You know the Differences Between What can the market and are about to do?
The difference between these designations may be subtle, but with a great importance to the trader of the forex market. While the first is that the market "can do", causing the trader to work on the possibility that anything can happen, the second is that the market is "about to do", meaning that, according to its analysis the market is likely to rise or fall.
What the Market Can Do?
All. Assuming that the market can do everything, you become independent and therefore work with the possibility that all or in all directions your currency pair prices may move.
For more "perfect" that is its analysis. As beautiful it is that Pin Bar leaning against a stand still, you will have to work with the possibility that prices may fall further.
And a trader working with "the market can do everything," of course, always use a stop loss.
What the Market Is About to Do?
In this case the direction that the market can take will depend on the trader's analysis. We are talking here about technical analysis. Whatever the technique that the trader use to operations, fibonacci, price action or moving averages, the aim of the trader is to find tips on the chart to show him the direction that the market is more likely to achieve.
It's good to make it clear that no existing technique is able to identify exactly what the market is about to do, even if some gurus say otherwise.
Conclusion
The professional trade works with these two grounds: one gives us security and the other calls for the decision. Security because if we admit that anything can happen in the market, so we have to work with all the possibilities, including a lack of energy in your home minutes before placing your stop loss order, or even a drop in the Chinese stock market.
Freedom is inextricably bound to acceptance. Freedom is to accept everything that happens around us, and not try to control things, much less the movements of the couple. Do not try to control the market. If you do this, you enter an infinite loop that I call the trader's losing cycle.
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