Liquidity Returns for Forex Scalping

What a difference a few days makes when it comes to the readiness of the market to offer up pips. Just by looking at the Logical Forex Activity Lines, it is so apparent how much more activity – and liquidity – there is in the market.

Ok, so that means it’s time to identify some trades…

 

*** EURUSD MARKET STRUCTURE ***

Structure, Scalping

EURUSD Market Structure - Big Move Down

 

As is evidenced by looking at the market structure, there sure was A LOT of downward movement during the European session. After such a pronounced move, my initial impression was that the highest probability trade would likely be on the buy side. However, I am not going to predict here. I am going to let the market tell me what it wants to do.

Price was interacting at a prime spot – right around a Logical Forex Magnet Line.

Which way, market, which way?

 

*** EURUSD SELL ***

Dance, Scalping

EURUSD Sell Trade

 

Let’s look at the Indicators:

  • Logical Forex Activity Lines – Enough activity to warrant a further look.
  • Logical Forex Flow Lines – Price started a move down, then hesitated (notice the stacking yellow?) then started to continue down some more. It is clear that price, at least at the moment, is going down. The black spine is fully revealed.
  • Logical Forex Phase – Tracking nicely with price. Nothing to cause any alarm.
  • Logical Forex Bias – Supporting the southward direction of price.
  • Logical Forex Magnet Lines – A nice, super-tight Magnet Line Dance right on the line. Notice how, after the slight pullback, price was ready to do its’ thing.

This trade was entered around the arrow, just as it had gone through the Magnet Line.

 

*** EURUSD EXIT ***

Scalp Exit

EURUSD Exit

 

Price took off quickly. As it approached the next Magnet Line, I was ready to exit with even the slightest hint that price was bouncing back. As is often the case (just check prior blog posts) price went through the next Magnet Line. I was then expecting a pullback to that line and would have exited had it pulled back beyond the Magnet Line. Luckily, it continued a bit further down, and you can see the exit around the green arrow.

Now, you can also see that price continued on for quite a bit more pippage. Of course, it’s easy to look at the chart post-mortem and wonder why I left so much money on the table. The honest answer is that when you are in a trade, you don’t know what is going to happen. Yes, I could have held on and captured more pips. I could have also just as easily ended up with a break-even or – worse – a losing trade. All pips are good pips. All profit is good. Large lot trades are awesome. Compounding is my friend.

Happy trading!

-Scott

 

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