Tag Archives: Trading Process

Keep It Simple


It's very easy in this business to bury ourselves in complexity. Typically leading to nothing but feelings of extreme overwhelm and doubt.

It can help at these times to "step back" a little and look at the bigger picture.

At a simpler level, what exactly are we trying to achieve here?

I would suggest that many of us could describe our trading by the following "simplified" flowchart.

Higher level simpler overview of the trading process

When you get one wrong, work to contain the damage as much as possible.

When you get one right, work to take as much profit as you can out of the move.

Aim to keep the losses smaller than the wins, on average.

Record data on your decisions and performance.

Identify what adds to your edge across a large sample of trades. Seek to understand why. And do more of it.

Identify what reduces your edge across that same large sample of trades. Seek to understand why. And aim to avoid it or reduce the damage.

And improve over time.

Essentially, that's how I run my trading business.

But perhaps the best use for this "simplified" flowchart is in it's ability to help us find the way forward when we're stuck.

Because the same flowchart can be used to guide our learning process. And to narrow our focus to ONE AREA OF IMPROVEMENT at a time.

Using the simplified flowchart to guide our learning

We won't get it right in every trade, of course. But our aim must be to learn to do so with sufficient frequency to provide an edge across a series of trades, assuming acceptable trade entry and management.

Using the simplified flowchart to guide our learning

Again, we won't always get this perfect. But we must get it right sufficiently often to ensure that our edge remains, assuming acceptable trade management.

Using the simplified flowchart to guide our learning

And once more, we don't expect to get this perfect every time. But across a large enough sample, we need to get this right enough to maintain our edge.

Using the simplified flowchart to fix a failure to provide edge.

Are you trading in the right area? Or do you need to work more on your strategy?

Are you entering well enough? Or are you getting chopped up as you try to consistently pick the exact turn point?

Are you holding for a reasonable portion of the move? Or are you regularly failing to manage the opportunity that is available.

Success requires that you first identify the source of current failure. So simplify! And then narrow your focus to one area at a time.

Do you need to work on your trade areas? Or trade entry? Or trade management.

There's work to be done.

Best of luck,

Lance Beggs



If I Could Only Take One Trade


This is a VERY useful question to ask yourself as a trade is setting up:

  • If I could only take one trade this hour, would I be happy to make it this one?

Of course, adjust the time to suit your style of trading. One trade per half-hour, per 4 hours, per day, per week… whatever suits your trade frequency is fine!

This question forces you to step back away from the excitement of the price action and the nervous tension associated with entry, and to briefly consider the quality of the trade.

If I could only take one trade this hour, would I be happy to make it this one?

If the answer is an obvious YES… take the entry.

But if there is any doubt… consider passing or waiting for more information.

You don't have to take every trade. A question like this can be useful in filtering out the lower quality trades. Give it a try!

If I could only take one trade this hour, would I be happy to make it this one?

If I could only take one trade this hour, would I be happy to make it this one?

YTC Price Action Trader references:

So would I take this trade?

If I could only take one trade this hour, would I be happy to make it this one?



Buy Because There Are No More Sellers (with lower timeframe)


A fortnight ago we looked at a few trades which were entered using the concept of "buying because there are no more sellers"… or "buying because the market can't go down".

I've received some requests for another example. And two people asked to see what I'm looking at on the lower timeframe.

So let's look at a couple more trades.

First though, we've discussed this idea a few times over the last six months or so. If you want to review some of the earlier material, try some of the following. There may be more if you search through the archives as well.

For one more example, let's look to the emini Russell (TF) on yesterday's session, Tuesday 26th of August.

buy because there are no more sellers

buy because the market can't go down

Let's back up to the start of the session and get some context from a slightly higher 5-Minute timeframe.


One Trade Can Make a Session


Not every session trades as you wish it would have traded.

Not every opportunity will be caught.

Not every trade will work.

But remain patient.

Sometimes all it takes is one trade to make a session.

Let's look at one session that with hindsight MASSIVELY underperforms what was available; but still provided a positive result when I finally caught one decent trade.

And that's ok.

That's trading.

You can't catch every move.

Review all sessions to see how you could have traded them better. Learn from the experience. And move on to the next session.

One trade can make a session


IF-THEN Analysis at Session Open


Continuing a theme from previous articles – here and here.

  • Keep your focus ahead of price
  • Never let price action take you somewhere your brain didn’t get to five minutes earlier.

This is not just a concept to apply during the trading session.

It also applies at session open.

Start the session with some thought as to likely expectations for the type of environment and for likely initial price action sequences.

This can be done for markets which have a defined pit-session opening time and for 24 hour markets at the time of major session openings (eg. UK, US forex session opening times).

  • Where is price going?
  • How is it likely to act? Why?
  • Will that provide trade opportunity?
  • What will it look like if my analysis is correct?
  • What will price look like if I’m wrong?
  • What else could it do?

This is not prediction. This is simply forward planning… developing “IF-THEN” scenarios based upon your assessment of the likely future price action.

If your “read” of price movement proves correct, you will have trade opportunity. If it proves incorrect, you stand aside and reassess.

This will ensure your actions in the market are pre-considered and your trades only occur when the market has conformed to your expectations.

And you will be less likely to be caught in a trap through impulsive reaction to unexpected price movement.

(** Important Note: This is only our initial expectation. Ongoing bar-by-bar analysis will adjust our expectations if price provides something different from our initial analysis. Don’t rigidly stick to your initial expectations against all evidence to the contrary.)

We saw an example of an opening IF-THEN scenario in last week’s article where we discussed an early-session trade opportunity in the SPI futures.

late session breakout provides early session opportunity

See here if you wish to review that article in full: http://yourtradingcoach.com/trading-process-and-strategy/late-session-breakout-early-session-opportunity/

But let’s look at another example.

This time from the Crude Oil market as it opened today, Monday 9th June 2014.

We’ll start with the Higher Timeframe in order to get a picture of the structure of the market.


Avoid What is Strong – Strike at What is Weak!


Avoid What is Strong – Strike at What is Weak!

So in war, the way is to avoid what is strong and to strike at what is weak.
… Sun Tzu, The Art of War


Trading is not about prediction.

Instead we let the marketplace reveal it's plan and attack only when we see an advantage.

We play the game on our terms, or not at all.

Orderflow drives the market; orderflow that comes from the decisions and actions of all other market participants competing in the same arena as us.

Let them drive price where they will; as determined by the collective sentiment of all who comprise the marketplace this day.

We simply observe. And wait.

Like the lion who waits patiently to attack the weakest in the herd, we avoid the market when it's strong and strike only when it shows it's weakness.

Trading is not about prediction.

It's also not about emotional reaction once we perceive weakness.

Our awareness should always be ahead of price (see the "Projection Phase" in this article) maintaining IF-THEN scenarios for likely future price action and what it means to those who hold trading positions.

Through maintaining these IF-THEN scenarios our reaction to the market movement will be preconsidered and decisive.

We attack when we see weakness.

We attack when we see someone trapped against the real bias of the market.

We attack when our risk can be contained.

We attack when we perceive potential opportunity greatly outweighs the risk.

Let's start by looking at the structure of the E-mini Russell as at the release of the FOMC Statement on Wednesday.

My higher timeframe is the 5 minute chart, but we'll commence first with a 30 minute chart in order to see a few days of data so that you have a wider perspective.

Avoid what is strong; strike at what is weak


Zooming in to my usual higher timeframe (5 minute chart)…


Avoid what is strong; strike at what is weak



Buy because there are No More Sellers

From last weeks article (Return to First Principles)…

  • You must aim to BUY at areas where you know others will buy after you, because their buying will create the net orderflow or bullish pressure to drive prices higher, allowing you opportunity to profit.

  • You must aim to SELL at areas where you know others will sell after you, because their selling will create the net orderflow or bearish pressure to drive prices lower, allowing you opportunity to profit.

Or from the opposite perspective, this would be…

  • BUY because there are no more sellers.

  • SELL because there are no more buyers.

Let's look at a trade example.

buy because there are no more sellers


It’s a Process – 3 – Longer Timeframes

The recent "It's a Process" visual articles have been very popular.

So I thought I'd do a different one with a focus on a longer timeframe.

Please note… I don't trade this timeframe. I trade lower timeframes for personality and lifestyle reasons. But there is no "best" timeframe. I know that many of you do trade higher timeframes such as hourly charts, 4-hourly charts or even daily charts. And that's fine. We all need to find our own niche. The important point though, is this simple fact… the process is the same.

So which market should we look at? And which timeframe?

Well perhaps we can do more of these covering different markets and timeframes. Let me know if you'd like more. But for today's effort I thought we'd start with the EUR/USD 4 hour timeframe.

I recently posted an image onto the YTC Facebook page as follows: