No BS Trading (Make your trading make sense)

No BS Trading

Hey trader, hope everything is going well with your trading and every other aspect of your life!

Have you thought about a magic formula that will help you trade with consistent results? Or a system? Or an indicator?

I know I have (a few years ago)…

And as much as I’d like to believe that there is a magic formula, indicator or system, the truth is that there isnt one! There never has been one, and there will never be one.

As simple as that.

So please, stop thinking about it…

It’s about time to think about trading as something real. Something that will help you achieve not only your professional goals (because that’s only a means to an end), but your personal goals: spending more time with your family, doing the stuff that you really enjoy, etc.

Trading that makes sense

So, from now on I want you to think about every trade you are about to take and ask yourself the next question:

Do I really believe that the market will go on that direction? Why?

Is it because an indicator is telling you it will go up? That’s non sense

Is it because there there is a Fibo retracement level? That’s non sense

Is it because your cat jumped twice instead of one? That’s non sense

Or…

Is it because the market is actually telling you that it will continue to trade in that direction?

Now you are talking…

Wait a minute… how do you know the market is telling you that?

I thought you would ask that…

And I have prepared this analysis for you…

EURAUD Analysis

Here is the daily chart:

EURAUD 1

It’s clearly going down…

You see I told you it was easy… Ok, you are good to go now.

I’m kidding…

It’s kind of difficult to determine what the market is likely to do on the chart above…

Now, let me show you the same chart using a few simple tools.

EURAUD 2

Now it’s a little easier isnt it?

Since the market got rejected from the resistance level, I know it is likely to continue its way down…

EURAUD 3

It makes sense doesnt it?

This is what trading should be like, it’s easier, more reliable, it makes you feel more comfortable and at the end it helps you trade with more discipline.

And once you trade with discipline, consistent results are around the corner…

Now you now what I mean right?

Your Turn

Does your trading make sense?

What do you think about the EURAUD? Its probably one of the clearest currency pairs out there tight now…

Leave a comment.

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Raul Lopez

I’ve been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .


  • Dwayne Graham

    Honestly Raul, you make me feel dumb when I trade, because you make it sound simple. I have made pips, on trades but I lost some very bad trades as well. My biggest fear is when I got to work all day and I set my trade in the morning and when I come home I either win the trade or lose it because I am not at home to look at it, because my work won’t let me check my phone on the job. I was doing ok, but I lost a bad trade two weeks ago and never went back on fxcm since. I just want to get consistent. That is the key to this forex game. Thank you for sharing Raul!

    • Raul Lopez

      You are right Dwayne, consistency is the name of the game…

      You just need to have a good strategy and follow it, if you cant watch your charts use pending orders and wait… and make sure you follow your strat day in/day out, its the only way to get consistent results…

      good luck Dwayne!

  • tp

    Raul, I love your NO BS attitude to trading. Now, here is the problem: I am only monitoring 10 currency pairs. Does it mean I have to monitor all 28 currency pairs? I find it tough to hit my target return of 4%. :(

    • Raul Lopez

      You dont have to monitor all 28 of them… just focus on the the ones that have a clear condition… the 5 that you feel more comfortable with… that should be enough!

      Cheers,

  • Angel Tee

    Raul, you made traders life a lot easier and simpler. :)

    • Raul Lopez

      I hope so Angel…

      Good luck!

  • richard

    Price action rules. Going back a bit what about the two big pin bars/candles at the rejection of resistance at 1.5023 or thereabouts.Plus the engulfing candle on 29 Aug. This seemed to be a good signal. Do u think pin bars with large tails are good indicators when they form at resistance levels or support levels as the case may be.

    • Raul Lopez

      Sometimes they are, and sometimes they arent… The thing is that you need to combine it with some other kind of analysis to increase their feasibility…

      In this case I’m waiting for a breakout…

  • Mustaffa

    Hi Raul,
    thanks again for sharing this analysis. It makes things seem so simple and clear. I have a few questions abut how you analyse the chart and take the trade:
    – How do you specify the “pip-width” of the S/R zones?
    – There seems to be a strong level at 1.4200 (if you open H4 and zoom out), is there any reason why this level is not important for you?
    – How far away from the S/R zone does the price have to move for you to consider it a break through or a reversal so you can actually open the trade?

    – Once the price runs into profit, when do you decide to go out of the trade? Do you use a trailing stop or a “jumping” trailing stop and you let the trade run till it hits the trailing stop? Or do you go out of the trade as soon as you see that a retracement or reversal starts to happen?
    A good example would be the CAD/JPY trade from last week, it went around 50-70 pips into profit after your post, but then it reversed at 93.20 by around 150 pips in the opposite direction. So if the wining trade could have turned into a losing trade.

    Also can you please check the GBPCAD chart? It seems there is Support at 1.6500 and Resistance at 1.6700. price seems to have bounced off the Support and is heading up. What do you think about that?

    Saludos

    • Raul Lopez

      Hey Mustaffa,

      – The pip width is different from pair to pair, or even on the same pair, the next zone will be different than the last one… you’ll need to adapt.
      – Yes, 4200 its important, but that’s exactly the breakout that I’m taking into consideration… remember S&R are more like zones instead of plain levels…
      – Again, it’s different from pair to pair (or even in the same pair, each breakout is different)… But dont worry about that, as long as you are only taking breakouts when the market is already trading in a clear condition.
      – Yes, I manage my trade, I keep trailing my SL based on market action. I make sure though to give the market enough room to express itself (I dont like to get stopped out and then see the market move in the intended direction).
      – GBPCAD is definitely bullish, but I’m not that comfortable yet with its ST levels… I’ll wait a little longer here…

      HTH

  • Ofer

    Another thing, how exactly do you figure out which are the three major SR levels, out of tens SR levels I can find, but lets say out of four or five levels that one can draw in a certain pair and time frame? Personally speaking, I can identify SR levels pretty good, but I don’t seem to be able to prioritize them, certainly not down to the level of 3 SR levels in 1000 pips range. For example, how did you decide that 1.4128 is not a possible support… It supported 2 previous retracments and also resisted large spikes around June 10… Would like to know you do it

    Thanks,
    Ofer

    • Raul Lopez

      First of all, every LT S&R should be considered as a zone instead of a plain level… 2nd, look at the market swings… what rejections create a new swings and which ones are just retracements?

      The rejections that are important are the ones that are followed by a complete swing…

      Cheers,

      • Ofer

        OK that was a good one. New understanding…

  • Ofer

    Raul, Thanks for this great insight. I am lost in all the current market dynamics, and the US default story. I wonder how do you relate to such issues? Obviously they have a direct effect on the market. Do you avoid trading in some directions or in certain pairs, or maybe it is all irrelevant… be glad to hear you on that.

    Thanks again,
    Ofer

    • Raul Lopez

      It’s not that it is irrelevant… but all the information available is reflected already in the market… that means that technical analysis includes the fundamental views of those trading it…

      For that reason I trade only what I think has a clear condition without paying too much attention to the fundamentals… (unless there is an important announcement and the market is too close to my SL, etc).

      HTH

      PS. Dont try to understand the market, you’ll go crazy…

      • Ofer

        Your note in the brackets has caught my attention. What do you really do if the market is too close to your SL in a time of a major announcement? Do you take your SL back assuming that even if the market will respond to that announcement it will retrace in the following days, or do you Stop your position manually?

        • Raul Lopez

          If its too close to my SL, I just close my trade! There is no guessing/hoping involved in my system :)

  • Guest

    raul, am your big fan not just because you used the simple tools with logic but also you explain every bit of your system so beautifully !

    • Raul Lopez

      I’m glad you like my explanations :)

      Cheers,