Trading Timeframe Narrow Range Bar Entry – Part One

The more I trade, the more I love a Trading Timeframe (TTF) Narrow Range (NR) bar entry.

Most of my trades involve an attempt to gain a low risk entry via lower timeframe (LTF) trigger patterns.

Typically the TTF bars themselves are wider than I like. An entry on a break of the TTF bar, with a stop on the other side, often involves more risk I’m willing to accept. So I prefer to seek LTF entry.

But occasionally the TTF bar sets up with a narrow range – right in my setup area. And I absolutely love that.

Let’s look at two trade sequences that occurred in this session, both involving TTF NR bar entry. (As is often the case I’ll choose difficult trade examples with messy price action sequences – ’cause that’s what the market often provides – and because it’s my belief that they provide you with greater educational value than simple “textbook perfect” examples that are in actual fact a rarity!)

Trading timeframe narrow range (NR) bar entry

Trading timeframe narrow range (NR) bar entry

Trading timeframe narrow range (NR) bar entry

Trading timeframe narrow range (NR) bar entry

Trading timeframe narrow range (NR) bar entry

Trading timeframe narrow range (NR) bar entry

Trading timeframe narrow range (NR) bar entry

Ok… that took a few more images than I expected, so let’s look at example 2 in a followup “Part Two” article next week.

For now we’ll wrap it up with two important points.

(1)Most traders look for confirmation via price movement in the direction of the trade.

I prefer to look for inability to move against my trade premise. It usually provides an entry much closer to the turning point.

This is a concept we’ve discussed previously – see here for the conceptand here for another example.

In this trade, I sold because price couldn’t move up. An NR bar is one example of how to do this.

Trading timeframe narrow range (NR) bar entry

(2) Please note that I am NOT advocating buying or selling the break of any TTF NR bar.

The trade must be in a proper setup location, where follow through in your trade direction makes sense with regards to the structure of the market.

The trade must offer good reward:risk parameters. The NR bar entry will ensure low risk. The market structure though, MUST provide multiple-R opportunity.

More to follow next week, when we look at one more example.

In the meantime, while looking for LTF price confirmation… make sure to also keep an eye on the TTF. It may just be proving an inability to move further into your setup area, offering you a nice low risk entry into your trade.

Happy trading,

Lance Beggs

 


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YourTradingCoach - Admin

5 Comments to “Trading Timeframe Narrow Range Bar Entry – Part One”

  1. Brent says:

    excellent article.

  2. Manish Shah says:

    Dear Lance,
    As far I can see the 5 min chart is in an up trend and the decline from the high at 1103.8 seems to be a pull back. Why would you not buy this instrument on a reversal signal on the 1 min chart to play for a rally back up to the high.

    Great site
    Regards,
    Manish

  3. Pete says:

    “(1)Most traders look for confirmation via price movement in the direction of the trade. I prefer to look for inability to move against my trade premise.”

    PING! Light bulb moment…Thanks.

  4. […] you'll also find the idea put in practice here and […]

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