Monthly Archives: January 2014

Would Re-Entry Improve Your Edge?

I had an opportunity this week to review and comment on some trades, from a trader who is using the YTC Price Action Trader strategy in the emini-Russell futures markets.

While not yet achieving consistent profitability, there are very strong signs of this potential in the future.

One strength that was clear from the start was that, in the vast majority of trades, this trader is clearly identifying the right market bias and generally reasonable trade locations.

He is picking areas in the chart that in most cases offer follow through of at least two times risk.

But there is also a weakness that was clearly evident. These multiple-R opportunities were not being captured.

Trades were typically stopped out or scratched early, leaving the trader to watch from the sidelines as price moves on to profits without him.

(more…)

Isn’t Buying at the Lower Low just Trying to Catch a Falling Knife?

The following image was a part of last week's newsletter article, "Real Opportunity is Found at the Edges of Market Structure".

Following the publishing of that article, I received a great question via email…

Question:

"Isn't buying at the lower low (D) just trying to catch a falling knife?

If a downtrend consists of LL’s and LH’s, I don't understand why are you advocating to buy at a lower low in a downtrend?"

Response:

(more…)

Where Do You See Opportunity?

Here's an interesting little exercise that may help you to see charts in a different way!

Where do you see the opportunity in this chart?

Don't think too hard. There's no trick. Just first impressions. Where do your eyes instantly go if you're seeking opportunity for profit?

If you're like most traders, I expect you'll have said that opportunity is found here:

(more…)

Real Opportunity is Found at the Edges of Market Structure

The following image was a recent post at YourTradingCoach Facebook.

Despite what the majority will tell you, Confirmation is Risk

If you want to check the pattern out, it's 11th Dec 2013; GBPUSD; 3 min TTF; at 09:51 UTC.

Today I'd like to discuss the statement within the yellow box, "Real opportunity is found at the edges of market structure, where the risk is smallest and the profit potential the greatest".

I recall back in the early days of my own trading, I had the opportunity to look at a chart of a professional trader, which contained annotations showing his entry and exit points. Talk about cognitive dissonance! That was truly an uncomfortable experience as the reality of what I was seeing did not in any way match what I believed to be true about trading.

I just didn't get it at the time.

In fact, I convinced myself that the chart was fake. There was (in my opinion at the time) ABSOLUTELY NO WAY that entries could be taken at the places marked on the chart. They were too close to the actual turning points. I'd studied Technical Analysis quite extensively. I knew that there were no TA methods to identify a turn point so accurately. You HAVE TO wait for confirmation of the move. There was no way on earth this guy actually took these trades.

Of course… I was wrong.

My own knowledge and experience were not sufficiently developed at the time to understand what I was seeing.

The reality, for swing traders, is that opportunity is found at the edges of market structure where the risk is smallest and the profit potential the greatest.

Most traders seek confirmation… by which they mean that "they need to see price having already moved in their expected direction". They enter simply in the hope that this movement will continue.

This is a psychological crutch. It offers them nothing from a reward:risk perspective. It usually offers them very little in terms of greater win percentage. But it eases their uncomfortable feelings. They see that others have already entered, so they feel comfortable following the crowd.

But who do you think has caused the initial movement? Who do they think created the confirmation?

It can't be those who only enter after confirmation. It has to be those who have a deeper
understanding of how price actually works.

(more…)

How Many Hours A Day Should I Practice?

Email question:

How many hours a day should I spend reviewing charts with my busy schedule?

Response:

How many hours a day do you expect a pro golfer practices?

How many hours a day do you expect a pro musician practices?

How many hours a day do you expect a (insert any other elite performance activity) practices?

That's how many hours a day you should be practicing.

Trading is an exceptionally difficult endeavour. The edge is very small. Success requires skill and expertise. This is a performance activity and you're competing against people who work at this full time.

How many hours should you work at trading each day?

As many as you can.

Will that be enough?

I can't say. Your results will provide that answer. And if the results are not what you desire, then look to your levels of passion for this game as to whether or not to continue pushing forward harder or smarter, or to find another path in life.

Hope that helps,

Lance Beggs


YTC Intro to TA – Unfinished Video Series

In 2012 I commenced a YouTube video series – YTC Introduction to Technical Analysis.

For various reasons, this series was unfinished. Perhaps it will be completed one day in the future. Perhaps not.

The one benefit that this series gave me was a realisation that the work I can best offer the trading community comes in exploration of advanced topics. I have no passion for creation of “basic” trading education. I love taking you into the unknown and more difficult areas of trading knowledge and skill.

There is a TON of basic information already available. Much of it poor. But some of it good. Adding to the huge volume of basic TA material was simply poor use of my time and poor service to you.

I’d rather just direct newbies to the good material that already exists, and then have them come back here when they need to move to higher levels of expertise.

The series was cancelled for cost vs benefit reasons. And I removed the existing videos from public display on YouTube.

Well… I’ve had a few requests for the series to be available on my site, even though it would not be completed.

So here it is… (**27/1/2016 Update – The series has been made public again on YouTube due to a number of requests!)

 

logo - ytc - introduction to technical analysis

Click here for Disclaimer

YTC Introduction to Technical Analysis

Table of Contents

  • Module 1 – Introduction
    • Introduction to Series
    • Aim of Series
  • Module 2 – Market Analysis
    • Aims of Analysis
    • Methods of Analysis
      • Technical Analysis
      • Fundamental Analysis
      • Other
  • Module 3 – Technical Analysis Tools & Methods
    • What are Charts?
    • Chart Components
    • Price Display
    • Multiple Timeframe Relationship
    • Technical Analysis Methods
      • Chart Analysis
      • Indicator Analysis
      • Volume Analysis
      • Other
  • Module 4 – Chart Analysis
    • Market Environment
    • Swing High/Low Structure
    • Trends and Ranges
    • Trendlines and Channels
    • Support and Resistance
    • Charting Patterns
      • Macro
      • Micro
  • Module 5 – Indicator Based Analysis
    • Classes of Indicator
    • Trend Indicators
    • Momentum Indicators
    • Volatility Indicators
    • Other
  • Module 6 – Volume Analysis
    • Principles
  • Module 7 – Other Forms of Analysis
    • Pivot Points / Fibonacci Analysis
    • Market Profile
    • Cycle Analysis
    • Market Internals
    • Inter-Market Analysis
    • Sentiment Analysis
  • Module 8 – Multiple Timeframe Analysis
    • How Multiple Timeframes Combine
  • Module 9 – Trading with Technical Analysis
    • Trading Methods
      • Mechanical vs Discretionary
    • Discretionary Trading Setups
      • With-Trend
      • Counter-Trend
    • Choosing Setups Appropriate to the Environment
  • Module 10 – Your Trading Strategy
    • Defining and Documenting your Strategy
    • Strategy Testing
    • Trader Development
  • Module 11 – An Introduction to Advanced Technical Analysis
    • Introduction to the Advanced Technical Analysis topics to be discussed through video or webinar at www.YourTradingCoach.com

 

(more…)