One of the key tasks I was looking forward to this last week, having recently overcome my long-term internet outage, was in catching up with Aaron Fifield's Chat With Traders podcast.
And I must say it was AWESOME to come across episode 117 with Larry Alintoff. (Yeah… I'm a long way behind!!!)
Despite the fact that we likely trade very different timeframes, markets and methods, I was really pleased to hear Larry describe one way that he seeks trade opportunity – when things that "should" happen, don't happen.
That is one of the themes I've shared through YTC over the last few years.
To have a trader of such high regard validate this idea… well I must say I felt just a little pleased with myself! 🙂
You'll find dozens of references to this idea if you search back through the archives, in either the blog or my social media posts.
The most recent, from memory, would probably be this one – http://yourtradingcoach.com/trading-process-and-strategy/studying-a-higher-timeframe-trap/
And of course, those with the YTC Price Action Trader should look to Volume 2, Chapter 3, Page 143.
So I thought, why not look at another example of this idea.
GBP/USD offered an interesting example during the last week. One which is perhaps not as obvious as some of the prior examples.
Let's look to the 4 hour chart at the close last Friday, 9th March.
So let's look at Monday's data, still on the 4 hour chart.
And now Tuesday…
Ok, it's not all bad.
This is why I wanted to share this one. It makes a nice difference from the previous one which I linked to above (here again if you missed it).
In that prior article, price did break the swing low.
This was the setup in that prior article.
As we've seen though, it doesn't always happen this nicely.
Sometimes price doesn't quite break that low.
But it doesn't matter.
Often, just trying to break that low is sufficient.
YTC Price Action Trader readers – see Figure 3.78 on page 143 for another example.
Let's drop down to a typical trading timeframe chart, the 5 Min chart, to see how we could have recognised this failure to continue lower.
In fact, just the day before, on Monday, I'd shared this example from the emini Nasdaq futures, via social media:
Here is the outcome…
A strong momentum drive often leaves an expectation in many traders of continuation, should price break the momentum drive extreme. Any failure of that break, or an inability to even quite get that far, can provide a reasonable move back in the opposite direction.
I'm a big fan of this concept – when things that "should" happen, don't happen.
Keep an eye out for it in your markets and your timeframes. Archive and study a few examples. And consider adding it to your trading toolkit, should you also find them to offer great opportunity.