Monthly Archives: June 2017

Momentum Doesn’t Always Continue

 

I love these patterns so much. Let's do it one more time.

Momentum doesn't always continue

I know… we've done this a couple of times already – see here – and here.

And of course, those with the YTC Price Action Trader should look to Volume 2, Chapter 3, Page 143, for the same idea expressed on the Trading Timeframe.

But I want to do it one more time, just to really emphasise the point.

In the right context these Test/Breakout Failures of momentum extremes can provide GREAT opportunity.

Regardless of your chosen market and timeframe, if this idea appeals to you then I highly recommend you look through your charts (both trading and higher timeframes) and study some historical examples. You may then want to keep an eye out for them in future.

So to look at yet another market, let's see one that occurred in the emini Dow (YM) futures earlier this week.

I watch for this on both higher timeframes AND on the trading timeframe. This example actually occurs on both. Let's start with a higher timeframe, using the 15 minute as it provides a good "fit" on the image.

Momentum doesn't always continue

Momentum doesn't always continue

Momentum doesn't always continue

Momentum doesn't always continue

Momentum doesn't always continue

Momentum doesn't always continue

I mentioned earlier that this momentum drive also offered a Trading Timeframe example. That would be for those on the 1 minute YTC Scalper timeframes. You'll note if you look at the 15 minute charts above you'll see the momentum low actually included two candles with bottoming tails. On the lower timeframe chart this is yet another example of this same pattern. Let's look at the 1 minute chart showing the "internal detail" comprising these bottoming tail lows.

Momentum doesn't always continue

Keep an eye out for large momentum moves. Those on the trading timeframe can offer nice movement for a swing or two. Those on the higher timeframe structure can offer a clear directional bias for a longer period of time, often a whole session.

  1. A strong momentum drive.
  2. The first pullback does not lead to immediate continuation.
  3. An eventual break of the momentum extreme, which rapidly fails.
  4. Potential opportunity!

 

Happy trading,

Lance Beggs

 


 

Higher Timeframe Forex – When The Market Can’t Push Lower

 

One of the key tasks I was looking forward to this last week, having recently overcome my long-term internet outage, was in catching up with Aaron Fifield's Chat With Traders podcast.

And I must say it was AWESOME to come across episode 117 with Larry Alintoff.   (Yeah… I'm a long way behind!!!)

The reason…

Despite the fact that we likely trade very different timeframes, markets and methods, I was really pleased to hear Larry describe one way that he seeks trade opportunity – when things that "should" happen, don't happen.

That is one of the themes I've shared through YTC over the last few years.

To have a trader of such high regard validate this idea… well I must say I felt just a little pleased with myself!   🙂

You'll find dozens of references to this idea if you search back through the archives, in either the blog or my social media posts.

The most recent, from memory, would probably be this one – http://yourtradingcoach.com/trading-process-and-strategy/studying-a-higher-timeframe-trap/

And of course, those with the YTC Price Action Trader should look to Volume 2, Chapter 3, Page 143.

So I thought, why not look at another example of this idea.

GBP/USD offered an interesting example during the last week. One which is perhaps not as obvious as some of the prior examples.

Let's look to the 4 hour chart at the close last Friday, 9th March.

Higher Timeframe Forex - When the Market Can't Push Lower

Higher Timeframe Forex - When the Market Can't Push Lower

Higher Timeframe Forex - When the Market Can't Push Lower

Higher Timeframe Forex - When the Market Can't Push Lower

So let's look at Monday's data, still on the 4 hour chart.

Higher Timeframe Forex - When the Market Can't Push Lower

And now Tuesday…

Higher Timeframe Forex - When the Market Can't Push Lower

Ha ha!

Ok, it's not all bad.

This is why I wanted to share this one. It makes a nice difference from the previous one which I linked to above (here again if you missed it).

In that prior article, price did break the swing low.

This was the setup in that prior article.

Higher Timeframe Forex - When the Market Can't Push Lower

As we've seen though, it doesn't always happen this nicely.

Sometimes price doesn't quite break that low.

But it doesn't matter.

Often, just trying to break that low is sufficient.

YTC Price Action Trader readers – see Figure 3.78 on page 143 for another example.

Higher Timeframe Forex - When the Market Can't Push Lower

Higher Timeframe Forex - When the Market Can't Push Lower

Higher Timeframe Forex - When the Market Can't Push Lower

Let's drop down to a typical trading timeframe chart, the 5 Min chart, to see how we could have recognised this failure to continue lower.

Higher Timeframe Forex - When the Market Can't Push Lower

In fact, just the day before, on Monday, I'd shared this example from the emini Nasdaq futures, via social media:

Higher Timeframe Forex - When the Market Can't Push Lower

Here is the outcome…

Higher Timeframe Forex - When the Market Can't Push Lower

A strong momentum drive often leaves an expectation in many traders of continuation, should price break the momentum drive extreme. Any failure of that break, or an inability to even quite get that far, can provide a reasonable move back in the opposite direction.

I'm a big fan of this concept – when things that "should" happen, don't happen.

Keep an eye out for it in your markets and your timeframes. Archive and study a few examples. And consider adding it to your trading toolkit, should you also find them to offer great opportunity.

Higher Timeframe Forex - When the Market Can't Push Lower

Happy trading,

Lance Beggs

 


 

That is a LONG TIME to be without Internet

 

Thursday 16th March to Friday 2nd June!

That is a LONG TIME to be without Internet

Yes, that’s how long I was without any fixed line Internet at my house.

But that’s what you get when the Government monopolises the internet infrastructure!

Aussie readers, AVOID THE NBN as long as possible.

So thankfully I was prepared and had my backup mobile broadband system in place, ready to take over and keep me trading (albeit with reduced size due to concerns over stability).

Granted, the backup system was only ever expected to be a short-term measure, put in place for short-term outages. Not 11 weeks. But it performed well and did the job it was meant to do.

So… the task for you this weekend…

  • What is your backup plan in the event of internet failure? How quickly can you get back online to manage (or close out) any positions?
  • What is your backup plan in the event of long-term internet failure? How will you manage to continue trading?

 

And if you feel up to it, consider other system failures as well:

  • What is your backup plan in the event of computer failure?
  • What is your backup plan in the event of power failure?
  • (Repeat for any other system your business relies upon!)

 

Happy trading,

Lance Beggs

 


 

Metagame Entry – After You’ve Made a Dumb Trade!

 

I often talk about identifying the areas where "other traders" are trading in really dumb places. Places where they've found themselves trapped in a really low odds trade. Or trapped out of a position they wished they were in.

Places of emotion – fear, anger, regret!

These areas of the chart often provide us with great trade opportunity.

But one thing I don't recall discussing is the obvious fact that sometimes we find ourselves taking these dumb trades.

We all do it!

The trapper… becomes trapped.

But that's fine. It's information. We read the market wrong. Now we've got feedback that helps correct our bias. And sometimes, if we've maintained a calm mindset, we might still find trade opportunity as price retests the area of our dumb trade.

Let's look at an example…

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Metagame Entry - After You've Made a Dumb Trade!

Too often we let a losing trade get to us. Especially when it's immediately clear that it's a dumb trade.

We can't allow any negativity to remain for long though.

It is IMPERATIVE that you have some kind of routine in place to briefly get away from the charts and clear your mind.

YTC Price Action Traders, refer to the FOCUS and REGROUP sections in Volume 4, Pages 49-50. Maybe consider printing out those two pages and sticking them on your wall.

Shake off that loss. It's small. It will be overcome by one good trade. Now focus. And prepare yourself for the next trade.

If the context suggests potential for a second chance entry, it could be coming up VERY SOON.

Happy trading,

Lance Beggs