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You Don’t Have To Trade EVERYTHING

 

This chart is from Thursday 19th March 2020. A couple of quick trades and then STOPPED. Done for the day.

<image: Two winners - and stopped. Why?>

Why stop?

Because today was a Hit & Run day!

Trading is a performance activity. And it's our job to manage ourselves in an attempt to get as close to peak performance as possible.

Good sleep routines, healthy eating, exercise. And some degree of separation of "life issues" from our trading day.

All good… and fairly easy… until a pandemic is unleashed across the world.

I expect most of us will be operating with heightened levels of anxiety and stress at the moment. I'll be the first to admit that this period of time has been harder on me than I expected. Having two daughters working as nurses provides an interesting mix of pride and anxiety right now.

The markets of course do not care at all how we're feeling. So it's up to us to manage ourselves. Limiting exposure at times when we're unlikely to be on our game. And pushing hard when we are feeling at our best.

Here's how I've chosen to manage my trading over the last few weeks.

Pre-session preparation includes an assessment of my current physical, mental and emotional state. And selection of one of three ways I need to approach the markets today.

1. NO TRADING

My physical state require strict adherence to my 5/12 fatigue management rules. If I have not had sufficient sleep, then there is NO trading.

And for my mental and emotional state, if there are any serious and unresolved problems or anxiety or any other type of distraction, impacting either myself or any member of my immediate family, then there is NO trading.

It's time to step back. Sort myself out. And come back again tomorrow.

The fact is that we don't have to trade EVERYTHING. Let today go.

I'm here for the long haul. I expect to be trading for decades to come. If I miss one day, who cares. It will not make or break my career.

2. FULL TRADING

The majority of days though, I'm completely fine. Sufficient sleep, feeling fit and healthy. And feeling in control of the current crisis (at least as it relates to my extended family).

It's time to trade.

Pre-COVID-19 routine: 0930 to 1100 compulsory trading, 1100 to 1200 optional trading.

Current routine: 0930 to 1100 compulsory trading, 1100 to 1600 optional trading but compulsory engagement with the markets, watching and learning.

It's time to trade.

FOCUS.

Press hard when in sync with the market. Step back a little when out of sync.

But make sure you're fully present and attacking whatever opportunity comes your way.

3. HIT & RUN

This is for those in-between situations. The shades of grey that fit somewhere in-between "obviously unfit to trade" and "hurry up and open the damn markets because I want to trade".

I've had a few of those days lately. I satisfy the fatigue rules. And I'm not overly consumed by current events of the world.

But I feel a little down. A little flat and deflated.

The plan here is for a shortened session. Hype myself up. Get in and attack the market. And then get out.

Hit and run.

And then take some time out for personal rest and recovery.

There are many ways to do this.

I've informally adopted the following plan:

(a) Trade the opening sequence.

(b) If I'm sitting on a loss then stop. Take the hit. Don't risk making it worse.

(c) If I'm sitting on greater than 2R profits then stop. Take the money and don't risk giving it back.

(d) But if somewhere in-between, I'll allow myself to make a call here based upon how I feel. Either take what I've got, or push on for one hour maximum to see if I can get to the 2R target.

Why one hour? Through personal experience I know I can hype myself up to focus sufficiently for about an hour. But beyond that, motivation starts to drop. Maybe you can do more?

The important point here… again… is that you don't have to trade everything.

If the market offers tremendous opportunity after that opening sequence, or opening hour, who cares.

It's not going to make or break my career. And given my low motivation I probably would have stuffed it up anyway.

So let it go. Take a break. And have a little "personal time".

Typically I find this is sufficient to have me back to 100% the following day. A short break from the markets can do wonders for reigniting the passion and having me eager to get back into the ring for another round of action.

Let's revisit the earlier chart…

<image: Two winners - and stopped. Why?>

<image: Two winners - and stopped. Why?>

The obvious thought here is "But Lance, you missed so much opportunity!"

<image: Two winners - and stopped. Why?>

Another "Hit & Run" day, on Tuesday 24th:

<image: You don't have to trade everything>

You might recall this opening trade from the social media post on Wednesday. If you were wondering how that trade turned out… now you know!

<image: You don't have to trade everything>

<image: You don't have to trade everything>

<image: You don't have to trade everything>

There are days when it is obvious that you shouldn't be trading. Stand aside. Let it go.

There are days when you're feeling great. Keen to get into the action and face the challenge of the markets head on. Go for it. Trade.

But there are also in-between days. When you're just… ok. A little flat. A little lacking in motivation. The last thing you probably need in such a situation is a full session of trading. So shorten it. Reduce the session length. Accept smaller profit targets. And get in there for a quick hit and run. Smash and grab. Two or three trades. Get a profit if you can. And get out of there.

You don't have to trade EVERYTHING. Let it go. And take some time out for YOU.

Take care of yourself. We're in this for the long haul.

Lance Beggs

 


 

When Obvious Expectations Are Wrong

 

There is market opportunity available when "obvious" expectations turn out to be WRONG.

You've no doubt experienced this. Those times when the market provides almost certain evidence that it IS going somewhere… but then it doesn't.

I can promise you – if you sense these "obvious" expectations then you're not the only one. Others will sense it too.

And the stronger the feeling, the better. Because more people will act on it.

And then when it fails… there's your opportunity.

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

Opportunity exists at the places where a lot of people get it WRONG.

So when you sense a sudden shift in the market sentiment… that surely must lead to obvious movement (through a key level or in a new direction), take a pause for a second.

Maybe it will follow through with these obvious expectations. Project ahead and plan how you will react.

But also – keep in the mind the fact that obvious expectations also fail.

And that can provide exceptional opportunity.

Project that forward as well. Visualise where and how that might provide opportunity. And focus. Hopefully you will be ready to act, a little quicker than I was with this one.

Happy trading,

Lance Beggs

 


 

Proving Your Edge in Re-entry!

 

Those who have followed YTC for a while will know that I'm a big fan of re-entry.

It's a personal preference. I much prefer a tight stop and the need for occasional re-entry, over a wider stop that might give a trade a whole lot of room to prove itself.

I typically allow two attempts at a trade. If the first is stopped out and the premise remains valid, I'll often seek a way back in. (NOTE: The premise MUST remain valid. We don't just try to re-enter every stopped out trade!)

I wasn't always comfortable doing this, in the early days.

And I know for a fact that many readers find it difficult as well.

From a mindset perspective, it asks that you put aside the fact that you just lost money on this very same trade idea, and place more money at risk.

And your thought process is probably fixated on the idea of "what if it loses again?"

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

Consider this – I could lose on my next four to five re-entry trades and I'd still be in front.

Edge doesn't require that you win on every trade.

There will be winners and losers. Both are fine. As long as your stats prove edge over a larger series of trades.

So if you struggle with re-entry, with thoughts of "what if it loses again" leading far too often to hesitation and doubt, maybe consider the following plan.

For the next twenty re-entry trades, let's try to prove once and for all whether they do provide you with edge.

Like this:

(1) Create a new copy of your Trading Journal Spreadsheet with one setup – "RE-ENTRY". The aim is to initially keep the stats separate from other setups and from other trading.

(2) Do NOT take re-entry trades live. There should no longer be any thoughts of "what if it loses again" because… who cares if it loses… you're not really in the trade.

(3) Take the trade either on sim (if your platform allows switching execution between live and sim) or else just on paper.

(4) Track the results in your separate Trading Journal Spreadsheet.

(5) And prove, over that sample of twenty trades, that you do have edge.

Or prove that you don't. At least then you know for sure. And you can either abandon the idea or use the data you just gathered to find a way to improve and build edge where there currently is none.

Nothing improves trade decision making and confidence like actually SEEING proven edge over a series of trades.

And if you want to continue to monitor this going forward, as you start taking them live, maybe you could continue to track re-entry trades separate from other setups. Make "RE-ENTRY" its own setup. This allows you to continue to monitor the edge over further samples of data. And hopefully, if the edge is proven, continue to build confidence in this highly valuable trading skill.

If you lack confidence in your re-entry edge, the best way forward is to test that edge. Commit to a full series of re-entry trades on sim, alongside your normal trading. Record results. And review.

Twenty re-entries minimum.

Go for it.

Lance Beggs

 


 

Market Open Traps

 

Market Open Traps are by far my favourite opening play right now.

I've demonstrated these quite a bit over the last year or two. Sorry for the repetition – but they're just working so well lately.

Not always for massive profits. The two shown today are definitely singles, rather than home runs.

But they're reliable. And while they keep working, I'll keep watching every open to see if I can catch one.

Here's the general concept.

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

The opposite applies as well. Price approaching a level of significant overnight resistance, breaking it just prior to or immediately after the open, and then smashing lower and trapping any LONGS in a losing position.

My plan of action upon seeing this set up is to prepare for either BOF or first PB trade opportunity, as taught here.

Let's start with Monday 24th February 2020…

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

And again the very next day…

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

<image: Market Open Traps>

Simple PB setup opportunity… but within the unique context of a trap setting up just before or immediately after the market open.

They're not always home run trades, as we've seen. But they're reliable. And right now, they're certainly my favourite opening play.

Review your charts and see whether you can apply this concept in your own markets and your own timeframes.

And if so, be ready, watching and waiting prior to the open.

Market open traps are a great way to get a quick and early entry into the market's opening trend.

Happy trading,

Lance Beggs

 


 

High Volatility – Thoughts for Developing Traders

 

We have been blessed with some absolutely amazing markets lately.

<image: High Volatility - Be Careful Out There>

<image: High Volatility - Be Careful Out There>

<image: High Volatility - Be Careful Out There>

<image: High Volatility - Be Careful Out There>

Incredible daily ranges. Incredible opportunity.

And incredible risk, if not played wisely.

So while it's tempting to use today's article as an ego-boosting review of a couple of winning trades, that's not really what motivates me with my YTC writing.

I'm more concerned about your journey. I want you to succeed LONG-TERM. And I'm worried that right now there is more potential for damage than there is good.

So today – something a little different and perhaps unexpected.

For the developing traders… the ones who are still working towards either finding their edge or consistently applying their edge… I'm going to try to talk you out of trading these markets.

This week's action is already gone. But I have a suspicion that there is more volatility to come. And even if I'm wrong and it's all over for now, there will again be times in the future when markets crash and this article can make a timely comeback.

Here is what I'm thinking:

<image: High Volatility - Be Careful Out There>

<image: High Volatility - Be Careful Out There>

<image: High Volatility - Be Careful Out There>

<image: High Volatility - Be Careful Out There>

I'd be impressed if I received this email or private message: "Lance, I've worked my backside off for the last year and managed to grind out wins every week for the last quarter. But this last week – I've stood aside. I'm not ready for that pace yet."

This would not impress me at all: "Lance, these markets are frickin' awesome. My trading has been crap for months, but I just smashed it today. $5000 profits. I think I've finally turned a corner and have got this game worked out."

I'd back the first trader to succeed long term, over the second.

Repeating…

<image: High Volatility - Be Careful Out There>

Trading is never compulsory. At any time if you feel the conditions are beyond your current levels of skill and experience, then the RIGHT decision is to stand aside.

However this does not mean you close up shop for the day. There is still valuable work to be done in building experience and expanding your skill levels, so that when these conditions return again in the future you will be ready and able to thrive in the opportunity they present.

So here's the plan:

  • Put aside any feelings of FOMO. One day these will be your markets, but not today. Let it go.
  • And use these sessions SOLELY as learning opportunities.

 

There are many options for learning:

  • Do not trade at all. Simply follow the market attempting to stay in sync with the price flow. Build confidence in your ability to not only read the current trend but to also keep your mind ahead of the market, through projecting the current trend forward and identifying the most probable future path.
  • Or SIM trade, if you feel you've already advanced beyond that first idea. Build skill in trading at these new levels of pace and volatility, without risking actual funds.
  • Or maybe a combination of the two. Watch price live, but record data so that you can trade key sequences through post-session repay.

 

I'm sure you can come up with numerous other options.

The key point is…

Trading is optional. Learning is not.

Maybe I'm wrong. But I don't think so. You know your own level of skill and experience and are big enough and old enough to make your own decisions. Perhaps you think you'll be fine in these markets. All I ask is you consider the risk. Play these markets wrong, and let them put you into tilt where you start compounding bad decision after bad decision, and these sessions can destroy you.

We often know when we're about to have one of these high volatility days. The gaps overnight and the news leading into the session made it obvious that Monday and Tuesday were going to be highly emotional sessions. There is little to lose by choosing to stand aside. Choose to focus your live trading on more "normal" sessions. And use these higher volatility sessions as a learning opportunity.

It's your choice though.

So having said that, let me add a few thoughts for those who do trade these sessions:

  • Structure your trading so that individual trade risk and session risk still fit within their normal parameters. This will typically require reducing position sizes and widening stops, in order to cater for the greatly increased volatility. Some may also prefer reductions in chart timeframes, noting that this can create its own challenges through speeding up the whole process.
  • Don't get stuck in "prediction mode". The market doesn't care where you think it should be going. Even in a crash, the market can have massive rips higher. Ensure that your game plan is visualised pre-session and you have clear guidelines for how to recognise the ACTUAL direction of the market and how to align with that direction, despite what you feel it should be doing.
  • Recognise that the simpler opportunity is almost always going to be WITH the market direction, not against. If you're a counter-trend trader, consider countering the pullbacks for continuation in the larger session-bias direction.
  • Before placing any trade, KNOW WHERE YOU ARE WRONG. And do not hold beyond that point. Standard practice really, but especially important in these environments.
  • And finally, most importantly of all, never forget that your number one aim each and every day is to SURVIVE TO TRADE ANOTHER DAY.

 

Take care out there,

Lance Beggs

 

PS. At the risk of repeating everything above, let me share the post that was sent out Monday morning prior to the open. (Sign up for YTC social media here)

<image: High Volatility - Be Careful Out There>

 


 

When the Pullback moves TOO DEEP TOO FAST

 

Let's look at a trade from Tuesday which was quite challenging to take.

One in which the pullback moves too deep… and WAY TOO FAST.

One which triggers the question in your mind – "Is this a pullback or is it the start of a complete reversal?"

Every trader is familiar with this feeling! It's NOT nice.

Let's look at how I timed the entry.

First though – a little context via the 15 minute timeframe:

<image: When the Pullback moves too deep too fast...>

I love an open like this. A real shock to the system. And potential for emotion to drive price with strong directional conviction.

I am secretly hoping for strong continuation lower. Blood in the water. Panic selling driving a massive trend day lower.

But I've been around long enough to know that this is not the only option from a large gap down.

Social media posts on Tuesday and Wednesday covered this. (Facebook: Tuesday, Wednesday. Twitter: Tuesday, Wednesday)

So let's look to the 1 minute Trading Timeframe chart to see the opening price sequence.

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

For readers of the YTC Price Action Trader, please refer to Volume 3, Chapter 4, page 81.

Note the very first item listed under the title "Entry Preconditions".

Candlesticks A to C do NOT satisfy this entry precondition requirement.

Following the pop higher with D, price then attempts a second push lower at E.

This candle (E) DOES satisfy the entry precondition requirement.

Take the trade!

Also – Page 89, Figure 4.65 (part 3 of 4). The third diagram is the LTF entry pattern.

<image: When the Pullback moves too deep too fast...>

Our plan is to understand the trend structure, project it forward and identify potential trade opportunity (should subsequent price movement confirm our projection).

Often though, price will decide to present us with something a little different.

No problem!

PAUSE & REASSESS.

If you find you're out of sync with the price movement and it doesn't make sense, then stand aside and wait for further price structure to develop.

But otherwise, you have processes in place. Carry them out again with this new information. Recognise the changes. Adapt. And take action.

Happy trading,

Lance Beggs

 


 

Enter LONG When it Can’t Go Lower

 

Today let's look at the art of entry timing… with one of my favourite ways to get into the market.

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

It's not the only way to enter. But it's one I love.

If the market can print a candle (or sequence of candles) which strongly suggest that "it's moving lower".

But then can't.

Enter LONG when it can't go lower!

Happy Trading,

Lance Beggs

 


 

Step Back and Reassess

 

Let's start with a daily chart to get some "bigger picture" context…

<image: Step back and Reassess>

<image: Step back and Reassess>

And now down to the trading timeframe…

<image: Step back and Reassess>

A little side note regarding the entry: While it may not be immediately obvious, this trade is a variation on the YTC Price Action Trader PB Setup. The pullback is all occurring within the one single TTF candle (in this case the green one prior to entry). While that is not ideal and we would prefer to see an actual pullback of at least 2 or 3 candles on the TTF, the fact remains that in an opening momentum drive this is often all you will get. So we either miss out entirely, or adapt. In an opening drive, I'll be looking to the LTF data for the first pullback. Everything else (eg. LWP entry timing) is as per normal.

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

<image: Step back and Reassess>

If you've lost all feel for what is happening in the chart…

(1) Step back.

(2) Define the edges of the structure.

(3) And wait.

Whatever happens within that no-trade zone, is none of your concern.

Let it break and then reassess.

Only then, if the market structure and price movement makes sense, is it game on.

Assess the trend structure. Project it forward. Identify your opportunity. And strike!

Happy trading,

Lance Beggs

 


 

Traps Just Before RTH Open – 5

 

Last Friday at 9:28am, just two minutes before the Regular Trading Hours (RTH) Open, the market suddenly jumped.

<image: Traps Just Before RTH Open>

<image: Traps Just Before RTH Open>

<image: Traps Just Before RTH Open>

That's right – it's a trap RIGHT BEFORE the regular session open.

See here if you missed the prior articles:

 

Here is the general idea, in both bullish and bearish form:

<image: Traps Just Before RTH Open>

<image: Traps Just Before RTH Open>

Well today we got the second version – a trap through overnight resistance which rapidly fails.

And so we'll be looking for opportunity to enter SHORT.

<image: Traps Just Before RTH Open>

Let's try something different though…

Rather than sharing my trading, I'd like to share a chart from a trader who has recently been making good progress with the YTC Price Action Trader methodology.

Having read the recent "trap before RTH open" articles he's been aware of this opportunity, but hasn't managed to catch one prior to this session.

This time was different.

His email:

Hi Lance,

I hope you've had a great week.

I just wanted to follow up again to say THANK YOU! I've come so far in my trading since I purchased your book back in October. I read all of your Twitter posts and newsletters and the topic that kept standing out was the BOF just before the open and how to trade it. I kept watching it happen and would miss the opportunity to get involved. Consequently, that lead to me trying to find another BOF or TST in the opposite direction of the opening drive, which resulted in small losses that were frustrating. I finally decided that when I see this again, I will get involved on a PB or CPB and if I miss the trade then I miss the trade…put it behind you and move on.

Today I saw a BOF just prior to the open on the NQ (I'm still trading the MNQ). I was ready and I executed without hesitation. In hindsight I could've managed the trade a little better but I'm very happy the process I went through to execute this trade. I have you to thank for this. Please know that your posts and newsletters are more helpful than you can imagine…and I know I'm not the only one who feels that way. I attached my chart and this will definitely be one that I will reference regularly.

Thanks again for all you do…have a great weekend!

Hunter

The "BOF" that he refers to is the YTC Price Action Trader name for the trap. The PB is the first setup short.

Hunter has included the following 30 second chart showing his trade entry and management. If you click on the chart it should open a full-size copy in your browser.

<image: Traps Just Before RTH Open>

Awesome!

Hunter – well done! That is a great trade.

The only thing better than catching a trap before the open, is seeing someone else learn from my prior articles and actually catch one themselves.

Some final words from Hunter:

I really enjoy reading about other traders' experiences and I hope that my experience can help others as well. Just as a reference, in case anyone asks, I use Interactive Brokers for my charts and as my broker. I'm only trading 3 contract lots of the micro futures MNQ, MES, and M2K. I started with 2 contracts and will increase my contract size as I continue to progress. Again, thank you for your encouragement and for all that you do for the trading community. Have a great weekend!

Happy trading,

Lance Beggs