Monthly Archives: December 2014

Breaks Against Bias – Their Failure is My Success

 

We've previously discussed the idea of fading breaks which occur against the market bias.

Often they're a trap!

If we can anticipate that trap then we can position ourselves for a successful trade by entering at or before the point of their failure.

See here if you missed the prior articles on this concept:

This concept can play out in many forms and on different timeframes. For example:

  • TTF CPB or BOF setups
  • LTF 3SR or Spring/Upthrust triggers

Let's look at two slightly different examples from Wednesday's Crude Oil session (to take advantage of the crazy volatility that CL has offered in the last few days!).

Don't let the low timeframes freak you out. The concept applies no matter what timeframe or market you trade – failed breaks against bias can provide you with great trade opportunity.

(1) Trading timeframe CPB trade.

Breaks against bias - anticipating failure

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WLSR – Not Win%

 

I've covered quite a few topics throughout 2014, but I believe the most important by far has been my attempt to have people looking for success over a series of trades, rather than on any individual trade.

Not every trade idea works!

But that's ok and that's normal. Keep the losses contained. And work to ensure those that do win are larger (on average) than those that lose.

Your aim is to have more focus on the Win/Loss Size Ratio (WLSR) and less on the Win Percentage (Win%).

Your aim is to focus on profits over a series of trades with less concern for results on individual trades (win or lose).

Focus more on WLSR and less on Win%

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