Tag Archives: Entry

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

 


 

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

 


 

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

 


 

Proving Your Edge in Re-entry!

 

Those who have followed YTC for a while will know that I'm a big fan of re-entry.

It's a personal preference. I much prefer a tight stop and the need for occasional re-entry, over a wider stop that might give a trade a whole lot of room to prove itself.

I typically allow two attempts at a trade. If the first is stopped out and the premise remains valid, I'll often seek a way back in. (NOTE: The premise MUST remain valid. We don't just try to re-enter every stopped out trade!)

I wasn't always comfortable doing this, in the early days.

And I know for a fact that many readers find it difficult as well.

From a mindset perspective, it asks that you put aside the fact that you just lost money on this very same trade idea, and place more money at risk.

And your thought process is probably fixated on the idea of "what if it loses again?"

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

<image: Proving your edge in re-entry>

Consider this – I could lose on my next four to five re-entry trades and I'd still be in front.

Edge doesn't require that you win on every trade.

There will be winners and losers. Both are fine. As long as your stats prove edge over a larger series of trades.

So if you struggle with re-entry, with thoughts of "what if it loses again" leading far too often to hesitation and doubt, maybe consider the following plan.

For the next twenty re-entry trades, let's try to prove once and for all whether they do provide you with edge.

Like this:

(1) Create a new copy of your Trading Journal Spreadsheet with one setup – "RE-ENTRY". The aim is to initially keep the stats separate from other setups and from other trading.

(2) Do NOT take re-entry trades live. There should no longer be any thoughts of "what if it loses again" because… who cares if it loses… you're not really in the trade.

(3) Take the trade either on sim (if your platform allows switching execution between live and sim) or else just on paper.

(4) Track the results in your separate Trading Journal Spreadsheet.

(5) And prove, over that sample of twenty trades, that you do have edge.

Or prove that you don't. At least then you know for sure. And you can either abandon the idea or use the data you just gathered to find a way to improve and build edge where there currently is none.

Nothing improves trade decision making and confidence like actually SEEING proven edge over a series of trades.

And if you want to continue to monitor this going forward, as you start taking them live, maybe you could continue to track re-entry trades separate from other setups. Make "RE-ENTRY" its own setup. This allows you to continue to monitor the edge over further samples of data. And hopefully, if the edge is proven, continue to build confidence in this highly valuable trading skill.

If you lack confidence in your re-entry edge, the best way forward is to test that edge. Commit to a full series of re-entry trades on sim, alongside your normal trading. Record results. And review.

Twenty re-entries minimum.

Go for it.

Lance Beggs

 


 

When the Pullback moves TOO DEEP TOO FAST

 

Let's look at a trade from Tuesday which was quite challenging to take.

One in which the pullback moves too deep… and WAY TOO FAST.

One which triggers the question in your mind – "Is this a pullback or is it the start of a complete reversal?"

Every trader is familiar with this feeling! It's NOT nice.

Let's look at how I timed the entry.

First though – a little context via the 15 minute timeframe:

<image: When the Pullback moves too deep too fast...>

I love an open like this. A real shock to the system. And potential for emotion to drive price with strong directional conviction.

I am secretly hoping for strong continuation lower. Blood in the water. Panic selling driving a massive trend day lower.

But I've been around long enough to know that this is not the only option from a large gap down.

Social media posts on Tuesday and Wednesday covered this. (Facebook: Tuesday, Wednesday. Twitter: Tuesday, Wednesday)

So let's look to the 1 minute Trading Timeframe chart to see the opening price sequence.

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

<image: When the Pullback moves too deep too fast...>

For readers of the YTC Price Action Trader, please refer to Volume 3, Chapter 4, page 81.

Note the very first item listed under the title "Entry Preconditions".

Candlesticks A to C do NOT satisfy this entry precondition requirement.

Following the pop higher with D, price then attempts a second push lower at E.

This candle (E) DOES satisfy the entry precondition requirement.

Take the trade!

Also – Page 89, Figure 4.65 (part 3 of 4). The third diagram is the LTF entry pattern.

<image: When the Pullback moves too deep too fast...>

Our plan is to understand the trend structure, project it forward and identify potential trade opportunity (should subsequent price movement confirm our projection).

Often though, price will decide to present us with something a little different.

No problem!

PAUSE & REASSESS.

If you find you're out of sync with the price movement and it doesn't make sense, then stand aside and wait for further price structure to develop.

But otherwise, you have processes in place. Carry them out again with this new information. Recognise the changes. Adapt. And take action.

Happy trading,

Lance Beggs

 


 

Enter LONG When it Can’t Go Lower

 

Today let's look at the art of entry timing… with one of my favourite ways to get into the market.

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

<image: Enter LONG when it can't go lower>

It's not the only way to enter. But it's one I love.

If the market can print a candle (or sequence of candles) which strongly suggest that "it's moving lower".

But then can't.

Enter LONG when it can't go lower!

Happy Trading,

Lance Beggs

 


 

Metagame Entry

 

Metagame Entry – Recognising that entry is not just about price or patterns, but about the people behind the price and patterns.

And in particular the times when they're experiencing frustration, pain and disappointment.

Because the best opportunity comes when I can feel someone on the other side of the market getting it REALLY wrong.

This was one of my favourite trades of the week. Partly because it wasn't in my original plan. But when it set up, it screamed out to be traded.

<image: Metagame Entry>

<image: Metagame Entry>

But then this happened…

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<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

<image: Metagame Entry>

For those with the YTC Price Action Trader, the setup should be obvious. Refer to Volume 3, Chapter 4, Pages 28-31.

And you'll note that the entry is exactly at the point I define as the LWP. Refer to Volume 3, Chapter 4, Pages 72-77 for discussion on the LWP concept.

 

This trade was not part of my plan at the market open. I was keen to trade once price broke the overnight chop-zone, either higher or lower.

But until then… watch and wait.

Remain focused!

Because sometimes… price will set up right to sucker someone into a trap.

And when you see that trap, and feel their pain, you may well have found yourself some opportunity.

Happy trading,

Lance Beggs

 


 

It’s Game On! Let’s Trade!

 

I operate with three general levels of engagement – Trading, Trade with Caution, and Stand Aside.

Because not all conditions in the market are the same.

If you haven't done so, I highly recommend adopting a similar practice. Take some time to consider the factors that might trigger each level of engagement in your own trading business.

Today let's look at three factors which had me in "Trading" mode right at the market open. No delays. No hesitation.

With these three factors in play, I wanted to be in the first opportunity I could find.

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

A gap open, from a strong and persistent overnight uptrend, with a recent trap showing an inability to drop.

There is emotion in the market.

And I want to trade.

(See here for prior articles on traps just before the open – here and here).

<image: It's Game On! Let's Trade!>

(NB. YTC Price Action Trader concepts – The First Principle is in play, PB setup)

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

<image: It's Game On! Let's Trade!>

I don't want to trade all market opens.

There are many that I classify as "Trade with Caution". Think of the opposite of today's example – a market opening in the middle of the prior day's range, following a dull and lifeless sideways overnight session. There is no emotion driving the market. And so I have no business in taking a position until something changes. Wait patiently. Let the opening structure form (5 minutes, 15 minutes, 30 minutes… or as long as it takes). And then trade off that structure.

But there are other days when I don't want to wait. Market sentiment appears to be strong and potentially one-sided. This is not a time to wait. This is not a time to "Trade with Caution".

Today was not one for waiting. It's game on. Let's trade.

Again, if you haven't done so, I highly recommend adopting a similar practice of classifying three general levels of engagement – Trading, Trade with Caution, and Stand Aside.

Take some time to consider the factors which might trigger each level of engagement in your own trading business.

Happy trading,

Lance Beggs

 


 

Higher Quality Breakout Failure Trades

 

One of the aims of your journaling process is to build a collection of near textbook-perfect examples of each of your trade setups.

And from these, develop awareness of the factors which lead to increased odds of success.

Friday, 21st June, offered an absolutely beautiful Breakout Failure setup.

Let's start with a 5 minute chart to get some context:

<image: Higher Quality Breakout Failure Trades>

The important factor that I wish to highlight today is not where the trade occurred.

But rather – how price got there.

One of the key features I like to see, which suggests potentially increased odds of success, is price not only having to travel a long way to reach the level, but to have also STRETCHED to do so.

<image: Higher Quality Breakout Failure Trades>

Looking at the 1 minute chart (my preferred Trading Timeframe in this market):

<image: Higher Quality Breakout Failure Trades>

This is a Breakout Failure that I DO NOT want to miss.

Additional study for those with the YTC Price Action Trader:

<image: Higher Quality Breakout Failure Trades>

<image: Higher Quality Breakout Failure Trades>

<image: Higher Quality Breakout Failure Trades>

Happy trading,

Lance Beggs