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.

Don’t Overcomplicate Things – 2

 

Just over a month ago we discussed the fact that the majority of my trades lately seem to fit within one of two broad categories.

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

(For those with the YTC Price Action Trader, the first category will include all variations of PB, CPB and BPB trades. The second category will include all variations of TST, BOF and any "reversion to the mean" scalp against an existing trend. For the second category, note that I will rarely be entering against strength. Look within the TTF/LTF to see weakness late in the over-extension, or on a subsequent retest. But the whole sequence should be over-extended.)

The prior article offered an example of of the first type of trade. If you missed that article, you can find it here – http://yourtradingcoach.com/trading-process-and-strategy/dont-overcomplicate-things-1/

In the week's since then we have focused on something different. A series of three articles showing breakout failure trades – here, here and here.

The focus of these articles was on using the lower timeframe chart to confirm a lack of buying interest after the break. And for timing the entry at the point where we feel any later buyers have completely given up all hope of their trade working.

But there is another VERY important point from these three breakout failure trades, that I think we need to discuss. You may have noticed it. I HOPE you noticed it.

But just in case you didn't…

  • They all look much the same.

 

They all fit (perhaps loosely) into the broad description for the second type of trade.

<image: Don't Overcomplicate Things>

Let's examine all three from this perspective.

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

Don't overcomplicate things.

Keep in mind a visualisation (or a series of visualisations) which broadly capture the vast majority of your trades.

It can help provide confirmation of the trade idea as it's setting up.

And more importantly, confidence in execution.

Happy trading,

Lance Beggs

 


 

Watch Post-Breakout Behaviour – 3

 

This is what I like to see in a breakout…

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

This is a prime target for a breakout failure.

But I don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, I watch post-breakout behaviour and CONFIRM that there are no signs of strength.

<image: Watch Post-Breakout Behaviour> 

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

Don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, watch post-breakout behaviour and CONFIRM that there are no signs of strength.

Happy trading,

Lance Beggs

 


 

Watch Post-Breakout Behaviour – 2

 

This is what I like to see in a breakout…

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

This is a prime target for a breakout failure.

But I don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, I watch post-breakout behaviour and CONFIRM that there are no signs of strength.

<image: Watch Post-Breakout Behaviour> 

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

Don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, watch post-breakout behaviour and CONFIRM that there are no signs of strength.

Happy trading, 

Lance Beggs

 


 

Watch Post-Breakout Behaviour – 1

 

This is what I like to see in a breakout…

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

This is a prime target for a breakout failure.

But I don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, I watch post-breakout behaviour and CONFIRM that there are no signs of strength.

<image: Watch Post-Breakout Behaviour> 

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

Don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, watch post-breakout behaviour and CONFIRM that there are no signs of strength.

Happy trading,

Lance Beggs

 


 

Don’t Overcomplicate Things – 1

 

The vast majority of my trades lately, maybe 95%, fit within one of two broad categories.

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

(For those with the YTC Price Action Trader, the first category will include all variations of PB, CPB and BPB trades. The second category will include all variations of TST, BOF and any "reversion to the mean" scalp against an existing trend. For the second category, note that I will rarely be entering against strength. Look within the TTF/LTF to see weakness late in the over-extension, or on a subsequent retest. But the whole sequence should be over-extended.)

Let's look at an example and see how it fits within one of these categories.

Today… category 1 (the bearish version).

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

 

Let me highlight two key points.

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

Happy trading,

Lance Beggs

PS. On Tuesday I posted a repeat of an old 2015 Facebook post. You can see it here. Note the similarity in concept. Don't overcomplicate things. Simpler is better.

 


 

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