Yearly Archives: 2020

Managing Anxiety While In A Trade

 

The following is a great question from YTC reader Aaron.

I thought this would be worthy of entry into the blog and newsletter as it's a question which will be relevant to anyone who allows discretion in their trade management plan.

And I'm really keen for anyone else to add their ideas and thoughts into the comments section of the blog post.

Question Received:

Super impressed with all your content. Do you have anything out there on managing your psychology while in a trade? I find I often deviate from my plan due to anxiety from who knows what.

My Response:

Hi Aaron,

Off the top of my head these come to mind:

(1) General psych content which may or may not offer something of relevance:

 

(2) Perhaps more targeted directly to your question:

 

But more importantly, give this a try. It's the general framework that I use whenever stuck with any problem like this:

 

Set aside some time and just brainstorm any and all options which might fit within these categories.

The fact is that there will not be a "one size fits all" solution for this problem of anxiety interfering with trade management. You might need to go through a process of trial and error.

So do the exercise and see what you come up with.

For starters, a few obvious ones:

AVOID:

  • Just go complete passive. Set the stop and target and walk away. Let it fall wherever it falls. (Not my preferred approach, but some people need this)

 

REDUCE FREQ/CONS:

  • Partially passive in that decisions and actions are ONLY made at certain times or price points. eg. the obvious solution here is when you only assess the trade on the close of each TTF candle. Inbetween these "decision points" you might find it helps to step away or look at other screens.
  • Closely aligned to the above idea, just push your chair back away from the screen immediately after the order is filled and initial stops/targets are set. Don't laugh. It's very effective. If you're out of reach of the keyboard and mouse, it's a whole lot harder to emotionally react.
  • Another option for "partially passive" is to actually split the position into two. One part is managed through a passive set & forget target. The other allows discretionary adjustment. Essentially you're diversifying your trade management across both styles. As a bonus it allows you to directly compare the impact of discretionary versus passive trade management and you'll clearly see whether or not you're adding to or reducing your edge.

 

Your turn. I'm sure there are a ton more. See what you can come up with.

Nice question by the way.

Happy trading,

Lance Beggs

 


 

One Trade Does Not Provide Enough Data

 

I think it's time we revisited a topic we discussed a few years back. The fact that an individual trade does not provide sufficient data to allow you to make informed changes to your plan.

Changes MUST consider the impact across a series of trades.

I see this problem repeatedly in email conversation with new traders, who have not yet understood the nature of edge.

Their questions come in various forms but this latest one is typical of the general nature of all of these questions:

  • "I took profits on this trade at the target area, only to see it then continue on without me. I could have got twice the profit if I held. Do you think I should use a trailing stop rather than targets?"

 

The trade involved a 2R profit at the target, which could have been 4R if he held for a trail exit. An addition of 2R to the account balance.

And so the trader was disappointed. And frustrated. Because when viewed after the fact, it was just SO OBVIOUS!

But here's the problem:

<image: One trade does not provide enough data>

<image: One trade does not provide enough data>

<image: One trade does not provide enough data>

<image: One trade does not provide enough data>

<image: One trade does not provide enough data>

<image: One trade does not provide enough data>

This is the whole point of a post that I shared about a fortnight ago.

<image: Fight to get to the next level>

Progress comes from analysis and review of your performance over a series of trades. Not individual trades.

Changes to your plan must come from analysis of results over a series of trades, whether you prefer to use samples of fixed number (20, 50, whatever) or a fixed time period (weekly, monthly).

You ask, "I took profits on this trade at the target area, only to see it then continue on without me. I could have got twice the profit if I held. Do you think I should use a trailing stop rather than targets?"

Or even a more generic, "Do you think I should make "xyz" change to my plan?"

Here's my response:

  • Only if you're seeking an answer in response to a recognised problem or underperformance across a series of trades, and not one individual trade.
  • And only if your subsequent investigation of that problem or underperformance shows clearly that this change would have improved your edge over that series of trades.
  • If yes to both, then implement the change and see what it does to the next group of trades.

 

You have access to this information. Do the work.

Assess the outcome over a larger sample.

And determine the appropriate plan of attack for your next series of trades.

You might argue, "But Lance, we don't know how the change will impact the next series?"

True. No-one knows.

That is why you continue to assess. Make the changes and then reassess. Did they help? Or is further work required?

Continue to track performance. And continue to learn, grow and develop in pursuit of never-ending improvement in both profits and consistency.

But never due to an emotional reaction to one single trade. This is a game of profiting over a SERIES of trades.

Happy trading,

Lance Beggs

 

Related Articles:

 


 

A WARNING REGARDING SOCIAL MEDIA & MESSENGER SCAMS

 

There is a growing problem on social media of scammers impersonating trading educators and firms and then contacting followers to attempt to scam you out of your money.

Their accounts will usually be copied straight from the original (same profile photo and posts). So they look legitimate. The primary difference is usually a very minor change in the username. Something you won’t notice unless carefully looking for it, such as a slight spelling change or the addition of a character such as a hyphen, underscore, period/full-stop or perhaps a number.

Please note: I will NEVER make unsolicited contact with you via direct message to sell you any product or service. And no other "representative of YourTradingCoach" will ever contact you to sell you any product or service.

This includes signup for a particular brokerage or managed accounts. And access to exclusive coaching services or groups.

In addition, I will NEVER ask you to pay for anything via transfer of Bitcoin or any other crypto funds.

If you are ever in doubt, contact me directly through proper means such as the contact page on my website so that I can confirm the offer does not come from me.

Please take care online.

And if you come across any of these scammers (whether impersonating me or someone else), please advise the real educator or firm so that they can request their followers report and block the scammer. The more reports they can get, the quicker these scammers are shut down.

Thanks,

Lance Beggs.

 


 

Today – Anything Can Happen

 

I sent out the following social media post last Saturday:

<image: E-mini NASDAQ - All Time Highs>

All-time highs in the NASDAQ! Incredible when you consider where we were just two months prior. And of course when you consider the current state of the world.

But that's the nature of markets. They don't care what we think.

So I thought I should expand upon two of the statements within that post.

"Are you able to reframe your beliefs to allow you to operate more effectively?"

"Can you separate your narrative about the world from your job of recognising and adapting to the actual market bias?"

Because, as an intraday trader, one thing that is absolutely devastating to your P&L is attempting to trade a personal feeling that is not aligned with the actual direction of the markets.

I can completely understand anyone who feels that "This market is so overbought. It doesn't make sense. The crash is coming for sure. This thing needs to go down."

I've been there myself.

And the feeling is not a problem. It's acting upon that feeling that is the problem.

It's positioning short when the market just continues on higher, caring little for you, your beliefs and your long-term viability in this trading game. That destroys accounts.

So the rally continued. Here's the NQ at the time of writing this article, about eight hours before the open on Thursday morning.

<image: E-mini NASDAQ - All Time Highs>

Success in intraday trading requires that you find some way to separate your FEELINGS about the market from your ACTIONS in trading the market. Leaving you free then to trade whatever direction the market moves, despite your underlying beliefs.

Here's a simple method I use:

Shift your beliefs and expectations further into the future.

In three steps:

(1) "I feel that this is so overbought that it just has to fall."

(2) "But that doesn't have to happen today. Maybe tomorrow. Maybe next week."

(3) "Today – anything can happen!"

So not only do I acknowledge my feeling and belief about potential market movement. I also allow it to be true.

But not necessarily today.

This frees me up to accept, recognise and adapt to whatever direction the market wants to go.

As shared in Wednesday's social media post:

<image: Freedom to adapt to actual market conditions>

Repeating for emphasis – "Being open to all three possibilities allows me the flexibility to adapt to actual market conditions. And to recognise and adapt to changes in sentiment and structure."

Because today (and in fact every day) – anything can happen.

<image: Monday>

<image: Tuesday>

<image: Wednesday>

Right now it's several hours before the open on Thursday. The markets feel even more overbought to me. But that doesn't mean it will fall today. It might. But it could also wait till Friday. Or maybe next week.

Today, anything can happen.

Becoming stuck in a mindset that the market SHOULD do one particular thing, just because you FEEL that it should, is poison to your account balance.

You have to find a way to separate your feelings about the market from your actions in trading that market. And then allow yourself to be open to all possibilities, ready to recognise and adapt your trading to the ACTUAL market conditions.

This is the plan that works for me – shifting my expectations forward in time. Hopefully it helps you as well.

Happy trading,

Lance Beggs

 

PS. Thursday update:

There's the fall I was expecting…

<image: Thursday>

<image: Thursday>

<image: Today - anything can happen>

 


 

When the Trap Entry is itself a Trap

 

Let's start by viewing the market right as it opens:

<image: When the trap entry is itself a trap>

<image: When the trap entry is itself a trap>

Readers of the YTC Price Action Trader have several principles they use for projecting the upcoming price swings and identifying areas of potential trade opportunity.

<image: When the trap entry is itself a trap>

<image: When the trap entry is itself a trap>

BUT WAIT!

There is something else that should be jumping out at you as relevant as well.

Something that we have discussed numerous times over the last couple of years.

That's right – it's a trap RIGHT BEFORE the regular session open.

See here if you missed the prior articles:

 

Here is the general idea:

<image: Traps Just Before RTH Open>

This is a feature of the open, long recognised through my daily Market Structure & Price Action Journal practice.

Traps just before the open can often provide nice follow-through, when the breakout fails in the opening price sequence.

<image: When the trap entry is itself a trap>

Wait!

What?

Why not today?

Because there is a price action feature that suggests the trap is itself potentially a trap.

It's IMPORTANT to look at the area the trap is moving into.

While normally I only put minor weighting on overnight price structure, there are some times it offers clear warning signs.

Like this:

<image: When the trap entry is itself a trap>

<image: When the trap entry is itself a trap>

<image: When the trap entry is itself a trap>

Let's move forward and see the outcome.

<image: When the trap entry is itself a trap>

<image: When the trap entry is itself a trap>

<image: When the trap entry is itself a trap>

A break of a significant level just immediately prior to the RTH open, or immediately after the open, should have you considering the potential for trap-driven opportunity. But just pause for a second and check the context. Does the pre-open structure provide a potential barrier to movement? The trap concept will still apply. However you might just need to widen the area and hold off on entry, until the barrier is also broken.

Because otherwise, you might find that the trap you're seeking to trade is itself a trap!

Happy trading,

Lance Beggs

 


 

Sometimes It Takes Multiple Attempts – 2

 

Tuesday's trade sequence reminded me of this article from last year – Sometimes It Takes Multiple Attempts.

Where the market reminds us that it doesn't give a damn about our expectations for a quick move from entry to the target.

And that sometimes, it would rather play a bit first and see if it can stop us out. 

<image: Higher Timeframe Context> 

I just love these narrow range holiday sessions. They provide a good "line in the sand" from which we can determine bigger-picture sentiment – bullish above and bearish below.

So yes, despite the low volume I do consider them relevant enough to mark on my charts as S/R. 

And so, prior to the session open, I sent out the following social media post. Please note that this is a repeat of a 2019 post so the price action is different to today's action. But it's the concept that is relevant.

<image: Question - Do I use the narrow range holiday sessions as SR?> 

So here's the plan today:

<image: The Trading Plan> 

<image: The Trading Plan> 

Sounds easy, right?

Let's drop now to the 1 minute Trading Timeframe:

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts>

<image: Sometimes it takes multiple attempts> 

A few thoughts post-session:

(a) It's unrealistic to expect that every trade will go immediately to your target. Sometimes a trade idea will require multiple attempts.

(b) Two failures – stop and reassess. Reconsider the original trade premise, but also be sure to consider the idea that you are completely wrong. And also that maybe you have no idea of what is happening and need to stand aside.

(c) Three failures – time out. Wait for a change of structure and only then look for the next trade idea.

(d) And maybe… consider the idea that a key goal in your trading should be to not only know how to find quality trade ideas, but also to get good at surviving those times when the trade idea doesn't quite match what the market is actually offering.

Because sometimes… it takes multiple attempts!

Happy trading,

Lance Beggs

 


 

When the Pullback Hits Harder than Expected

 

Pullbacks… a simple retracement structure depicted in textbooks as smooth flowing and simple to read.

Reality though, is usually not so kind.

Far too often these pullbacks will be a mess. Full of chop, false-starts and stop-outs. Or unexpected and sudden shifts in pace or volatility.

Price action seemingly designed to confuse you and cause you to react emotionally and impulsively. Tempting you to enter too early and stop out. Or hesitate and miss the entry entirely.

In time, with experience, you'll improve your ability to read the market. And your ability to perceive edge.

And develop some rules-of-thumb for how to best manage these situations, when it seems the market is putting up a fight.

Let's look at one example of a rule, which guides me through a pullback that hits harder than expected.

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

<image: Pullback Entry Timing>

When the pullback hits harder than expected – step aside.

Don't be tempted to chase the first entry. If it v-turns and you miss the trade, let it go. It wasn't yours to catch.

The far better option is to wait for a second push lower and reassess.

Consider whether or not this rule might add value to your trading.

And then when you're comfortable with this, see if you can expand your skill level to find the exceptions to the rule. Those times and places where you might take that first entry. Because they exist as well.

Happy trading,

Lance Beggs

 


 

Until it Breaks and Holds, Exercise Extreme Caution!

 

This image was posted on social media recently, to highlight the way that the opening range can help minimise early damage to your P&L.

<image: Using the opening range to minimse damage in unfavourable opening conditions>

I received a message in response to the post:

This has me curious. Did you trade it? Can you show us the trades? If you did stand aside, at what point did you know to stop?

I did take two trades. Neither went to the targets as planned, but active trade management meant I was not in drawdown. I'm happy with both trades. They were the right decision.

I then stood aside and waited for the break.

So let's look back at the market and discuss my decision making. In particular, when I "called" price as stuck in the opening range. And when I stood aside.

Because it's rarely obvious that there will be opening range chop, until after the fact. And quite often it's only obvious after we've taken a loss or two.

As we work through this price sequence, it might be helpful to think of me as transitioning through three stages:

1. Fully engaged in the price action right from the open. Ready to react to any potential early trade opportunity, should the market drive with strength.

2. Recognising a chop-zone, with price stuck in the opening range, but still allowing limited engagement.

3. Recognising a chop-zone, and standing aside because I see greater potential for damage than profits.

Let's look at the market and work our way from stage 1 through to stage 3.

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

<image: Using the opening range to minimse damage in unfavourable opening conditions>

Happy trading,

Lance Beggs

 


 

Adding to a Position

 

From time to time I get asked how I add to positions. That is, entering a new trade while the prior trade is still open.

So I thought it might be a good idea to outline my response here. Then I can just link straight to the article in future. (Time management WINNER!)

The plan is nice & easy. Because this is not something I do very often.

<image: Adding to a Position> 

Ok… not always… sometimes I will hold a partial position for a larger move. But mostly that is how I operate. It's how my trading has evolved over time.

All in, scale out.

Wait for the next one.

If you wish to chase larger trends and hold through multiple price swings and retracements, pyramiding into a larger position with numerous entries along the way, then you should seek guidance elsewhere. It's not a part of my plan.

But still… I do add on the rare occasion.

So here's how it works.

Pre-conditions:

  • The existing trade MUST be in profit.
  • The existing trail exit MUST be in a position such that even if both trades stop out immediately, I will still profit overall from the combined sequence. Or at least not lose!
  • And most importantly, the added position MUST be a valid trade in its own right.

 

That last point is critical for me. The added trade MUST be one that I would want to take, even if I missed the original entry. 

Let's look at an example.

<image: Adding to a Position> 

<image: Adding to a Position>

<image: Adding to a Position>

<image: Adding to a Position>

<image: Adding to a Position>

<image: Adding to a Position>

<image: Adding to a Position>

<image: Adding to a Position>

You won't see many examples on my site, where I have added to an existing position.

But all of them will (or should) have the following in common:

  • The existing trade MUST be in profit.
  • The existing trail exit MUST be in a position such that even if both trades stop out immediately, I will still profit overall from the combined sequence. Or at least not lose!
  • And most importantly, the added position MUST be a valid trade in its own right.

 

Happy trading,

Lance Beggs

 


 

The Day After a Bad Performance Day

 

Last week we looked at a session that caused me some troubles. See here if you missed it – Good Trading Isn't Just About Winning Trades.

It wasn't a losing day. A "bad" day isn't necessarily a losing day. This one profited. Cycling from negative to positive and back again to negative and then to positive, before I finally called it a day.

What makes it a "bad" day was my poor performance.

My poor decision making. My poor execution.

<image: The Day After a Bad Performance Day

It happens. I just wasn't with it that day.

Sometimes I can brush it off easily. Especially when it didn't lose.

Laugh at myself. Get over it. And move on.

But other times… like this time… that's not so easy.

Perhaps it's the ongoing COVID-19 isolation fatigue? Who knows?

All I know is that I can't let it infect the next session.

So here's the plan for "The Day After a Bad Performance Day":

I can't do anything to influence the market, obviously. So the focus needs to be on me and on my interaction with the market. The things that I can control.

Fixing your Mindset

The problem here is simply that the mind is "stuck". It's anchored to the negative outcome from one single session.

We can fix this with two steps:

(1) Let's shift the mind from its current negative feelings to something more positive.

I recommend you keep a folder containing printouts (charts, trades, stats, whatever) that show examples of you at your absolute best. A "highlights" folder. Best trades. Best sessions. Equity curves overcoming drawdown.

And most importantly for our current situation, include at least one example covering two sessions where poor performance in the first session was followed by good performance in the second.

Keep this in your trading room. It will become your GO-TO tool for shifting focus quickly.

A reminder that the performance yesterday was an aberration. And that you are capable of so much more – because you've done it before.

And if you haven't done it before, then make it up. Because you WILL in time. You just haven't done it yet. Perhaps two printouts of yesterday's performance, one showing actual results and one showing ideal performance. It's something you may not have achieved yet but you know you damn well can next time.

A "highlights" folder. Create one if you don't have one.

And then use it.

(2) Let's shift the mind away from its single-session focus.

Yesterday was one day. If all goes well, I'll be trading a few thousand more days over coming decades. Yesterday is insignificant.

Take a calendar or diary covering at least a year into the future. And skim forward in time and have a look at a whole lot of days to come. And ask yourself, given all those days available to improve on your recent performance, does yesterday really matter?

And then turn today's page. This is the only day that matters now. And it's a blank sheet. And it offers a perfect opportunity to create a new entry in your "highlights" folder, as you follow up yesterday's poor performance with an example of you trading at your best.

Planning your Interaction with The Market

The aim here is to simply ensure you get the session off to a good start. That doesn't necessarily mean a winning trade. The outcome is somewhat out of our control. But it means A GOOD TRADE.

However you define them. An A+ Trade.

One that you would be happy to print and put on your wall. One that you would be happy to screenshot and send to me.

Even if it loses. A trade that you know that you HAD to take. It had edge. It was the right thing to do at that time and that place.

To give yourself the best chance of achieving this, you need to slow down. Be comfortable with no trades at all, until sufficient structure is in place such that you have a GOOD READ on the market and are completely in sync with the price movement. No trades at all, until you find one that you'd be happy to take if you were only allowed to take one trade this day.

That's all you need:

  1. Focus on the positives by skimming through your "highlights" folder.
  2. Recognise yesterday as insignificant in the context of a multiple-decade career. And see today as an opportunity to add to your "highlights" folder.
  3. And then slow yourself down. Commit to no trades, until the market is screaming out to be traded with an A+ trade opportunity.

 

So let's trade…

<image: The Day After a Bad Performance Day

<image: The Day After a Bad Performance Day

<image: The Day After a Bad Performance Day

<image: The Day After a Bad Performance Day

Moving forward a few minutes… and compressing the data slightly so that I can fit more price action…

<image: The Day After a Bad Performance Day

<image: The Day After a Bad Performance Day

<image: The Day After a Bad Performance Day

<image: The Day After a Bad Performance Day

There were no real secrets here in managing my performance, on the day after a bad performance day. Just a short process to get my mindset right. And to take my time, happy with no trades at all if conditions were poor. Waiting and watching until a trade set up that I knew I could look back upon in the post-session and say with 100% certainty that it's a good trade. Win or lose, it wouldn't matter.

I guess the obvious comment is: "Shouldn't all trades be like that? And shouldn't all sessions be traded with this patience?"

Yeah, sure!

But let's be real.

They're not all like that. There are always going to be some that are a bit questionable.

The aim on a day after a bad performance day, is to just slow down a little and make sure that the first trades today are NOT questionable at all.

Three simple steps:

  1. Focus on the positives by skimming through your "highlights" folder.
  2. Recognise yesterday as insignificant in the context of a multiple-decade career. And see today as an opportunity to add to your "highlights" folder.
  3. And then slow yourself down. Commit to no trades, until the market is screaming out to be traded with an A+ trade opportunity.

 

Happy trading,

Lance Beggs