Tag Archives: Entry

Higher Quality Breakout Failure Trades

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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

 

 

The Hardest Trade

Posted in: Trader | , by
10 comments

 

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

What do we do here?

Well there's not a lot we can do. It's missed opportunity.

And yes, I know that with hindsight we can look at the lower timeframes and find ways we "could" have got in. But we're not hindsight traders!

It's missed opportunity. It's gone. And our job is now to get on with the business of being a trader.

We've covered this scenario before.

See here for example, where we discussed an effective mindset hack through affirming – "It was never mine to take. If it was, I would have taken it. Let it go!"

So I did this.

I let it go.

I took a quick walk and cleared my head. And came back to the screens.

But let's be realistic here.

This next trade… is NOT going to be easy.

The first trade after missed opportunity can be one of the hardest trades.

The last thing I want to do is get smashed twice. Following up the missed opportunity with a losing trade.

I know… this shouldn't be any concern… every trade is independent and our edge plays out over a series of trades!

But I'm human… and even having carried out my regroup & focus routines… I recognised residual emotion.

So what to do?

Here were my actions:

1. Extend the break – NO TRADING. Let this whole price swing play out with no intentions to trade.

2. Use this time to absorb myself in the price movement. Watch and feel the bullish and bearish pressure play out within each candle.

3. When this price swing is complete AND I feel in sync with the price movement, it's GAME ON. Define the new trend structure. Project it forward. And seek the next trade opportunity.

The intent here is to get myself "out of my own head" and focused back on the price movement.

<image: The hardest trade>

Be careful in the pullback from here. Initial strength in the rally was news driven. But note how it weakened into the top of the swing. YTC PAT readers – this is a Second Principle scenario. Not First Principle. Be patient here.

And if it goes too deep, consider the possibility of this eventually transitioning into a sideways trend.

Until then though, I'm still looking for buy opportunity for continuation higher.

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

<image: The hardest trade>

Well done to anyone who might have traded something like an opening range breakout strategy, off the first 5 minute candle. You got a home run trade today.

For me though – it's one of those days with missed opportunity.

That happens. It's part of the game.

What is important though, is how we respond.

Take a break. Remind yourself – "Let it go. It wasn't mine to catch. If it was, I would have caught it."

And if there is still residual emotion, just watch and wait and let the next swing (or two or three) play out. There is no hurry to trade. Absorb yourself in the price movement. And then… when the structure becomes clear and you feel in sync with the price movement… only then is it time to trade.

Happy trading,

Lance Beggs

 

 

Three Key YTC Lessons in this Opening Price Sequence!

Posted in: Trading Process and Strategy | , by
One comment

 

Lesson 1: When two trade ideas fail to work, consider a break. When three trade ideas fail to work, force a break.

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

Lesson 2: When the pullback is deeper and stronger than expected, let it roll over. Get in on the other side.

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

Lesson 3: An exit is not necessarily final. Remain focused and consider re-entry if the premise is proven to still be valid.

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

<image: Three key YTC lessons>

Happy trading,

Lance Beggs

 

 

Order Entry Error – Again

Posted in: Trading Process and Strategy | , by
2 comments

 

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.

  • Is the position in immediate threat? (ie. Is price likely to continue to move against you?)
  • If so, then exit immediately
  • If not, then see if you can actively work a better exit, or even turn it into a profitable trade.

 

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:

<image: Order entry error - and how I manage it...>

Reference for CPB setup: YTC Price Action Trader Vol 3 Ch 4 P38

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

<image: Order entry error - and how I manage it...>

Use your skill to make a real-time contextual risk management decision.

  • Is the position in immediate threat? (ie. Is price likely to continue to move against you?)
  • If so, then exit immediately
  • If not, then see if you can actively work a better exit, or even turn it into a profitable trade.

 

Happy trading,

Lance Beggs

 

 

Traps Immediately After the Open

Posted in: Trading Process and Strategy | , by
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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…

<image: Traps Immediately After the Open>

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?

<image: Traps Immediately After the Open>

(2) If price drives strongly, will it be driving into clear space that offers good potential for continuation?

<image: Traps Immediately After the Open>

(3) If price offers a trap immediately after the open, would the structure offer a multiple-R potential?

<image: Traps Immediately After the Open>

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.

<image: Traps Immediately After the Open>

<image: Traps Immediately After the Open>

<image: Traps Immediately After the Open>

<image: Traps Immediately After the Open>

See here for more on PB Setups.

<image: Traps Immediately After the Open>

<image: Traps Immediately After the Open>

<image: Traps Immediately After the Open>

(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

 

 

Patience at the Open

Posted in: Trading Process and Strategy | , by
4 comments

 

Until you have a good read of the market, there is NO TRADE.

  • Confidence in your real-time understanding of the market structure.
  • Confidence in your real-time understanding of the nature of price movement.
  • Confidence in your real-time assessment of market bias.
  • Confidence in your projection of that market bias forward in time and price.

 

And most importantly:

  • An understanding of how future price movement should behave if your forward projection has some validity.
  • And confidence in your ability to adjust your understanding (and your trading decisions) should price movement offer something unexpected.

 

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.

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

2. Seriously BAD LOOKING Price Action

Not just bad looking price action. We're talking seriously bad looking price action.

<image: Patience at the Open>

<image: Patience at the Open>

Remain Patient. Watch and Wait.

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

Happy trading,

Lance Beggs

 

 

The Other Trader (6)

Posted in: Trading Process and Strategy | , by
2 comments

 

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…

<image - metagame trading - the other trader 5> 

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:

<image - metagame trading - the other trader 6>

 

The key part I want to emphasise today is the following:

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6> 

 

Let's play the metagame and put ourselves in the mindset of those who entered LONG on the breakout.

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6> 

 

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

 

 

Watch Post-Breakout Behaviour – 3

Posted in: Trading Process and Strategy | , by
5 comments

 

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