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It’s Game On! Let’s Trade!

 

I operate with three general levels of engagement – Trading, Trade with Caution, and Stand Aside.

Because not all conditions in the market are the same.

If you haven't done so, I highly recommend adopting a similar practice. Take some time to consider the factors that might trigger each level of engagement in your own trading business.

Today let's look at three factors which had me in "Trading" mode right at the market open. No delays. No hesitation.

With these three factors in play, I wanted to be in the first opportunity I could find.

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

A gap open, from a strong and persistent overnight uptrend, with a recent trap showing an inability to drop.

There is emotion in the market.

And I want to trade.

(See here for prior articles on traps just before the open – here and here).

<image: It's Game On! Let's Trade!>

(NB. YTC Price Action Trader concepts – The First Principle is in play, PB setup)

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

I don't want to trade all market opens.

There are many that I classify as "Trade with Caution". Think of the opposite of today's example – a market opening in the middle of the prior day's range, following a dull and lifeless sideways overnight session. There is no emotion driving the market. And so I have no business in taking a position until something changes. Wait patiently. Let the opening structure form (5 minutes, 15 minutes, 30 minutes… or as long as it takes). And then trade off that structure.

But there are other days when I don't want to wait. Market sentiment appears to be strong and potentially one-sided. This is not a time to wait. This is not a time to "Trade with Caution".

Today was not one for waiting. It's game on. Let's trade.

Again, if you haven't done so, I highly recommend adopting a similar practice of classifying three general levels of engagement – Trading, Trade with Caution, and Stand Aside.

Take some time to consider the factors which might trigger each level of engagement in your own trading business.

Happy trading,

Lance Beggs

 


 

Overnight Range Double Break

 

There were three NQ sessions in the last two weeks which broke both sides of the overnight range. Let's check them out.

The following are all Higher Timeframe 15 minute charts. I chose this timeframe simply because it fits on the image quite nicely. Whatever higher timeframe you use, is fine. The concept here is the same.

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

<image: Overnight Range Double Break>

Does this always happen?

No.

Does this mean that when it does happen that the trend always will be smooth and easy to trade?

No.

But you can bet your whole account on the fact that when it does happen, I'll be prepared, focused and ready to exploit any trend that does develop.

YTC Price Action Trader with-trend setups ONLY.

Until the market proves otherwise.

Have a look through some of the charts in your own markets and see if you can identify a similar feature. Forex traders will want to use a break of both sides of a narrow range Asian session.

Happy trading,

Lance Beggs

 


 

Managing Trading Decisions with Simple Compliance Checks

 

I want to share a simple process used by a reader in addressing a recurring problem in his trading. I was happy to see him use this approach, because it references a post-session technique I shared quite a few years back.

And perhaps it will be useful to you as well, in ensuring compliance with any changes you wish to make to your trading.

Problem:

With-Trend (WT) trades were providing positive stats but he was consistently giving too much back through his Counter-Trend (CT) trades. The CT trades show some promise so he's not quite willing to abandon them entirely. But he wants to cut back on the number.

So here's the plan:

(a) No CT trades unless the daily P&L is positive.

(b) Aim to ensure that there are more WT trades than CT trades.

The plan for this month is to ensure 100% compliance. Item (a) will avoid his tendency to dig himself into a hole occasionally in fading a trending market. And item (b) will ensure that he is trading (more often than not) in the direction that "should" offer the most opportunity.

One month only. Then reassess.

In particular item (b) because he does recognise that some days are quite rotational and may be better suited to CT trading.

But that's for the future. For this month, 100% compliance. And let's see if that provides improvement to the trading results.

Implementation:

Pre-Session:

  • Reading the plan and making a verbal declaration of intent to comply with both items.

 

In-Session

  • A single sheet of paper with two columns – WT and CT. Place a checkmark after each trade. The aim is to ensure more checkmarks in the WT column than the CT column.

 

Post-Session

  • Addition of two Compliance Check questions to his post-session routine.
    • (1) Were any CT trades taken with P&L at or below zero? If so, why?
    • (2) Did the WT trades outnumber the CT trades? If not, why not?
  • Marking up a calendar with a large green tick if he complied with both items.

 

The use of the calendar is something we discussed here – http://yourtradingcoach.com/trading-business/dont-break-the-chain-a-simple-tool-to-improve-consistency/. The original discussion aimed to ensure consistency in completing each part of your daily routine. What he is doing differently is using this same technique to ensure compliance with desired changes in his decision making. Effectively, using it as a reward or punishment system to guide and shape changes in the way he trades.

I also love the use of green ticks rather than the red crosses we used in the original article. Green ticks provide a more "positive" reinforcement than red crosses.

At Month End:

  • Review the outcome, ideally achieving both WT and CT profits, but at the very least ensuring that CT losses are somewhat contained and do not completely erode the WT profits.
  • Assess the effectiveness of the plan in making positive changes to the trade results.
  • Continue or amend, as required.

 

It's Your Turn to Take Action:

What trading behaviour do you need to reinforce on a daily basis? Is there something you know you need to change, only to find yourself repeating the old behaviour over and over again?

Consider trying a similar process, as described above. Just for a month.

Pre-Session declaration of intent. In-Session tracking to manage your decision making. Post-Session confirmation of compliance and a visual reward system to track your progress.

See if you can keep those green ticks going for the whole month!

It only adds a couple of minutes to your trading routines. But if it can help to reshape your behaviour away from destructive practices, then the benefits could be priceless.

<image: Managing Trading Decisions with Simple Compliance Checks>

Happy trading,

Lance Beggs

 


 

Do NOT Make the Same Mistake Three Times

 

Ideally, you won't make the same mistake two times.

But it happens.

So here's an idea.

Use that second occurrence as a trigger to INCREASE AWARENESS and FOCUS.

And make absolutely certain that you do NOT make the same mistake a third time.

Clearly there is something wrong with your execution or decision making. Make this a new short-term priority. Two times is enough. Do not accept a third.

And if you do get a third… banish yourself to the Sin Bin for a short while.

<image: Do NOT make the same mistake 3 times>

Let's drop down to the Trading Timeframe chart:

<image: Do NOT make the same mistake 3 times>

Reference: CPB Setup

<image: Do NOT make the same mistake 3 times>

<image: Do NOT make the same mistake 3 times>

<image: Do NOT make the same mistake 3 times>

That's now two mistakes.

It's time to get angry. Time to focus. Time to vow to NOT make the same mistake three times.

<image: Do NOT make the same mistake 3 times>

Reference: BOF and BPB Setups

<image: Do NOT make the same mistake 3 times>

Do NOT make the same mistake three times.

Use the second occurrence as a trigger to INCREASE AWARENESS and FOCUS.

And make absolutely certain that you do NOT make the same mistake a third time.

Happy trading,

Lance Beggs

 


 

Because Sometimes you want to Smash the Damn Keyboard!

 

Yes, sometimes you do want to smash the damn keyboard!

But while it might feel good for a short while, that kind of mindset does little to help your trading.

So let's talk mindset. And specifically, one little tip that can help you quickly get back in the right frame of mind. Focused and ready to trade again.

Let's start with a higher timeframe 30 minute chart to get some bigger picture context…

<image: Overcoming frustration and quickly regaining focus>

So now let's drop to the Trading Timeframe (1 minute chart)…

<image: Overcoming frustration and quickly regaining focus>

<image: Overcoming frustration and quickly regaining focus>

Reference: The YTC Price Action Trader Principles of Future Trend Direction – Vol 2, Ch 3, Section 3.3.3, Page 145-153

<image: Overcoming frustration and quickly regaining focus>

<image: Overcoming frustration and quickly regaining focus>

<image: Overcoming frustration and quickly regaining focus>

<image: Overcoming frustration and quickly regaining focus>

<image: Overcoming frustration and quickly regaining focus>

<image: Overcoming frustration and quickly regaining focus>

You know those times when you just KNOW that you should exit… you just KNOW that the edge is gone… and you ignore it!

They never seem to work, do they!

Ok… I'm not at the "MUST SMASH KEYBOARD" stage.

I've played this game long enough that individual trade results don't worry me.

But I'm no robot. There is still frustration.

Not at the trade. But rather at my pre-session decision of "Hey, you know what I should do. I should work on holding trades longer. I think I've been cutting them too short too often lately!"

Really?

What is with that?

Changes in process are NOT made like this.

I have no doubt that my trade management is somewhat shifting in recent years to shorter holds and more of a "get out, get back in " style. But if I'm doubting that this is the most suitable approach, then any decision to shift back needs to be more than a simple pre-session decision.

It needs planning.

  • Do the stats confirm that a more passive style would provide greater edge? Or not?
  • Under what circumstances should I blindly hold till the target, regardless of any feelings that the edge is gone?
  • And when should I instead trust my intuition and get out?
  • Can I possibly "live test" both options, for comparison purposes over a month or two? Normal trading on NQ, but simultaneously trading on the micro MNQ contracts with a longer hold. Run both in parallel, as best I can, to compare performance over a period of time.

 

So while I'm not quite at the smashing keyboard stage, I am feeling frustrated.

And I promised you a tip on how to quickly get rid of that frustration and return to a more effective mindset.

Here's something I've been using for a little while. And quite liking.

(1) Allow yourself permission to be frustrated. Big time! Let it all out.

(2) But ONLY for the next trading-timeframe candle.

(3) Then it's game on. Back to the charts.

I want you to exaggerate step one. Vent. Curse. Yell. Shout. Let it all out.

But only for the next trading-timeframe candle.

Then it's game on. Back to the charts.

Give it a try. It's actually kind of fun. And perhaps that's why it's effective.

The quality of your upcoming trade decisions depends (to some degree) on the quality of your mindset. Frustration won't help. So let that frustration out. And then get your mind back on the job.

<image: Overcoming frustration and quickly regaining focus>

Happy trading,

Lance Beggs

 


 

Daily Market Structure & Price Action Study – 8

 

See here if you missed the earlier articles – No. 1, No. 2, No. 3, No. 4, No. 5, No. 6, No. 7

The concept:

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.

The following are examples of entries in my Market Structure & Price Action Journal; although tidied up and expanded upon slightly to work in newsletter article & blog format. (The real journal rarely needs more than one image and a small handful of notes.)

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

 

Wednesday, 14th August 2019

We had a day today which trended lower throughout, although never with any great bearish strength. One which just grinded it's way lower. And one which at times "tempted" entry LONG to catch the reversal.

So I thought I should use my MSPA study to find a few "bigger picture" structural signs which should have had me positioned with bearish sentiment throughout the day.

Let's begin with the prior day, Tuesday 13th August 2019.

<image: Daily Market Structure and Price Action Study>

FTC Reference – YTC Price Action Trader Vol 2, Ch 3, P 143

<image: Daily Market Structure and Price Action Study>

<image: Daily Market Structure and Price Action Study>

<image: Daily Market Structure and Price Action Study>

<image: Daily Market Structure and Price Action Study>

Lessons:

  • When the market provides multiple reasons to favour one direction over another, prior to and leading into the session open, the Opening Range can act as a nice "line in the sand" to give you confidence in holding a bias in that direction.

 

Happy trading,

Lance Beggs

 


 

Daily Market Structure & Price Action Study – 7

 

See here if you missed the earlier articles – No. 1, No. 2, No. 3, No. 4, No. 5, No. 6

The concept:

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.

The following are examples of entries in my Market Structure & Price Action Journal; although tidied up and expanded upon slightly to work in newsletter article & blog format. (The real journal rarely needs more than one image and a small handful of notes.)

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

 

Tuesday, 13th August 2019:

What a day this was. Or at least, what a day it started out as!

The opening drive was the feature of two social media posts. I'll copy them here if you missed them.

Post one:

<image: Opening drive post one>

And post two:

<image: Opening drive post one> 

I'm off track though. The opening drive was NOT the focus of my Market Structure & Price Action (MSPA) Journal.

Trades journal – yes.

Post session review – yes.

Because I underperformed.

But for the MSPA study, I found this interesting…

<image: Daily Market Structure and Price Action Study> 

A break of the initial balance area (opening hour) is a high probability occurrence. But despite all of that initial momentum, price could not continue.

Not even just up to retest the initial balance high. 

I was reminded of a previous MSPA entry from 30th of July, which was also shared via social media.

<image: Strong Opening Drives do not always continue> 

So the lesson today was simply a reminder of a pre-existing one. The fact that no matter how strong we see the market moving at the open, this is no guarantee of a trend day.

Sure, it might be. And we act as if it will be until proven otherwise.

But like all market analysis, we need to recognise that at best we're dealing with probabilities.

There is great danger in holding onto a belief in the state of the market, as if it's a certain thing.

Assess the state of the market. Act in accordance with that view. But don't trust it to hold forever.

Lessons:

  • Remain flexible in mindset at all times. There is no certainty. Nothing lasts forever in the markets. And when it changes, it can happen rapidly.
  • A strong opening drive is not always guaranteed to lead to a trend day.

 

Happy trading,

Lance Beggs

 


 

Daily Market Structure & Price Action Study – 6

 

See here if you missed the earlier articles – No. 1, No. 2, No. 3, No. 4, No. 5

The concept:

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.

The following are examples of entries in my Market Structure & Price Action Journal; although tidied up and expanded upon slightly to work in newsletter article & blog format. (The real journal rarely needs more than one image and a small handful of notes.)

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

 

Monday, 12th August 2019:

This was a difficult session. Choppy action. Narrow range (compared to recent sessions).

Definitely a session where you wish you just took a day off.

Of course, there's no way to know that till after the fact.

What is important though is accepting that such days are a normal part of the game. And in quickly recognising any potential for unfavourable conditions.

The sooner you can recognise potential danger, the sooner you can respond and adapt.

This doesn't always mean shutting down for the day. It may well be an option. But more often than not, it's just a warning to slow down a little. Step back and be patient. Wait for the easier opportunity perhaps at the edges of the structure. Don't jump into marginal opportunity just because you "want to" trade.

So that was the focus of today's entry into my Market Structure & Price Action (MSPA) Journal – What signs were present early in the session, which identified potentially unfavourable conditions?

<image: Daily Market Structure and Price Action Study>

This is one of my go-to, most reliable, signals for potentially dangerous conditions.

If the market sentiment was bullish or bearish then price would expand from the opening region. The fact that it can't, indicates either a lack of interest from both sides of the market, or at least roughly balanced commitment from both bulls and bears. Either way, a sign of potential chop ahead.

This is NOT a signal for no trading. But rather one of caution.

Take it slow. You don't have to trade every move. Wait for something that is screaming out to be traded.

<image: Daily Market Structure and Price Action Study>

One structural feature I hate is the presence of two "levels" within close proximity. Sometimes price gets stuck between the two leading to nothing good, unless you like getting caught in a real chop-fest.

And that's where we found ourselves today.

Opening range at the top. And the overnight low at the bottom.

If market sentiment were indeed bearish then this break should have held. It didn't.

Caution is required.

Again, this is not a "no-trade" signal. Just a warning that we're not likely to have an easy trending environment. Be patient and wait for the right opportunity. Maybe something like getting LONG on the retest of the overnight low!

<image: Daily Market Structure and Price Action Study>

Volatility contraction leads to volatility expansion.

Ok, not always.

But it's a good "rule of thumb" expectation.

So when we find ourselves stuck between the opening range and the overnight low, I was very interested to see the outcome of the break from this area of compression. If that could break the high of day, and hold the break, I'd be much more comfortable.

But no, it's not to be.

Immediate failure. And straight back into the chop zone.

This is a day for extreme caution. 

Lessons:

  • Price stuck at or within the opening range = CAUTION REQUIRED.
  • Price stuck between two levels in close proximity = CAUTION REQUIRED.
  • An inability for a break from volatility contraction to provide any meaningful expansion = CAUTION REQUIRED.

 

Simple!

As mentioned earlier, this daily activity rarely takes more than about 5 minutes. But I feel that it's been an incredibly important part of my own learning and development.

Often there is nothing earth-shattering, although it can happen. Usually after having done this for so long I find it's just reinforcing prior observations and seeing new instances of prior patterns.

All acting to build upon the mental models which I will use in the future to navigate the unfolding landscape.

If you haven't done so already, consider adopting the same habit. Every day – find something interesting in the markets to add to your Market Structure & Price Action (MSPA) Journal.

And as a side-note… consider doing the same with trades as well. Every day – find one A+ trade opportunity, whether you took it or not. Study it. And add charts and notes to your Trades Journal.

Short-term minimal effort. Long-term massive gain!

Happy trading,

Lance Beggs

 


 

What if you Narrowed Your Focus – 2

 

I want to expand upon an important idea which we covered a bit over a year ago (and which I shared on social media again recently).

That is the idea that while learning and developing as a trader, you may find greater value in narrowing your focus and specialising in just one small segment of the daily trading session.

The prior article was here – http://yourtradingcoach.com/trading-process-and-strategy/what-if-you-narrowed-your-focus/

And the suggestion was that rather than fight through 6.5 hours of a full trading session, leaving little time to focus on replay and review, why not try to specialise in just the opening hour.

One hour of trading… during the time when the market most often (but not always) provides the best hourly range.

And then review!

Find the lessons… replay the sequence… and LEARN.

Get profitable on this short sequence of price action. Ignore the rest. You can always add it back later, if you wish.

Now let's expand upon this idea just slightly!

The opening hour is not the only option.

And the fact is that this type of sequence will not suit all traders.

<image: What if you narrowed your focus?>

<image: What if you narrowed your focus?>

If you like fast pace momentum drives and are comfortable with a little more "uncertainty", then perhaps you will love the open like I do. And enjoy the game of getting into sync with this new and evolving daily structure.

But again, this is not the only option.

If you don't find a liking to the pace and uncertainty of the open, then why not just let the opening structure play out. And then trade off that structure.

The opening hour is often referred to as the Initial Balance (IB) area.

Let the IB form. Let the market give you clues as to what type of day we might be in store for. Is it trending? Is it ranging? Is it volatile? Or is it dull and lifeless? Let the market set up some significant levels for you (IB high and low and any in-between).

And then trade off that already-formed structure.

You don't need to specialise in the opening hour. If you find you're not suited to that type of action, maybe you could specialise in trading from 10:30 through till midday?

<image: What if you narrowed your focus?>

<image: What if you narrowed your focus?>

There is no right or wrong.

The opening hour will sometimes offer incredible opportunity. At other times it will provide a real challenge.

The same applies for those trading after the opening hour. At times the structure and opportunity will be clear. Other times it will make for a very hard day at the office.

The point is that they offer different options for the trader who is struggling to gain some consistency. For someone who might benefit from narrowing their focus. And from specialising in a shorter sequence of price action and allowing greater time for replay, review and learning.

Play with both options and see what best fits your needs and your personality.

I like the opening sequences. They're faster. They offer incredible range at times.

But it's not the only option.

However you choose to do this, it's a simple concept.

Narrow your focus. Build expertise in one smaller sequence. And FIGHT to get off that cycle of continual failure.

Go for it! You can do this!

Lance Beggs