Best time to trade
There are good times to trade and there are bad times to trade.
It’s important to know the difference.
Sometimes the best position you can take is the one on the fence. Often in the FX markets you will find killer setups that follow through like a dream trade should.
Other times there will be nothing that you can trade, and sitting on the sidelines is the best position you can take.
We always want to put the advantage in our favour, always. It’s not a bad thing, it’s not trickery and it’s not cheating if we wait for nice market conditions before we take a trade.
One time about a year ago, a gentleman accused me of having an unfair advantage by waiting for a nice tradable market. He seemed really upset that I was waiting for nice setups while he was taking all the trades and getting hammered doing so. He accused me of “Cherry Picking”.
Shouldn’t that be part of your trading system, whatever trading system you may be using? You wait for other signals, a clean market should be one of them. You do want to have the advantage and the better the advantage, the higher your hit rate will be. And that is what counts.
In order to determine what kind of markets to stay away from, it’s a good idea to know what kind of markets we should be attracted to.
The following is an example of a pretty market. It moves like an intermediate dancer, it is graceful and flowing. From time to time it stumbles, but it quickly gets back into its rhythmic swing.
Below we have a picture of the EURUSD daily chart. You can see that it has a graceful flow to it. Price moves up and down fairly consistently and has only a small amount of chop. The indicators also display a smoothness to them. They reflect the market oscillations and they too flow quite nicely.
When price moves in a direction, it moves in that direction!
Price isn’t flailing itself all over like a child having a temper tantrum. The market looks orders and organized. It is in fact very tradable, this is a picture of a beautiful market.
When the market moves, it will form peaks and valleys. These peaks and valleys are import to us as traders, they definite areas where we can enter the market, we need the peaks and valleys.
When these peaks and valleys form, there are clear “white spaces” that form, you can see the background through the peak and valley formations. Let me show you what I mean.
These white spaces help make the peaks and valleys easily definable. There is no question as to where the swing highs and lows are. Signals on a currency pair that looks like this are easy to trade.
Don’t for get to read :
Market Conditions Not To Trade
This Article Edited by ForexWinners©