Yearly Archives: 2014

Open in the Vicinity of Prior Day’s Low Support

 

Last Friday we looked at a couple of examples of Market Structure journal entries, one of which involved a weak emini Dow open in the vicinity of the prior day’s low. Let’s quickly review this example, and the lesson it offered.

If you want to review the whole sequence you can see it here: http://yourtradingcoach.com/trading-business/a-simple-step-to-becoming-a-better-trader/

But otherwise, let’s just look at one image which shows the important point – A market open in the vicinity of the prior day’s low offers exceptional R:R if testing the support level with weakness.

Weak test of prior day's low support 

It’s my hope that you did get time to read last week’s article.

And that you saw the value in placing that entry into your Market Structure journal, or at least some notes with regards to the lesson.

And if you trade the emini Dow, it’s my hope that this concept was fresh in your mind when Monday opened.

Because it happened again!  🙂

Let’s look at Monday’s YM charts…

Weak test of prior day's low support

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A Simple Step to Becoming a Better Trader

 

After every trading session, find something you can learn from. Perhaps a market structure feature. Perhaps an interesting sequence of price action. Perhaps a trade management insight. Whatever you find to be of most value!

Document it.

Store it in your journal.

Review your journal as often as possible.

Two examples…

 

1. A market open in the vicinity of the prior day's low offers exceptional R:R if testing the support level with weakness.

Market Structure and Price Action Journal

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Reader Session Review

 

I received an email recently from trader MK which I want to share, as it contains a few good lessons.

MK has kindly provided permission to share his session review. (His words… “You can use the email and the charts, that is why I sent them. It is important for traders to know that if you put the time in you will get to a point where you will trust your skills are up to the task.”)

 

Email Received:

Hey Lance,

Here is a picture of where I am at on one of my better days. I am constantly working on my weaknesses but they are now finally in a minority of sessions.

Thanks for all your help and guidance over the past. wow, almost 5 years. Your weekly insights and of course your Ebook (Read the first three sections more times than I can count) have been instrumental in my development as a trader.

You Lance are, the “Real Deal” and I would highly recommend YTC for anyone who aspires to be a trader.

MK

2 Things I learned from Lance that helped a ton.

1. Forgive your self for your mistakes, you will make many, and move on.

2. If you can not do it on the simulator you will never do it in the real world.

🙂

 

Charts:

(NB. Click on the images to open a full-size copy in your browser!)

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Gap Closure

 

Reader Email:

To: Your Trading Coach

Hi Lance,

I thought this was pretty cool and just wanted to show it to you.

Nick

Attached Image:

(*** Click on the image to open a larger copy in your browser! ***)

Gap closure market structure observation and notes

My Thoughts:

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Buy Because There Are No More Sellers (with lower timeframe)

 

A fortnight ago we looked at a few trades which were entered using the concept of "buying because there are no more sellers"… or "buying because the market can't go down".

I've received some requests for another example. And two people asked to see what I'm looking at on the lower timeframe.

So let's look at a couple more trades.

First though, we've discussed this idea a few times over the last six months or so. If you want to review some of the earlier material, try some of the following. There may be more if you search through the archives as well.

For one more example, let's look to the emini Russell (TF) on yesterday's session, Tuesday 26th of August.

buy because there are no more sellers

buy because the market can't go down

Let's back up to the start of the session and get some context from a slightly higher 5-Minute timeframe.

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Sometimes you need TIME-OUT

 

No… not the naughty chair. This is not a punishment.

Sometimes you just need to separate yourself from the screen.

Get away from the computer. Get some fresh air. Relax and refresh the mind and come back to start again.

Like a reboot for the trader!

Sometimes you need time-out

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You Can Do This!

 

Manage your growth and development via twenty trade groupings

 

My aim in this article is simple – to stop you “tweaking” your approach based upon the results of 2-3 trades.

So, what are your stats for the last twenty trades?

You don’t have any? Perhaps that’s the problem. Start recording stats now!

Or were your last twenty trades inconsistent with respect to strategy or method of application? Maybe that’s the problem. Commit to ONE method for a full series of twenty trades. Don’t quit and mess with the idea just because you start with three losing trades. Complete the full twenty.

Can you do the above steps?

Absolutely!

It won’t give you instant success.

But it will make it clear exactly where you stand right now.

And it will provide a simple framework for improving.

You can do this… twenty trades at a time!

Lance Beggs

PS. One assumption – that you do actually have a valid strategy that can provide an edge!

 


Feeling Joy When I Look at this Price Action

 

I absolutely love this email I received recently, from a trader who is making tremendous progress in his growth and development.

It's nice and simple. Just one single line…

Feeling joy when I look at this PA.

And here's the attached image:   (It's a large one so I've reduced the size. Click on the image if you wish to open a full-size version in your browser!)

Click on the image to open a full size version in your browser

 

I also feel great joy when looking at this. Here's what I see…

Trapped Longs

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Trading a Small Account with One Contract (Part Two)

 

Last week we discussed my thoughts on trading a small account with one contract.

See here if you missed the article – http://yourtradingcoach.com/trading-business/trading-a-small-account-with-one-contract-part-one/

We finished up by stating the following:

  • It doesn’t matter which management style you choose; a higher probability smaller win target (like my “part one”) or a lower probability larger win target (like my “part two”).
  • Both management styles will incur psychological challenges during periods of underperformance.
  • Both have the same goal – building your account to the point where it allows multiple contracts.
  • Both will achieve the goal if your edge is real.
  • Both will fail if your edge is not real.

However, having said all that, there are other options.

1. Your chosen trade management style does not need to be a “one or the other” decision.

You don’t need to choose just the close target or the further target and stick with that forever. You may decide to use both at varying times.

You might decide to target the first potential opposing orderflow (the closer target) as the default option, switching to the further target whenever the market context suggests the potential for runner.

When does market action suggest a potential runner? Your market structure journal will help you find these situations. But for starters let’s consider the following:

  • Volatility contraction leads to volatility expansion – as a period of contraction tightens into the apex you might consider holding any entry gained within that contraction for the multiple-R wider target, should the contraction break into expansion. And of course the same applies to any pullback which retests the point of expansion.
  • Compression of price against an area of S/R can lead to multiple-R expansion. This will often display as a form of volatility contraction, but that’s not always the case. A short-term ledge pushing against resistance can offer great opportunity, either with a pre-break entry or again the first pullback after confirmed break.

Let’s “borrow” some YTC Facebook posts showing examples where a wider target may be the wiser option. (The text on the images will not relate to the issue of trading a small account with one contract; look to the price action and market structure to identify the multiple-R potential. And if you don’t follow YTC Facebook, consider liking the page if you want to get new images like this every couple of days!)

In this first example we see a long-term volatility contraction. As price approaches the apex, any trade opportunity within the contraction could be held for it’s potential to break the structure and provide a larger directional expansion. If missed though, further opportunity is available on the first pullback after the break of the structure (at point C).

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