A few days ago I was talking with an old trading friend, he was asking me how come I didn’t take any trade that day, he had 4 trades so far and was thinking about going long EURUSD as we spoke (that day he took 7 trades over all).
To tell you the truth I was surprised how could he found good trading opportunities that day, to me, at least by how I saw the market, it was very difficult to trade that day. Most pairs were ranging, but not usual ranges, those undefined ranges where it’s very difficult to find consistent support and resistance levels, the market changed direction without prior notice, it just did…
I’m not going to lie to you, I thought that day: is there something wrong with the methodology I use to analyze and trade the market?
That day I waited for the market to give me a low risk trading opportunity (as I define a low risk trading opportunity) but I didnt get that setup, so I didn’t trade.
This is what I do: I first analyze the long term charts and decide which currency pairs have a good probability of moving in my direction, then I look for my signal on those pairs in the short term charts, if I don’t get my signal, I just don’t trade. That simple.
After much thinking, I concluded that I was doing the right thing. You see, our job as traders is not to trade every hour or day, but to trade when the likelihood of your trade increases.
By the way, my friend confessed that he won 4 out of the seven trades that day, but the overall result was negative… -113 pips.