WARNING: This text is a word-for-word transcription of Mac’s daily forex trading video. That means the writing will reflect the way he speaks, if anything seems out of place, please refer to the forex video on the page.
All right, everybody. Well, I am still cleaning out my lungs, it seems, from the last couple of of days. I had to abort the last recording, so let me get through this quickly. If you remember, yesterday I was talking about the area coming right down through here. The aggressive trader, of course, managed to get in a little bit early. The conservative trader had to wait just a little bit in order to get paid. But ultimately ‑ let’s go ahead and zoom in here ‑ ultimately there were some really good opportunities.
The break came early in the session. This is one AM. By two AM over here you can see the market had already broken down quite a bit. But then coming into the New York session ‑ this is back into nine and 10 AM Eastern Time ‑ you can see the market had popped up. It was giving us that little dipper that actually paid off very, very quickly.
The market came, made this move ‑ this was a very dramatic move, about 100 pips ‑ you can see, inside of about two hours. So here is the first move up. The trigger came on this bar over here, and then boom. About 45 minutes later, the market had moved down aggressively. If you look over here on the 15‑minute, you can see exactly how that played out.
Remember what I said yesterday, too: you’ve got to watch out for these whipsaw rapid moves. OK? So there’s the break, coming into the early European session. Here’s the little dipper. The signal, depending on how you were trading, either came here ‑ well, let me get it more exact ‑ it either came right in here or it came right there.
So a very narrow range of entry, about 100 pips top to bottom on the downside. So maybe 70 was grabbable, if you will, before the market came rocketing right back up. And if you’re really aggressive, of course, you could have gotten in on the second trip up. That one really would have rewarded just the aggressive trader with an entry right about in here, just about the same level as the prior trade, for ‑ again ‑ a quick hit before getting stopped out or break even.
So again, there was opportunity today, and if you didn’t get it ‑ in fact, let me actually address something that has come up more than once in our live sessions over the last couple of weeks, but it has come up for years when I’m trading. And this is something I didn’t really understand until this last year. You’ve probably heard me saying over the last couple of weeks that I’ve made a lot of key discoveries just this year alone that I think will help you to really revolutionize your trading.
All right. So when you sat down and you decided, “OK, I want to learn how to make money in the markets, ” because you need more money for whatever ‑ you’re sick of your job or you want some job security ‑ most of us are here not because of the love of trading, necessarily, but because of the possibility of making money.
Well, like most optimistic endeavors, whenever we start something and we’re optimistic, we don’t think about the family obligations, the business obligations, or ‑ whatever, volunteer. The rest of our life kind of fades into the background when we’re first looking at an opportunity, OK?
And so as we come into trading, we start thinking, “Wow, I can trade any time I want. It’s a 24‑hour market.” And there is this perception that that will translate into you can sit down at the computer and make money whenever you want. You notice I put the emphasis on “you.”
And what you have to realize is yes, there is this sea of opportunity traveling by. But hopefully by now you’ve realized that there are times in the market that have more opportunity than others. Bottom line. There is no way around it, there is no way to sugarcoat it. It doesn’t matter what kind of system you have: if no one is around to trade with you and after you, you won’t make a dime.
Now, let’s look up here. This is on the 15‑minute chart. For several hours with the pound, this currency pair went nowhere. And if your system or your robot or whatever was looking for trades inside of this area, well, if you were lucky, you just didn’t trade. Unfortunately, because computers aren’t very smart at all, the computer is going to start whacking away at your account trying to make money when there is no one else to drive the market. OK?
So let’s look at the market realistically. And this may come as bad news to some of you. If you just absolutely cannot sit in front of your computer during any of the sweet spot times ‑ and remember, sweet spot time starts from maybe one AM Eastern Time and runs to about noon Eastern Time, which ‑ that’s a pretty big window. Again, it’s one AM ‑ Let me put that on the screen. One AM, and this would be noon Eastern.
So from one AM to noon, you’ve got traders that are ‑ you’ve got the most activity. If you can’t do that, then you just have to know, you will not make optimal money trading the pound. Now, can you set up autopilot trades and do things to set your trades ahead of time? Absolutely. Do you have to sit in front of your computer? No. But that also means something, right?
And so what most people expect when they sit down and they’re learning how to trade, when we’re at that peak state of optimism, the world is our oyster, is they think that the making of money will be easy. Now, in the introduction to The Insider Code I say trading isn’t easy, because if it was easy, everyone would make money at it. But it is simple. I mean, I can explain it very simply to you. In fact, even better and more simply now than I could back in 2006 and 2007.
Now, if you can trade in the evening hours, yes, you can trade the Yen pairs. We get into that in ‑ James actually gets into that more than I do in the live trading room with Forex Deal Butler. But you can modify ‑ and this is important, so listen ‑ you can modify your schedule to capitalize on the market.
But you have to just get OK with the fact that the market doesn’t care about your schedule. It doesn’t care about my schedule. It is a time‑sensitive occupation. If you’re not in front of the screen or if your computer program isn’t running, you’re not going to capture the opportunity. And so you’ve really got to adjust for that.
And the reason why I spent so much time today talking about that is that concept came up repeatedly during the last couple of weeks of live trading, and it’s just critically important for you to realize that the market is the market. We have techniques that are very, very effective in the marketplace.
And it really is a lot like Michael Jordan, right? He has got all the skill in the world as a basketball player, but if nobody passes him the ball, he might as well just be another body on the court, right? The key to Michael Jordan is he has the basketball. The key to trading is knowing when the ball is in play. Excuse me.
All right, and so we’re coming into the end of the week. It’s Thursday, tomorrow is Friday. Really, if we look over here at the one‑hour, not a whole lot going on as far as patterns, right? Just a very active day. Big ‑ whoops, what the heck was that? Big move down, big move up, and then a whole lot of nothing. But we are starting to get kind of this compression, but it’s ugly, right? You’ve got this big down bar right here, not a lot going on right now, the market is kind of just dribbling around.
This is not the time to try and make something happen, on Friday. Fridays are generally a slow day for the currency markets anyway. If you add to that the fact that we’ve had some very, very, big activity in the market ‑ let me actually zoom in just a little bit more ‑ this is on a daily bar now. I mean, the pound is way off of this low here, but then it has also come down very, very quickly. OK? So in a couple of days, we’ve managed to see traders erase almost 50% of this overall move from high to low, OK?
So, just very volatile. People need a chance to adjust. They generally speaking are not going to try and do that on a Friday. However, one thing to note is that we are ‑ price has come right back down into one of these zones that I’ve been talking about right here, and so far it’s holding. And so really for the most part I am anticipating price to make a bounce to the upside, simply because ‑ excuse me ‑ that’s the pattern at this point.
Again, I apologize for my voice. However, I am still looking for a move to the downside. In fact, again, I like the trade to the downside better than to the upside. Why? Well, because if this market does indeed bounce up, look what it has to get through. All of that mess. OK? So from 6275 up to 6350, you’ve got a lot of guys selling into this market, OK?
Whereas on the downside, there is not a lot of consolidation. Look at this. Let me actually use black and make it thicker. Or blue. You see, you’ve just got one move down, move up, move down, move up, and no real sideways consolidation. This is a perfect area where there wasn’t a whole lot of agreement about price.
Over here, yeah, there’s a lot of agreement. Basically everybody said, “Ah, that’s too high.” Right? Whereas not so much in here. Nobody could really agree. If you look at it, well, they pushed it down. There was some agreement right here, but then they pushed it right back up. Pushed it right down, pushed it right up.
OK, again, think about the market from the other guy’s perspective. This is not just about some magic system you can put onto your computer making money. Those guys don’t care what your system is. But, they leave tracks.
So I like the trade to the downside a bit better than the trade to the upside. So trading below 6246 ‑ again, if you’re conservative, you’ve got to wait for the little dipper, got to wait for it to come back up. Like ‑ let’s go up here to the hourly ‑ you might miss the trade. But look at this: invariably, I’ve seen it more times than not, you’re going to get the little dipper a little bit later. So if you were patient, the conservative trader worked out over here as well.
Guys, I’m sorry. So you’re going to want to wait for that type of action in the pound. Again, to the upside, got to be careful of whipsaw trades. If the market does break to the upside, that is going to be ‑ whoops, what’s going on there? Let me try that. Come on. There you go. If the market does get to the upside, you’ve got to wait for it to break above 6234, which are these highs right here.
But remember, you’ve got resistance just above you right here. You’ve got another zone of resistance up here. Your price is going to be chewing through the sellers, and so you’ve got to expect that the market is going to do like this. It’s going to have fits and starts, it’s going to make you go crazy before ‑ if, I should say ‑ it does manage to get to the upside.
And as always, Fridays are a slow day. Take a break. You don’t have to sit in front of the screen all the time. In fact, I know some traders that don’t even look at the markets on Fridays.
All right, so I hope you have a great weekend. I hope you had a chance to tune in on our live sessions this week. We’re going to be continuing those all throughout ‑ well, we’re going to add in the live video, but we’re going to continue the live sessions with James. We’re probably going to start doing the live show. He and I both thought that everyone got a lot out of that.
And so tune in. Come in to the support sessions. We’re going to have a few of those scheduled coming into next week. Just watch your emails. Have a great weekend.
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