EURUSD

We didn't get a fill on our order by 9:00 am est.  That means we are not in a trade right...!?

Now, why did I say execution by 9:00?  Because the bar that opened at 7:00 and closed at 8:00 am was the signal bar for a 1hr bear pivot reversal.  The very next bar after the signal bar is the reaction bar.  We want to enter when the man is backing into the wall not when he is running into the wall.

The reaction bar is like backing into the wall but after the reaction bar, the man has to turn around and face the wall in order to run into it.  Let me ask you a question....If I turn and face a wall and run into that wall don't you think I have a much greater chance to break through that wall than I would if I were backing up into it?

See, I knew you knew the right answer was of course Jerry, do you think I'm stupid...He-he, of course I dont.  The point is that I want you to look at trading from that perspective.  Once you know what to look for nothing else makes sense.

It's now 10:10 am as I write this.  We did not back into the wall, we are turned around facing the wall and testing the wall.  Just because we are facing the wall does not mean we will break through the wall it only means that we have a much greater chance than backing into the wall.  There are still other things to consider of course, such as trend for instance. But right now we are in a holding pattern.  We need to wait for a new signal.

Hopefully you can get a better understanding here about the difference between a trade signal and an entry signal.  We had a trade signal at 8:00 am.  with the bear reversal bar.  However, we did not get our entry signal to go ahead and enter the trade.  Now, let me ask you another question.

For you math-a-manics, how can you code that into your automatic trading robot?  You can't....How do you calculate that into your mathematical backtesting model.  YOU CAN'T....Seriously...How do you program the decision to enter or not to enter after a signal?

The point is, even though we have an amazing set of indicators in our Trendwalker package they cannot do the thinking. 

What we learn here are not just trading techniques.  What I mean to say is this, If this were basketball I would not be teaching you how to shoot but, how to PLAY BASKETBALL, PLAY FOOTBALL not throw the ball.

To my people, stop running after every slick talking guy out there.  You follow everything and become a jack of all trades and master of none.

Cheers, Jerry

jerry@forextradingmajic.com

jerryjstew@yahoo.com