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Trading The U.S. Session's Wall O' Worry A Forex Trader Portal

Market Wire Update: Jul 14 09 12:10 EDT

Wall 'O Worry Trading: The Wall Street slog is underway, and having witnessed a very flat European market close, we now have to set our sights on the Asian and European opens to come. Like an anxious groom who arrives two hours early to the church, some traders just cannot help but hang around in the U.S. session, checking the clock, and pacing the floors, straining their neck to get the first glimpse of action. The truth is that the bride will likely be late, rather than early, and just as likely is the fact that sustainable order flows will be not seen until Asian trade, rather than in this session. But still some wait, just in case, under the guise of 'if it comes, I will catch it'. However, that thought process is flawed.

If it comes in U.S. trade after 12:00 EDT, there is no other global region to back it, and whatever moves are made will be re-directed back by international hedged positions, and reversal order blocks, that will contain the flow until the Asian and/or European, commercial markets are open. Take a look; how many U.S. sessions can you see that a break happens after 12:00 EDT, holds, moves substantially higher, and then does not finish the session with the Asian trade machine getting it by the ear, and sending back to where it just broke from?

We will wait, while you count, because it may be a while until you find any! Seriously, there are so many variables, and far more important markets than forex to a U.S. session trade desk; equities, commodities, bonds, options, and futures, are all dominant in U.S. trade, and as per the Bank for International Settlement data, the 10:00 EDT to 17:00 EDT trading session is the lightest of the three global sessions, in regard to forex order flows.

Having said that, as we write, the major pairs are pushing the dollar lower, and the equity futures markets are at the high of the day, all leading to a potential trade. Shall we wait and sit it out, or shall we get outside and breath fresh air. To most traders it is a no-brainer; we sit and wait, because after all, if we walk away we know that this will be the big runner that puts the past mistakes in order, and rights a wobbly ship at the times that is required.

It is blatantly obvious to most traders that trade desks and market players wait until they pack in for the day before they make their moves, and they also know that just as soon as they do jump in, with anticipation of a happy afternoon, the momentum will stop, they will become deflated, and worse still resigned then to watching the poorly thought out trade play itself into a sideways crawl.

The distant sound of "I thought you said when you did this full-time that you would have more time for me. When are you actually going to get out of that room. You are not getting dinner in there any more. Get washed, and put that eight man tent away....." Can you hear it? It only comes from being enticed into the U.S. session; there is a cure!

However, cures are for wimps, so the guru's say; this is now guerilla warfare; us and our mid-day trade on the road to nowhere. Not only do we now watch it, we switch to a one minute chart for inspiration, and think of putting a call out to ask if anybody knows a company that offers a 10 second charting package. Unbeknown to us, the one minute Gartley, followed by Three Black one minute Crows, and even a mighty one minute Doji, stand little chance of following through. 

Then, unable to accept a U.S. session kick in the teeth, we try to place horizontal lines on the screen, and make them bold and thick, in the hope that they will actually impact price action. And, sadly, we unpack the eight man tent, and hunker down for a while. Ear-plugs are then inserted to stop the noise that comes from afar.

Finally we get to break-even, and at that point we stop sweating bullets, but instead are left with a new Wall O' Worry; why did it do that to us? We were there with a loss, looking to a failed trade that at least once stopped would put us out of our mid-day U.S. session misery. But now, we have to follow through and not only watch one minute candles, we watch tiny P/L fluctuations from red to green, as if they were the National Debt Clock, ticking away a fortune.

How are we ever going to explain the need for us to now have spent 6 hours more than our allotted time in our cave, to those who we know will just not get it, and worse still, to those who always have a common sense answer. Why is it, we ask, that non-traders just don't get it? And why is it that the non-traders just never understand the need to watch a loss, that is already protected by a stop, unfold before us, pip by miserable pip? Strange.

Having spent far too long in U.S. trades (can you tell?), we will ignore the Pandora's box that is laid before us by those attempting to entice us into a new position, and instead we will accept that if things do break that they will very likely come back before too long. After all, it is far better to travel the path well trodden, later in the day, and at least know where it leads when momentum is in play. Because, to take the U.S. mid-day session path less trodden, is to ultimately end up lost and frustrated.

We will see you outside, in fresh air, minus the tent and sleeping bag!