Just a reminder about todays webinar its free to register and join me.

http://www.fxstreet.com/search/contributors/authors/author.aspx?id=27ba7b24-e6e4-4b8b-9443-2457d23752c6

Starts at 11 GMT today.

See you all in there

Phil

Drum roll…. (insert own sound effects)

Answer = 10

The funny thing is that out of all the possible answer I don’t think that this was one given, although it was mentioned mid way through the comments.

How did I get that? 1 + 2 + 3 + 4 = 10

Before you all shout at me for such a simple sum ask your self what is more important;

• The answer?
• OR
• How you came to an answer?

The object of this game was to highlight some of our failures in logical thinking. Many people simply put the answer that they thought which was simply a guess. With a little prompting some of you started to think about this and what rules need to be used to come to a conclusion.

Even the most obvious answer, 5, has a set of rules that has been bred into us from an early age as a basic number sequence. So before we come to any answer we need to establish what the rules of the game are otherwise we are making simple guesses and assumptions to ascertain an outcome.

Now lets think about this in trading terms. Mr Market knows the rules and with that same number sequence there are a certain number of possible outcomes. As traders we are looking for outcomes based on a certain sequence of events leading up to making a trade decision.

To make this decision we need a plan. We need a rule set. We don’t know the rules of the game but we do know that when certain things happen we can assume a favourable outcome.

5 is the most obvious answer and is what all the so called text books tell and and is really what Joe Public is doing and loosing money as a result. So what other outcomes could there be.

What I am telling myself as a rule set for a trading plan is that every time 1,2,3,4 happens I expect an outcome based on 1+2+3+4=10.  I have researched, back tested and forward tested this rule set and I’m happy that this is a set of rules that I can follow and make money in the market with.

The point is I have a plan based on a logical set of assumptions with a tested and expected favourable outcome based on probability.

As traders we need to always be thinking about all the possible scenarios that could develop and take a course of action if those events fit into the trading plan that you have devised, researched and tested.

So one last question.

Do you have a trading plan?

Sunday afternoon again and taking a quick look at the charts for the day and week ahead. So far its not looking to interesting with the currency pairs that I’m looking at having developed some 240 min ranges which for my is usually a step aside and wait indication.

Enjoy

Phil

Answers on the comments please.

Just a reminder about todays webinar its free to register and join me.

http://www.fxstreet.com/search/contributors/authors/author.aspx?id=27ba7b24-e6e4-4b8b-9443-2457d23752c6

Starts at 11 GMT today.

See you all in there

Phil

Doing the crystal ball thing again.

1. Buying when its going up
2. Selling when its going down
3. Waiting (usually) when its sideways

One of the many e-mail questions I get asked is;

Can I use Price Action on XYZ?

The simple answer is yes. As I’m dealing with markets facts I can trade price action in exactly the same way as I would any instrument.

Enjoy

Phil

• Weekly FX Street Presentation Every Wednesday at 11:00 gmt
• Trading Breakouts Strategy - ARTICLE
• Trading Breakouts Strategy - VIDEO
• FX Street Members Discount to my Daily Live Trading Room

I hope you dont mind me being a little lazy with this post as I didnt have time to post each item in real time as I did on my own website.

But there is a good video and a nice running commentary of some trades on the video and static charts of the late evening trades that developed on the pairs I have been trading today.

Enjoy

Phil

I’m looking at the charts as usual this morning and have been all morning and all I can do is shake my head. 

Most of the cross rates that I’m looking at are still range bound and waiting for price to get to S/R levels or break past those S/R levels and so far they are nowhere close to being at those levels previously identified.

The only cross rates that have looked interesting for me so far today are AUDJPY AUDUSD and CADJPY which have broken out of the larger 240  min ranges and there is such a lack of activity today that I’m thinking that these might really struggle to make any significant intraday moves at the very least.  the good news with them is that I have managed the trades to a break even point as Ive described in the Ive room today.

So its back to waiting… waiting and waiting some more.

I think personally If I wasn’t at the trade desk and doing some presentations, today and this week would be a really good time to go fishing. Have a long weekend. Spend some time with the family. If I was flat that’s what I would do with my time…. something better than sitting at the desk.

What every you decide to do today and tomorrow… enjoy yourself and have a great weekend.

Phil

Just a reminder about todays webinar its free to register and join me.

http://www.fxstreet.com/live/sessions/session.aspx?id=bdec3a46-3ae4-406f-9e87-ac5906be0454

Starts at 11 GMT today.

See you all in there

Phil