Patience at the Open

 

Until you have a good read of the market, there is NO TRADE.

  • Confidence in your real-time understanding of the market structure.
  • Confidence in your real-time understanding of the nature of price movement.
  • Confidence in your real-time assessment of market bias.
  • Confidence in your projection of that market bias forward in time and price.

 

And most importantly:

  • An understanding of how future price movement should behave if your forward projection has some validity.
  • And confidence in your ability to adjust your understanding (and your trading decisions) should price movement offer something unexpected.

 

In simpler language… if you don't know what's going on… you have no business trading.

Watch and wait until some clarity appears, in terms of structure, price movement and opportunity.

The market open is one time which has great potential for confusion, doubt and uncertainty.

I remind myself before the open that there is no need to rush the first trade. If it screams out to be taken, then take it. But otherwise, be patient and allow myself time to get in sync with the flow of price.

Here are two of the market opening "warning signs" that have me keeping my trigger finger well clear of the mouse.

1. Bias Conflict

During the session I maintain a sense of the bias through the YTC Price Action Trader rules for trend projection.

At the session open though, I like to complement this with a really simple and objective method – the opening range breakout.

If they're in agreement, it's game on.

But if they conflict, it's a sign to be patient and wait till they come into alignment.

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

2. Seriously BAD LOOKING Price Action

Not just bad looking price action. We're talking seriously bad looking price action.

<image: Patience at the Open>

<image: Patience at the Open>

Remain Patient. Watch and Wait.

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

<image: Patience at the Open>

Happy trading,

Lance Beggs

 


 

Written by

YourTradingCoach - Admin

4 Comments to “Patience at the Open”

  1. Johnny says:

    Hi Lance! Nice article as always. Thank you for it. Some hindsight thoughts: as you say a long entry expecting breakout within sideways trend is a little agressive isn’t it? Was it an option to take first PB long instead? And what about entries long off triangle’s support also springs which are quite far from range support though? https://i.imgur.com/QLK9t1b.png

    • Lance Beggs says:

      Hi Johnny,

      Yes it is aggressive entering just below the level. But that was when I was “feeling” price wanting to move higher. The pullback to that region had found support and price was moving to retest higher. I had room for 1:1 even if it didn’t get to new highs, so was confident that worst case I’d get a small profit and scratch the rest.

      First PB after the break – yes absolutely. Especially the first one you highlighted. I’m actually disappointed that I didn’t re-enter some there to get back to a full position.

      For entry long off the lows – yes, with hindsight it looks good. But I wasn’t able to see this at all live. And stepping bar-by-bar through the chart, I’m not sure it’s obvious either, without that benefit of hindsight. My focus really was only on price interaction with the high or low of the wider range.

      Cheers,
      Lance

  2. Ajazz Shake says:

    Hi,
    You took long position on Breakout Failure when the price closed back in the range.
    but according to your principles, you should have waited for the bull candle to break the resistance and then a weak pull back with price closing above the resistance and then taken long position.

    • Lance Beggs says:

      Hi Ajazz,

      Have a look at the second-last image. Note the text: “It’s never nice to be entering just below where a level is marked”

      The reason for that comment is that you’re right that the absolute ideal BPB entry LONG would involve a definitive and strong break through the level along with a weaker pullback. Ideally that is what I was looking for. And in fact (with hindsight) there was perhaps this situation just four candles later.

      However note the dashed lines in the third-last image and then the second-last images. The issue here is that, given a break of the resistance area, where can we expect a BPB to find support. It’s reasonable to expect that price may drop through the marked line but find support at this dashed level. The dashed level didn’t end up providing that support on the third-last image, so this became a confirmed BOF setup. But it did in the second-last image, ultimately confirming a BPB.

      Remember, S/R are actually areas, they’re rarely seen as single price levels. So it’s all well and good for us to mark a single line as shown, but we must allow potential for the actual area around this to provide the support or resistance.

      This was not an easy entry. But while price held above the dashed level there was still potential for the BPB. That’s what I was playing. Not a text-book perfect setup. But reality is not always text-book perfect.

      Cheers,
      Lance

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