I have said many times before "just when you start to think you have a handle on what is going on in the markets, you are forced to rethink your position."

And it is for this reason you have to be an ostrich with your head in the sand.

My good friend/mentor has always said to me "news, what news?" and says everything you are looking for is in the charts.

Unfortunately for the masses, reading charts is akin to deciphering the Da Vinci Code. (shameless self promotion here, the Forecasts do all the chart reading for you). Anyways, I digress.
So where does this head burying activity apply to the markets? Lets take a look at the loonie.

Less than 10 biz days ago it hit an all time high $1.10 then rapidly dropped 900 pips. Two of the drops (300 plus pips, 200 plus pips) were the deepest drops in decades. Yet only 2 weeks ago it was a shoe in to hit $1.15. Which side has the momentum? What has happened?

Well, there are those that say a high loonie will be a disaster for the Canadian economy. Canadian manufacturing stats came in under expectations (our dollar makes it difficult to compete) so fear comes into the market place which coincides with drops in oil, global doom and gloom, blah, blah, blah.

How do you stay on top of all of this? If you are like my friend, he looks at the BIG picture in the charts over years, months, days, not 5 minute/1 minute/ticks. Applies bollinger bands, stochastics, fibos etc etc. and his gift has allowed him to be very successful not only with his money, but other peoples money as well.

As a Forecast Day Trader we use news and market sentiment to give us the heads-up, not the "inside" trade. Our energy is better spent logging the Forecasts and becoming familiar with the day to day ranges of moves within the currency pairs we desire to trade, and how the Forecasts react after the market moving news events.

Pattern identification is not new in trading. Many have written books on the study, and many chart readers depend on chart formations and patterns to anticipate trades. I use my logs every day when "deciphering" the particular trades I am looking for. I will look for different obvious pieces of information based on my logs.

You may have noticed my conservative trades are based on making a quick 25 to 30 pips. Did I pull this number out of the air? No. Actually I do a regular painstaking process of picking a section of my logs/Forecast printouts to get a handle on what currency pair is giving the highest probable trade over recent history. I discovered early on that if I did not go for the actual full pip potential (which hits 75 -80% in 2 to 3 days) 30 pips could be hit on a favoured pair (strength, good pip profit) within 24 hours. Wow, what a discovery!

Does this mean you will never take a loss? No, but you will have a chance to protect yourself from a catastrophic loss. It is much easier to get 30 pips than 300 as you don't have to spend us much time exposed in the market.

So instead of trying to figure out what the markets are doing, I spend my time trying to figure out what the Forecasts are doing. The Forecast has spit out a summary of some very intense/complex data which would be very difficult for a single chart reader to come up with. I trust the Forecast for my trading and try to demonstrate this with my ongoing "Public" trades.

Why try and figure out the markets and the herd? There are better things to do with your time. Once you think you have it figured out you will once again be left scratching your head.