Focus on Catching These Trades First

 

There are some trade ideas you look at with hindsight which are quite complex and which may have been difficult to execute.

And there are others which jump out at you as being really simple.

If you're not yet profitable, then focus on the SIMPLE trade ideas.

Identify them. Study them. Learn from them. And then trade ONLY them… until you've got a proven edge.

What you see as simple may be different to what I see as simple. But essentially, we're talking about those you would call your A+ trades.

Look at any historical chart. They're the trades which your eyes go straight to. The ones that are immediately obvious. The ones that you'd be kicking yourself if you missed.

They're the simple ones.

They're the ones you need to focus on first.

For me… one of my favourites is the first pullback following a significant change in structure.

<image: Focus on catching these trades first>

This trade… and every trade like it… jumps out of the chart at me.

If there is a "first pullback after a change of structure" trade that I miss, I'm seriously not impressed with myself.

Here's what I was seeing as it unfolded:

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

<image: Focus on catching these trades first>

What trade opportunities jump out of the chart to you?

Identify them. Study them. Learn from them. And then trade ONLY them… until you've got a proven edge.

They're the simple ones.

They're the ones you need to focus on first.

Happy trading,

Lance Beggs

Additional Notes:

1. YTC Price Action Trader readers – From the YTC PAT perspective the trade is simply the first PB opportunity after a transition from uptrend to downtrend. The classification of uptrend is not immediately obvious due to the lack of structure this early in the session. In the absence of any pre-session data, I will usually make use of any opening gap and also an opening range bias. With both being bullish in this case, I'm happy to call an uptrend.

2. Note the similarity with the trade in this post. Even though it's pattern sets up on the higher timeframe chart, the concept is exactly the same. You'll start to notice that after a while – all your good trades share similar qualities.

3. The reference to 11:30 is of course my timezone (UTC+10). The time at the exchange is 09:30. This is the time that stocks commence trading on the Hong Kong Stock Exchange.

 


 

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YourTradingCoach - Admin

8 Comments to “Focus on Catching These Trades First”

  1. Tushar kalsotra says:

    What i learnt is profit booking is also important. Otherwise what i was doing in Backtesting bar by bar…… I was juat trailing my stops to previous highs/lows and wanted to market work my way. Market is its own king, totally unaware of me who I am, move in its own way.

    Learning is ok but until we manually backtest what we have learnt will be futile as we will get new idea and we observe it in our own way. Making own edge by learning by mentors and not just spoon feeding as it wouldn’t be liked by them as well.
    Thank you so much.

    • Lance Beggs says:

      Yes, whether backtesting or forward testing, I agree that the real learning doesn’t come from the mentor, but from the time and experience in observing the market ourselves and coming up with our own understanding of how to see, identify and exploit edge.

  2. Mave says:

    Just a query regarding trade management. In which time frame do you manage your trade? Is it LTF or TTF. Its ripping away my confidence every day just because of bad trade management. Always seeing nice move in my direction and then one bar taking away my SL and then moving again. I tried LTF and TTF both. I also tried fixed target booking. In those cases, market 3 to 4 times more than my fixed target areas. Please comment as it is taking a toll on emotional capital as well.

    • Lance Beggs says:

      Hi Mave,

      I use both the LTF and TTF, so I don’t think this is going to help you. And I use a combination of targets and trailing stops, depending upon the conditions in the market.

      But then “how I trade” is not really the issue. I’m sure you’re really asking what you need to do to see some improvement in your own trading.

      This is difficult to answer as I have no real insight into your trading.

      It could well be that what you perceive to be a trade management is actually a result of low quality trade ideas, poor trading conditions, or late retail entries. Consider this!

      But let’s assume it’s trade management.

      You say, “Always seeing nice move in my direction and then one bar taking away my SL and then moving again.”

      I assume you’re referring to a trailing stop here. Firstly I don’t imagine it’s “always” happening. But if it’s happening a lot then the obvious solution is that you either need to widen stops and/or develop the ability to get back in should a stop-out prove premature. What you need to quantify though, is whether or not the profits gained through holding these larger moves is sufficient to outweigh the greater losses now through wider stops. Some investigation will be required.

      Regarding fixed targets, you say, “I also tried fixed target booking. In those cases, market 3 to 4 times more than my fixed target areas.”

      Again I doubt this is happening every time. But if it’s happening more often than not then you might want to extend your targets. Or use them as a soft-target only and switch to a trailing stop on reaching the level.

      Or why not diversify across multiple exit styles. Part of the position for a close target, part for a more distant target, and part for a trailing exit.

      My gut feel though is that you’re frustrations in trade management are due to some expectation that you can perfect the trade management style. This will NEVER happen. Trade management will always be a source of frustration. Accept it and get used to it. You will rarely get the perfect exit, in any individual trade. When you look at it with hindsight you’ll either have given back too much, or failed to take enough of the move.

      By all means keep building skill. And keep trying to improve. But if you’ve got edge then who cares if it wasn’t perfect. Personally, I massively underperform what is available. I keep trying to learn from it and improve. But it doesn’t worry me any more.

      Again, I’ve very little to go on here. And I’ve probably completely misinterpreted your question anyway!

      Hope it helps though,
      Lance.

      • Mave says:

        Thanks Lance for the reply.

        Some of the point regarding what you said above –

        Just to let you know, I am not so good while trading in ranging environment. I almost completely avoid trading or look somewhere else for trading at the first sign of range developing. And some of your articles have immensely helped me with that like overlapping bars/ 4 swing points contained within a impulsive move.

        My frustration is with the trade that have the already moved in my favorable direction. It has an R:R of more than 1:2 already. But I dont see any nearby SR for which I should book profit. Sometimes it may be overextended. I usually do all in all out since I find it difficult to manage part-by-part.

        Now the problems comes here – with both LTF and TTF swing point beyond which I keep my SL/TSL. Around 25% of the time, I am happy that the SL/TSL has reversed or temporarily stalled the market. In those scenarios, I actually re-enter again if premise is valid with more than 1 R:R.

        But 75% of the time – it just pokes my SL/TSL and goes again in my direction. I am concerned I am moving my SL prematurely as when using LTF for TM or giving away too much of profit while using TTF for TM!!

        I know its difficult for you to come to conclusion without having complete background regarding my trading style.I guess it could be a combination of everything that you said above.

        • Lance Beggs says:

          Regarding this: “I usually do all in all out since I find it difficult to manage part-by-part.”

          It might help to think of this as not being one trade of two parts, but two separate all-in-all-out trades. They just happen to have the same entry time and price. Then one can be managed for a closer or earlier exit. And the other for a later exit. Of course, this still may not suit you and that’s fine. There are many successful traders using an all-in-all-out approach. The key though is that you have to get comfortable with underperformance, as it will happen in MANY trades. Always seek to improve, but understand that you will never perfect this.

          Regarding your stats, you say that 75% of the time when the market takes out your trailing stop that it is premature and the trade then continues without you. If that’s a valid statistic, then it’s a clear indication that the stop is too close. Or am I missing something here?

        • ajazz says:

          I think you should buy his course… you won’t regret it.

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