’ flow down, then consolidated (as can be seen by the stacking of yellow) and then started to interact around the Magnet Line. Because this was a continuation trade of sorts, I checked the Logical Forex Phase to ensure that it was tracking with price – which it was. If it had been out of sync, I would have re-evaluated the trade.

Since price didn’t do its typical dance before the Magnet Line, I did decide to wait for it to do so on the other side of the Magnet Line. Had I chosen to just jump in, I would have needed to tolerate a pullback to the Magnet Line, as stops were being cleared out. But, because I was patient – I got a got fill as price started its way down.

 

*** Scalping Exit ***

Fx Scalp

Scalping Exit - Nice Profit - Click to Enlarge

 

Typically I like to get out as price starts to go against me. However, given the huge run up that EURUSD saw over the course of the day, I was willing to be just a little more lax in my exit. Once price pulled back to the Logical Forex Groove (the black dotted line) I was surely getting out – for a nice profit.

 

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If you have been reviewing our blog posts for a while, or are just new to this site, you should quickly start to see the consistency of patterns, times of day, stress-free trading we have every day with Logical Forex.

Just because forex scalping isn’t like a video game doesn’t mean it still isn’t a whole lot of fun! :)

-Scott

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4 Responses to “Is Forex Scalping like a Video Game?”

  1. Scott says:

    Hi Lance! Thanks for the kind words.

    I admire the fact that you still practice using Market Replay every day. Talk about dedication. You truly are a professional, Lance.

    Yes, the Logical Forex Groove did work pretty well for this trade. It works best on the EUR/JPY most of the time. It is not always the best thing to use to determine your exits, however. The method I use most of the time (in-and-out quickly) accomplishes what you and I both are happy with, 4-6 pips.

    There are other methods I use for holding onto a trade longer, which Greg mentioned in the Video on his blog post just prior to this one. We cover that very powerful method and others exclusively with our Mentoring clients, and only after they have progressed to a certain point in the Mentoring Program.

    How did I select between EUR/USD and EUR/JPY?

    One of the quickest ways to determine which pair might work best is to zoom out and look at the Market Structure and how price is interacting within that structure, particularly around Magnet Lines. If they both have good Market Structure, then the first tie-breaker is which has better price flow, then which has better activity and liquidity (Logical Forex Activity Lines) and spreads (Broker Quote Panel). Then, if all of that is the same, I will tend to trade the EUR/JPY because I find as of late that it tends to give me more pips than the EUR/USD. Of course, just like price, this is subject to change.

    Keep up the great work, Lance. You are a true role model for all of us.

    -Scott

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