Daily Market Structure & Price Action Study – 4

 

Week 4 of 4 while I'm away from home…

From the original post:

I've been writing online for over a decade now. And for that whole time I've been promoting the idea of daily study in both Market Structure and Price Action.

It's a simple task that takes no more than five minutes, but which offers incredible value to your own learning and development.

Sometimes this study fits within certain themes, if there is a particular feature of market structure which I want to focus on for a period of time.

Often though, it's completely unstructured. Simply searching for whatever captures my attention.

Either way, every trading day after the session is over, I look to the charts to find something interesting. Having done this for so long the findings are usually just reinforcing prior lessons. But occasionally, they'll uncover something new which can lead to further exploration, further learning and further growth and development.

As I'm away from home for the month of April, celebrating my 50th birthday, and unable to prepare any new articles for the YTC newsletter, I though I'd simply preload the email system and blog with a few articles which share some daily market structure and price action study.

I hope you find it useful. If you do, consider starting your own Market Structure & Price Action Journal.

 

Tuesday 20th March 2018:

The first step in managing difficult trading conditions is to QUICKLY recognise potential for difficult trading conditions.

Let's look at a higher timeframe (15minute chart).

<image: Daily Market Structure and Price Action Study>

Notes:

  • A = A very neutral open. There is no suggestion of any emotion or directional sentiment in the market. Note it's position is approximately the middle of the prior day's range (from B to C). Note also the fact that it has barely moved from the prior day's close at D.
  • E = A sideways narrow range overnight session. Again, there is no suggestion of any emotion or directional sentiment in the market.
  • Review of the scheduled economic news events for the day show nothing of interest.
  • F = Subsequent price action throughout the session displayed no clear or persistent directional bias.

 

Lessons:

  • A neutral open can be a sign of a potentially slow day with potentially difficult trading conditions (non-trending chop).
  • The default option given a neutral open is to expect difficult conditions UNTIL PROVEN OTHERWISE.
  • Prioritise defence over attack. Survive to trade another day. But always remain alert for a change of conditions. Anything can change at any time.

 

Tuesday 20th March 2018:

Sometimes the simplest ideas are the best.

Here's an example which stood out while flicking through other markets. It's from the EUR/USD spot forex 3 minute chart.

(Do not be afraid to extend your Market Structure & Price Action study to markets and timeframes beyond those which you usually trade.)

<image: Daily Market Structure and Price Action Study>

Notes:

  • A = Choppy, narrow-range difficult conditions (yellow shaded region)
  • B = Lower boundary of the sideways chop environment.
  • C = Break from through the boundary level.
  • D =
    BPB opportunity SHORT.

 

Lessons:

  • Sometimes the simplest ideas are the best.
  • When a market is choppy and tough to read, consider standing aside: (a) define the "edges" of the structure, (b) wait patiently for a break from the structure, and (c) only then seek trade opportunity.

 

Happy trading,

Lance Beggs

 


 

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YourTradingCoach - Admin

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