Tag Archives: Uncertainty

Trading Alongside the Uncertainty and Fear

 

I shared the following post via social media on Wednesday:

<image: What if it's ok to feel uncertain?> 

Without doubt, this is one of the key lessons we must learn on the way to becoming a professional trader.

And so I was incredibly pleased to get the following reply:

<image: What if instead we learn to operate alongside the uncertainty and fear?>

Brilliant!

Thanks A.H.

This is exactly the right approach to the presence of the fear and doubt.

1. Recognise the emotion.

Just briefly, bring your focus back from the external (charts) to the internal (your body and mind). Notice what you're feeling.

2. Acknowledge the emotion.

Accept it. You can't fight it. You may as well welcome it.

If it helps… verbalise it.

3. Understand the emotion.

What is it trying to tell you? There is information there. Find it!

4. Review the trade premise.

Often you will find that steps one to three will significantly reduce the severity of emotion.

So the final step – review the trade premise from an objective chart-based perspective.

With the emotion acknowledged and diminished, does the trade premise actually contain edge?

If so, go for it.

<image: What if instead we learn to operate alongside the uncertainty and fear?>

<image: What if instead we learn to operate alongside the uncertainty and fear?>

<image: What if instead we learn to operate alongside the uncertainty and fear?>

<image: What if instead we learn to operate alongside the uncertainty and fear?>

If it helps, consider creating a "pre-entry mantra" to shift your focus inside and recognise, acknowledge and understand any emotion that may impact upon your trading decisions and actions.

With experience (and of course proper risk control) fear and emotion will reduce. But it never completely goes away.

You can't fight it.

Accept it. And learn to work alongside it.

Happy trading,

Lance Beggs

 


 

Trading an Uncertain Trend

 

The YTC Price Action Trader provides clear definitions for a trend – uptrend, downtrend and sideways trend.

But despite this, there will be times where price action offers something that is not so easy to read.

One of these times can be immediately following a news release:

 

Trading an Uncertain Trend

Trading an Uncertain Trend

Trading an Uncertain Trend

Trading an Uncertain Trend

It would be great if the market was always smooth and easy to read. But it's not.

And that's fine.

The plan at times like this is simple:

  • WAIT until it is clear.

 

If you wish to make "Uncertain" an additional trend type for your trading, alongside up, down and sideways trends, then by all means do so.

But either way, the plan is to wait until it is clear.

STAND ASIDE completely. At least until price reaches the edges of the structure.

What do I mean by "the edges of the structure"?

It's the place where the market has potential to transition into something that is more readable. Something that does fit more nicely into the definitions of up, down or sideways trend.

Like this:

Trading an Uncertain Trend

Trading an Uncertain Trend

Trading an Uncertain Trend

Trading an Uncertain Trend

Trading an Uncertain Trend

Trading an Uncertain Trend

 

An important news release has the potential to completely shift the sentiment of the market. Sometimes the new trend structure is not completely clear, immediately following the news release.

If the trend is uncertain, WAIT until it is clear.

STAND ASIDE completely.

At least until price reaches the edges of the structure, where the trend will (hopefully) become more readable.

The same applies at any other time, outside of news releases. If the market is choppy and you just don't have a good read, it's fine to declare it uncertain. Zoom out on the chart and identify the edges of the structure. Where are the upper and lower zones which might offer some clarity as to what is happening from then on. And stand aside until price reaches these zones.

It's ok to not know. "Uncertain" can be a valid trend type.

Happy trading,

Lance Beggs

 


 

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

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Sorry To Be So Blunt!

Question Received via Email:

I'm an experienced long time, unsuccessful trader looking for profitability and consistency (aren't we all), anyway you seem to have way TOO much information. Can your method be boiled down to a few simple rules or is it more complicated than that. Sorry to be so blunt. Thanks.

Initial Email Response:

Thanks for your email. The short answer is no! My methods cannot be boiled down to a few simple rules.

It's a good question though so I'll expand upon this answer in Friday's newsletter, looking at a trade sequence from today's HSI market.

That will give you greater awareness of how I trade.

And also why I don't believe that market success can be boiled down to a few simple rules.

A Bit More Detail:

To say that my methods cannot be boiled down to a few simple rules, is not quite correct. It can be:

  1. Trade against those who attempt to fight the market bias, aiming to enter at or before the point of their trade failure, to profit from their exit orderflow.

  2. Improve your ability to do step 1, over time, through application of deliberate practice methods of learning.

Simple rules… but not easy to implement as they require a process of skill development!

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This is the REAL Challenge of Trading

Price has collapsed rapidly at the start of the new session

Following the initial low, then a retest, price pulls back to offer us a 3-swing-retracement entry short (also could just as well be considered an upthrust).

(Chart Info: Crude Oil, 20 Jan 2012, 1-min chart; although the concept discussed in this article applies to all markets and all timeframes. Timeframes used for the trade were 1-min and less (YTC Scalper timeframes) although the trade decision making and management in this instance were pure YTC Price Action Trader, not YTC Scalper).

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Comfortable Lies and Uncomfortable Truths

"We do not err because truth is difficult to see. It is visible at a glance. We err because the lie is more comfortable."

… Alexander Solzhenitsyn

 

Are comfortable lies holding you back from making progress as a trader?

Is the time and effort you currently devote towards the comfortable lies, perhaps better spent in learning to accept some of the uncomfortable truths?

Comfortable Lie:

  • Market insider shares secrets to massive success. Only 5 copies left. Be one of the lucky few to own the Forex Orgasmatron.

Uncomfortable Truth:

  • There are no market insiders sharing secrets. There are no secrets. The Forex Orgasmatron will never leave you satisfied! There is no Holy Grail magic system that can make all your dreams come true. Success requires talent. Talent requires time and effort to develop.

Comfortable Lie:

  • I just need to trade this pattern with discipline and I’ll be a success.

Uncomfortable Truth:

  • Trading is not about blindly taking pattern based entries. Trading is about knowing when to take your pattern based entry and when to avoid it. And on those occasions when you do take the entry, it’s then about knowing when to hold your position and when to scratch it.

Comfortable Lie:

  • If I just set a target of three times my risk then I only need to be right 25%
    of the time.

Uncomfortable Truth:

  • As you increase your target, your winning percentage will also reduce. You cannot just increase your target and expect to maintain the same winning percentage. Quite likely you may end up getting close to that 25% winning rate. How will that affect your mindset? Targets need to be suited to the market environment. Sometimes, in some environments, the market will not offer three times risk.

Comfortable Lie:

  • I just need to trade without emotion and I’ll be fine.

Uncomfortable Truth:

  • You can’t! You’re human! Emotions are part of being who you are. You cannot just
    block them out. You need to understand them and learn to work with them.

Comfortable Lie:

  • The broker took out my stop.

Uncomfortable Truth:

  • Perhaps you put your stop in a really dumb place!

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