Monthly Archives: June 2017

I love these patterns so much. Let's do it one more time.

I know… we've done this a couple of times already – see here – and here.

And of course, those with the YTC Price Action Trader should look to Volume 2, Chapter 3, Page 143, for the same idea expressed on the Trading Timeframe.

But I want to do it one more time, just to really emphasise the point.

In the right context these Test/Breakout Failures of momentum extremes can provide GREAT opportunity.

Regardless of your chosen market and timeframe, if this idea appeals to you then I highly recommend you look through your charts (both trading and higher timeframes) and study some historical examples. You may then want to keep an eye out for them in future.

So to look at yet another market, let's see one that occurred in the emini Dow (YM) futures earlier this week.

I watch for this on both higher timeframes AND on the trading timeframe. This example actually occurs on both. Let's start with a higher timeframe, using the 15 minute as it provides a good "fit" on the image.

I mentioned earlier that this momentum drive also offered a Trading Timeframe example. That would be for those on the 1 minute YTC Scalper timeframes. You'll note if you look at the 15 minute charts above you'll see the momentum low actually included two candles with bottoming tails. On the lower timeframe chart this is yet another example of this same pattern. Let's look at the 1 minute chart showing the "internal detail" comprising these bottoming tail lows.

Keep an eye out for large momentum moves. Those on the trading timeframe can offer nice movement for a swing or two. Those on the higher timeframe structure can offer a clear directional bias for a longer period of time, often a whole session.

1. A strong momentum drive.
2. The first pullback does not lead to immediate continuation.
3. An eventual break of the momentum extreme, which rapidly fails.
4. Potential opportunity!

Happy trading,

Lance Beggs

One of the key tasks I was looking forward to this last week, having recently overcome my long-term internet outage, was in catching up with Aaron Fifield's Chat With Traders podcast.

And I must say it was AWESOME to come across episode 117 with Larry Alintoff.   (Yeah… I'm a long way behind!!!)

The reason…

Despite the fact that we likely trade very different timeframes, markets and methods, I was really pleased to hear Larry describe one way that he seeks trade opportunity – when things that "should" happen, don't happen.

That is one of the themes I've shared through YTC over the last few years.

To have a trader of such high regard validate this idea… well I must say I felt just a little pleased with myself!   🙂

You'll find dozens of references to this idea if you search back through the archives, in either the blog or my social media posts.

The most recent, from memory, would probably be this one – https://yourtradingcoach.com/trading-process-and-strategy/studying-a-higher-timeframe-trap/

And of course, those with the YTC Price Action Trader should look to Volume 2, Chapter 3, Page 143.

So I thought, why not look at another example of this idea.

GBP/USD offered an interesting example during the last week. One which is perhaps not as obvious as some of the prior examples.

Let's look to the 4 hour chart at the close last Friday, 9th March.

So let's look at Monday's data, still on the 4 hour chart.

And now Tuesday…

Ha ha!

Ok, it's not all bad.

This is why I wanted to share this one. It makes a nice difference from the previous one which I linked to above (here again if you missed it).

In that prior article, price did break the swing low.

This was the setup in that prior article.

As we've seen though, it doesn't always happen this nicely.

Sometimes price doesn't quite break that low.

But it doesn't matter.

Often, just trying to break that low is sufficient.

YTC Price Action Trader readers – see Figure 3.78 on page 143 for another example.

Let's drop down to a typical trading timeframe chart, the 5 Min chart, to see how we could have recognised this failure to continue lower.

In fact, just the day before, on Monday, I'd shared this example from the emini Nasdaq futures, via social media:

Here is the outcome…

A strong momentum drive often leaves an expectation in many traders of continuation, should price break the momentum drive extreme. Any failure of that break, or an inability to even quite get that far, can provide a reasonable move back in the opposite direction.

I'm a big fan of this concept – when things that "should" happen, don't happen.

Keep an eye out for it in your markets and your timeframes. Archive and study a few examples. And consider adding it to your trading toolkit, should you also find them to offer great opportunity.

Happy trading,

Lance Beggs