One thing I love to do over the Christmas & New Year break is to schedule a couple of days for Market Replay learning. Last Sunday & Monday were scheduled for my replay sessions. The ability to speed up the market data in-between key decision making areas means that I can squeeze in half a dozen sessions over a two day period, rather than just one a day.
This is an opportunity for me to address areas of my trading that have underperformed during the previous year, and to experiment with slight tweaks to my trade execution and management style.
One area of underperformance I've identified is the fact that I'm leaving a lot of potential profit on the table whenever gifted a structural trade. My trade management style has drifted over the last couple of years towards having less patience with trades (quicker to close out). This works fine when the environment supports earlier exits. But for a structural trade that offers a much larger than usual potential return, it means I'm leaving a lot on the table if I can't or don't get back in on a subsequent entry.
When identifying a trade in a structural location, I will be aiming for more patience with my trade management. This will involve slightly longer time-stop. And a wider trailing-stop. The key difference though is in mindset; the biggest challenge for me will be keeping my hands off the trade.
What do I mean by good structural locations?
Essentially, I call it a structural trade when the entry and targets are based upon key higher timeframe market structure features.
This would be areas such as the Prior Day's High or Low, or the current High of Day or Low of Day. Our aim would be to hold at least a partial position from one of these locations to another.
Let's look at an example from one of my replay sessions. These sessions were in the emini's rather than Crude Oil, so I was not completely familiar with the outcome (it's important to make replay as realistic as possible). The following charts will step us through the trade location, entry and management decisions for one of these trades. I like this one as it wasn't a smooth path to the target and involved an exit and subsequent re-entry.
Let's look at the trade:
As mentioned, I call it a structural trade when the entry and targets are based upon key higher timeframe market structure features.
In this case entry in the vicinity of the current Low of Day, targeting the High of Day.
Let's look at the entry.