Monthly Archives: May 2016

Stop Fighting an Obvious Market Bias

 

Charts this week come courtesy of a trader who contacted me seeking some help.

This is something he finds himself doing time and time again.

And in my experience he's certainly not alone.

This is such a great example. I'm really pleased I can share it.

The original images were too large to fit here, so I've included two smaller segments of the larger chart. The market and timeframe have been removed. Examine the charts as if they're your own market and your own timeframe.

In case it's not obvious, all trades here are SHORT.

Stop it. Seriously... just STOP IT!!!!

The key point…

STOP FIGHTING AN OBVIOUS MARKET BIAS!

If you consistently trade like this you are NOT on the right path.

This is not the way to win.

And it doesn't always need to be such an extreme trend. 

The pain continues… a little bit later in the same session…

All SHORT except for the second last trade.

Stop it. Seriously... just STOP IT!!!!

STOP FIGHTING AN OBVIOUS MARKET BIAS!

If you have this problem of continually fading an obvious market bias, here's a starting point for correcting the problem:

First, gather some chart evidence which highlights the problem.

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The Other Trader (2)

 

As price moves into my setup areas, "the other trader" is always at the forefront of my mind.

Who created this recent move against market bias? Are they trapped? Are they feeling stress? Where is the point of extreme stress at which they'll bail out of their position?

If I can't feel someone on the other side of the market getting it really wrong, there is no trade.

In recent weeks we've looked at some examples which include a break of a key level, which then stalls and fails.

The other trader - trapped on a break of a level

You can see these recent articles here:

http://yourtradingcoach.com/trading-process-and-strategy/the-other-trader/

http://yourtradingcoach.com/trading-process-and-strategy/metagame-trading/

These type of trap scenarios provide some of my favourite trade entries.

The other trader - trapped on a break of a level

But we don't always need a break of a level in order to find trade opportunity.

What we're looking for is a move, against market bias, into a REALLY LOW PROBABILITY place to trade.

Like this, for example:

The other trader - trapped on a move into an area of prior congestion

Reality is never as nice as these "text book" line diagrams though.

So let's look at a real-world example.

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Sometimes All You Need is a Slight Shift in Perspective

 

Our progress as we develop as a trader rarely occurs in a uniform, straight-line manner.

From time to time our development stalls, awaiting some trigger that shifts our perspective and allows us to see the game in a whole new way.

It's my hope that this article can provide at least one of you with your next paradigm shift!  🙂

So here's the thing:

Most of my trade ideas fail to achieve the expected outcome!

I made four attempts to trade this S/R level:

Context

Attempt 1

Attempt 1

Attempt 2

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