On Friday the USDJPY traded down to 101.40. The level moved into a buy zone on the weekly chart.

Despite the negative talk in the market about the dollar value, a trader must watch the market and not the talking suits.

A quick look at the daily USDJPY shows an interesting candle pattern developing. THe pattern is somewhat bullish.

To be a successful trader, you must build positive feedback loops into your mindset. 

The best time to trade is when the market is moving. Traders need volatility. If there is not a clear direction, bank traders will often "push and pull" around a certain price locked in a trading range. This can be hazardous to your bank account because tight stops will be hit on both sides.

If you are in the USA, consider being in the market between 7 a.m and noon, which is when both London and New York are trading. When sessions overlap the liquidity is the best and the volume of orders in the market make it difficult to run stops.

This is the eternal dilemma. Should you try to force a trade or should you sit on your hands and wait for resolution? 

Of course while you are sitting on your hands, you might miss a sudden move. In this instance, I believe a trader should pick his battle quite clearly. Stay in the market with at least a small position and try to hit singles. When the market sets up properly, at least you will be prepared for the move. And don't forget to watch the dollar for a rebound!

Sometimes a trade entry point is very obvious. So you enter the trade. You have done the necessary preparation, and you know where your target is and how many pips you are risking. You place an order at your target point and one at your stop loss point. Then you wait for the market to do what it has to do.

Fundamentals versus Technicals
What drives the markets? Is it an intellectual appraisal of the the fundamantals or a visual appraisal of the price action, as represented by bars or candlesticks on various charts in various timeframes? Or is it the coincidence of the two? For example, in the chart below, of the Dow Jones Industrials, the sub prime mortgage disasters had dried up liquidity in the credit markets causing the stock market to sell off.

Dow Jones Industrial Average

Friday's non farm payrolls were worse than expected causing a spike down in the USDCAD. But was the spike just a random reaction to the news or was response by traders planned to sell off the USDCAD so they they can buy it back after they lowered the price sufficiently to come in with some size? Look at the chart below;
 

This is a favorite discussion. Many traders believe that somehow there is a system that is a "Holy Grail". I traded for a private equity fund for 15 years and never saw any trader, in any bank that I dealt with, "rely" on a "trading system". Sure some traders had their own systems to provide them with a sense of direction and trend, but they never relied on the system totally.