The Other Trader (5)

 

Let's continue with a series we started last year – the metagame – trading AGAINST other traders who find themselves on the wrong side of the market.

Because…

If I can't feel someone on the other side of the market getting it really wrong, there is no trade.

You can see the prior articles here if you missed them – OneTwoThreeFour.

Let's set up the scenario…

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

(Source: YTC Price Action Trader Vol 2 Ch 3 P99-102)

<image - metagame trading - the other trader 5>

(Source: YTC Price Action Trader Vol 2 Ch 3 P145-153)

From a metagame perspective, this is the scenario we're looking at. We aim to place ourselves in the mindset of any trader who bought late in the move, at or soon after the breakout. Feel their stress build as price stalls. And stalls. And stalls. Feel their pain as their "sure thing" collapses back below the stall region. And find a way to profit from their pain.

<image - metagame trading - the other trader 5> 

Let's zoom in a bit. And take on the mindset of the novice retail trader who entered late in the move (let's say right on the break).

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

<image - metagame trading - the other trader 5>

Trading the metagame…

If I can't feel someone on the other side of the market getting it really wrong, there is no trade.

Fast, sudden price moves don't always continue.

Quite often, someone is getting trapped.

And that… is opportunity.

Go get 'em,

Lance Beggs

 


 

Written by

YourTradingCoach – Admin

1 Comment to “The Other Trader (5)”

  1. Personally, I believe most short-term price movements are market inefficiencies. So I use Overbought and Oversold signals on entry and exit but stay with the longer-term trend.

Leave a Reply

Message

Please prove you're a person: Time limit is exhausted. Please reload CAPTCHA.