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.
And now the trade entry on our Trading Timeframe chart.
Will this trade win?
Monthly Archives: June 2014
Reader Feedback – Light Bulb Moments
Reader Feedback – Light Bulb Moments:
Hey Lance,
Hope you are well.
I refer to your newsletters dated 28/3 and 4/4, the contents of which embedded a light bulb moment in my head.
Up until now I’ve always hated gaps, I felt like the markets flow has been disrupted. In reality my perception was disrupted.
Hence I’ve always traded globex tick data. However there were limitations to this method as the chop of this data was based on my random figure, not that of the market participants. And the visual patterns regarding volatility are much clearer on time charts.
Then came your newsletters regarding Opening range and two lines you must have on your chart. My initial reaction was wow!, but after testing it on 3 months of RTH time data my reaction was wooooooowwwww! (PS. I included the prior day close while I was at it)
Now instead of needing a bias before the trading day, I go into each day with a neutral bias. Instead of being so tense prior to each open I’m now Mr cool.
The contents of your FREE newsletters are GOLD, but most people will likely underestimate it – unfortunately that’s human nature. All I can say is “KEEP IT COMING”
Thanks and Regards
R
NB. These are the two articles from the 28/3/14 and 4/4/14:
Check them out if you missed them… or try them again if you didn’t get your own light bulb moment.
Lance Beggs
IF-THEN Analysis at Session Open
Continuing a theme from previous articles – here and here.
- Keep your focus ahead of price
- Never let price action take you somewhere your brain didn’t get to five minutes earlier.
This is not just a concept to apply during the trading session.
It also applies at session open.
Start the session with some thought as to likely expectations for the type of environment and for likely initial price action sequences.
This can be done for markets which have a defined pit-session opening time and for 24 hour markets at the time of major session openings (eg. UK, US forex session opening times).
- Where is price going?
- How is it likely to act? Why?
- Will that provide trade opportunity?
- What will it look like if my analysis is correct?
- What will price look like if I’m wrong?
- What else could it do?
This is not prediction. This is simply forward planning… developing “IF-THEN” scenarios based upon your assessment of the likely future price action.
If your “read” of price movement proves correct, you will have trade opportunity. If it proves incorrect, you stand aside and reassess.
This will ensure your actions in the market are pre-considered and your trades only occur when the market has conformed to your expectations.
And you will be less likely to be caught in a trap through impulsive reaction to unexpected price movement.
(** Important Note: This is only our initial expectation. Ongoing bar-by-bar analysis will adjust our expectations if price provides something different from our initial analysis. Don’t rigidly stick to your initial expectations against all evidence to the contrary.)
We saw an example of an opening IF-THEN scenario in last week’s article where we discussed an early-session trade opportunity in the SPI futures.
See here if you wish to review that article in full: https://yourtradingcoach.com/trading-process-and-strategy/late-session-breakout-early-session-opportunity/
But let’s look at another example.
This time from the Crude Oil market as it opened today, Monday 9th June 2014.
We’ll start with the Higher Timeframe in order to get a picture of the structure of the market.
Late Session Breakout – Early Session Opportunity – Email Q&A
Last week we examined an early-session opportunity in the Australian SPI futures market.
See here if you missed the article: https://yourtradingcoach.com/trading-process-and-strategy/late-session-breakout-early-session-opportunity/
Over the weekend I received an email from a reader asking an excellent question. I thought I should share it with you all.
Question:
Hi Lance,
You mentioned that there were 2 opportunities to go long.
Would you have taken the first one?
The pullback “B to Open” was weak, then the impulse move “Open to BOF” appears quite bearish, though you do get the BOF set up.
Image from Prior Article:
Reply:
Late Session Breakout – Early Session Opportunity
Every day you should look for one quality trade opportunity and study it. Print it out, review it, learn from it and file it in your Trades Journal.
It doesn’t have to be one you traded.
If it is, that’s great.
But it doesn’t have to be. There is still opportunity to learn.
It doesn’t even need to be in the markets you trade.
I look at several markets for my daily “trade” lesson. Primarily CL and TF because they’re my current focus for trading. But I also have a quick scan through ES, SPI and GBP/USD. And any others that may have significant news influence.
Here’s one from last Monday which I particularly love, from the Australian SPI futures market.
What do I love about this?
Dealing with Psychological Pressure Post-Entry
From YTC Facebook:
Posted Wednesday 4/6/14:
It’s psychologically draining to enter a trade and then watch it almost immediately move to drawdown.
But here’s a fact… the best entry technique for any particular trade CANNOT be known until the trade is over and reviewed with the benefit of hindsight.
We can’t expect to pick the optimal entry point every time.
Is it therefore not reasonable to expect that a good proportion of your trades will move to a worse price after entry?
Absolutely!
Here’s one way to help with this psychological pressure… expect it!
Assume your entry will always be early and price will pull back further to retest the prior swing highs or lows.
Consider how price should behave if the trade premise is still valid and the swing highs or lows should hold. And how should it look and behave if it is likely to take out the stop.
Pre-considering the worst case scenario helps you to hold during drawdown if price action is such that it still supports your trade premise.
Posted Thursday 5/6/14:
Yesterday we discussed one strategy that can help with the psychological pressure post-entry.
Here’s another…
If you find you’re scratching your trade too often or too soon, then amend your entry procedures to include walking away or turning off your monitor for (at least) the duration of the first trading timeframe candle.
So if you trade on the 5 minute chart for example, enter your trade, then walk away for 5 minutes and clear your mind.
Simple… but very effective!
Happy trading,
Lance Beggs