About: Lance Beggs

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Recent Posts by Lance Beggs

Daily Market Structure & Price Action Study – 3

 

Week 3 of 4 while I'm away from home…

From the original post:

I've been writing online for over a decade now. And for that whole time I've been promoting the idea of daily study in both Market Structure and Price Action.

It's a simple task that takes no more than five minutes, but which offers incredible value to your own learning and development.

Sometimes this study fits within certain themes, if there is a particular feature of market structure which I want to focus on for a period of time.

Often though, it's completely unstructured. Simply searching for whatever captures my attention.

Either way, every trading day after the session is over, I look to the charts to find something interesting. Having done this for so long the findings are usually just reinforcing prior lessons. But occasionally, they'll uncover something new which can lead to further exploration, further learning and further growth and development.

As I'm away from home for the month of April, celebrating my 50th birthday, and unable to prepare any new articles for the YTC newsletter, I though I'd simply preload the email system and blog with a few articles which share some daily market structure and price action study.

I hope you find it useful. If you do, consider starting your own Market Structure & Price Action Journal.

Friday 16th March 2018:

One of my LEAST favourite types of market opening price action:

<image: Daily Market Structure and Price Action Study>

Notes:

  • A = Price drives higher from the open. It pauses (smaller range candle at the top). I'm watching the lower timeframe for potential opportunity to enter LONG for continuation higher.
  • B = Nope… the market drops lower.
  • C = Price drives lower. Again, I'm watching the lower timeframe for early signs of potential opportunity to enter SHORT for continuation lower.
  • D = Nope… the market pushes higher.
  • At this point, we have the start of a broadening formation. Certainly one of my least favourite environments from a market open.
  • At this point, I need to step back from the chart a little to avoid any impulsive action. It could well continue for another few legs. I am NOT ALLOWED to act unless I see some form of partial decline or partial rise.

 

<image: Daily Market Structure and Price Action Study>

<image: Daily Market Structure and Price Action Study>

Notes:

  • E = Price pushes higher. I'm not interested.
  • F = Price pulls back and stalls. One candle. Two candles. It's finding support. This is a potential partial decline. Now I'm interested.
  • G = Take the PB trade opportunity for continuation. Manage aggressively. It needs to break to new extremes, or you have to get OUT OF THERE.

 

Lessons:

  • A broadening formation is a sequence I have struggled with in the past.
  • I recognise a potential broadening formation through rejection one way and then again the other way.
  • The best way I have found to manage this situation is to stand aside until recognising either a partial decline or partial rise.

 

Monday 19th March 2018:

One of my favourite technical analysis concepts – volatility contraction leads to volatility expansion.

On ALL timeframes.

Let's look at a higher timeframe (60 minute chart) example.

<image: Daily Market Structure and Price Action Study>

Notes:

  • H = Multiple-day volatility contraction
  • I = Gap open (above the prior days high and clearly beyond the boundary of the volatility contraction pattern
  • And again…
  • J = Multiple-day volatility contraction
  • K = Gap open (below the prior days low and clearly beyond the boundary of the volatility contraction pattern
  • In both cases the gap open led to a strong trend for several hours.

 

Lessons:

  • Higher timeframe volatility contraction can lead to highly directional trading sessions, when the open gaps beyond the pattern boundary.
  • Watch the TTF opening range for confirmation of potential continuation.
  • On a confirmed break of the opening range, anticipate a trend day UNTIL PROVEN OTHERWISE.

 

Happy trading,

Lance Beggs

 


 

Daily Market Structure & Price Action Study – 2

 

Week 2 of 4 while I'm away from home…

From the original post:

I've been writing online for over a decade now. And for that whole time I've been promoting the idea of daily study in both Market Structure and Price Action.

It's a simple task that takes no more than five minutes, but which offers incredible value to your own learning and development.

Sometimes this study fits within certain themes, if there is a particular feature of market structure which I want to focus on for a period of time.

Often though, it's completely unstructured. Simply searching for whatever captures my attention.

Either way, every trading day after the session is over, I look to the charts to find something interesting. Having done this for so long the findings are usually just reinforcing prior lessons. But occasionally, they'll uncover something new which can lead to further exploration, further learning and further growth and development.

As I'm away from home for the month of April, celebrating my 50th birthday, and unable to prepare any new articles for the YTC newsletter, I though I'd simply preload the email system and blog with a few articles which share some daily market structure and price action study.

I hope you find it useful. If you do, consider starting your own Market Structure & Price Action Journal.

Wednesday 14th March 2018:

When obvious expectations fail:

<image: Daily Market Structure and Price Action Study>

Notes:

  • A ridiculously fast and long bearish price swing (A). Price just collapsed.
  • Note also the massive increase in volume (B), proving eventually to be the highest volume of the day.
  • Price then stalls for half an hour (C). Whatever caused the momentum drop is clearly no longer driving sentiment.
  • Price breaks the low at D. Surely expectations are for continuation lower? Well, that's what many will expect. But those familiar with my writing will know that, while I'm ready for that potential, I'm more excited by the potential for the break to fail. Obvious expectations OFTEN fail. And that failure can provide nice opportunity in the opposite direction.
  • Area D offers some beautiful price action to trigger BOF entry LONG. Lower tail rejection. Stall with an inside bar. A tiny break of the low of the inside bar. Then compression against the level and eventual break higher.
  • Step through the candles following the break lower at D and place yourself in the mindset of anyone who might have entered SHORT on the break down. Feel their emotion as price stalls. And stalls. And stalls. This is how you play the metagame – playing against the other traders who find themselves stuck in the market and subject to extremes of emotion.

 

Lessons:

  • Whenever you find any price occurrence which suggests OBVIOUS expectations (especially in accordance with standard technical analysis), pause and ask yourself the following question: "What if it doesn't?"
  • Obvious expectations CAN and DO fail. This failure can provide good trade opportunity and good trade conditions in the opposite direction.

 

Thursday 15th March 2018:

Patterns repeat…

Looking at a higher timeframe (5 minute chart) to get a wider perspective:

<image: Daily Market Structure and Price Action Study>

Notes:

  • F = Strong bullish drive from 11:00 to 11:30
  • G = The strong bullish drive is unable to continue, settling into a tight sideways congestion.
  • H = Strong drive down.
  • I = Opportunity available on a retest of the tight sideways congestion.
  • And again…
  • J = Strong bearish drive from 13:45 to 14:05
  • K = The strong bearish drive is unable to continue, settling into a tight sideways congestion.
  • L = Strong drive up.
  • M = Opportunity available on a retest of the tight sideways congestion.

 

Lessons:

  • Watch for a potential top or bottom when a very strong bullish or bearish drive suddenly stops and fails to continue.
  • If a top or bottom pattern forms as a tight sideways congestion, with a subsequent strong break from that congestion, look for trade opportunity on any retest.

 

Happy trading,

Lance Beggs

 


 

Daily Market Structure & Price Action Study – 1

 

I've been writing online for over a decade now. And for that whole time I've been promoting the idea of daily study in both Market Structure and Price Action.

It's a simple task that takes no more than five minutes, but which offers incredible value to your own learning and development.

Sometimes this study fits within certain themes, if there is a particular feature of market structure which I want to focus on for a period of time.

Often though, it's completely unstructured. Simply searching for whatever captures my attention.

Either way, every trading day after the session is over, I look to the charts to find something interesting. Having done this for so long the findings are usually just reinforcing prior lessons. But occasionally, they'll uncover something new which can lead to further exploration, further learning and further growth and development.

As I'm away from home for the month of April, celebrating my 50th birthday, and unable to prepare any new articles for the YTC newsletter, I though I'd simply preload the email system and blog with a few articles which share some daily market structure and price action study.

I hope you find it useful. If you do, consider starting your own Market Structure & Price Action Journal.

Monday 12th March 2018

Studying a high-of-day breakout failure:

<image: Daily Market Structure and Price Action Study>

Notes:

  • Price breaks the high of day (A) right into an area of overnight-high resistance (yellow shading B).
  • Regardless of whether you consider this setup a BOF of A or a TST of B, it's a good reminder that reversals are not always a single-touch V-turn.
  • Entry at C would at best be scratched for breakeven or very small profit. Re-entry would be required at D.
  • Further potential opportunity is available through the engulfing candle (E) or the retest of the breakdown at F.

 

Lesson:

  • If you miss a trade setup, remain patient. There is often (but not always) another chance to enter.

 

Tuesday 13th March 2018

Studying opportunity available after a period of volatility contraction:

<image: Daily Market Structure and Price Action Study>

Notes:

  • Context = down-trending market (G)
  • Price finds some support around 11:30am and settles into a period of sideways contraction (H).
  • The contraction itself offers no real clues in terms of strength or weakness of either side. It can't go up. It can't go down. Wait. Be patient.
  • Seek opportunity SHORT in the yellow shaded region (I), once price has broken the volatility contraction pattern. While there is potential for a trap, all effort should be made to trade these. The risk is often minimal, especially if the breakout occurs very close to the apex of the triangle. And the potential reward is often multiple-R.
  • A trap and reversal to rally through the upper boundary of H could be considered for entry LONG, should that occur.

 

Lesson:

  • Volatility contraction leads to expansion. Always seek opportunity on a break from the area of contraction.

 

Tuesday 13th March 2018

A bonus extra one for today – a place where my expectations were wrong!

Increasing the timeframe up to the 15 minute chart…

<image: Daily Market Structure and Price Action Study>

Notes:

  • The 13th March opened above the prior days high and moved through the full prior day's range to break the low at J.
  • My expectations following an engulfing of a prior day's range are for price continuation lower.
  • Instead, the breakout proved false and price rallied back within the prior day's range, providing very smooth and easy-to-read bullish price movement.

 

Lessons:

  • The market cares little for my expectations. It goes where orderflow tells it to go.
  • As always, some of the best signals come from failed expectations. If I'm stopped on any breakout pullback entry SHORT, get over it. There is potentially now even better opportunity for a breakout failure entry LONG. Find it and take it.

 

More to follow next week!

Happy trading,

Lance Beggs

 


 

A Small Hack which has GREATLY Improved Consistency

 

For years now, I have been trading with a 5-minute countdown timer.

When it counts down to zero it sets off a buzzer before resetting and starting again.

<image: A small hack which has greatly improved consistency>

This served two purposes.

(1) It brings my focus back to the markets, in the event that it's slipped away (not unusual given that I trade overnight).

(2) It reminds me to carry out a process checklist which cycles through various aspects of higher and trading timeframe analysis. The aim here is to maintain some "bigger picture" situational awareness.

But here is the problem…

The buzzer has become such a common occurrence that it tends to slip into the background of my awareness. Especially if I'm getting tired. I effectively just IGNORE it.

Damn you brain!!!

It worked great for the first few months.But for quite a long time now, it just hasn't been effective. (The buzzer, I mean. Not the brain!)

So here's a little hack. It's an idea I got from the TV show "Lost".

In "Lost" there is a countdown timer that must be reset every 108 minutes, otherwise the world ends. The important difference is that this timer must be reset BEFORE it hits zero. It's not reset AFTER reaching zero, like my little timer.

So what if I did the same thing?

What if my intent was to complete my regular "situational awareness" routine and manually reset the timer BEFORE it hits zero, or else the world ends and we all die in a fiery inferno?

Disclaimer: The world doesn't really end. It's just a game!

Sounds good so far. Apart from the dying bit.

The results have been tremendous.

Simply shifting my intent from "taking action AFTER the buzzer goes off" to "taking action BEFORE the buzzer goes off… or else everyone dies", has dramatically improved my consistency.

It's turned the process into a game. Into a bit of fun. I can maintain a higher state of focus for most of my trading session. And it REALLY annoys me when I slip up and let it hit zero.

Particularly because I changed to the standard Windows-10 Alarms & Clock app. When it hits zero it sounds an alarm and displays a pop-up notification, and DOESN'T STOP until I manually stop it. It's damn annoying.

<image: A small hack which has greatly improved consistency>

If you also struggle with consistency in applying regular routines or procedures, consider trying this little hack.

It kind of adds to the enjoyment of the day.

But more importantly… it seems to work.

Give it a try. Reset that timer. And help me keep the world safe.

Lance Beggs

 


 

Inside Bars at the End of a Price Swing

 

By far the majority of my trading decisions are based upon TTF setup areas and LTF pattern-based execution (or scalper-channel execution).

Very rarely do I enter based upon the TTF price action alone, without any real reference to the lower timeframe chart.

When I do though, it's almost always due to the presence of a narrow-range Inside Bar.

<image: Inside Bars>

The concept is simple – volatility contraction leads to volatility expansion. And yes, an inside bar is an example of volatility contraction. It's simply occurring over a very short time scale.

Look to the context of the market and decide – avoid it, take a breakout long, breakout short, or bracket it for either direction.

You can't just trade them all. If they appear in the middle of any extended sideways chop, then just stand aside.

And you've always got to watch for a fake-out, where they break one direction and then immediately turn to move out the other side.

Where I like them best is in a smooth-flowing market, at the end of a price swing. They can often provide a simple trigger to enter into the next price swing.

And more importantly – good Reward:Risk potential.

Let's look at a couple of examples…

<image: Inside Bars>

The market is flowing nicely.

YTC PAT traders – note the weakening trend via reducing projection just after 10:00 (two occurrences both with nice lower-tail rejection). Note also the strength of the price swing off the lows.

For these reasons, the Second Principle applies and I'm not interested in SHORT here. I'll wait for a complex correction.

Normally, this wouldn't imply entry LONG. However, the inside bar has tempted me. Given it's nature (volatility contraction leads to volatility expansion) any push higher will not only provide the second swing that is needed for my complex pullback, but also potentially break the prior swing high (and the trend definition as well). It could get quite a nice pop higher.

From a setup name perspective, it's pretty far from being a textbook perfect example. But it is a very shallow (single bar) pullback LONG pre-empting a change of trend. Yeah, not something we would take every day. But in a smooth flowing market, with strength off the lows and expectation for a second leg higher, with potential to break the trend change point, let's give it a go.

<image: Inside Bars>

Moving on…

<image: Inside Bars>

<image: Inside Bars>

<image: Inside Bars>

<image: Inside Bars>

As always, context is essential.

And the market "should" be flowing nicely.

Given these conditions, if you get a TTF narrow-range Inside Bar in the right area, consider whether any short-term volatility expansion might offer trade potential.

Happy trading,

Lance Beggs