Tag Archives: Price Action

Studying a Higher Timeframe Trap

 

There are some common themes that run through the articles I produce at YTC. One of these, which has been here since the beginning, is the importance of creating a Market Structure & Price Action Journal.

Every day, find something that amazes you in the charts. Print it out. Cover it with notes. Study it. File it. And review your journal often. It really will be the greatest trading book… EVER!

Over time, I promise you will start to see patterns within the market structure or price action, which repeat themselves again and again and again.

Like this, which we shared via social media way back in 2015:

What doesn't happen... is important information! 

This is a structural feature that I see repeated again and again and again.

Here's another previous example – http://yourtradingcoach.com/trading-process-and-strategy/trading-failed-expectations/

And of course, those with the YTC Price Action Trader should look to Volume 2, Chapter 3, Page 143.

But let's look to an example which occurred last week, on a higher timeframe chart.

Yes… it's an idea which you will find in all markets and all timeframes!

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Studying a higher timeframe trap

Happy trapping,

Lance Beggs

 


 

Leaning Your Entry Against Other Price Action

 

Sometimes you're just not 100% sure.

Not quite ready to pull the trigger.

At these times it's best to wait.

Remember this – "If I could only take one trade this hour, would I be happy to make it this one? If not, pass."

Clearly if you're hesitating then the trade does not meet this criteria.

Let it pass.

And maybe… just maybe… the next couple of price bars will offer up something that makes the decision easier.

Like this…

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

Leaning your entry against other price action

If I'm unsure about a trade then I'm happy to pass.

If I miss the trade, so be it. I don't have to take every trade. I plan to trade for several more decades. My career is unlikely to be defined by this one potential trade. Let it go. And prepare for the next.

But sometimes just another few candles is all it takes. If it offers some price action structure to lean against, I'll attack that opportunity. And manage whatever follows.

Consider watching for this in your charts.

Happy trading,

Lance Beggs

PS. The following were some earlier articles "loosely related" to this idea, although exploring the concept on the Trading Timeframe chart rather than the Lower Timeframe chart. Either way, it's all about letting the market turn first and then entering on a slight retest, with other price action at your back. Enjoy…

 


 

If you find yourself out of your trade, the reality is that you won’t always find a way back in!

 

Hindsight analysis is always suspect. Our normal human biases have us believing that we would have made the optimal trade decisions. After all, they always look so simple with the benefit of hindsight.

So I'm always hesitant to provide my thoughts on someone else's trade review.

But it's the Christmas / New Year week and I'm feeling too lazy to think up a new article, so sharing some email Q&A solves that problem for me.

And it provides a good lesson – if you find yourself out of a trade, for whatever reason, the reality is that you won't always find a way back in.

If you've scratched a trade to reassess and decide that there is still potential, unless you're just willing to enter at market then and there, or place a limit order at some point closer to the stop area, you might not find a way to re-enter. Pattern triggers may not eventuate.

And that's fine. Review the decision that led to the initial scratching. And move on.

I scratch trades a lot. If I doubt a trade, I'll reduce risk through either a partial or full exit, and then reassess. If I'm happy with the premise, I'll look to get back in. But sometimes… there is no good way to get back in.

In developing as a trader and discovering whether you better fit the passive set and forget trade management style, or a more active style such as I use, this is a factor that you need to consider. If you find yourself out of your trade, the reality is that you won't always find a way back in.

Anyway, here's the Q&A from a trader who recently asked me to review one of their EUR/USD trades, in which they took profits early but then were unable to get back in.

The question was sent to me in image chart form. It's displayed here in smaller format, in order to fit. If you click on the image it will open a full-size version in your browser. All following images are already full size.

INITIAL QUESTION:

You won't always find a way back in

 

REPLY:

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in

You won't always find a way back in 

Happy trading,

Lance Beggs

 


 

Open Drive – First Pullback

 

When the market drives in one direction straight from the open, I’m ALWAYS watching the first pullback for trade opportunity.

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

Open drive - first pullback

A strong open drive might only happen a couple of times a month.

But when it happens, I'm ALWAYS watching the first pullback for trade opportunity.

Happy trading,

Lance Beggs

 


 

Reversals Often Give Multiple Clues

 

In the absence of any unexpected news event, or some other reason to shock the market, a reversal will usually not just appear out of nowhere.

V-Turn reversals happen. But they're not the usual outcome.

More often than not, there will be multiple clues in the lead-up to the reversal.

The challenge for you, as a trader, is to learn to read the clues as they're presented and adjust your bias and trade expectations to suit.

Reversals often give multiple clues

Reversals often give multiple clues

Reversals often give multiple clues

Reversals often give multiple clues

Reversals often give multiple clues

Reversals often give multiple clues

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Traps – This One Needed Patience

 

It seems that most of the examples of market traps which I've shared over the years, were all traps which trigger very quickly.

We all like the quick ones. They're easy. Like this one:

Traps - They don't always play out straight away!

See here for the TST, BOF & BPB Setups.

Let's see what happens as price breaks the swing high at C:

Traps - They don't always play out straight away!

And the outcome:

Traps - They don't always play out straight away!

Interestingly, had I not been trading this trap opportunity, would I perhaps have seen the even better one that followed immediately after?

Traps - They don't always play out straight away!

We all love the traps that trigger quickly and move immediately in the positive direction. 

But traps don't always spring quickly.

Sometimes they require a little patience.

Sometimes they play out slowly.

Like this one which occurred a bit later:

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Defining “No-Trade Zones”

 

Let's look one final time at last week's trade sequence.

The problem we attempted to address was one of continual attempts to fade long and extended price swings, finding that instead of timing that entry to perfection we more often than not end up with two to three stop outs, and a mindset destroyed for the remainder of the session.

Check it out if you missed it – http://yourtradingcoach.com/trading-process-and-strategy/let-it-turn-then-find-your-entry/

This was the sequence on the "trading timeframe":

The trading timeframe view

This was the "lower timeframe" view of the challenge we face in trying to time the entry short:

The lower timeframe view - "what we don't do"

This article seems to have resonated with a number of readers, who felt as if it was written personally for them and their circumstances. Here's one example:

Great advice, Lance! As always. I really loved your explanation “Here’s what we don’t do” in the article. It’s so true. It's totally about me in the recent past and so funny to recall. How many times have I found myself trying to get short below every upper-tail candle somewhere in the vicinity of “here’s a support, it goes down now”, only to get stopped out. A daily and weekly review process helps me to get rid of these dumb trades now, but it's really cool to refresh this experience by reading your article.

My reply:

Thanks! Glad you enjoyed it. "Getting rid of dumb trades" is a great plan for driving progress. I still do dumb trades. We all do. But if you can identify over time those dumb ones that you always seem to repeat… they're the ones you can work to get rid of to provide a big boost to your edge.

The solution last week was simple. Stand aside during the long and extended price swing. Wait for the market to turn. Only then should you seek entry.

The solution - let the market turn - then seek entry 

So this led to a different kind of feedback, in which people asked, "how do we know when to stand aside?"

Great question!

Let me answer first based upon this particular sequence; and then we'll wrap it up with some general guidance for when to stand aside.

So… why did I decide to stand aside during this sequence?

It was the strength in the candles as price rallied to the resistance level.

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Let It Turn. Then Find Your Entry.

 

The best entries lean against some recent structure which limits movement against the position and provides a logical place for the stop.

Unfortunately though, the market cares little for what we want to see in an entry.

So how do we get in when there is no recent structure and we're trying to time entry to a market that is still pulling back against our expected trade direction?

Let's start with the Higher Timeframe Chart to get some context.

Let it turn. Then find your entry.

Let it turn. Then find your entry.

Let it turn. Then find your entry.

Let it turn. Then find your entry.

Let's go to the Trading Timeframe Chart now. And we'll move forward a little to see the rally up to the general setup area.

Because there are some concerns about exactly where we should be looking for the trade entry.

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I’d Take These Trades EVERY TIME. Here’s Why…

 

Win, lose or draw!

I'd be happy to take these trades EVERY TIME.

Let's start with some much higher timeframes to give you some context.

I'd take these trades EVERY time.

I'd take these trades EVERY time.

I'd take these trades EVERY time.

So there is good potential for strong directional movement below prior lows.

Any break to new lows… I'll be all over any BPB weakness.

And even better… if the market sets up right I'll try to enter short pre-break (above the low of day) to profit as price breaks lower. 

Let's look to the Trading Timeframe chart to see what the market offered.

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