The perfect state is not as perfect as we think. trader101 uses the term of perfect setup but I prefer to use perfect state. They are the same.
Example by trader101:
Sell GBPUSD 500
Sell EURGBP 450
Sell GBPCHF 400
Sell CHFJPY 350
Sell AUDJPY 300
Sell EURJPY 250
Sell USDCHF 200
Buy CADJPY -200
Buy AUDUSD -250
Buy USDJPY -300
Buy EURUSD -350
Buy EURCHF -400
Buy GBPJPY -450
Buy USDCAD -500
The is happening at this state? I will use Universal pairs to illustrate.
Sell AUDUSD 500
Sell NZDJPY 450
Sell GBPCHF 400
Sell EURUSD 350
Sell EURCHF 300
Sell CHFJPY 250
Sell USDJPY 200
Buy USDCHF -200
Buy EURGBP -250
Buy NZDUSD -300
Buy GBPUSD -350
Buy EURJPY -400
Buy AUDJPY -450
Buy GBPJPY -500
For the perfect state above, Sell pairs are gaining and Buy pairs are losing. This is relative to the beginning of the week (since we opened the trades since the beginning of the week).
On natural hedge state, the account only suffers losses of spread.
However, if you notice carefully, the prices of 14 pairs are declining.
The so-called perfect state, in fact, is not perfect. The market is actually moving towards anti carry trade direction (anti market force direction). Such phenomenon may continues for several hours, days or weeks. At this state, it is not helpful for predicting price action (using T101 system).
