Monthly Archives: April 2020

Good Trading Isn’t Just About Winning Trades

 

There were two lines in last week's article, which I want to continue exploring today.

Good trading isn't just about winning trades.

Just as important is managing yourself during those times when you don't have a good read on the market.

This business is HARD. And I tend to perhaps focus on the negatives a little more than some readers like. But this aspect of the game fascinates me.

Anyone can talk about the easy sessions, with directional markets and quick profits. But I want to talk about those times when we struggle. How we make decisions when under pressure. And how we can best manage our performance to safely close out the day and survive to trade again tomorrow.

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

So let's have a look at Wednesday and see how I managed my performance, on a day when fate decreed that very little should go right.

And yet, I somehow managed to get out of it with a slight positive result. I guess, as per the notes in the image above, that makes this a damn good day.

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

<image: Managing your performance when it's just not working to plan>

Wrong direction entries – they happen.

Neutral openings chopping above and below the opening range – they happen.

Impulsive entries, in places and times you had no intention of trading – they happen.

Your job is to manage your performance such that these things do not destroy you.

Recognise… and adapt.

The key lesson to surviving days like this is simply the following – recognise it happening quickly – and STOP TRADING.

The odds are that the longer you continue to trade in these conditions, the greater the likelihood that you'll grind your way down to your daily drawdown limit. That is not a good outcome for your account. And not a good outcome for your mindset.

You've got to stop.

You don't have to trade every market sequence. And you don't have to trade a full session every day.

If the market is offering crap conditions or if you're just out of sync with the flow of the price action, get out of there.

Come back tomorrow, when everything is new and you're ready to start again with a clear mind and a positive attitude..

<image: Managing your performance when it's just not working to plan>

Good trading isn't just about winning trades.

Just as important is managing yourself during those times when you don't have a good read on the market.

Recognise that it's not working. And STOP.

Tomorrow is a new day.

Happy trading,

Lance Beggs

 


 

Recognise when it’s not working – and ADAPT

 

The plan was simple. Catch the opening drive. And bask in the glory of a winning start to the new session!

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

Three failures… compulsory time-out!

Note that this doesn't necessarily mean three losses. The first two were small wins. The last was a small loss.

I'm still in front.

And now have some important information.

THE MARKET IS NOT IN AN OPENING DRIVE.

So it's time to put the mouse down. Step away and clear my mind (it doesn't take long – I was gone for maybe 30 seconds at most).

And then reassess.

There are generally two ways I'll play this.

Option 1 is to just pack up for the day. Today is too early for this. But if I hit a stretch where I'm out of sync with the market, say as it's approaching midday, I see no problems with just calling it a day and making sure that the small profit does not turn into a loss.

Option 2 is to bracket the whole area and then wait for price to break clear and show improved conditions. In particular smoother price flow! Then it's game-on. Reassess the trend, project it forward and identify the next trade opportunity.

<image: When you're out of sync with the market - recognise it and ADAPT!>

<image: When you're out of sync with the market - recognise it and ADAPT!>

Good trade.

Unfortunately this was the extent of the directional move and the market settled into some sideways ranging action.

<image: When you're out of sync with the market - recognise it and ADAPT!>

I'm actually quite happy with this trading.

Six trades. Only ONE went to plan.

Of the other five, one was a loss but the other four all provided partial small wins.

When you're not reading the market well, anything positive is a winner.

Lessons today…

Good trading isn't just about winning trades.

Just as important is managing yourself during those times when you don't have a good read on the market.

Because they DO happen.

Recognise when it's not working. And ADAPT.

Protect any profits, if you're lucky enough to have them. Or if you're on a loss, stop the bleeding.

Step aside. Clear your mind.

And if you want to continue, do so on YOUR terms.

Bracket the area which is causing your problems. And visualise. When price eventually breaks clear of this current chop, what conditions do you need to see before you will engage the market again?

Recognise when it's not working. And ADAPT.

Happy trading,

Lance Beggs

 


 

Opening Structure Trap

 

I do very much like a large Gap Open with a strong Opening Drive.

<image: Opening Structure Trap>

But do you know what's better than a large Gap Open with a strong Opening Drive?

How about a large Gap Open with Opening Drive failure and reversal to the opposite direction!

<image: Opening Structure Trap>

We have discussed traps at (or just before) the RTH Open quite a lot over the last year.

<image: Market Open Traps>

But if I recall correctly, the vast majority of these trap examples occur within the opening 1-5 minutes, or so.

The concept today is the same. The reason it works so well is the same.

IT TRAPS SOMEONE IN A LOSING POSITION.

It just happens over a slightly longer time period.

<image: Opening Structure Trap>

There's a key point here related to trading success. A big part of success comes from minimising damage during those times when your plan is out of sync with the actual market conditions. Conduct your analysis and trade accordingly. But always keep in mind the following: (a) What do I need to see to know I'm right? (b) What conditions will confirm I'm wrong, or at least raise some doubt and allow me to contain risk?

And by minimising damage I mean not just to your account, but also to your mindset. Both are essential for profiting from the subsequent momentum drive, once the trap is sprung.

Let's step through the trade sequence.

<image: Opening Structure Trap>

<image: Opening Structure Trap>

<image: Opening Structure Trap>

<image: Opening Structure Trap>

<image: Opening Structure Trap>

<image: Opening Structure Trap>

What is better than a large Gap Open with a strong Opening Drive?

A large Gap Open with Opening Drive failure and reversal to the opposite direction!

But only if you don't destroy your account or mindset, during the times when you're wrong.

Happy trading,

Lance Beggs

 


 

Don’t Chase the Missed Entry… Unless Price does This…

 

The session begins…

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

<image: Don't chase the missed entry>

Don't chase the missed entry.

But remain focused.

Because sometimes, while price has still not reached the expected target area, it might offer a nice lower timeframe structure. Something that you can lean an entry against, which offers an acceptable level of risk. Something that still offers potential rewards, sufficient to justify the risk, should price break from that structure.

And if not… too bad. Let it go. There will be more opportunity available shortly. Always is!

Happy trading,

Lance Beggs