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

 


 

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YourTradingCoach - Admin

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