Will This Trade Win?

 

Let’s try and improve your thought process at the time of trade identification and entry.

Will this trade win?

Let’s start by looking at the higher timeframe structure.

Will this trade win?

And now the trade entry on our Trading Timeframe chart.

Will this trade win?

Will this trade win?

This is the wrong question!

A better question is, “Is this a good reward:risk opportunity?”

Will this trade win?

Structurally, a Breakout Pullback LONG at the prior day’s high is in a great trade location. With a low risk entry and multiple-R potential, this is a trade we MUST take. It doesn’t matter if this particular trade wins or not. Your edge exists over a SERIES of trade. Some will lose. Some will win. The winners should overcome the losers.

So at the time of entry, do NOT concern yourself with worrying thoughts such as “will this trade win?”

Instead ask yourself, “Is this a good reward:risk opportunity?”

If it is… you are right to be in the trade.

Now is the time to manage the risk and opportunity.

And let your edge do its job over a series of trades.

Will this trade win?

Again…

Will this trade win?

Will this trade win?

Will this trade win?

That is the wrong question!

A better question is, “Is this a good reward:risk opportunity?”

Will this trade win?

Again, structurally, we are trading in a good location. The market has fallen back below the prior day’s high and retested the level from below setting up a Breakout Failure SHORT.

With a low risk entry and multiple-R potential, this is a trade we MUST take. It doesn’t matter if this particular trade wins or not. Your edge exists over a SERIES of trade. Some will lose. Some will win. The winners should overcome the losers.

So at the time of entry, do NOT concern yourself with worrying thoughts such as “will this trade win?”

Instead ask yourself, “Is this a good reward:risk opportunity?”

If it is… you are right to be in the trade.

Now is the time to manage the risk and opportunity.

And let your edge do its job over a series of trades.

Will this trade win?

Will any particular trade win? You cannot know!

But we don’t seek winners. We seek good reward:risk opportunities and manage whatever follows.

Happy trading,

Lance Beggs

 


Written by

YourTradingCoach - Admin

13 Comments to “Will This Trade Win?”

  1. Ashish says:

    Very useful article Lance, Thanks. Learning has never stopped with your articles and especially this one was just a rehearsal of yesterdays trade to me.

  2. Sven Gralla says:

    Hi Lance,

    thanks for the interesting article. On the second chart you write
    “A fakeout lower (D) provides the stop driven order flow necessary to break resistance (E).”

    What does that mean? Could you explain more explicit, please?

    Thanks in advance, Sven

    • Lance Beggs says:

      Sven,

      It’s all about orderflow. Short answer: the break lower from the volatility contraction will bring new SHORTS into the market with stops at or just above the contraction. If this movement lower is met by sufficient buying to trigger the stops then we can expect a surge higher from that point. (ie. a trap which triggers stops to provide a surge of orderflow)

      Study orderflow. Study auction market theory. Also look up “short squeeze” as it’s basically that same process, although most short squeeze info you’ll find will be talking about stocks on a daily timeframe.

      Also, refer to YTC Price Action Trader volume 2: http://www.ytcpriceactiontrader.com/

      Cheers,
      Lance

  3. Martin says:

    Very nice article. thank you

  4. Jozsef says:

    Hi Lance,

    just bumped into this analysis, very educative. Just one question: your very first figure shows an downward trend, so why did you go long in your first two trades? Were they not against a HTF trend?

    Thanks,

    Jozsef

    • Lance Beggs says:

      Hi Jozsef,
      Thanks for your great feedback. I’m glad you’re enjoying my writing. Much appreciated.
      I do not trade an HTF trend. I trade the TTF trend within an HTF S/R framework. Essentially the HTF defines the potential barriers to the TTF trend. If one was to look at HTF trends it becomes a never-ending source of confusion. The trend you identified on the 30 min chart was down. But if you move out the the next higher timeframe, it’s an uptrend. So we have TTF up, HTF down, next higher HTF up. Which one is relevant? Or at least most significant? So I don’t look for trends in alignment. I trade the TTF trend. The HTF only determines the S/R structure.
      Regards,
      Lance Beggs

  5. Jyoti says:

    Very educative..as usual..

  6. Paul says:

    Thanks, Lance, for the article and comments!

    Best Regards.

  7. Vikas says:

    First Long then Short. Happens most of the time and make one to loose confidence. In the end does not end in good gains. Then one is told by those who do not know Tech Analysis that one does not know Stock selection. Very frustrating as one sees them make more money

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