Monthly Archives: May 2014

Trading Timeframe Narrow Range Bar Entry – Part Two

 

Last week we discussed the Trading Timeframe (TTF) Narrow Range (NR) bar entry and looked at a trade example.

See here if you missed it. You’ll want to read this first. (Link: http://yourtradingcoach.com/trading-process-and-strategy/trading-timeframe-narrow-range-bar-entry-part-one/)

So now, as promised, let’s look at another trade example from later in the same session.

(Again this is a difficult trade example with messy price action sequences – ’cause that’s what the market often provides – and because it’s my belief that they provide you with greater educational value than simple “textbook perfect” examples that are in actual fact a rarity!)

Trading timeframe narrow range (NR) bar entry

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Trading Timeframe Narrow Range Bar Entry – Part One

The more I trade, the more I love a Trading Timeframe (TTF) Narrow Range (NR) bar entry.

Most of my trades involve an attempt to gain a low risk entry via lower timeframe (LTF) trigger patterns.

Typically the TTF bars themselves are wider than I like. An entry on a break of the TTF bar, with a stop on the other side, often involves more risk I’m willing to accept. So I prefer to seek LTF entry.

But occasionally the TTF bar sets up with a narrow range – right in my setup area. And I absolutely love that.

Let’s look at two trade sequences that occurred in this session, both involving TTF NR bar entry. (As is often the case I’ll choose difficult trade examples with messy price action sequences – ’cause that’s what the market often provides – and because it’s my belief that they provide you with greater educational value than simple “textbook perfect” examples that are in actual fact a rarity!)

Trading timeframe narrow range (NR) bar entry

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Avoid What is Strong – Strike at What is Weak!

 

Avoid What is Strong – Strike at What is Weak!

So in war, the way is to avoid what is strong and to strike at what is weak.
… Sun Tzu, The Art of War

 

Trading is not about prediction.

Instead we let the marketplace reveal it's plan and attack only when we see an advantage.

We play the game on our terms, or not at all.

Orderflow drives the market; orderflow that comes from the decisions and actions of all other market participants competing in the same arena as us.

Let them drive price where they will; as determined by the collective sentiment of all who comprise the marketplace this day.

We simply observe. And wait.

Like the lion who waits patiently to attack the weakest in the herd, we avoid the market when it's strong and strike only when it shows it's weakness.

Trading is not about prediction.

It's also not about emotional reaction once we perceive weakness.

Our awareness should always be ahead of price (see the "Projection Phase" in this article) maintaining IF-THEN scenarios for likely future price action and what it means to those who hold trading positions.

Through maintaining these IF-THEN scenarios our reaction to the market movement will be preconsidered and decisive.

We attack when we see weakness.

We attack when we see someone trapped against the real bias of the market.

We attack when our risk can be contained.

We attack when we perceive potential opportunity greatly outweighs the risk.

Let's start by looking at the structure of the E-mini Russell as at the release of the FOMC Statement on Wednesday.

My higher timeframe is the 5 minute chart, but we'll commence first with a 30 minute chart in order to see a few days of data so that you have a wider perspective.

Avoid what is strong; strike at what is weak

 

Zooming in to my usual higher timeframe (5 minute chart)…

 

Avoid what is strong; strike at what is weak

 

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