Don’t Overcomplicate Things – 3

 

Let's go over this key concept one more time.

  • Don't overcomplicate things.
  • Keep in mind a visualisation (or a series of visualisations) which broadly capture the vast majority of your trades.
  • It can help provide confirmation of the trade idea as it's setting up.
  • And more importantly, confidence in execution.

 

We discussed this recently via two articles – part one and part two.

Both articles discussed the fact that the majority of my trades lately seem to fit within one of two broad categories.

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

(For those with the YTC Price Action Trader, the first category will include all variations of PB, CPB and BPB trades. The second category will include all variations of TST, BOF and any "reversion to the mean" scalp against an existing trend. For the second category, note that I will rarely be entering against strength. Look within the TTF/LTF to see weakness late in the over-extension, or on a subsequent retest. But the whole sequence should be over-extended.)

The first article in this series shared a type-1 trade.

The second article in this series compared three type-2 trades.

Today I thought we could look at one more type-1 trade.

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

<image: Don't Overcomplicate Things>

Ok, so the trade didn't reach it's ultimate target in this case. But "active trade management" recognised the failure to push lower and scratched the position, locking in some good profits anyway.

Key points:

(1) Note how "a clear directional bias" does not necessarily mean a strong and persistent downtrend. In this case we have a somewhat sideways market, shifting from initial downtrend to uptrend and then back again to downtrend. The "clear directional bias" occurred at the point of failure of the uptrend, when anyone holding a long position would have found themselves trapped. When they knew without doubt that they were sitting on a loser and had no choice but to get out.

It's the trap in this case which creates the "clear directional bias".

And it's the pullback against that bias, towards the point of break of the topping pattern, which offers my trade opportunity.

(2) And most importantly, I want you to take note of the similarity with the trade from the first article in this series.

<image: Don't Overcomplicate Things>

This is one of the key points to take away from this series:

  • They all look much the same.

 

It helps with identifying the setup. And it helps with confidence in execution.

Because I've seen it all before.

So once again:

  • Don't overcomplicate things.
  • Keep in mind a visualisation (or a series of visualisations) which broadly capture the vast majority of your trades.
  • It can help provide confirmation of the trade idea as it's setting up.
  • And more importantly, confidence in execution.

 

Happy trading,

Lance Beggs

 


 

Written by

YourTradingCoach - Admin

5 Comments to “Don’t Overcomplicate Things – 3”

  1. Michael says:

    The following is maybe also a useful tip – Lance, you tell me if it’s actually an overcomplication… I do have that tendency! 🙂

    I like to organize my trading journal in folders, using this criterion: each folder contains trades originated by structures of a given type.

    I find this idea greatly useful to (1) assess the effectiveness of my trades in each different scenario (I simply keep an updated number of wins / number of losses for each folder); (2) within each folder, I can focus on each type of price structure and zero in on things that make my trades succeed/fail; finally (3) if a folder accumulates 20 trades or more with a less than 40% success AND losing or breakeven average performance, I stop acting on those particular structures in real time.

    Michael

  2. Asok Sen says:

    Yes Sir really nice one.

  3. Nik says:

    Perhaps this comment-a phrase from the 2014 film about chess player Bobby Fischer “Sacrificing a pawn” will also come to this article (at least in part):
    – “It’s all just a theory and a good memory. People think there’s a lot of opportunities here. But there’s only one right move, and you don’t have a choice after all.”

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