Tag Archives: Journals

Build a Visual Library of MUST-TRADE Scenarios

 

We've spoken in NUMEROUS articles about the importance of using a journal to study key market structure and price action sequences, with the aim of developing your ability to perceive and understand the current strength or weakness of price movement and project that forward to develop a bias for the near future.

Here are some articles on this topic if you missed it all:

 

That's a quick list from the top of my head. But there are likely more if you want to search through the archives (http://yourtradingcoach.com/site-map/). Perhaps try the Tag List on the right hand side, or the search box at the top right.

Equally as important though is a Trades Journal, studying the best trade sequences of the day whether you took them or not, with the aim of developing your ability to perceive, understand and exploit trade opportunity when it presents in the markets.

I know… I ask a lot of you!

But I really believe it's of GREAT benefit to your trading business. Every trading session – one entry in your Market Structure / Price Action Journal. And one in your Trades Journal.

Trading is a skill-based & performance-based activity.

How do you develop skill?

How do you improve performance?

By studying best-practice! Whether you traded it or not!

What was the best trade opportunity of the session? If you did see it at the time, what did you do well and how could you do it even better? What did you do poorly and how could you improve next time? And if you didn't see it, what clues did the market provide that this was a Must-Trade scenario.

If you don't have a Trades Journal, get started today. Open up your charts to the prior session and find that day's Trade of the Day! Print it out. Study it. Cover it in notes. And file it.

Here's a few to get you started… all from last Friday's session… all of which I consider Must-Trade scenarios.

Click on the images to open larger copies in your browser! Or see the links below the images to download a copy to your computer!

trades journal - sample 1

 

(more…)

Why Do We Create and Regularly Review our Market Structure and Price Action Journal?

 

Last Sunday I shared the following image on YTC Facebook and Twitter.

It's such a beautiful example of the benefits of journaling, I just had to expand upon this in a newsletter article.

From YTC Facebook and YTC Twitter - why we create a Market Structure and Price Action Journal

Here's the thing…

Finding and exploiting market opportunity

Ok, I know!

The markets don't always back up the very next day with a repeat of key price sequences.

The real benefit builds over time. As you populate your journal with more and more examples of key price action sequences (and ensure regular reviews) you will come to see repeated patterns or themes within the data.

Some of these patterns or themes lead to documented improvements to your trading plan.

But most are simply internalised, improving your situational awareness as real-time data unfolds in future trading sessions. You have improved your ability to perceive shifts in the supply/demand dynamics of the market. You have improved your ability to understand what that shift means in terms of risk and opportunity in the near future. And you have improved your ability to exploit that opportunity for profits (or minor losses when wrong).

Similar benefits apply when journaling market structure features, in particular the points of transition from one environment to another.

There was another recent article related to the topic of journaling, in which we discussed the journal-identified hypothesis that "A Day After a Monster Trend Day, which shows no follow through overnight and a weak open, is likely to remain rangebound within prior session S/R levels". You can see the article here if you missed it: http://yourtradingcoach.com/trading-business/day-after-monster-trend-day/

This article attracted the following comment:

(more…)

The Path to Increased Understanding of Price Action and Market Structure

 

An expert level understanding of price action and market structure will not come through books.

It comes through experience in the live markets!

It comes through direct observation!

And it comes through questioning anything new or unusual you see in the charts.

The Path to Increased Understanding of Price Action and Market Structure

 

Kind of like the Scientific Method!

And exactly the process we've been suggesting for effective use of your Market Structure Journal.

Let's look at a couple of examples from the last week:

(more…)

Day After Monster Trend Day

 

For the last seven years I've been highly recommending traders keep a Market Structure Journal for recording and studying any interesting market structure and price action observations.

In my opinion this will become the greatest book in your trading library, by a long margin. Certainly the most valuable in terms of quality content.

Every day… find something of interest in the charts. Print it out, study it and add notes. File it in your journal. And review it often.

Usually traders will produce their journal in one of two ways.

(1) Based upon themes. Choose a theme for the current month, such as: "This month I will study the price action which forms the low of the day for clues that may have alerted me to this being a significant low." Then next month, replace it with another theme.

(2) Completely freeform. Simply focus on whatever stands out the most from the current session. For example, "Today's climactic exhaustion into prior resistance is amazing. Let's study that; and in particular that opportunity to fade the move on the weaker retest of the highs".

Today's article fits more in the "completely freeform" category in that it's based upon something that stood out in the markets.

But with a slight twist.

Instead of focusing on the feature of interest (a monster trend day), I thought it would be a good idea to look at what follows it (the day after a monster trend day).

While there is value in studying a price action sequence which stood out during a session, there is also exceptional value in studying what comes after it.

One example (such as provided here) cannot give a complete and accurate picture about "how to trade the day after a monster trend day". At best, it may provide us with a hypothesis which can be explored as further examples are found in future trading sessions. Over time our Market Structure Journal will be populated by other similar occurrences. And as we get 20+ examples of "day after monster trend day" we'll start to see some common features that allow us to establish some "rules of thumb" for extracting profits from these days.

Last Friday's Crude Oil session provided a monster trend day.

Let's start by looking at the daily and 30 minute charts to get an idea of what happened that day.

Day After Trend Day

Day After Trend Day - 30 min perspective

Certainly this day was worthy of it's own journal entry.

But let's check out what followed. Because while we might not be able to recognise a monster trend till part-way through the session, we will always know when we're about to commence trading a "day after monster trend day".

So it will be very handy to have some "rules of thumb" in place for what to expect following a monster trend day, if that is at all possible.

Let's examine this one occurrence, from Monday 1st June, and see if we can find anything interesting.

We'll use a combination of both 30 and 5 min charts, simply because they fit the required data into my article image sizes. In producing your own journal entries you will typically use your higher timeframe (or higher) for structural analysis and the trading timeframe for price action analysis.

Let's look first to see what immediately followed the monster trend day. Did it produce any significant follow-through in the overnight data?

(more…)

Do This to Increase Learning Every Session

 

Every session… find at least one price action or market structure feature that you find interesting… and STUDY it.

I posted the following images to YTC Facebook and YTC Twitter recently:

Wide Range Bars with No Follow Through

Wide Range Bars with No Follow Through

Yes, you're lacking some context in examining the above trade (there is limited room on a facebook image). But the main point is not the trade itself, but rather the idea of identifying and studying one price action or market structure feature EVERY DAY.

If you do this after every trading session, you'll have well over 200 entries in your journal in twelve months time. How valuable will that be!

What REALLY pleased me was that a couple of days after the original post, I received the following comment from YTC reader Naveen:

 

(more…)

Market Structure and Price Action Study

 

"Fortune favors the prepared mind."

… Louis Pasteur

 

In a recent article I discussed the importance of regular study of market structure and price action. See here if you missed it – http://yourtradingcoach.com/trading-business/a-simple-step-to-becoming-a-better-trader/

After every trading session, find something you can learn from. Perhaps a market structure feature. Perhaps an interesting sequence of price action. Perhaps a trade management insight. Whatever you find to be of most value!

Document it.

Store it in your journal.

Review your journal as often as possible.

The article included two examples of market structure & price action study, to get you started in creating your own journal.

One of these provided an example of the following rule of thumb – A strong momentum drive into the close with no follow through overnight provides an initial expectation of a rangebound environment.

Market Structure and Price Action Journal 

(more…)

A Simple Step to Becoming a Better Trader

 

After every trading session, find something you can learn from. Perhaps a market structure feature. Perhaps an interesting sequence of price action. Perhaps a trade management insight. Whatever you find to be of most value!

Document it.

Store it in your journal.

Review your journal as often as possible.

Two examples…

 

1. A market open in the vicinity of the prior day's low offers exceptional R:R if testing the support level with weakness.

Market Structure and Price Action Journal

(more…)

Gap Closure

 

Reader Email:

To: Your Trading Coach

Hi Lance,

I thought this was pretty cool and just wanted to show it to you.

Nick

Attached Image:

(*** Click on the image to open a larger copy in your browser! ***)

Gap closure market structure observation and notes

My Thoughts:

(more…)

You Can Do This!

 

Manage your growth and development via twenty trade groupings

 

My aim in this article is simple – to stop you “tweaking” your approach based upon the results of 2-3 trades.

So, what are your stats for the last twenty trades?

You don’t have any? Perhaps that’s the problem. Start recording stats now!

Or were your last twenty trades inconsistent with respect to strategy or method of application? Maybe that’s the problem. Commit to ONE method for a full series of twenty trades. Don’t quit and mess with the idea just because you start with three losing trades. Complete the full twenty.

Can you do the above steps?

Absolutely!

It won’t give you instant success.

But it will make it clear exactly where you stand right now.

And it will provide a simple framework for improving.

You can do this… twenty trades at a time!

Lance Beggs

PS. One assumption – that you do actually have a valid strategy that can provide an edge!