Tag Archives: Setup

Traps just before RTH Open

 

I've written a lot about displaying patience at the open. About waiting till the bias is clear and trading conditions are favourable.

But there are some situations where I don't display patience.

Where I'm keen to get a trade on as soon as I can.

No patience. No delays. It's game on!

One of these situations is when the market sets up a trap just before or just after the RTH Open. (RTH = Regular Trading Hours).

Today we'll look at an example which sets up just before the open.

Here's the general concept:

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

This concept can be applied in any market which offers pre-session trading leading into a clearly defined "regular" day session. Spot forex traders might apply it at the UK open, or the US open.

This example set up a break of the overnight low. Here's what I was seeing:

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

(YTC PAT FTC Ref: Vol 2, Ch 3, P143))

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

<image: Traps just before RTH Open>

Happy trading,

Lance Beggs

 


 

First Pullback in a NEW Directional Trend

 

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

REFERENCE: Definition of a sideways trend – Vol 2, Ch 3, Pages 99-102

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

<image: First Pullback in a NEW Directional Trend>

Not all trade setups are equal.

You need to collect and review your stats to determine which setups provide your A+ MUST-NOT-MISS potential opportunity of the day.

For me, the first pullback in a NEW directional trend is one of these MUST-NOT-MISS setups.

No, they do not always profit. And sometimes they offer profits, but I mismanage the opportunity.

But when they do run and I perform well enough to catch them, the profits can more than make up for any other failed attempts. As always, we profit over a series of trades. Individual trades are irrelevant.

Check your own charts, in your own market and timeframes. Note any sideways trend environments. Find a breakout which occurs with some strength, which holds the break. And see if you can also find edge on the first pullback into this new directional trend.

Happy trading,

Lance Beggs

 


 

First Pullback after Significant Structural Change

 

I don't often trade after midday Eastern Time. It's the middle of the night here and I'd much prefer to get some sleep.

But from time to time I'm alert and awake and there is no chance I'd be able to sleep even if I tried.

So I'll complete some of my post-session review and then go on with other work, while keeping an eye on the markets.

The default intent is to NOT trade… unless it's screaming out to be traded.

What does that look like?

Here's one example. A trade that is so damn obvious I would have been kicking myself if I missed it.

It's a YTC PB trade. But what is important is not so much the trade itself, but WHERE it happens in the "bigger picture" market structure.

<image: First Pullback after Significant Structural Change>

<image: First Pullback after Significant Structural Change>

<image: First Pullback after Significant Structural Change>

<image: First Pullback after Significant Structural Change>

Dropping down to the Trading Timeframe to see the outcome:

<image: First Pullback after Significant Structural Change>

<image: First Pullback after Significant Structural Change>

1. Structure!!!

2. Break of structure.

3. First pullback against the break of structure.

It's no Holy Grail. Sometimes there will be losses. And sometimes you'll miss the trade.

But it's opportunity I do NOT want to miss.

Happy trading, 

Lance Beggs

 


 

Traps on a Retest of a Level

 

My normal trading times are between 09:30am and 12:00 midday US Eastern Time. You won't see many trades after midday because in my timezone that is 3:00am. It's time to complete my post-trading routine before getting some well deserved rest.

But occasionally circumstances allow me to push a little beyond this midday (3:00am) time limit.

This occurs ONLY in those times when (a) I'm feeling wide awake and alert, (b) the market is directional with smooth price flow, and (c) something is screaming out to be traded.

So that raises a good question. What exactly is something that is screaming out to be traded? Unfortunately that's difficult to define. Essentially it's a feeling. Let me explain.

The default option is to stand aside. Most setups I just leave alone. I'd rather get on with my post-trading routine.

But from time to time the market sets up in such a way that I just KNOW… I have to be in this trade. This one is so good. It's an A+ trade. An edge that is so obvious that I'd be a fool to miss it.

A trade which I'd rather enter and take a loss than miss the opportunity entirely.

Think carefully about that last statement if you're new to trading!

From a technical perspective though, they will almost always involve a trap of some kind.

You need to sense the blood in the water. Someone, somewhere, has got themselves caught. There is pain. There is emotion. And for me… there is opportunity.

Today… we get to see one of these trades.

A trap on a retest of a level. A setup that was screaming out to be traded.

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

<image: Traps on a Retest of a Level>

NOTE: Complex pullbacks plus the strength/weakness analysis used in this example are all covered in the YTC Price Action Trader.

Happy trading,

Lance Beggs

 


 

Trading the Price Spike High or Low

 

Let's start with a little disclaimer – I didn't trade this price sequence. I took a break on Friday 18th of January in an effort to manage my fatigue levels. But this does not mean that I don't review the session. The next day I scheduled some time to look over the charts in a number of markets in order to (a) see how I would have traded them, and (b) complete an entry in my Market Structure & Price Action Journal.

Yes… just because you skip a session it doesn't mean you get to skip the study!

One of the very first things to jump out of the screens at me, upon opening the 1-minute Emini-Dow futures chart, was an awesome price spike at 10:19am. This became the focus of some extra study, for my journal. And I thought I should discuss it with you here today as well.

I love price spikes – a sudden and dramatic expansion in price range and volume. Because they often create a shift in the market structure. And they allow you to immediately identify two potentially great trade locations.

Let's have a look at the charts.

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

<image: Trading the Price Spike High or Low>

Happy trading,

Lance Beggs

 


 

Trading the Edges of a Sideways Market

 

When the market is stuck in a sideways trading range, the primary place to look for opportunity is at the upper and lower edges.

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

<image: Trading the edges of a Sideways Market>

When the market is stuck in a sideways trading range, the primary place to look for opportunity is at the upper and lower edges.

Important References:

Sideways Trend definition: Volume 2, Chapter 3, Pages 99-102

3rd & 4th Principles of Future Trend Direction: Volume 2, Chapter 3, Pages 145, 149, 150

BOF Setup: Volume 3, Chapter 4, Pages 28-31

LTF Pattern entry: Volume 3, Chapter 4, Pages 86-93

Happy trading,

Lance Beggs

 


 

Find Your A+ Trades

 

Let's continue this recent theme…

  • Focus on the areas of the market structure that jump out at you. The sequences that are so obvious, so easy, that you'd be kicking yourself if you missed the trade.
  • Identify them. Study them. Learn from them.
  • And then trade ONLY them… until you've got a proven edge.

 

These are potentially your A+ Trades. The ones you will aim to master.

In last weeks article, I shared what I consider to be one of my A+ trades – http://yourtradingcoach.com/trading-process-and-strategy/focus-on-catching-these-trades-first/

This was followed up with a social media post on Tuesday, comparing the trade sequence from that article with another from a previous article.

Note the similarity…

<image: Your favourite trades should all look the same>

The key point, repeated for emphasis:

These trades come easy to me. The ones that come easy to you might differ from this. Your job is to find YOUR OWN A+ opportunity and get to know it in detail. There are more trades coming soon. You need to be ready.

Do you want another one?

<image: Your favourite trades should all look the same>

<image: Your favourite trades should all look the same>

<image: Your favourite trades should all look the same>

Note again how similar it looks in structure to the prior two trades. Your favourite trades will all share similar qualities.

And this first pullback after a change in structure IS one of my favourites.

It might not be one of your favourites. And that's fine. The idea is not that you should start trading these setups.

You need to find your own.

  • Focus on the areas of the market structure that jump out at you. The sequences that are so obvious, so easy, that you'd be kicking yourself if you missed the trade.
  • Identify them. Study them. Learn from them.
  • And then trade ONLY them… until you've got a proven edge.

 

If you're struggling, then please note that this could be the key insight you need. 

I received some great feedback from a YTC reader, TK, in response to last weeks article. Here's an excerpt from his email:

Hi Lance,

I just wanted to thank you for the last Friday's article and let you know that I find articles on this theme of great value.

This is exactly what makes all the difference for me. The shift in mindset that made me focus on the moves that I find obvious and easy has greatly improved my trading. I regularly come back to the article "Focus on the obvious moves first" that was the first article that made me review my trading and think about whether I take mostly the obvious trades or not. This has helped me to get rid of many marginal trades.

Last week's article reinforced this practice for me. I think that this may be a key thing that developing traders need to focus on. If I may, I would suggest that you follow up with more articles like this, that would be great.

This is the article he referred to, as being originally responsible for the new and better understanding – http://yourtradingcoach.com/trading-process-and-strategy/focus-on-the-obvious-moves-first/

Be sure to read it.

Why?

Repeating the key point from the email: "This is exactly what makes all the difference for me. The shift in mindset that made me focus on the moves that I find obvious and easy has greatly improved my trading."

Could this be the difference you need as well?

Happy trading,

Lance Beggs

 


 

Focus on Catching These Trades First

 

There are some trade ideas you look at with hindsight which are quite complex and which may have been difficult to execute.

And there are others which jump out at you as being really simple.

If you're not yet profitable, then focus on the SIMPLE trade ideas.

Identify them. Study them. Learn from them. And then trade ONLY them… until you've got a proven edge.

What you see as simple may be different to what I see as simple. But essentially, we're talking about those you would call your A+ trades.

Look at any historical chart. They're the trades which your eyes go straight to. The ones that are immediately obvious. The ones that you'd be kicking yourself if you missed.

They're the simple ones.

They're the ones you need to focus on first.

For me… one of my favourites is the first pullback following a significant change in structure.

<image: Focus on catching these trades first>

This trade… and every trade like it… jumps out of the chart at me.

If there is a "first pullback after a change of structure" trade that I miss, I'm seriously not impressed with myself.

Here's what I was seeing as it unfolded:

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

What trade opportunities jump out of the chart to you?

Identify them. Study them. Learn from them. And then trade ONLY them… until you've got a proven edge.

They're the simple ones.

They're the ones you need to focus on first.

Happy trading,

Lance Beggs

Additional Notes:

1. YTC Price Action Trader readers – From the YTC PAT perspective the trade is simply the first PB opportunity after a transition from uptrend to downtrend. The classification of uptrend is not immediately obvious due to the lack of structure this early in the session. In the absence of any pre-session data, I will usually make use of any opening gap and also an opening range bias. With both being bullish in this case, I'm happy to call an uptrend.

2. Note the similarity with the trade in this post. Even though it's pattern sets up on the higher timeframe chart, the concept is exactly the same. You'll start to notice that after a while – all your good trades share similar qualities.

3. The reference to 11:30 is of course my timezone (UTC+10). The time at the exchange is 09:30. This is the time that stocks commence trading on the Hong Kong Stock Exchange.

 


 

Traps Immediately After the Open

 

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

 


 

It’s All About Real-Time Contextual Decision Making

 

You've learnt the pattern or setup. Great. But that's not trading.

Now work on the real-time contextual decision making around that pattern or setup.

Look beyond the pattern itself to the wider context.

Where is the pattern occurring within the larger timeframe market structure? What structure will suggest avoiding this particular setup? What structure might suggest caution, or reduced position sizing? What structure might suggest increased odds and the potential to really press the trade for a larger gain?

Where is the pattern occurring within time? Are there news influences which suggest passing on the trade? Are their time-of-day / week / month factors which might suggest standing aside?

Consider the behaviour of price movement – the pace, the volatility, smooth vs choppy price action.

What conditions might suggest adjustments to the default plan? All-in vs scaling in? All-out vs scaling out? Closer stops vs wider stops? Closer targets vs extended targets?

Consider the real-time decision making once in a trade.

What signs might suggest a loss of edge? How will you react to this new information?

What signs might suggest greater potential than originally perceived? How will you react to this new information?

What conditions suggest a re-entry attempt should be taken, if stopped out of the position? And how many re-entry attempts are appropriate?

Trading is not about simplistic patterns. It's about real-time contextual decision making.

If you've been on the wrong path then it's time to make a change. It's time to do the real work.

Best of luck,

Lance Beggs