Tag Archives: Setup

A BOF Trade with Many YTC Concepts

 

Let's look over a trade I particularly like, from earlier this week.

It's nothing special in terms of returns. But it took an otherwise dull session from breakeven into profits.

And it displays many of the concepts that we have discussed here in the newsletter over the last few years.

So I particularly like this one. And I thought it's a good one to share to reinforce some of these key lessons.

The trade is a Breakout Failure trade following price interaction with the Prior Day's High resistance.

Breakout Failure Review 

Let's see what I liked about this trade…

Breakout Failure Review

Breakout Failure Review

Breakout Failure Review

Breakout Failure Review

Breakout Failure Review

Breakout Failure Review 

Let's see the outcome…

Breakout Failure Review

Breakout Failure Review 

Happy trading,

Lance Beggs

 


 

The Other Trader (4)

 

Let's continue with the metagame concepts discussed in recent months.

Here – The Other Trader
Here – The Other Trader (2)
Here – The Other Trader (3)
Here – Metagame Trading

And of course based upon concepts from here: YTC Price Action Trader

Here is the basic idea…

If I can't feel someone on the other side of the market getting it really wrong, there is no trade.

Here's how we do it.

 

1

Identify a potential trap

 

Identify a potential trap

Identify a potential trap

Identify a potential trap

Identify a potential trap

Identify a potential trap

 

1

Feel the pain

 

Feel the pain

Feel the pain

Feel the pain

 

1

Spring the trap

 

Spring the trap

For those with the YTC Price Action Trader:

  • Setup – See Volume 3, Chapter 4, Pages 28 to 31
  • Entry trigger – See Volume 3, Chapter 4, Page 87, Figure 4.63 (third entry in the table)

 

If you're not achieving the results you wish to achieve, consider placing more thought towards who is on the other side of your trade.

It may be the paradigm shift you're seeking to take your trading to new levels.

Happy trading,

Lance Beggs

 


 

Using Pre-Session Data to Confirm Levels

 

The following text and image were shared recently through both the YTC facebook and twitter pages.

  • My first action on Monday mornings upon opening my charting platform…

 

My first action on Monday mornings upon opening my charting platform...

Actually, it's one of the first things I do every day.

This is the key part we're discussing today:

Using pre-session data to confirm levels

Let's stick with the same timeframe but move forward to the market open at 09:30am.

Using pre-session data to confirm levels

Sometimes analysis of pre-session data offers nothing at all to confirm the relevance of previous session levels.

Sometimes it will allow us to invalidate these levels, when we see price slice through them with absolutely no reaction at all.

And sometimes, like in this case, it helps to validate a level as being still "potentially" significant.

Friday's low will be on my mind as I commence trading today.

Let's see how the opening sequences played out on the trading timeframe.

Using pre-session data to confirm levels

Using pre-session data to confirm levels

(If you're not sure what I'm looking for, see here to find out how I trade!)

Using pre-session data to confirm levels

Using pre-session data to confirm levels

Sometimes analysis of pre-session data offers nothing at all to confirm the relevance of previous session levels.

Sometimes it will allow us to invalidate these levels, when we see price slice through them with absolutely no reaction at all.

And sometimes, like in this case, it helps to validate a level as being still "potentially" significant.

If you prefer to trade with RTH data (pit session data) in order to take advantage of opening gaps, that is absolutely fine.

But at least take a quick look at the ETH data (overnight). See where it has traded with respect to the prior day. Where did it find movement quite easy. And where did it find did it find support or resistance.

This might just provide important information that can help once the opening bell has rung and trading has commenced.

Happy trading,

Lance Beggs

 


 

Wait till the Reversal Trader is Trapped

 

I am quite a fan of Al Brooks' first book, "Reading Price Charts Bar by Bar", despite the fact that we trade very differently.

Out of close to 400 pages, there is the one idea which has stuck with me more than any other. From page 384:

"Countertrend setups in strong trends almost always fail and become great With Trend setups…"

The idea is simple.

In a strong trend you will find all manner of reasons to suspect that the trend is ready for reversal. And you'll find yourself easily tempted to enter counter-trend.

But more often than not, it's a trap.

When you feel this strong desire to trade counter-trend, do NOT trade. Be comforted by the fact that others will notice it as well. And that they'll enter.

Then watch their position, waiting patiently until they're trapped.

The failure of their counter-trend position will often provide a great entry for you, back in the with-trend direction.

Those who trade the YTC Price Action Trader methodology will be very familiar with this concept – timing our entry off the failure of "the other trader".

This concept came to mind on Tuesday, as I felt a strong desire to enter counter-trend against a strong bearish trend in NQ.

Let's look at the charts.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Don't fade a strong trend... wait for the trap and enter with-trend.

Actually, I'm not happy with the exit decisions. But that's something for me to explore in my trade review process.

In terms of setup and entry… I love this one.

"Countertrend setups in strong trends almost always fail and become great With Trend setups…"

Keep this in mind next time the price bars scream out for you to fade a strong trend.

Is it actually a trap?

And is better opportunity perhaps available if you stand aside and wait for the "other traders" to be caught?

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

 


 

Where Price Can’t Go

 

I'm always VERY interested in these places on the chart – the places where price can't go. The places where it tries… it pushes… but it just can't go there.

This is opportunity.

Let's start with the Higher Timeframe chart…

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Let's switch now to the trading timeframe… 

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Where Price Can't Go...

Reference… this is a BOF Setup as described in YTC Price Action Trader Volume 3, page 28.

Happy trading,

Lance Beggs

 


 

The Other Trader (3)

 

In recent months we looked at a number of metagame examples – trading at places where the "the other trader" feels extreme stress or fear.

You'll find some of these articles, if you missed them, here, here and here.

Today, I thought we could look at another one. Because I just LOVE these setups.

You might recall this general concept from prior articles:

Trading based upon feeling the stress and fear of "the other trader"

Things don't always go according to plan though.

Trading based upon feeling the stress and fear of "the other trader"

If you missed the entry… no problems.

Let it go. It wasn't yours to catch.

There will be MANY other trade opportunities. Stay focused.

In fact… sometimes that next opportunity comes along VERY quickly.

Trading based upon feeling the stress and fear of "the other trader"

Trading based upon feeling the stress and fear of "the other trader"

Let's look at an example, a BOF setup on break of the high of day.

We'll start with the higher timeframe chart to get some context. And then move on to the trading timeframe and lower timeframe charts to discuss the trade opportunity.

Trading based upon feeling the stress and fear of "the other trader"

Trading based upon feeling the stress and fear of "the other trader"

(more…)

The Other Trader (2)

 

As price moves into my setup areas, "the other trader" is always at the forefront of my mind.

Who created this recent move against market bias? Are they trapped? Are they feeling stress? Where is the point of extreme stress at which they'll bail out of their position?

If I can't feel someone on the other side of the market getting it really wrong, there is no trade.

In recent weeks we've looked at some examples which include a break of a key level, which then stalls and fails.

The other trader - trapped on a break of a level

You can see these recent articles here:

http://yourtradingcoach.com/trading-process-and-strategy/the-other-trader/

http://yourtradingcoach.com/trading-process-and-strategy/metagame-trading/

These type of trap scenarios provide some of my favourite trade entries.

The other trader - trapped on a break of a level

But we don't always need a break of a level in order to find trade opportunity.

What we're looking for is a move, against market bias, into a REALLY LOW PROBABILITY place to trade.

Like this, for example:

The other trader - trapped on a move into an area of prior congestion

Reality is never as nice as these "text book" line diagrams though.

So let's look at a real-world example.

(more…)

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

(more…)

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:

(more…)