The Law of “If” and “Then”

Today I was basically just stirring up the waters around one of my favorite online forums and it hit me.. After all of the reading I had done and all of the brilliant comments that I had read around “forum world’ I started to understand that many Traders do no have an understanding of the Law of “If” and “Then”, and sometimes as Traders and Analyst, we take this for granted.

The FX Market is a 24 hour market prices are continuously going up and going down.. The key word in this statement which is sooo critical (big things come in small packages)…A N D! Up AND Down… But as Traders who want to be “Right” we feel like we need to pick one of these directions, plot it out and bank on it happening. WHO TAUGHT YOU TO DO THIS!!! It is self destructive from a psychological standpoint and could mean the difference between your success and failure.

The Law of If and Then  is simple it goes like this… If price reaches this point.. THEN it should “climb” to this point (then our key word) AND if it reaches this point.. Then it will fall to this point… IF it takes route 1.. up… Then my stop loss is here… If it goes route #2 THEN my stop loss is here… Simple… IF and THEN.

What this thinking does is makes you impartial to ONE direction and opens the door to possibility… It opens the door to taking action based on technically sound bias.

I took this Principal for granted as “TRUTH” until I realized that not many “New” Traders understood it.