Category Archives: Trading Process and Strategy

Trading Process and Strategy – In this category we discuss all aspects of the trading process, including: (a) Technical analysis, (b) Trade Strategy, (c) Identification of trade opportunity, (d) Trade entry, (e) Trade management and exit.

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

 


 

Traps Just Before RTH Open – 2

 

A few months ago we examined the concept of traps occurring in the price action just before, or immediately after, the RTH Open (RTH = Regular Trading Hours).

I'll place links to the prior articles at the bottom of this one, if you want to review them.

Today, let's look at another example of a breakout very late in the pre-session market, just before the RTH Open.

This is something which I absolutely LOVE to see. Because if that breakout fails, then it often sets up quite favourable conditions from the open. And so I'm keen to get a trade on as soon as I can.

No patience. No delays. It's game on!

Here's the general concept:

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

This concept can be applied in any market which offers pre-session trading leading into a clearly defined "regular" day session. Spot forex traders might apply it at the UK open, or the US open.

Today's example set up a break of the overnight high. That is, the same concept as the second image above.

Let's start by looking at a higher timeframe chart, to get some wider context.

<image: Traps just before RTH Open>

And the breakout on the Trading Timeframe chart:

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open> 

I've written a lot about displaying patience at the open. About waiting till the bias is clear and trading conditions are favourable.

But there are some situations where I don't display patience.

Where I'm keen to get a trade on as soon as I can.

No patience. No delays. It's game on!

One of these situations is when the market sets up a trap just before or just after the RTH Open.

Keep an eye out for similar opportunity in your own trading.

Happy trading,

Lance Beggs

 

Prior Articles:

Traps Just Before RTH Open – http://yourtradingcoach.com/trading-process-and-strategy/traps-just-before-rth-open/

Traps At The Open – http://yourtradingcoach.com/trading-process-and-strategy/traps-at-the-open/

Traps At The Open 2 – http://yourtradingcoach.com/trading-process-and-strategy/traps-at-the-open-2/

 


 

Targeting the Overnight High or Low – 2

 

Last week we discussed one of my current favourite plays for the first 30-60 minutes of the session – targeting the overnight high (ONH) or overnight low (ONL).

You can review last week's discussion here.

Just a few hours after sending out that email the market opened again. And the same concept played out once more. Let's check it out.

<image: Targeting the Overnight High or Overnight Low>

<image: Targeting the Overnight High or Overnight Low>

<image: Targeting the Overnight High or Overnight Low>

You don't have to manage your trades like this. It's just the way that makes most sense to me. If there is any threat of a trade moving into negative territory, I prefer to scratch it and reassess, rather than holding and hoping for it to recover.

Sometimes that works to my advantage. Other times it doesn't.

This method of trade management does require you to be completely comfortable with re-entering.

If you're not able to easily re-enter, you'll be better operating with a wider stop and a more passive set & forget style. On this particular day, your trade would have worked out fine.

Back to the trade…

<image: Targeting the Overnight High or Overnight Low>

<image: Targeting the Overnight High or Overnight Low>

As mentioned in the prior article, there is a very high probability that the overnight high or overnight low will be hit at some point during the session.

And a good probability that it will occur within the opening hour of the session.

I could give you stats for the last few months. But I'd rather you find them yourself. You'll learn more this way.

If it interests you, spend some time over the weekend to review the prior two to three months to get an idea of just how high these probabilities are.

And then monitor the concept in coming weeks in your own markets. Perhaps you'll also find the overnight high or overnight low provide nice targets for early trade opportunity.

Please realise though – this is NOT the setup. The concept we're discussing here is simply selection of a high probability target. Take whatever setups you normally take from the open. Manage risk as you normally would, because they won't all work. But when they do work, the fact that the target is backed by some really high probability stats, can make it quite easy to hold.

Sometimes they work really well:

<image: Targeting the Overnight High or Overnight Low>

But occasionally, not so well.

The very next day fails to reach both the ONH and ONL. If you held a trade for either of these targets, it would have fallen well short.

<image: Targeting the Overnight High or Overnight Low>

There are NEVER certainties. No matter how high the probability, some targets will fall on the losing side of the stats. So manage risk, as per normal. And expect a challenge. If it hits the target quickly, as it sometimes will, consider it a bonus.

Happy trading,

Lance Beggs

 


 

Targeting the Overnight High or Low

 

I've become rather fond of targeting either the overnight high (ONH) or overnight low (ONL) during early session trading.

If you're new to this idea, schedule some time to look back at the last few weeks of charts and take note of how many times they hit. For the ten sessions leading up to today's trading, nine sessions have hit either the ONH or ONL. Six of these occurring in the opening 30 minutes of the trading session. Seven within the opening hour.

So not only can we use the ONH/ONL as levels to trade off. But they also offer a price target for PB/CPB trade opportunity early in the session.

Of course, some happen too quickly to offer any opportunity. But otherwise, if the bias is clear and a valid setup is in place with sufficient room to the level, take the trade.

Let's start with a 30 minute chart to get some "bigger picture" context.

<image: Targeting the Overnight High or Low>

Dropping to the 1 minute trading timeframe:

<image: Targeting the Overnight High or Low>

<image: Targeting the Overnight High or Low>

<image: Targeting the Overnight High or Low>

<image: Targeting the Overnight High or Low>

<image: Targeting the Overnight High or Low>

Before you even consider looking for a trade entry, you need a target. You should have some sense of WHERE the market is going.

The ONH and ONL are two levels which I like to use as a price target in the opening 30-60 minutes of a session.

Have a look at recent sessions in your preferred markets. How many times has the market hit the ONH or ONL? How soon within the session?

Perhaps you'll also find they act as good initial price targets for early session trades.

Happy trading,

Lance Beggs

 


 

Choose YOUR Playing Field

 

One of the most obvious changes in my own trading over the last decade is a willingness to take fewer trades.

It used to be that if there was a price swing… I wanted to trade it.

On the plus side this meant that I was there for everything that did move to good profits. But it also meant that I had to suffer through many sequences where the market went nowhere and the best I could hope for was to grind out a breakeven result.

Now, I'm quite content to let the market play without me. If I miss opportunity, so be it.

I don't need to trade everything that moves.

Instead, I aim to stick to the easier sequences. The times in the market that typically have greater range. And the places within the structure that are more likely to offer favourable conditions.

I choose MY playing field. And I play MY game. What the market does outside of this game, is of no concern at all.

Let's start by looking at a Higher Timeframe chart to get some context:

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

You don't have to trade every price sequence.

Choose YOUR playing field.

And make sure you're playing YOUR game, not the markets.

Happy trading,

Lance Beggs

 


 

Higher Quality Breakout Failure Trades

 

One of the aims of your journaling process is to build a collection of near textbook-perfect examples of each of your trade setups.

And from these, develop awareness of the factors which lead to increased odds of success.

Friday, 21st June, offered an absolutely beautiful Breakout Failure setup.

Let's start with a 5 minute chart to get some context:

<image: Higher Quality Breakout Failure Trades>

The important factor that I wish to highlight today is not where the trade occurred.

But rather – how price got there.

One of the key features I like to see, which suggests potentially increased odds of success, is price not only having to travel a long way to reach the level, but to have also STRETCHED to do so.

<image: Higher Quality Breakout Failure Trades>

Looking at the 1 minute chart (my preferred Trading Timeframe in this market):

<image: Higher Quality Breakout Failure Trades>

This is a Breakout Failure that I DO NOT want to miss.

Additional study for those with the YTC Price Action Trader:

<image: Higher Quality Breakout Failure Trades>

<image: Higher Quality Breakout Failure Trades>

<image: Higher Quality Breakout Failure Trades>

Happy trading,

Lance Beggs

 


 

Trend Change Study

 

Do you ever experience the joy that comes from watching a price sequence develop and feeling that it is just technically "beautiful"?

No? Maybe it's just me.

But I do really love this sequence.

And I think it is a good one for those new to the YTC Price Action Trader methodology who might still be getting used to the ideas of strength and weakness analysis.

Sorry for those who don't have the YTC Price Action Trader. This article won't be relevant. We'll get back to usual programming next week!

Here's the price sequence we're going to study:

<image: Trend Change Study>

Click here if you wish to open a larger chart image in your browser. Or right click to download.

Pattern traders call this a Rounded Top.

For me, it's a transition from Uptrend to Sideways Trend (very briefly) and then into Downtrend.

But what makes it great for review is the fact that the whole transition occurs in slow motion, with gradual changes from swing to swing, rather than a sudden and dramatic break of structure.

Price just rolls slowly over from Uptrend… to Sideways… and to Downtrend.

So… study time!

A primary aim in my own personal trading is to get "in sync" with the price movement. This is not just assessing the trend direction as up, down or sideways. But at a deeper level, aligning myself and connecting with the underlying bullish or bearish sentiment within the trend. The result being a strong sense for whether the trend itself is stable, or perhaps weakening, stalling or at risk of reversing.

The aim of this exercise: To start developing these same skills through studying a reversal price sequence, identifying the signs within the swing structure that could have helped you sense the trend weakening and rolling over eventually into a new downtrend.

Please note: (a) Our concern is NOT with how this structure might be traded. Just with keeping yourself aligned with price as it flows. (b) And while we recognise that we're missing the "feel" that comes from watching this occur live, there is still value for new traders in historical chart study. Knowing what to look for is step one. Then we progress to learning to see it unfold in real-time.

Let's go:

1. Examine the price swings as they move from start to finish, using only one single method of strength and weakness analysis at a time.

(a) Momentum slope – bullish swing comparison

(b) Momentum slope – bearish swing comparison

(c) Projection

(d) Depth

Take note of any signs that each method might offer, alerting you to a weakening of the uptrend and gradual rolling over into a downtrend. (Noting of course that not every swing gives clear evidence of change. You're looking for gradual changes across multiple price swings.)

Now let's try to make it a little more realistic…

2. Real analysis, conducted in real-time at the hard right edge of the charts, actually considers all methods of strength and weakness analysis as a whole. So this time, step through the chart swing by swing and let all four methods create a "picture" in your mind. Allow yourself to feel the uptrend weakening, rolling over to the sideways. And then again rolling over to a downtrend.

If you want to review the text first, refer to sections 3.3.1 and 3.3.2 (pages 113 to 144).

If you have a couple of hours to spare you may feel like replaying the sequence (NQ, 3rd June 2019). But for those of us with better things to be doing on the weekend, simply stepping swing by swing through the chart from left to right should provide sufficient learning opportunity.

Happy trading,

Lance Beggs

 


 

Traps at the Open – 2

 

I had no plans to continue the recent article series but the market had different ideas, so here we are!

First, if you missed the prior articles then see here – http://yourtradingcoach.com/trading-process-and-strategy/traps-just-before-rth-open/

And here – http://yourtradingcoach.com/trading-process-and-strategy/traps-at-the-open/

And that brings us to today's sequence…

We'll start with a quick look at the prior day and overnight session, for a bit of "bigger picture" context.

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

I hesitated to show this example, as it's really a very quick and small trap. And a difficult entry based on a very minor lower-timeframe stall.

But sometimes that is all the market offers. And given the potential for a trap at the open to provide a nice momentum drive, it's one that I had to take.

Part of me wonders whether I'd take this entry anyway even if there had not been a trap. I had a bullish bias due to the pre-session action holding above the prior day's range. Plus the fact that I expected some range expansion on the open following a narrow range holiday session.

We'll never know for sure. Perhaps I would have taken it. I suspect not though. The lower timeframe trigger pattern was a little "smaller" and less defined than I would perhaps have liked. It really was the presence of the trap, albeit small, that provided the confidence to go for it.

For me… a trap entry prior to or right on the open is something that will often have me taking the quick early trade. Without that, I prefer to sit and wait. Let any opening congestion clear itself. Let the structure develop. And then trade once I have some clarity regarding the bias and market conditions.

Happy trading,

Lance Beggs

 


 

Traps at the Open

 

Our last article discussed one of the times when I show no patience at the open. One of the times when I'm keen to get a trade on as soon as I can.

No patience. No delays. It's game on!

You can see it here if you missed it – http://yourtradingcoach.com/trading-process-and-strategy/traps-just-before-rth-open/

That article dealt with a trap in the market structure JUST BEFORE the RTH open. (RTH = Regular Trading Hours)

Today let's look at a situation very closely related to that. It's a trap IMMEDIATELY AFTER the RTH open. It's another situation in which I don't wait for the market to establish a clear trend structure.

Here was the concept from last week:

<image: Traps JUST BEFORE the Open>

But what if the open comes… and the market hasn't provided that trap?

<image: Traps JUST AFTER the Open>

That's fine.

If it's a good level, I prepare myself for for a trap anyway in the opening few price bars. If the market is nice enough to offer that, I'll be ready to get in on the first available opportunity.

<image: Traps JUST AFTER the Open>

Let's look at an example…

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

Personal preference – I don't just hit BUY MARKET. I prefer to find a way to better control risk through certain TTF/LTF patterns, as outlined in the YTC Price Action Trader.

If I miss the move, so be it. Let it go. It wasn't mine to catch.

But otherwise, remain patient and watch for a retest of the range highs.

<image: Traps JUST AFTER the Open>

If ever in doubt about the structure of the market, don't rush to trade. There is no hurry. Let the market open and complete the first swing or two. Let the structure develop and then trade once you have some clarity.

But sometimes, when the pre-market sets up just right, there will be opportunity available within that opening sequence.

One of my favourites is a trap in the market structure, setting up just before, or just after the market open.

Keep an eye out for this concept, in your market and your timeframes.

Happy trading,

Lance Beggs

 


 

Traps just before RTH Open

 

I've written a lot about displaying patience at the open. About waiting till the bias is clear and trading conditions are favourable.

But there are some situations where I don't display patience.

Where I'm keen to get a trade on as soon as I can.

No patience. No delays. It's game on!

One of these situations is when the market sets up a trap just before or just after the RTH Open. (RTH = Regular Trading Hours).

Today we'll look at an example which sets up just before the open.

Here's the general concept:

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

This concept can be applied in any market which offers pre-session trading leading into a clearly defined "regular" day session. Spot forex traders might apply it at the UK open, or the US open.

This example set up a break of the overnight low. Here's what I was seeing:

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

(YTC PAT FTC Ref: Vol 2, Ch 3, P143))

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

Happy trading,

Lance Beggs