Forex Vs. straight line moves and grooves. Here is another Forex Trading Snack.
It’s easy to post up any trade idea as it happening or just after the best opportunity has come and is now gone. Here is an idea before it has become a filled order or trade. The trade before it a trade!
Someone once told me, in Forex trading straight line moves usually to a great trader equals taking a calculated counter trend position opposite to that straight line move. Because nothing moves in straight lines for long.
In other words, in seeing moves like this and then aligning one’s self up with the trend or the changing trend equals a higher probability opportunity.
I can see new traders saying but my candles on my chart really aren’t all that straight in my view....
There is no wrong or right in different traders looking at the same chart. The differences usually are in seeing high probability opportunities within the same view, and this comes by seeing things that you have kept statistics on and you also know what the statistical probabilities are. All of that comes easier with experience.
EURNZD has broken down out of a up trend 4H channel. The move has been ( at least on my chart ) in a longer straight-ish line out of the channel and right into a support zone. For my trading likes, this points to a top in trend price action and a newly set lower low. The lower low tells me a new trend is setting up. As to how long the trend will be or how long it lasts... well it anybody’s guess. Trading isn’t about guessing but seeing a potential move before it happens and getting into position to capture that move utilizing good practice of risk reward according to your trading plan.
If you want to trade successfully you will need to build a personal trading plan according to your personality and risk tolerances. Without a personal plan... your a gambler!!
My idea is to wait for a bounce. Maybe it does, or maybe it doesn’t bounce. Here is my trade idea and look. I set orders according to my idea and walk away from that screen till the end of the day NY trade. At that time we reevaluate or readjust.
This style of trade might have some of you just plain scared. I have to set a bigger stop, some say. Usually they say this because they are wrongly focused on the potential negative account impact, or they are trading with to much leverage or they have failed to build a personal trading plan, or all of the above! How ever, just looking at this idea.... would you say it’s a good exchange to be willing to trade 40-60 pips loss for a chance to gain 100-200-300 pips in return??
You know, I like living life! Being tied to a computer screen trying to trade, to me isn’t a better, or more enjoyable life now or for some dream in the future. I love to have as much or more freedom with my life’s time currently.... but then those are some of the things that are important to me while I journey towards my dream. A trader only needs to plan for that kind of a life.
The secret is, if you trade less, only trade high probability trades, except a tad bit larger stop loss limits ( hey here is another way to look at it. If I was trading smaller stops but tied to the screen and took 3 small stops, let’s say 20 pip losses—isn’t that the same impact to the account if I only took one trade with a 60 pip stop....But also wasn’t tied to the screen??) then you’ll also be focusing on finding the best high probability trade setups. It’s a trade off within the mind as to what strategy or life style you want to use in your trading life.
As always, if you trade any ideas, you also assume all risk of loss.
In trading you either make dust or you eat dust.
All the best in your trading.
