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Improving and Maintaining FOCUS for Day Traders

 

This is not for those who trade longer timeframes. If you trade the 15 minute chart or higher then you should NOT be aiming for constant screen watching all day. Set alarms to monitor price on completion of each trading timeframe candle. And price alerts to bring your attention back to the charts at key levels.

If you trade the 5 minute chart, perhaps you'll want a blend of the two. Alerts when price is well clear of potential setup areas. Screen watching only when there is potential for trade opportunity.

But below 5 minutes, you'll likely want to spend considerable time watching the price movement.

And for you, it's important that you develop a plan to achieve peak-performance levels of focus.

<image: FOCUS>

Photo by Stefan Cosma on Unsplash

Here are my thoughts:

Let's start by reviewing one of the key ideas in the article on discipline.

Read it here if you missed it: http://yourtradingcoach.com/trader/how-can-i-get-more-discipline/

In that article, I suggested that you can't "get more discipline". Discipline is actually an outcome. And it comes about through effective HABITS and STATE MANAGEMENT.

The same applies when we think about focus.

Focus is not something you can just get more of. Again, it's an outcome. And it comes about through HABITS and STATE MANAGEMENT.

We aim for habitual use of processes in our pre-session, during session and post-session routines, in order to establish a focused state. And to return quickly to the focused state if our mind should start to wander.

And we aim to place our body, mind and soul in as much of a peak-performance state as we can, in order to best maintain effective levels of presence, awareness and FOCUS.

So let's split this article into two parts, turning the idea of "focus" into a daily habit, and then ensuring effective state management.

Here's my plan:

Habits

1. The Power of Intention

There is nothing I've found more powerful in kick-starting my daily habit and ensuring disciplined focus than the power of intention.

This is a documented part of my pre-session routine.

It is simply a verbal statement of intent that "Today I WILL focus on the charts. I will not allow myself to open my browser for any non-trading purpose".

That is obviously set up for my most common distracter. "I'll just have a quick look at email and social media."

Adjust the statement to suit your own needs. But be sure to give it a try.

I can confirm through having monitored this as part of my review process, that days which begin with a verbal statement of intent are typically more focused than days when I did not make the statement of intent.

2. My Focus Statement

This is used during the session, whenever I have caught my attention wandering.

Here it is via a recent share on social media:

<image: FOCUS>

3. Regular Checks

Every 30 minutes I check my personal state. This includes an assessment on how effective I was in maintaining focus.

If particularly good or bad, I'll jot down some notes.

These then feed into the post-session review.

And if poorly focused, it's back to the statement of intent and the focus statement (above). 

4. The Focus Alarm

I don't always use a focus alarm. I find if used continuously that it tends to just disappear into the "background" after a while.

But from time to time, in particular if slightly fatigued, it has helped.

It's simply an alarm that goes off on the close of EVERY trading timeframe candle. It sounds a bit extreme. But it works. You can of course set it for longer if you prefer. Or shorter.

But it acts as a "wake up" to not only shock me back into focus if I've slipped away again, but also allowing me to "update" my market analysis with this new candle information.

I use SnapTimer, but there are dozens online if you don't like it.

5. Post-Session Review

The 30 minute notes on your ability to maintain focus are pointless if you don't review them.

So post-session… review them.

And then, if you were not particularly effective, aim to identify why and find a way to improve tomorrow.

State Management

1. Eliminate Distraction

Your mind cannot be focused if it's surrounded by multiple temptations or distractions.

The mind is NOT a multi-tasker.

Remove all distractions – social media, internet, phones, pets, kids, and whatever else acts to take your attention away from the charts.

For web browsers, you can find apps which block access to them during preset times each day. Keep one browser available though (not the one you usually use for surfing). If your platform goes down or you get other tech issues, you're going to want some way of getting online quickly.

2. Adequate Rest

Set a minimum standard for rest. And stick to it.

See here for mine – http://yourtradingcoach.com/trader/trader-fatigue-management/

3. Adequate Hydration

There's a water bottle just off to my right. Always accessible.

Essential.

Get one for your trading room if you don't have one.

4. Physical Health

This kind of goes without saying. If you struggle with focus, exercise better and eat better. Simple!

You will notice improvement in all areas of your life.

5. Relaxation processes

I have regular breathing routines from back in my Tai Chi & Chi Gung days.

If you don't, Google search it.

Find some exercises to relax the mind, body and soul.

6. Stimulants

Coffee pre-session. To be honest I'm not sure on the science of this one. It is effective for me, given the night hours I trade. But not too much. One a half-hour before trading seems to help me. Give it a try.

I have a glucose lolly pre-session. And then a second during the session if I feel a bit flat. See here – http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-from-decision-fatigue.html?pagewanted=all

I've heard chocolate helps. But maybe I'm making that one up because, you know, chocolate!   🙂

I've heard blueberries are good for a sharp mind. Give that a try if you're not a fan of chocolate. (Send me your chocolate!)

Chewing gum, while not exactly a stimulant, seems to work well in dissipating any nervous energy that can act as a distraction.

7. Regular Breaks

Always aim to spend a few minutes every half hour AWAY FROM THE DESK.

Get up. Stretch. Go for a walk. Whatever you need.

Just get away from the charts to reset your mind.

8. Regular Exercise

Consider incorporating this into your breaks.

Nothing gives you a "wake up" quite as effectively as a short, sharp burst of exercise.

9. Background Music

Nothing with lyrics. EVER.

But experiment with background ambient music, binaural beats or isochronous tones. Or whatever works the best for you.

It's a process of trial and error. Add this to your post-session review until you find a number of preferred solutions.

10. Standing Desks

I don't have one right now due to the current layout of my trading room. But I've used this in the past to great effect.

Seriously, it works incredibly well.

Raise your desk. And stand back a bit, out of arms reach of the keyboard and mouse.

Step forward ONLY when it's trade time.

It's just you and the charts. Absolutely NO WAY to click on that web browser, even if you wanted to.

If Nothing Else Works

I've yet to see a trader try this but it looks like it has potential.

– – –

Well that just about wraps it up.

What have I missed?

If you have any tips or techniques which you've found effective for improving or maintaining focus, let us know in the blog post comments.

Best of luck,

Lance Beggs

 


 

TTF Narrow Range Bar Entry

 

Let's say we have a market with a clear bearish bias.

Price then pulls back higher and reaches an area in which I'd be happy to enter a SHORT position.

Two of the key things I'm looking for are:

  1. Signs that the bulls have exhausted everything they've got.
  2. Signs that the late bulls, entering late in the pullback rally, will be under maximum stress and likely to give up on their trade.

 

<image: TTF Narrow Range Bar Entry>

One of the ways I love to see this play out is through a Trading Timeframe (TTF) Narrow Range Bar.

Let's see one in play…

<image: TTF Narrow Range Bar Entry>

Let's zoom in a little to see how the pullback develops…

<image: TTF Narrow Range Bar Entry>

<image: TTF Narrow Range Bar Entry>

<image: TTF Narrow Range Bar Entry>

<image: TTF Narrow Range Bar Entry>

<image: TTF Narrow Range Bar Entry>

<image: TTF Narrow Range Bar Entry>

Please note that I am NOT advocating buying or selling the break of every TTF Narrow Range bar.

The trade must be in a proper setup location, where follow through in your trade direction makes sense with regards to the structure of the market.

The trade must offer good reward:risk parameters. The Narrow Range bar entry will ensure low risk. The market structure though, MUST provide multiple-R opportunity.

While trading and waiting for lower timeframe price confirmation… make sure to also keep an eye on the TTF. It may just be proving an inability to move further into your setup area, offering you a nice low risk entry into your trade.

Happy trading,

Lance Beggs

 

PS. For more examples of this TTF Narrow Range Bar entry concept:

 


 

Seeking Entry on the Wholesale Side of the Market Structure

 

I absolutely LOVE IT when people send me charts and emails full of excitement at new discoveries or new ways of "seeing" the price movement.

I received one last week that I just had to share.

It's such a great example of seeking entry on the wholesale side of the market structure. I love it.

An email came from G.N. with the following chart. Of interest was the upthrust pattern allowing entry short, in line with the ideas discussed in prior articles – Professionals Traded Here and Confirmation is Risk.

(Note: The image here is compressed to fit the page. If you click on the image it will open an original-size image in your browser. Or refer to GBP/USD on the 2nd November, 1 min chart, if you wish to look at your own charting platform.)

<image: Seeking Entry on the Wholesale Side of the Market Structure>

Actually, let's zoom in a little to identify the upthrust area.

<image: Seeking Entry on the Wholesale Side of the Market Structure>

So here is what I ABSOLUTELY LOVED about receiving this image and email from GN:

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

This chart provides an awesome example of entry on the wholesale side of the market structure. Here's what I love about this particular trade idea:

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

<image: Seeking Entry on the Wholesale Side of the Market Structure>

Just beautiful!

It's been one of my favourite concepts for years.

The idea of watching breakouts against market bias for failure. And using that to trigger entry back in the direction of the original market bias.

Keep an eye out for it in your markets and your timeframes.

Happy trading,

Lance Beggs

 


 

Caught on the Wrong Side of the HTF Trap

 

Last week we profited from recognising and exploiting a Higher Timeframe (HTF) trap. Check it out here if you missed it – http://yourtradingcoach.com/trading-process-and-strategy/higher-timeframe-trap-everyone-long-above-this-level-is-wrong/

This week, let's look at the other side of traps.

The fact that sometimes… the trapper becomes trapped.

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

<image: Caught on the Wrong Side of the HTF Trap>

Repeating for effect:

  • You don't always get it right.
  • Sometimes you're "the other trader" that's caught in the trap.
  • The key to surviving and minimising damage is in quickly recognising when price movement is NOT behaving as it should if the premise is correct.
  • Recognise and adapt.

Happy trading,

Lance Beggs

 


 

Higher Timeframe Trap – Everyone Long Above This Level is WRONG!

 

Most of the traps I trade come from the Trading Timeframe or Lower Timeframe charts.

I don't watch the higher timeframe for traps.

However, I do see them from time to time. And they can provide some nice trading opportunity.

<image: Higher Timeframe Trap>

Ok, "wrong" is probably a poor choice of word. The reality is that we don't know their strategy and their timeframe.

But let's just say that they're in a drawdown.

And if they're operating on similar timeframes to us, their position is NOT looking good.

They'll likely be under a significant amount of stress. And probably hoping, wishing and praying for some way to get out of the position closer to breakeven.

Let's drop down to the Trading Timeframe chart to see where we currently stand.

<image: Higher Timeframe Trap>

<image: Higher Timeframe Trap>

<image: Higher Timeframe Trap>

<image: Higher Timeframe Trap>

From a Trading Timeframe perspective, this was simply a BPB of a sideways range boundary.

But from a wider context perspective, it was also triggering a trap on the higher timeframe chart. Those betting on a gap-open continuation higher suddenly found their trade premise threatened.

And this makes our range breakout SHORT just a whole lot sweeter.

It pays to always be asking, "Is anyone trapped?"

And while our focus should primarily be on the Trading Timeframe chart, we should ensure our scan also extends to the Higher Timeframe chart. At least once per new higher timeframe candle.

Maintain a feel for context. Where is the current price action occurring within the higher timeframe structure? Sometimes this wider situational awareness will keep you out of a bad trade. Other times, as here, it can add additional fuel to our trade idea.

Always be asking, "Is anyone trapped?"

Happy trading,

Lance Beggs

 


 

Stop – Pause to Reassess – Reverse

 

I get asked from time to time whether I ever "stop and reverse" a trade.

That is, enter SHORT when stopped out of a LONG position. Or enter LONG when stopped out of a SHORT position.

The reality is that I don't do that often.

The failure of one trade is usually NOT an indication of potential in the opposite direction.

The only time there may be potential is when the CONTEXT suggests the new trade is a valid trade in its own right. So the trade validity has little (or nothing) to do with the failed trade preceding it.

For example, if I'm fading a strongly directional market and recognise that I'm wrong, then I might use the stop to reverse to a with-trend trade. In this case, the with-trend trade is a completely valid trade in its own right. It's a with-trend trade I'd be happy to take, even had I not taken the earlier counter-trend trade.

But as I said, I don't tend to do this often. It's not always easy to shift bias so quickly.

There is however a closely related trade, which is a little more common.

It's more of a "Stop – Pause to Reassess – Reverse".

A common place for these is a key level of some kind, such as an S/R level or range boundary, where we might be assessing two potential opposite biases through either a breakout failure or breakout pullback.

Let's look at one example:

<image: Stop - Pause to Reassess - Reverse>

<image: Stop - Pause to Reassess - Reverse>

<image: Stop - Pause to Reassess - Reverse>

<image: Stop - Pause to Reassess - Reverse>

<image: Stop - Pause to Reassess - Reverse>

<image: Stop - Pause to Reassess - Reverse>

<image: Stop - Pause to Reassess - Reverse>

 

Key points:

1. Failure of one trade does not imply potential in the opposite direction, unless the context suggests the new trade is a valid trade in its own right.

2. A stop and reverse does not need to happen at the same time. Often a better option is "Stop – Pause to Reassess – Reverse". Give yourself an opportunity to reassess the situation with a clear mind, as a result of having no exposure to the market.

Happy trading,

Lance Beggs

 


 

3 Methods to Manage a Negative Expectancy Setup

 

Let's start by assuming that you are tracking your trade results and compiling stats to drive further growth and development. (See here if you're not!)

What do you do when you discover one part of your trading plan consistently underperforming?

It might be one particular setup.

It might be one particular type of market environment.

Or it might be any other subset of your trading plan which you're tracking through your spreadsheet.

Either way, that subset of data is providing a negative expectancy and damaging your overall edge.

You need to take action.

Common advice is to just drop that part of your trading. But it's not the only option.

In general risk management theory there are five methods for dealing with negative risk.

<image: 3 Methods to Manage a Negative Expectancy Setup>

Let's scrap the last two as they're not really appropriate to our situation.

Option 5, accepting the risk, is not a solution. It's negatively impacting your edge. Even if this is more than adequately overcome by the remainder of your trading, this is not something we're willing to accept.

And option 4, transferring the risk, would be something like trading other people's money. Again, not applicable in this case, as it doesn't really solve our problem.

So that leaves us with three options.

<image: 3 Methods to Manage a Negative Expectancy Setup>

 

Option 1, avoid the risk, is the common advice.

Just stop doing it.

<image: 3 Methods to Manage a Negative Expectancy Setup>

Simple. And effective.

Avoid the risk entirely by just avoiding these sequences.

But it's not the only option.And often we just "know" there is potential within that negative expectancy performance. Somewhere. We just have to find it.

So let's look for additional options.

Option 2 allows us to continue trading these sequences, but not all of them. 

<image: 3 Methods to Manage a Negative Expectancy Setup>

We still want to trade. But we don't want to trade them all. So let's see if we can filter out the marginal trades, leaving only those A+ trade opportunities.

Dig deep within the stats and data for this setup. There may well be certain conditions which provide a positive expectancy.

This will allow you to continue trading live, but with a smaller frequency. Only trading this setup when these specific conditions are met.

Or if you are absolutely sure that you can develop skill over time, to take your negative expectancy performance into positive expectancy territory, then option 3 might best suit your needs.

Option 3 allows you to continue to trade as before, but in a way that is much safer and has less negative impact upon your edge.

<image: 3 Methods to Manage a Negative Expectancy Setup>

The extreme case here would be to trade these sequences in sim mode, rather than with live funds. Track your sim results separate to your live results.

But you might also prefer to simply cut position sizes. Markets such as spot forex offer significant flexibility here, with the ability to trade right down to the micro-lot level.

Positive edge sequences can continue to be traded at normal size. Those sequences which are currently showing a negative edge should be traded at reduced size.

An example:

Through tracking your stats you find that you "mostly" have a positive edge in your trading.

Except in one particular market environment, in which you find yourself repeatedly trying to fade the market.

It's one of those situations where you get it right often enough to sense you have potential in this environment. But get it wrong often as well and end up taking a positive session to your daily drawdown limit.

The end result with these sequences is a negative expectancy over time.

NOT COOL.

Here's an example of what we're dealing with. In this case, a strong and persistent trend with low volatility (small, shallow pullbacks).

<image: 3 Methods to Manage a Negative Expectancy Setup>

Let's examine the three options:

<image: 3 Methods to Manage a Negative Expectancy Setup>

 

Option 1: Avoid the risk

Simple.

Determine clear and objective rules to confirm this type of trending environment.

And when that triggers, either:

(a) Limit trading to the with-trend direction only.  (Duh! Seems like the obvious solution, right!)

or

(b) If there is some reason why you prefer not to trade with-trend, then stand aside.

 

Option 2: Reduce the Frequency of Occurrence

Dig into your stats. Examine all occurrences of counter-trend trading within a strong, persistent, low-volatility trend.

Is there a subset of trades within this data which DOES offer a positive edge?

Second chance entries perhaps?

Trap entries?

Entries which involve size traded at the extreme high?

There may be nothing there. But if there is, FIND IT.

Determine clear and objective rules to confirm this type of trending environment.

And then only trade the positive expectancy subset. Of course, continuing to track results to confirm this positive expectancy continues into the future.

 

Option 3: Reduce the Severity of Occurrence

You believe there is potential with these trades. You don't want to trade them on sim, because you feel you need some "skin in the game".

Fine.

Keep trading.

Determine clear and objective rules to confirm this type of trending environment.

And cut the position size to a fraction of your normal size.

Continue to track results and work to improve over time.

Option 1 is of course the simplest. And it provides a very quick solution. But it's not the only option. In discussion with traders who are fighting against a negative expectancy setup or environment, I find they're often unwilling to give it up. That's fine. There are other options. Dig deeper to find a more highly selective setup, which does offer a positive edge. Or cut size and continue to "more safely" build skill and expertise.

Best of luck,

Lance Beggs

 


 

EDIT: From a discussion with another trader on twitter it appears I did not make the following point clear enough. The intent of reducing size (option 3) is to allow you to continue trading more safely WHILE determining why it’s a negative expectancy and turning that around to positive. There is no point just reducing size if you do no further work on attempting to correct the issue. Simply reducing size on a negative expectancy setup will still provide a negative expectancy, albeit smaller. You MUST continue to study the problem. Identify the cause. And correct it. Then work to slowly and incrementally increase size again, as success is proven at each level. The problem may be contextual. It may be an execution issue. Whatever it is, reduce size so that any negative edge can be easily absorbed within your other results, and then work to fix the problem.

 


 

Two Attempts – Then Reassess (2)

 

The quicker you can recognise that you're wrong… the quicker you can become right.

Here is a useful rule:

  • Two Attempts – Then Reassess!

After two attempts at a trade idea, if it hasn’t worked, it’s clear that something is not right. You’re not in sync with the market.

Either:

  • You have misread the situation and you're wrong, or
  • Your timing is out (which still means you're wrong).

 

Break the pattern!

Two Attempts – Then Reassess!

Confirm your position is flat.

Step away from the charts.

Clear your mind.

Then reassess from first principles.

Try to see the picture from the perspective of someone who might have the opposite bias to you. What are they seeing? Could they be right?

You may choose to get back in for a further trade (assuming session drawdown limits are not hit).

But you may also have prevented a meltdown; stopping a good trade idea which didn’t work from turning into an absolute mess of a session.

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

<Image: Two Attempts - Then Reassess>

 

The quicker you can recognise that you're wrong… the quicker you can become right.

Here is your rule:

  • Two Attempts – Then Reassess!

Happy trading,

Lance Beggs

 

Previous Article: http://yourtradingcoach.com/trading-process-and-strategy/two-attempts-then-reassess/

 


 

Is This a Trade You Would Take if You Were in Drawdown?

 

Some of my better trades lately seem to occur after a string of marginal trades which either stop out or seriously underperform.

Mostly because of my rule which says that after two poor trades I need to step aside, clear my mind and reassess the situation.

Time out!

Reassess!

It prevents a downward spiral of emotional revenge trading.

And allows me to return to the market with a new plan. Usually, a plan which waits for a change of structure and takes the first pullback opportunity within that new market regime.

<image: Two trades placing me in drawdown.>

<image: Time out. Reassess.>

<image: Consider the options when price breaks current structure.>

<image: Entry>

<image: Exit>

So this brings me to an idea that may help me cut out some of the more marginal trades.

And perhaps may help you with improving your trade quality as well.

Rather than waiting for two marginal trades to place me in drawdown, maybe I could trade "AS IF" I were already in that situation.

Prior to entry, ask:

  • "Is this a trade I would take if I were in drawdown?"

 

If so, go for it.

But if not, maybe pause and reassess.

Sometimes it will keep you out of a winner. That's how this game of probabilities works.

But if it's keeping you out of a number of marginal trades then there could well be a positive change to your edge.

If the idea appeals to you, give it a try. But track the impact it has on your edge over a series of "avoided trades".

Prior to entry, ask:

  • "Is this a trade I would take if I were in drawdown?"

 

<image: This IS a trade I'd take in drawdown.>

Happy trading,

Lance Beggs