Fading the edges of the market structure requires that you see the markets in a different way to the usual retail trader.
Strength in price movement towards a range boundary or an S/R level is not necessarily going to continue with strength following a breakout.
In the right context, this apparent strength can produce a nice trap at the edge of the market structure, providing breakout failure opportunity for anyone willing to fade the move back into the prior range.
Here's a great question I received via private message on Facebook during the week, which I think is relevant to all of us.
I'll make an assumption here that the intent is to talk about how to fit trading into "life". That is, how to find sufficient time for not only trading, but all the admin pre and post-session, plus the never-ending tasks of personal and professional learning and development.
Yeah… there is a lot to do.
There are no shortage of supposedly effective time management systems. These are two of the major systems I've tried over the years, both of which have a big following. But there are no shortage of others if you feel like searching Google for "time management".
So what system do I use?
None of them!
Whenever I implement a comprehensive system for managing my time, I end up spending too much time working and managing the system, rather than doing productive work.
But hey… maybe that's just me?
There are millions of people around the world who swear by these type of systems. Give them a try. Just because I didn't find them effective, doesn't mean you won't get great value out of them.
So what do I do then? Let's call it a "Time Management Non-System". I have general themes in life; things that are important to me. Family, trading, YTC, personal and spiritual growth & development, and a bunch of other stuff. And I just work on whatever I feel most motivated to work on at any particular time.
It's perhaps not as efficient as the above "systems". But it works for me.
Now… here's the important bit though, which was my motivation for sharing this via an article rather than just a private message reply.
Whether you operate with GTD or Agile or the "YTC Time Management Non-System", there is a foundation that needs to be in place first. It is the key that ensures you not only find time for all your trading activities, but that you also make maximum effective use of this time.
Without this foundation, you're wasting your time (pun intended!).
What really matters is NOT how you prioritise all your competing tasks and schedule them across your limited calendar.
Instead, what matters is how productive you are with the time you spend on each of your tasks.
Ultimately we are not managing time, but rather managing ourselves and how well we are able to apply ourselves to the task at hand.
And we do that by managing our ENERGY and our MOTIVATION.
Perfect prioritisation and scheduling of tasks is pointless if you don't have the energy to make productive use of the time.
Perfect prioritisation and scheduling of tasks is pointless if you don't have the motivation to work efficiently and effectively on the task.
Energy – Keep fit and healthy, in mind, body and soul. Sleep well. Keep hydrated. Eat healthy foods. Exercise. Maintain good relationships.
Motivation – Fill your life with reminders as to the "WHY" that drives all your efforts towards trading success.
If you lack energy and motivation, it doesn't matter what task you allocate to a particular block of time. It will be poorly executed.
But if you have high energy and are bursting with motivation, you'll ensure efficient and effective use of your time.
So if you wish to be effective in completing all daily trading routines and also allowing time for personal and professional development, then work to first ensure high energy levels, and do ALL YOU CAN to ensure massive motivation towards your trading goals.
The task for you now, if you haven't already done so, is to spend some time thinking about how you can improve your life in terms of both ENERGY and MOTIVATION FOR TRADING.
Because I don't believe it matters which time management system you ultimately choose to use. Or even if you choose to live without one. If you are highly energised and motivated, you'll not only find the time needed to work on your trading, but you'll also quite likely be unstoppable.
Just do it!
PS. None of these ideas are mine. I don't know where they originally came from, but if you do Google "time management" you'll surely find people discussing these ideas as well. There is a lot of great material out there on productivity. Schedule some time to study the topic and to experiment with different approaches till you find the one that best works for you. 🙂
I trade low timeframes. Maybe you've noticed? 🙂
But I've always said that no one timeframe is better than any other. There are professional traders operating across the full spectrum, from watching the tape move tick by tick, right up to daily and weekly charts. There is no "best"; only what is best for our own personality, needs and circumstances.
And I've always said that the ideas expressed in the YTC blog (and also in the YTC Price Action Trader) are applicable across all timeframes. Ok… maybe not the screen-watching ideas from last week's article. But the VAST MAJORITY of what I discuss can be applied to other markets and other timeframes, with only a little extra thought about how it might be adapted.
So I absolutely LOVE getting emails from traders who realise this fact. And who have applied the ideas. And who have found some success.
Here is an extract from an email conversation I had during the week with Anatoliy, who trades forex markets on daily timeframes.
I've been reading your blog for more than a year now, and along with Trading in the Zone it's been one of the bigger reasons for considerable improvement in my trading.
Even though I am hardly ever looking below D1 timeframe, the principles all stay the same. Trading long term allows me to analyze all 28 major forex trading pairs for entry opportunities.
Anyway, just wanted to share two pictures with you, inspired by your November blog post: http://yourtradingcoach.com/trading-process-and-strategy/who-would-buy-here/
The post is so simple, but I have to say, it is one of my favorites. There are at least 5 long term entries I am taking per month just based on this principle.
Thank you once again for sharing all your knowledge, experience and ideas.
There were two images attached to the email. I've had to shrink the images to fit here.
If you click on the images, they will open a full-size copy in your browser.
One of the advantages of low timeframes is that you can FEEL the price action.
By "low timeframes", I'm referring to any timeframe which allows you to watch the screen continuously. So we're probably talking anything in the range of 5 minute charts and lower.
Operating on higher timeframe charts, where you're only getting a visual sense of the price movement as each candle closes, you're missing out on the real-time feel for sentiment that comes through experiencing the way price moves in creating that candle.
Let's look at an example…
The following YTC Social Media post was just about a perfect example of the concept of trading failed expectations.
I received a question on the facebook post about trade entry. So let's look at the trade I took in this area – a test of Low-of-Day support.
Noting of course that there is one significant difference. I traded the 1 minute timeframe; not the 3 minute timeframe.
The 3 minute chart was used for the facebook and twitter post, simply because it beautifully demonstrated the concept that I was trying to highlight. It wasn't about my trade or my timeframes. It was about the general concept of looking for opportunity in places where "obvious expectations" are proven wrong.
The same idea applies on the 1 minute chart, of course. And it's the reason underlying my trade.
But this time… it's a WHOLE LOT MESSIER!
The good trades move quickly to the targets. But we don't always get good trades. And there's not much to learn from them. The messy trades though… much more common and much better for "lessons".
Here's the same test of Low-of-Day support in the one minute chart:
The strong drive towards the support level appears as before, creating an expectation in the mind of many market participants for continuation lower. Personally, I expect that as well (YTC PAT Sixth Principle). And my plan is to wait for the break and assess the likelihood of either breakout failure or breakout pullback potential.
But when a move this strong stalls… and breaks back above the next TTF candle… well this is NOT what would be expected of a "strong" bearish market.
Let's wait and see what happens on a retest. If the retest continues with strength, I'm back with the original plan (watching for breakout failure or breakout pullback potential). But if the retest cannot continue lower… well I just love these setups. They can snap back higher quickly. So I'll be looking to enter LONG on a test of the support level, based upon the fact that the market has shown it can't go lower and the prior bearish strength was an illusion (liquidity vacuum perhaps!).
The market sets up that scenario nicely, as we see in the above image with the first failure to continue lower. Look for lower timeframe entry in the shaded region.
In this case though, there is no quick movement higher. And the market falls for a second attempt to break support.
This provides a second opportunity to get long, as the market is once again unable to continue lower. But it's quite a messy one with some chop at the turning point.
This is the reality of the markets. We all want trades that move quickly to their target. But that's not what we always get. You need to decide how you will deal with these "messy" setups. Some people prefer wider stops, to allow for chop and imperfect decision making at the entry zone, willing to accept the reduction in R:R potential. Others, like me, prefer to keep the stops tighter. But to be effective in that regard you need to be willing to scratch and re-enter. Don't let an initial failure prevent you from trading the second chance entry.
My entry is triggered on the lower timeframe charts (a combination of 15 second and YTC Scalper 2-Range). But for the sake of this article I'm going to show the 30 second chart, which displays all the information you need to see while also fitting nicely on the one image. So let's check it out.