Super Dynamic, Subjective and Multi Interpretation Business.

Forex trading is the ART of predicting super dynamic price movements. Looks random but can be patterned.

Directionally there are only 2 possibilities, up or down. But in terms of price movements, there are many possibilities.

For example, at 07.00.

Will the price go up or down? If it goes up, how long does it go up? 5 pips, or 10 pips, or 3 pips, or how much?

Then after that the price will turn down or be silent or will it continue to rise? If it goes down, how long does it go down? If silent, how long is it silent? Or if it's still going up, how much longer?

AND ON AND ON AND ON...

There are thousands of mysteries and the next question, WHERE WILL PRICE MOVE? Not to mention if the question is added to the unit of time.

One minute later ?

An hour later ?

One day later ?

One week later ?

Imagine, the possibilities become very many and even UNLIMITED ( Infinity Probability ).

This is the reason why many traders fail and admit that it is difficult to "guess" the market. Because the market has millions of possibilities and a trader may not be able to prepare millions of SCENARIOS and how to ANTICIPATE THEM.

Therefore, if you want to become a successful trader, from now on STOP thinking about guessing the market direction! Our mindset needs to change.

What we need to understand is NOT how the market is going, but how is the cycle and market conditions? In this post, I will explore it in more detail.

The market basically moves divided into 2 major groups, namely SIDEWAYS and TRENDING. This pattern of movement is always alternating.

TREND - SIDEWAYS - TREND - SIDEWAYS - AND SO ON

SIDEWAYS are movements back and forth, bouncing, back and forth within a certain price range. The direction is not clear. One moment up, one moment down. When viewed in a larger Time Frame, it forms a candle with a long tail (shadow).

TRENDING is a straight, fast movement, without reversal. Even if there is a reversal, it is very small and not too significant. Just form a temporary retrace / pullback, then move to follow the previous trend. The direction is very clear, go up or down. When viewed on a larger Time Frame, it forms a candle with a large body.

After defining the meaning and pattern, we still have the next question, WHEN DO SIDEWAYS HAPPEN AND WHEN DO THE TRENDING OCCUR?

Trading business can not be separated from the so-called TIME RANGE. Yes of course ! Because in trading, there are only 2 information, namely PRICE and TIME. Time Range is divided into 2,

SHORT. The time measurements are minutes, hours, and days. Maximum a week, no more than a week. The time frame used is H1 and below.

LONG. The measure of time is weeks and months. More than a week. It could be 2 - 3 weeks, it could even be up to 1 - 2 months. Time Frame used H1, H4, and D1.

By looking at the diagram above, we can draw some conclusions,

1. DYNAMIC IN THE SHORT TERM.

The nature of price movements is dynamic. Every second, minute, hour is always changing and moving. Sometimes it moves in a narrow range (Sideways) in the morning and afternoon. Then the afternoon and evening began to widen the range of movement.

In the short term, trend changes occur quite often. A moment trending, a moment sideways. See sections A and B. The downside of trading on short time frames is that it is more dynamic, changes a lot and is full of "surprises".

Novice traders I recommend not trading on the H1 time frame and below so as not to be surprised by the market dynamics in the short term.

2. ABILITY TO SEE TRENDS.

THE SECRET TO SUCCESSFUL TRADING is the ability to see and find trends. As a lot of advice says, if you want to be successful in trading, you must follow the trend.

TREND is your FRIEND.

PRICE move in TREND.

However, this advice has a weakness, namely that the trend that often appears in the market is a short trend, only for a moment (part B). After that the price reversed again.

The trend most traders are looking for is the big/long term trend (D). This trend has huge profit potential.

The movement is long and relatively difficult to reverse (reversal) in a short time so that trading at this moment makes our position "safer". Without the need for complex analysis and without any indicators, the long-term trend is relatively easy to identify and the direction is very clear. Strong downtrend or strong uptrend.

THE ART OF TRADING, A long trend ( D ) ALWAYS starts from a short trend ( B ) but a short trend ( B ) DOES NOT ALWAYS be a long trend ( D ).

Big waves ALWAYS start with small waves. However, small waves DO NOT necessarily become big waves.

This is the reason why many traders are fooled h and feel manipulated by the market. They don't realize that TREND is MORE short trend ( B ) not long trend ( D ). They expect to get a big profit ( in pips ) but the price often reverses before touching the TP level.

Traders must always hone their trading skills by increasing their experience and flying hours so that they are able to distinguish which short trends are only temporary and which are short trends that have the potential to become long trends.

Long trend movements are usually triggered by strong FUNDAMENTALS. For example, the issue of global recession, geopolitics, the threat of war, and natural disasters. These events are relatively rare.

Or it could be the release of economic data, interest rate announcements, and inflation data. The news schedule can be seen here. News that often moves the trending market is the FOMC and NFP. Apart from that, all news is often relatively sideways and the trend is short (B).

So the popular advice FOLLOW THE TREND means look for a long-term trend because it has a high winning probability. The direction is clear, the profit potential is large, and the possibility of reversal is very small.

The big players are out of the cage and enter the market with millions of dollars, making the trend even stronger.

3. SIDEWAYS IN THE LONG TERM.

Let's discuss condition C in more detail. As I explained earlier, there are more short-term trends than long-term trends.

If condition B continues, it will become D. Remember, this is our discussion in point no 2.

Now, because condition D is relatively rare, condition B becomes A more often. Conditions A and B will often occur alternately. The combination of conditions A and B is C. The market basically moves back and forth like a wave, there is never a straight line.

Even long trends still require a reversal or correction (retrace / pullback) because traders take profit taking after successfully riding a trend.

4. CONCLUSION.

After understanding the existing reality, we can conclude that the Sideways method is relatively superior and has many possible profits than the Trending method because trending markets occur less frequently.

The sideways method is usually not too dizzy to guess the direction of the market. Buy or sell positions are "meaningless". Both can profit if the market moves back and forth.

However, using the sideways method, you need to be careful when the market turns into a long trend without a reversal, it is necessary to immediately CUT LOSS before the floating loss gets bigger.

Well there is no perfect method. The sideways method will be problematic when in a trending market. The trend method will be battered when in a sideways market.

The market is like the SEA which provides a lot of fish in abundance. However, we need to be PATIENT and UNDERSTAND how to respond appropriately to the cycle of change so that we can survive in all market conditions.

CONSISTENT AND OPTIMAL PROFIT GREETINGS.

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