Monthly Archives: January 2017

Leaning Your Entry Against Other Price Action

 

Sometimes you're just not 100% sure.

Not quite ready to pull the trigger.

At these times it's best to wait.

Remember this – "If I could only take one trade this hour, would I be happy to make it this one? If not, pass."

Clearly if you're hesitating then the trade does not meet this criteria.

Let it pass.

And maybe… just maybe… the next couple of price bars will offer up something that makes the decision easier.

Like this…

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

If I'm unsure about a trade then I'm happy to pass.

If I miss the trade, so be it. I don't have to take every trade. I plan to trade for several more decades. My career is unlikely to be defined by this one potential trade. Let it go. And prepare for the next.

But sometimes just another few candles is all it takes. If it offers some price action structure to lean against, I'll attack that opportunity. And manage whatever follows.

Consider watching for this in your charts.

Happy trading,

Lance Beggs

PS. The following were some earlier articles "loosely related" to this idea, although exploring the concept on the Trading Timeframe chart rather than the Lower Timeframe chart. Either way, it's all about letting the market turn first and then entering on a slight retest, with other price action at your back. Enjoy…

 


 

It is NOT your job to win on any particular trade!

 

Before you can consistently win, you're going to have to learn how to lose really well.

That is…

  • Completely accepting losses as a normal part of the game.
  • And containing the damage to pre-accepted limits.

 

This has been one of my favourite themes of the last year or so. Let's go over it one more time.

It really is that important!

Here's an extract from an email discussion I had on Wednesday with another trader in response to a really challenging sequence of price action.

(5) This point may not be a problem for you. You might understand it completely. But in my experience, while the vast majority of "developing" traders say they do understand this, the reality is that very few traders actually do REALLY GET it at a deeper level. Their actions and decisions prove they don't get it. And often when I'm sent an email asking "why didn't this trade win", it's obvious that this is the case – they don't really understand the game.

It is not your job to win on any particular trade.

It is your job to identify opportunity that contains edge. And to take it and manage it well. Some will win. Some will lose.

Our aim is not to profit on any particular trade. But rather to profit over a series of trades.

Feel free to define a "series of trades" based upon whatever number you consider provides a sufficient sample size. For the sake of this email, let's assume it's 20 trades, which is the absolute minimum I'd consider as sufficient.

So we aim to profit over 20 trade groupings. Within each group there will be some winners. There will be some losers. Both are absolutely fine. They're meant to be there.

And in fact, there will likely be strings of losers, from times when either the market environment was not optimal. Or our decision making was suboptimal.

Again, that is completely normal.

So our decision making pre-entry should be in confirming that (a) the trade idea has edge, and (b) regardless of whether it wins or loses, it's a trade that we really want contributing to our 20 trade sample.

And during the trade management stage, at the forefront of our mind is always the thought about whether or not we still want this contributing to our 20 trade sample.

The reason for bringing this up, is because the interaction with S/R that you have provided in your example, is rather messy. We don't know that will be the case until after the fact, when we can view the charts with the benefit of hindsight. But it's not unusual in messy price sequences to end up with two, or maybe even three losses or scratched trades. This is completely normal. And it should be absorbed within the 20 trade sample, with other better sequences providing sufficient profits to overcome them.

This is also why I will typically only limit myself to two attempts at a trade idea. Three at most (if the prior losses are less than 1R each). If after these 2-3 attempts, I've not captured a good entry, then I'm clearly not reading the market well. Stand aside. And wait for the structure to change. If one further entry would have been sufficient to capture the planned move, and it now occurs without me, so be it. It wasn't mine to catch. Let it go and move on to the next.

 This is VERY IMPORTANT. In fact, key to success. ALWAYS be thinking about the larger sample of trades. Is the current trade one you want contributing to the sample? And if it's one of the losers, keep it small so that it can be easily overcome. And if it's one of the winners, work to take as much out of it as you can.

 

There is no need to review the sequence from that email.

Let's instead look at a few trades in the first hour on Tuesday.

Trades in which there is nothing particularly special. They're just normal run-of-the-mill trades.

Some lose. Some win.

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

Let's look at the two losses…

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

Here's the plan:

KEEP THE LOSSES SMALL.

CONTAIN THE DAMAGE.

SO THAT IT ONLY TAKES ONE OR TWO SMALL WINNERS TO MORE THAN MAKE UP FOR THEM.

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

It is not your job to win on any particular trade.

Before you can consistently win, you're going to have to learn how to lose really well.

That is…

  • Completely accepting losses as a normal part of the game.
  • And containing the damage to pre-accepted limits.

 

Stop worrying about profiting on every single trade.

Aim instead to just manage them well.

And seek to profit over a larger SERIES of trades.

Happy trading,

Lance Beggs

 


 

Before Making Changes to your Strategy, Ask These Questions…

 

We're one week into the new year. Are you already trying to tweak your strategy, or your trading process, based upon a bad session or two?

Before making changes to your strategy or process, ask yourself the following questions:

1. Is the change the result of deliberate analysis of past performance, in order to improve upon a recognised deficiency or to further enhance a current strength?

A Deliberate Process

2. Or is the change a result of looking at a few different indicators or settings and thinking, "This might be a good idea"?

I know it will work this time!

It better be the first one!

If not, the major problem is not with strategy, but with your growth and development process. Yes, the strategy may well need further work. But without an effective growth and development process you'll likely never find the right solution.

Let's fix it now.

First, review this article – http://yourtradingcoach.com/trading-business/dont-break-the-chain-a-simple-tool-to-improve-consistency/

We're going to use this method to try to force some consistency. But with a tracking sheet designed just for this purpose.

Right click to save a PDF copy

(Larger copy: http://www.yourtradingcoach.com/products/ebooks/consistency-tracker.pdf)

And second, commit to a better process.

Review this article – http://yourtradingcoach.com/trading-business/its-time-to-fight-to-get-to-the-next-level/

Print out the article if necessary.

And take action.

A Deliberate Process

Your trading success requires consistency in application of your plan… and an effective process for driving growth and development.

You can do it!

Happy trading,

Lance Beggs