Wrong Wrong Wrong Right

 

This was an interesting sequence of trades – three which I got completely wrong, followed by one which I finally got right.

The key takeaways:

  1. You won’t always get it right. Sometimes your timing is out. Other times, like in this sequence, your assessment of bias is just wrong.
  2. Good entry location and good active trade management can ensure that even when you get it wrong, you still don’t lose much. Or, as in this sequence, you don’t lose anything.
  3. One right trade can more than make up for numerous wrong trades.
  4. Profits come from a series of trades. Not from individual trades. In this business, individual trade results are irrelevant (assuming they do not break your money and risk management limits).

 

Market open

The plan

Wrong

Note importantly on the Trading Timeframe that the entry was very much near the low. There was absolutely NO waiting for confirmation of price moving higher. Instead, entry was taken when price showed it could not move lower.

Note also how active trade management allowed the trade to profit, with half taken off at the first target area and the remainder scratched for a smaller loss once it was clear this trade was wrong.

Good decision making with regards to entry and trade management ensured that I did not lose here, despite being wrong about the direction of the market.

Let's try again

Wrong

Again…

Note importantly on the Trading Timeframe that the entry was very much near the low. There was absolutely NO waiting for confirmation of price moving higher. Instead, entry was taken when price showed it could not move lower.

Note also how active trade management allowed the trade to profit, with some risk taken off when I wasn’t happy with the post-entry stall. This turned out premature, but it’s a good decision. Price should have moved quicker. Of the remainder of the position, half is taken off at the next stall area and the remainder scratched for a smaller loss once it was clear this trade was wrong.

Good decision making with regards to entry and trade management ensured that I did not lose here, despite being wrong about the direction of the market.

One more time... cause it's working so well so far!!!

Wrong

Yes, the temptation to not show bad trading is GREAT. But sometimes there are good lessons.

Once more for effect…

Note importantly on the Trading Timeframe that the entry was very much near the low. There was absolutely NO waiting for confirmation of price moving higher. Instead, entry was taken when price showed it could not move lower.

Note also how active trade management allowed the trade to profit, with some risk taken off early (in the area of the prior pullback lows) and the remainder scratched for a smaller loss once it was clear this trade was wrong.

Good decision making with regards to entry and trade management ensured that I did not lose here, despite being wrong about the direction of the market.

A better plan

Right

Repeating the key takeaways:

  1. You won’t always get it right. Sometimes your timing is out. Other times, like in this sequence, your assessment of bias is just wrong.
  2. Good entry location and good active trade management can ensure that even when you get it wrong, you still don’t lose much. Or, as in this sequence, you don’t lose anything.
  3. One right trade can more than make up for numerous wrong trades.
  4. Profits come from a series of trades. Not from individual trades. In this business, individual trade results are irrelevant (assuming they do not break your money and risk management limits).

 

Happy trading,

Lance Beggs

 


 

Written by

YourTradingCoach - Admin

2 Comments to “Wrong Wrong Wrong Right”

  1. Marcus says:

    Wow this is a great article in my opinion. It’s almost like I’m looking at one of my own sessions, except on the winner you had I would have either suffered a loss or missed it chasing a BOF, mainly because of the way price accelerated as it reached support. Sadly, I have to say because the entries and especially managment are really well done I would have consider this one of my better days. To be honest I cant see an error in any of the chosen entries taken long. Also, I would have loved to have seen your thought process though on the LTF on that very last entry short as I would have placed my stop on the upper tail of the red candle before the last entry candle.

    • Lance Beggs says:

      Hi Marcus,

      From an execution perspective (decision making with respect to entry timing and subsequent management) these were good trades.

      What I mean by calling the trades “wrong” was simply that hindsight showed I wasn’t aligned with the actual bias.

      From a trade idea perspective, it could be argued that after the first two losses I should have perhaps passed on the third trade. At that point, if not before, it should have been obvious to me that I was out of sync with the market.

      Apart from that, there are not really any errors.

      As to the final short, I assume you mean the one at approx 10:01. That’s one I shouldn’t have been in at all. Obviously I was playing for continuation lower, but it’s not a smart place to do this. Price is overextended to the lows. The prior green candle (09:59) was the first to have it’s high broken in half-a-dozen or so candles. The subsequent break of it’s low was then immediately rejected in what produced an engulfing candle. I seem to have entered right on the close of that engulfing candle. Odds were for continuation higher. This was not a good trade idea. (Thoughts here just taken from that TTF image, so the live picture might have felt different).

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