Tag Archives: Traps

Traps Just Before RTH Open – 2

 

A few months ago we examined the concept of traps occurring in the price action just before, or immediately after, the RTH Open (RTH = Regular Trading Hours).

I'll place links to the prior articles at the bottom of this one, if you want to review them.

Today, let's look at another example of a breakout very late in the pre-session market, just before the RTH Open.

This is something which I absolutely LOVE to see. Because if that breakout fails, then it often sets up quite favourable conditions from the open. And so I'm keen to get a trade on as soon as I can.

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

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.

Today's example set up a break of the overnight high. That is, the same concept as the second image above.

Let's start by looking at a higher timeframe chart, to get some wider context.

<image: Traps just before RTH Open>

And the breakout on the Trading Timeframe chart:

<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> 

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.

Keep an eye out for similar opportunity in your own trading.

Happy trading,

Lance Beggs

 

Prior Articles:

Traps Just Before RTH Open – http://yourtradingcoach.com/trading-process-and-strategy/traps-just-before-rth-open/

Traps At The Open – http://yourtradingcoach.com/trading-process-and-strategy/traps-at-the-open/

Traps At The Open 2 – http://yourtradingcoach.com/trading-process-and-strategy/traps-at-the-open-2/

 


 

Choose YOUR Playing Field

 

One of the most obvious changes in my own trading over the last decade is a willingness to take fewer trades.

It used to be that if there was a price swing… I wanted to trade it.

On the plus side this meant that I was there for everything that did move to good profits. But it also meant that I had to suffer through many sequences where the market went nowhere and the best I could hope for was to grind out a breakeven result.

Now, I'm quite content to let the market play without me. If I miss opportunity, so be it.

I don't need to trade everything that moves.

Instead, I aim to stick to the easier sequences. The times in the market that typically have greater range. And the places within the structure that are more likely to offer favourable conditions.

I choose MY playing field. And I play MY game. What the market does outside of this game, is of no concern at all.

Let's start by looking at a Higher Timeframe chart to get some context:

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

<image: Choose YOUR playing field>

You don't have to trade every price sequence.

Choose YOUR playing field.

And make sure you're playing YOUR game, not the markets.

Happy trading,

Lance Beggs

 


 

Higher Quality Breakout Failure Trades

 

One of the aims of your journaling process is to build a collection of near textbook-perfect examples of each of your trade setups.

And from these, develop awareness of the factors which lead to increased odds of success.

Friday, 21st June, offered an absolutely beautiful Breakout Failure setup.

Let's start with a 5 minute chart to get some context:

<image: Higher Quality Breakout Failure Trades>

The important factor that I wish to highlight today is not where the trade occurred.

But rather – how price got there.

One of the key features I like to see, which suggests potentially increased odds of success, is price not only having to travel a long way to reach the level, but to have also STRETCHED to do so.

<image: Higher Quality Breakout Failure Trades>

Looking at the 1 minute chart (my preferred Trading Timeframe in this market):

<image: Higher Quality Breakout Failure Trades>

This is a Breakout Failure that I DO NOT want to miss.

Additional study for those with the YTC Price Action Trader:

<image: Higher Quality Breakout Failure Trades>

<image: Higher Quality Breakout Failure Trades>

<image: Higher Quality Breakout Failure Trades>

Happy trading,

Lance Beggs

 


 

Traps at the Open – 2

 

I had no plans to continue the recent article series but the market had different ideas, so here we are!

First, if you missed the prior articles then see here – http://yourtradingcoach.com/trading-process-and-strategy/traps-just-before-rth-open/

And here – http://yourtradingcoach.com/trading-process-and-strategy/traps-at-the-open/

And that brings us to today's sequence…

We'll start with a quick look at the prior day and overnight session, for a bit of "bigger picture" context.

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

<image: Traps at the Open>

I hesitated to show this example, as it's really a very quick and small trap. And a difficult entry based on a very minor lower-timeframe stall.

But sometimes that is all the market offers. And given the potential for a trap at the open to provide a nice momentum drive, it's one that I had to take.

Part of me wonders whether I'd take this entry anyway even if there had not been a trap. I had a bullish bias due to the pre-session action holding above the prior day's range. Plus the fact that I expected some range expansion on the open following a narrow range holiday session.

We'll never know for sure. Perhaps I would have taken it. I suspect not though. The lower timeframe trigger pattern was a little "smaller" and less defined than I would perhaps have liked. It really was the presence of the trap, albeit small, that provided the confidence to go for it.

For me… a trap entry prior to or right on the open is something that will often have me taking the quick early trade. Without that, I prefer to sit and wait. Let any opening congestion clear itself. Let the structure develop. And then trade once I have some clarity regarding the bias and market conditions.

Happy trading,

Lance Beggs

 


 

Traps at the Open

 

Our last article discussed one of the times when I show no patience at the open. One of the times when I'm keen to get a trade on as soon as I can.

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

You can see it here if you missed it – http://yourtradingcoach.com/trading-process-and-strategy/traps-just-before-rth-open/

That article dealt with a trap in the market structure JUST BEFORE the RTH open. (RTH = Regular Trading Hours)

Today let's look at a situation very closely related to that. It's a trap IMMEDIATELY AFTER the RTH open. It's another situation in which I don't wait for the market to establish a clear trend structure.

Here was the concept from last week:

<image: Traps JUST BEFORE the Open>

But what if the open comes… and the market hasn't provided that trap?

<image: Traps JUST AFTER the Open>

That's fine.

If it's a good level, I prepare myself for for a trap anyway in the opening few price bars. If the market is nice enough to offer that, I'll be ready to get in on the first available opportunity.

<image: Traps JUST AFTER the Open>

Let's look at an example…

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

<image: Traps JUST AFTER the Open>

Personal preference – I don't just hit BUY MARKET. I prefer to find a way to better control risk through certain TTF/LTF patterns, as outlined in the YTC Price Action Trader.

If I miss the move, so be it. Let it go. It wasn't mine to catch.

But otherwise, remain patient and watch for a retest of the range highs.

<image: Traps JUST AFTER the Open>

If ever in doubt about the structure of the market, don't rush to trade. There is no hurry. Let the market open and complete the first swing or two. Let the structure develop and then trade once you have some clarity.

But sometimes, when the pre-market sets up just right, there will be opportunity available within that opening sequence.

One of my favourites is a trap in the market structure, setting up just before, or just after the market open.

Keep an eye out for this concept, in your market and your timeframes.

Happy trading,

Lance Beggs

 


 

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

 


 

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

 


 

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

 


 

The Other Trader (6)

 

Let's continue with an old article series – the metagame – trading AGAINST other traders who find themselves on the wrong side of the market.

Because…

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

You can see the prior articles here if you missed them – OneTwoThreeFourFive.

Here is the general concept for today's trade…

<image - metagame trading - the other trader 5> 

In playing the metagame, we aim to place ourselves in the mindset of any trader who bought late in the move, at or soon after the breakout. Feel their stress build as price stalls. And stalls. And stalls. Feel their pain as their "sure thing" collapses back below the stall region. And find a way to profit from their pain.

Yes, trading is a predatory game!

Let's see some charts.

We'll be seeking BOF Setup opportunity at this point here:

<image - metagame trading - the other trader 6>

 

The key part I want to emphasise today is the following:

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6> 

 

Let's play the metagame and put ourselves in the mindset of those who entered LONG on the breakout.

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6>

<image - metagame trading - the other trader 6> 

 

Trading the metagame…

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

Let someone trap themselves in a low-probability position.

Place yourself into their mindset.

Feel their pain.

And when it gets to the point where they've lost all hope, STRIKE.

Go get 'em,

Lance Beggs

 


 

A Failed Break of One Side Leads to…

 

In preparing my daily entry for my Market Structure & Price Action Journal, I sometimes venture away from my usual market and timeframe if there is an example that REALLY catches my interest. This was one of them.

We're looking here at the Crude Oil 30 minute chart.

<image:A failed break of one side of a range will often lead to a test of the other side.>

Why did this interest me?

Because breaks from a structure like this can lead to some really nice trading opportunity.

<image:A failed break of one side of a range will often lead to a test of the other side.>

Sometimes!

But not always!

Sometimes the market will present me with one of my favourite rules of thumb. If you've been following me for a few years you will have no doubt heard this one before.

  • A failed break of one side of a range will often lead to a test of the other side.

 

<image:A failed break of one side of a range will often lead to a test of the other side.>

And that's exactly what we got the next day.

<image:A failed break of one side of a range will often lead to a test of the other side.>

Let's zoom in to the 3 and 1 minute charts and look at the price action from the session open.

<image:A failed break of one side of a range will often lead to a test of the other side.>

<image:A failed break of one side of a range will often lead to a test of the other side.>

I didn't trade this. It's not my current market. It's just a great example of one of my favourite rules-of-thumb, which caught my attention and made it into my Market Structure and Price Action Journal.

But have a look over the 3 Min TTF chart and the 1 Min LTF chart. See if you can identify the places you might have caught entry short.

In particular the BOF entry short from the top.

And keep an eye out for this scenario in your own markets.

  • A failed break of one side of a range will often lead to a test of the other side.

 

It may just provide some nice trading conditions as you profit from the move that occurs after the breakout traders are stopped out of their position.

Happy trading,

Lance Beggs