It’s Game On! Let’s Trade!

 

I operate with three general levels of engagement – Trading, Trade with Caution, and Stand Aside.

Because not all conditions in the market are the same.

If you haven't done so, I highly recommend adopting a similar practice. Take some time to consider the factors that might trigger each level of engagement in your own trading business.

Today let's look at three factors which had me in "Trading" mode right at the market open. No delays. No hesitation.

With these three factors in play, I wanted to be in the first opportunity I could find.

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

A gap open, from a strong and persistent overnight uptrend, with a recent trap showing an inability to drop.

There is emotion in the market.

And I want to trade.

(See here for prior articles on traps just before the open – here and here).

<image: It's Game On! Let's Trade!>

(NB. YTC Price Action Trader concepts – The First Principle is in play, PB setup)

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

I don't want to trade all market opens.

There are many that I classify as "Trade with Caution". Think of the opposite of today's example – a market opening in the middle of the prior day's range, following a dull and lifeless sideways overnight session. There is no emotion driving the market. And so I have no business in taking a position until something changes. Wait patiently. Let the opening structure form (5 minutes, 15 minutes, 30 minutes… or as long as it takes). And then trade off that structure.

But there are other days when I don't want to wait. Market sentiment appears to be strong and potentially one-sided. This is not a time to wait. This is not a time to "Trade with Caution".

Today was not one for waiting. It's game on. Let's trade.

Again, if you haven't done so, I highly recommend adopting a similar practice of classifying three general levels of engagement – Trading, Trade with Caution, and Stand Aside.

Take some time to consider the factors which might trigger each level of engagement in your own trading business.

Happy trading,

Lance Beggs

 


 

Written by

YourTradingCoach - Admin

2 Comments to “It’s Game On! Let’s Trade!”

  1. Hi Lance. Greate article. I like this kind of articles about structure and decision making based upon that structure.

    It’s been hard for me to relate this setup with the standard YTC PAT PB setups. It seems more to me like a pause of the upwards extension from the open, in fact, there is no a swing low, right?
    Could it be more like a volatily contraction/expansion pattern in the LTF?
    Finally, where did you place your initial stop loss?

    Thanks!

    • Lance Beggs says:

      Hi Sergio, Thanks for a great question. Yes, this is not a “standard textbook” example of a pullback. Such an example would have a clear multiple-candle extension and then a clear and obvious multiple-candle pullback (shorter in length) with an obvious swing low in place before continuation higher. But it’s still a pullback; just a very short one in depth and duration. And certainly, much more obvious on the LTF chart where it was a nice volatility contraction/expansion pattern.

      The question then is when should one take such a very shallow pullback? Certainly not in any “normal” trending environment where pullbacks will typically contain multiple candles.

      Shallow ones are ONLY relevant when you have expectations of a fast or strong momentum drive. Perhaps news driven, or trap driven. Or in this case, a momentum drive from the open.

      In such an environment, with expectations for a momentum drive, the first pullback will quite often be a single candle in duration. On the TTF it will look more like just a stall. It will typically be easier to see on the LTF chart. But it’s still a pullback.

      The stop was just below the very narrow second red candle, so very tight. If my premise was right that this was a momentum drive, then price should not get back to that point. If it did, then I’d take a tiny loss and reassess my expectations about the current environment.

      Cheers,
      Lance.

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