The Typical Forex Profit making Cycle

I was just chilling and watching the market (being a medium-term trader) when I decided to pen this article. I haven't seen it all but I have been 3 years old in this game of forex. What I have discovered is that there seems to be a definite cycle to how one makes profit in this market depending on whether you trade with the trend or trade while the market is ranging as well.
This discussion would apply to the trend traders. It has always been known that for more than 70% of the time the market is always ranging (even in long term trends there are short spells of ranging data). How you manage yourself and thus your account during this ranging period would determine your ultimate success or failure in making and keeping pips.

In the picture attached one can see that the duration when one accumulates profit is much shorter than the duration used in breaking even or losing your pips. Area AB has being known to give traders a feeling of excitement and invincibility against the market whereas Area BC in some cases could make you wanna smash your computer, rip out your internet cable (for those without wireless connections) and hang yourself but you'd rather want to take it out on the market hence you challenge it (the market); these could be in the form of taking larger positions than you normally take, removing your stop losses and chanting some voodoo to move the market back in your favour, moving into a shorter time frame and starting to trade like mad, trying out another system which has more hype than results or (the safest bet) go back to demo trading!

But my dear padawan rookie, there's no need to fear because that is just the market messing with your mind...if you hold on a little while longer and stick to your method (which you had demo/paper traded for months with good results) you will soon find yourself back in the AB zone and you can start dreaming again!!!

Except you are a broker, everyone losses money in this market but with much practice you are on your way to freedom.

See you when you get there!

http://www.forexfactory.com/attachme...5&d=1263390184

Thank you. Apparently, fear and greed are the litmus of one's tolerance.

About all I can stand right now is to make it through A and B and just enough of C to see positive pips on the balance. This, or some of A, before greed overtakes me and to skip B.

I demo the 1', so market speed is a big factor. If price is stuck in an area, I'll probably go with the latter, unless I can work up a technical justification for more. If price is on the move, I often have to suffer B.
To continue in this: I usually avoid catching the latter of A, since I'm unsure what I'd be greedy about and very sure I don't want to sweat B for little reason.
I wonder if experiencing A and B without being financial invested inoculates one to capture C and on.

Nice post

One would do well to pay attention to the speed of movements higher and lower. Individual legs of trends (A-B) move quickly and don't offer too many solid entry opportunities once the leg has begun (although small pauses, usually showing themselves as anywhere from 1-3 low volatility low range candles are a sign of possible continuation are good entries for the trader not scared to enter in continuation and not tops/bottoms), retracements have a tendancy to move slower. Pretty much as illustrated in ajantala's picture. If the B-C move retraces the last candle of the A-B move in one jump, you may not be retracing but actually turning around.

Well said guys...well this week for me so far has been within the BC Area...but I have started climbing the next AB section since yesterday evening...Let's see how far up the hill I can climb before the week stop's me out!

I conclude, to my slight surprise that both ranging and wild times are great opurtunities you just need to be able to tell the difference between them. A strategy should, adjusted for these two different conditions, be able to handle both conditions.