Scalping Forex For The Brave and The Calm

Well…it was a fascinating (and surprising) day “yesterday” (Thursday July 2) at 4pm US/Central. Both the EUR/USD and the EUR/JPY “took off” and moved a LOT. I wasn’t available to trade then…but it was interesting to see on the Logical Forex Charts. Very pretty…and there were some really nice setups during those fast moves.

But…I’m not concerned about “missing out”. There will be many more “big moves”, and it just makes it that much easier to find my little ole 4 pips. :-)

I’m going to show you two things in this post. One is my single trade for the day. I am done. I’m not going trade the New York session, as it will probably be a “light trading day” due to the holiday weekend. I need some rest, anyway. So, I’m going to show you my only trade “for the day”.

And, I’m going to show you a GREAT example of the market “going crazy”. I’ve talked about this before (many times). It happens. Even though you know your currency pair quite well…and the patterns and signals all say “GO!”…you enter the trade (LOGICALLY!) yet the market goes CRAZY. There is no need to “blame anybody or anything” (including yourself) when this happens. It’s just…the way it is. Just like “real people”, even when you know them well, every now and then, their behavior will surpise you. And…what is the forex market comprised of? Yep. People.

Okay…here was the great trade I had just a few minutes ago. I took the trade on the EUR/JPY, but it was equally well setup on the EUR/USD.

Oh yeah….I’m going to let you in on a little “secret”, too…

### EUR/JPY Context  Zoomed Out

EUR/JPY Continuation Trade

EUR/JPY Continuation Trade

*** TRADE #1

Now, you already know that I’m not too fond of trading just after a big “spike” in price. But, this time, the Logical Forex ¬†Indicators were telling me that this was a clear continuation. You can zoom evern further out on your charts to see this. And, when the price approached the Logical Forex Magnet Line…it blasted through it with huge momentum.

At that moment, I decided to “let it run” and, unless price made a fast move against me, I was going to hold on until price crossed the Logical Forex Groove. I don’t always do this…but it did make sense in this context.

EUR/JPY Continuation Trade

EUR/JPY Continuation Trade

Exit #1

EUR/JPY Continuation Trade

EUR/JPY Continuation Trade

What a ride!

Okay…you wanna to know that ¬†”secret” I mentioned?

Here it is…

I was reminded that I’m still human with this trade. :-) My heart actually beat two extra pumps in this trade. One was at the flat spot in price. That is where I will normally get out. But…I felt “brave”. In retrospect, it wasn’t all that smart. Why? It increased my stress. I hate stress.

But wait! There’s more!

When price “almost” touched the Logical Forex Groove, I thought about getting out. Heartbeat #2. Ick. But, believe or not, the broker quote panel was giving me some real nice clues that price was going to continue up…this time, and even when price was at the first flat spot during Heartbeat #1.

Then…duh!….I had to “hurry up” and exit the trade so I could get out with my GREEDY profit. I went through all those extra 2 heartbeats for nothing extra. No extra profit. Nope. And…this is why I trade the way I do (normally)…go with the flow, and when price goes against me (or stalls), get out.

More than anything else…this is a clear indication that I need to stop trading. My “bravery” was not “smart-ery”. May the Forex Dieties forgive me.

Now…for an example of….

*** THE MARKET GOING CRAZY! ***

This happened about 8:30pm US/Central. I very rarely trade that time of day. I happened to be sitting at my computer working on other things…but still had the charts up.

Both the EUR/USD and the EUR/JPY had a moment of insanity.

But…was it REALLY all that crazy? You decide…

First of all, let’s just look at the normal chart…pretending that we were considering a trade…

Crazy Forex Scalping Example

Crazy Forex Scalping Example

So…that looks like a “potential” sell, right? (Not for me for several reasons…time of day/session, Logical Forex Activity Lines were nasty, it was a VERY aggressive setup, etc.)

But, let’s pretend that we are aggressive, and disregard all of the other reasons that tell us not to trade…and continue building our perspecitve.

I want to get an idea of the Market Structure…what does it look like? Is there an overall pattern to the flow of the currency pair? I zoom out for that…

Crazy Forex Scalping Example

Crazy Forex Scalping Example

Do you notice anything? I’m not going to elaborate here (but my Private Workshop clients know EXACTLY what to look for). There is an OBVIOUS CLUE that the market could go either direction here. AND WE MUST WAIT UNTIL PRICE TELLS US WHAT TO DO…no predicting, no hesitation, no stress.

What happened? Assume (for some reason) you decided this was a good trade (yikes!)…and entered…near the red diamond on this chart…

Crazy Forex Scalping Example

Crazy Forex Scalping Example

And…what happened?

Crazy Forex Scalping Example

Crazy Forex Scalping Example

Now THAT is UGLY!

Yes, an aggressive trader may have been trapped into that trade…but then again, if you’re an aggressive trader who has attended my Private Workshop, you would have entered much earlier and made about 7 pips. :-)

Here is the important thing…Was this REALLY a “crazy move”?…one that would have surprised you? Should it have surpised you?

NO! There are plenty of reasons that we would have never entered that trade. Do you see them? Check the charts very carefully (and review the Online Training Videos).

However, this IS a good example of where the market did “go crazy” in some ways. Who could have “predicted” that big spike in the other direction? NOBODY! And that’s why we trade the way we do with Logical Forex…and understand fully that the trades we take ARE logical and works out to give us profit the majority of the time.

Again…I want to emphasize that I did not take this trade, nor would I have taken this, and I said why above. But for those that did…the market DID “go crazy” a bit…but with more experience and better observation skills of all of the clues, you will see why this was not and was never going to be a good trade.

*** THE MARKET REASSMEBLES ITS BRAIN ***

Within moments, the market “returned to its senses”, and showed a VERY logical trade.

I didn’t take this trade, only because I wasn’t “trading” the time, just obvserving the charts while I was working on other things. But I WOULD have definitely entered this one had I been actively engaged in my dedicated trading seesion. (You do this, too, right? — only trade and nothing else with no interruptions, no checking email, etc..right?)

So…here is the setup… and remember…this was just moments after the market “went crazy”. Remember the context of that zoomed out chart when you consider this too. Do you see the reasons why this is a decent setup (especially for somebody who prefers contination trades)…

*** TRADE EXAMPLE #2

Scalping Setup after Crazy Move

Scalping Setup after Crazy Move

Exit Example #2

Scalping Setup after Crazy Move

Scalping Setup after Crazy Move

Yes, I would have exited at the first place where price ‘went against me”, and netted about 8 pips. Or, as I marked on the chart, one could hold on a bit longer waiting for price to interact more with the Logical Forex Groove before exiting…and pocketed even more pips…but with a few more pounding heartbeats than I would have had. :-)

Okay…I want to almost holler now! The past several posts I have provided some nearly priceless information to you…and I *know* you can take this and use it…immediately…and effectively in your trading and forex scalping.

YOU CAN DO THIS!

2 Responses to “Scalping Forex For The Brave and The Calm”

  1. Greg says:

    Hey Mario! It’s great to hear from you!

    Thanks for your kind words. I do everything I can to openly show how I trade. I know the frustrations that I experienced in the past when all I was shown was a “completed trade” without the preceding setup. Just seeing “after the fact” on the chart, it’s almost impossible to learn anything since everything has “already happened”. In “the real world” we all have to trade on The Right Side of The Chart…and so that’s why I show a chart with the setup, followed by the results of the trade.

    It is absolutely exciting to me to hear how well you are doing. I believe you “have it” much better than you might imagine right now. It’s easier sometimes for “other people” to see your abilities and successes than it is to see on our own. I’m seeing it for you. :-)

    About that trade that you “thought” was a great setup…pay attention to the market structure. Look at the zoomed out perspective. What do you see? Remember how to “divide the chart”? Since you have been in a Private One-on-One Forex Training Workshop with me, I’ll contact you separately from this blog and remind you. :-)

    Yes, more practice is ALWAYS good. In fact, as we discussed in your Private Workshop…one should “practice” frequently…no matter how much of an “expert” we become. Does Tiger Woods hit golf balls EVERY day? Do professional musicians practice every day? YES! Even though they are “expert” and they “go live” in their performances or their athletic events, the STILL PRACTICE. So, yes, continue to practice even after you have “gone live”.

    Of course, don’t “rush it”, either! There is no “scheduled event date” like other professionals have to face…like the tournament date for a golfer or a performance date for a musician. You have the true luxury to “go live” when you KNOW you are ready!

    I would like to recommend, too, that when you first go live that you trade VERY SMALL LOTS…maybe 0.10 Lot (10,000 units) if your broker allows that. This way, you will still experience some emotion from a trade execution, but it won’t be too much emotion. Then, continue increasing your lot sizes in your trades…all the while monitoring your “heartbeat” and your emotions. Continue doing this, and each time you increase your lots, you’ll initially experience some increased emotion, but as your experience and confidence builds, the “emotional charge” will drain and influence you less. Then, you’ll know you can move to the next level of lot sizes…of course, paying attention to your risk management and money management along the way.

    Finally, you will DEFINITELY improve your trading results if you can COMPLETELY “block out” and dedicate about 1 hour of time EXCLUSIVELY for trading forex. Turn off the phone. Close the door to your office. Shut down your email software. Close your Web Browser. Put away the books and magazines. AND JUST WATCH THE CHARTS FOR SETUPS (especially at those “best times to trade” that we discussed in the Private Workshop).

    Not only will you find it easier to concentrate, your consistency will improve, you’ll create a better “personal structure” for you day…and you can be “done for the day” quickly…leaving a LOT of time remaining for you to work on your regular projects…or do anything else you want to do…including writing your resignation letter. :-)

    Take your time. This isn’t a race. Continue practicing in demo mode, with Market Replay, and live experience, and it will all “connect” in your brain in ways that will amaze you.

    I am impressed, Mario! Keep up the fantastic progress…and if you have a bad trade or two, or even a bad day or two…just trust that you will make it through those events. That is part of learning. Remember when you were first getting starting in your engineering field…and those stumbles and recoveries you may have had…and how NOW you are calm, experienced, know what you are doing, and have a great deal of confidence in all of your decisions. Your forex experience will be much the same! YOU WILL SUCCEED because of your determination and your sincerity!

    -Greg

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