For Setup Definitions and discussion – see Vol 3, Ch 4, Pages 25-41
For those with the YTC Price Action Trader, you'll note that the entry is exactly at the point I define as the LWP. Refer to Volume 3, Chapter 4, Pages 72-77 for discussion on the LWP concept.
Happy trading,
Lance Beggs
Lesson 1: When two trade ideas fail to work, consider a break. When three trade ideas fail to work, force a break.
Lesson 2: When the pullback is deeper and stronger than expected, let it roll over. Get in on the other side.
Lesson 3: An exit is not necessarily final. Remain focused and consider re-entry if the premise is proven to still be valid.
Happy trading,
Lance Beggs
I seem to average an order entry error maybe once every two months. That's not too bad considering entry is via a single click. But it's something I will continue to work at improving.
In the meantime, it's an opportunity to again present my ideas on how to best manage those times when you somehow find yourself trading in the wrong direction.
Those times when order entry gives way to confusion, as things just don't look right, and then to shock as you realise you're short when you expected to be long (or vice versa).
Common advice is to IMMEDIATELY hit the CLOSE button. Accept any loss (or bonus profit). It's not part of your edge so you have no business trading it. Then try to get back in; this time in the right direction.
If you want to do that – fine. There are no problems with this.
I prefer something a little different. Maybe the idea will appeal to you as well.
The general idea is to use your skill to make a real-time contextual risk management decision. You can do this. Your brain is better at pattern recognition than you realise.
Think of it this way. What percentage of your trade ideas lose?
50%, 40%, 30%?
Whatever it is, there's a reasonable chance that this trade idea could fall on the losing side.
Which means, now that you're trading in the wrong direction, you might actually be able to get a profit.
Low odds perhaps. But you've found yourself in this situation. So why not try to turn it into a positive.
Don't jump straight for the CLOSE button if there is no immediate threat.
Pause. Assess the situation. And allow yourself to make a real-time decision as to whether to close or whether to manage any further risk and opportunity.
Here's the trade idea:
Reference for CPB setup: YTC Price Action Trader Vol 3 Ch 4 P38
Use your skill to make a real-time contextual risk management decision.
Happy trading,
Lance Beggs
The open can be a time of great opportunity. But you need to be prepared.
My default option is to always wait for the Trading Timeframe (TTF) to develop some structure. To wait until the initial trend is clear and obvious.
But there are some times when I'll trade earlier, before the TTF settles into the day's trend.
Like here…
There are generally three situations where I'll take an early trade.
The only way I can catch them is to be prepared. BEFORE THE OPEN!
I will ask some questions:
(1) Is there some exceptional pre-session structure to trade off?
(2) If price drives strongly, will it be driving into clear space that offers good potential for continuation?
(3) If price offers a trap immediately after the open, would the structure offer a multiple-R potential?
If none of these three questions suggest good trade opportunity, then I will happily sit back and relax until there is some structure in play.
But if the answer to any of these questions is YES, then I will pre-consider how the price action will need to set up. And I will prepare myself for potential opportunity very quickly after the open.
Today I will remain alert and ready for a possible trap opportunity.
See here for more on PB Setups.
(1) Is there some exceptional pre-session structure to trade off?
(2) If price drives strongly, will it be driving into clear space that offers good potential for continuation?
(3) If price offers a trap immediately after the open, would the structure offer a multiple-R potential?
If the answer to any of these is YES, then pre-consider how the price action will need to set up. You might just find some opportunity very quickly after the open.
But if the answer to all three is NO, then sit back and relax. Let the open play out and wait until some new structure develops.
Happy trading,
Lance Beggs
Until you have a good read of the market, there is NO TRADE.
And most importantly:
In simpler language… if you don't know what's going on… you have no business trading.
Watch and wait until some clarity appears, in terms of structure, price movement and opportunity.
The market open is one time which has great potential for confusion, doubt and uncertainty.
I remind myself before the open that there is no need to rush the first trade. If it screams out to be taken, then take it. But otherwise, be patient and allow myself time to get in sync with the flow of price.
Here are two of the market opening "warning signs" that have me keeping my trigger finger well clear of the mouse.
1. Bias Conflict
During the session I maintain a sense of the bias through the YTC Price Action Trader rules for trend projection.
At the session open though, I like to complement this with a really simple and objective method – the opening range breakout.
If they're in agreement, it's game on.
But if they conflict, it's a sign to be patient and wait till they come into alignment.
2. Seriously BAD LOOKING Price Action
Not just bad looking price action. We're talking seriously bad looking price action.
Remain Patient. Watch and Wait.
Happy trading,
Lance Beggs
Let's continue with an old article series – the metagame – trading AGAINST other traders who find themselves on the wrong side of the market.
Because…
If I can't feel someone on the other side of the market getting it really wrong, there is no trade.
You can see the prior articles here if you missed them – One – Two – Three – Four – Five.
Here is the general concept for today's trade…
In playing the metagame, we aim to place ourselves in the mindset of any trader who bought late in the move, at or soon after the breakout. Feel their stress build as price stalls. And stalls. And stalls. Feel their pain as their "sure thing" collapses back below the stall region. And find a way to profit from their pain.
Yes, trading is a predatory game!
Let's see some charts.
We'll be seeking BOF Setup opportunity at this point here:
The key part I want to emphasise today is the following:
Let's play the metagame and put ourselves in the mindset of those who entered LONG on the breakout.
Trading the metagame…
If I can't feel someone on the other side of the market getting it really wrong, there is no trade.
Let someone trap themselves in a low-probability position.
Place yourself into their mindset.
Feel their pain.
And when it gets to the point where they've lost all hope, STRIKE.
Go get 'em,
Lance Beggs
See here if you're not familiar with the BOF Setup, why it works and how to trade it.
Happy trading,
Lance Beggs
This is what I like to see in a breakout…
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.
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
This is what I like to see in a breakout…
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.
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
This is what I like to see in a breakout…
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.
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