6/29 Analysis: Let the market dictate when to trade
Today’s lesson is all about allowing the market to dictate how and when we trade. Most amateur traders get pre-occupied with predicting what the market will do and therefore get sucked into analyzing deeper, adding needless indicators and the like.
What professional traders do differently is they RESPOND to the market, they don’t predict it.
If we look at our indicator today at the London open, the EUR (pink line) is clearly the strongest currency and the JPY (yellow line) is clearly the weakest currency.
However, we don’t have current momentum (no steep lines to the far right) so we must place pending orders 10 pips above or below the market price so that if/when price continues in the direction of the current trend it will trigger our entry. If it reverses trend, then we won’t be executed and will have nothing at risk.
- EUR/JPY BUY
If we look at this breakout trade, from the point of entry this pair moves 45 pips straight up. But more important than the end result, look at why it’s critical NOT to enter the market when there is no momentum.
After establishing the uptrend earlier (before the London open), price goes sideways for quite a long time before continuing the uptrend and eventually triggering your order. We already had a good idea that the market may do this because our indicator wasn’t showing any current momentum in the market.
Wait for the market to dictate HOW and WHEN you should trade.
Watch the entire video analysis below:
You can see that our Currency Strength Indicator is an effective tool for picking out the highest probability, lowest risk trade set ups while avoiding market conditions that aren’t favorable. If you keep using this tool every day along with our daily Forex analysis, you will increase your win rate and be on your way to becoming a profitable trader long term.
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