The Survival of the Fittest (and a possible 10% of return trade)


“The Survival of the fittest” is a phrase that originated from an evolutionary theory as way of describing the mechanism of natural selection (wikipedia).

But it can also be applied to other contexts, “fit” refers to “best adapted to the current environment”.

I believe that it can also be applied to the markets.

A trader that gets positive results is a trader that adapts to the current market condition. There is just no other way to get consistent results.

The market is always changing, each currency pairs is always changing, today any instrument might behave differently from how it behaved yesterday and different to the way it will behave tomorrow.

So its always about trying to adapt to the way the market is trading right now, it doesn’t matter how it traded yesterday… its all about today.

Here is a good example.

EURUSD Analysis

Let me show you this chart:


When you look at it, its quite simple to determine what the market is currently doing, and what it is likely to do.

The upper resistance level (1.1429) wasn’t that easy to draw, because the market has been rejected only once from there.

What tells you that the upper rejection wasn’t a random rejection?

In order to answer that question you need to understand what happened in the short term charts once the market gets close to an important level…

If you have been following my articles, you already know the answer… Most of the times, when the market gets close to an important long term level, it will range on the short term charts.

That means that, if you switch over to the short term charts when the market gets close to an important LT level, most of the time you’ll see a short term range…

And this is how the EURUSD behaved in the short term charts, while it was close to that long term level:


Its clear that the EURUSD traded around an importan level, that’s the reason it traded in a range.

It was risky to take a trade it right away after the EURUSD broke though the bottom of the range. Its always better to wait a little longer…

And now, that the market has already moved in that direction, it would be safer to look for your trade.

EURUSD Short Signal

Here is where I took my trade yesterday (called at the trading & analysis session of the Intensive Course).

As you already know, when the market is trading in a clear condition, the only thing we should do is to look for an excuse to either go long or short.

In this case, since the EURUSD is trading in a bearish condition, we are looking for excuses to go short.

And here is where we found our signal:


The signal was triggered on the breakout of the short term range, here are the details of my order:

Entry: 1.0943
SL: 1.0978
TP: 1.0557

We always risk 1% of our accounts on each trade, since the risk reward ratio in this trade is 10:1, the profit potential form this trade is 10% Not bad ha?

Do you think the risk was well worth it?

I think it was…

And the same happened with other pairs, such as the GBPUSD and AUDUSD, we had to adapt to the market conditions so we can trade based on what the market is currently doing.

Your turn

Do you adapt to the market conditions?

Are you currently trading the EURUSD? What’s your take?

What other currency pairs are you trading/monitoring?

Adapt, condition, market, trend

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 .