Trading in the financial markets is a rather unique profession. You can place bets on any type of financial instrument across the world every day. You can buy and sell breakouts, on retracements, in the middle of consolidations, you can do whatever you want. You can be placing bets in certain stocks one day and shift to placing trades in some commodities the next day. You can shift your bets and trades as quickly as the liquidity allows you to do so.
Forex is even more unique in the sense that it is open 24 hours a day for 5.5 days of the week. That means that you can place a trade at any point during the day. You can place a trade during the London session, during the NY session, right before the 5pm EST rollover. You can place an order in the Sydney session twilight zone. You can do whatever you want. This imposes even more discipline on you. Because while stock traders can only trade when the stock exchanges are open, the forex trader can trade whenever they want do. That can present opportunities, but for most beginning traders, it usually means even more opportunities to lose money. Some people can get home from work, and the forex market is open, they can be itching to place a trade and decide to place one. Even if they throw a stop loss on, it is done haphazardly.
Quick Way, Lazy Way To Analyze The Market
All these different markets to trade and information exists, and people want a quick way to sort out whether an opportunity exists or not. They want a quick way to analyze the market. Thus, people like to use technical indicators, chart patterns, price patterns, forex robots, etc as a way to analyze the markets. Rooted in all these methods is an overriding need to break down the market into a simple and frankly “lazy” way. Most people are unwilling to analyze the news and develop an order flow mindset, partly because there isn’t much information out there on it, but also because some of them are lazy and just want a “quick” way to analyze the market.
They are looking for the easy button so they can know within a few seconds where there is a trade setting up or not.
Other people are looking for a visually appealing way to trade the markets. All those indicators, chart patterns, lines, can make the chart look good. It can make you feel good. It can give you a false sense of security.
After all if the market has just broken out, has retraced nicely to the 38 fib, has posted a nice chart pattern or price pattern, there is some nice divergence on a technical indicator, and a forex robot is confirming the move, it must be a good trade right?
That is funny right up until your stops get hunted or you suffer a large consecutive series of losses.
The people who are lazy will never know when to go for the jugular.
That doesn’t mean that quick ways don’t exist to analyze the market. There are many ways to know when you should have a particular bias in a currency pair. But it does require a bit of work to recognize what type of macro environment you are trading in, what the order flow generators are, and what scenarios can play out. I will reveal it all in the order flow mastery course.
Soros, Bank of England
When Soros broke the Bank of England, he wasn’t looking at technical indicators, moving averages, stochastics, high frequency trading, price patterns. It was all pure order flow, global macro, liquidity, whether intervention would succeed or fail, scenario analysis, how sensitive the market was to intervention and predicting what other traders would do. He was gathering information that existed outside of the chart from what was happening in Europe at that time.
Nowadays a lot of that information is available instantly through news releases and news platforms. But still most people don’t look at them because they are lazy and want the easy button. They may think that trading has progressed to a new level where they can trade with these magical technical indicators.
When in reality trading hasn’t changed that much from twenty or thirty years ago. The market posts real breakouts, false breakouts, stop hunts, small moves, medium sized moves, big moves, etc.
What has definitely changed is an explosion of the retail forex trading. And that has led to a proliferation of trading forums. Once you have attained the order flow mindset and know the process for finding the great trades, then trading forums can become a liability. Then you should beware the trading forums.