Tag Archives: Price Action

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

 


 

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

 


 

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

 


 

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

 


 

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

 


 

When Obvious Expectations Are Wrong

 

There is market opportunity available when "obvious" expectations turn out to be WRONG.

You've no doubt experienced this. Those times when the market provides almost certain evidence that it IS going somewhere… but then it doesn't.

I can promise you – if you sense these "obvious" expectations then you're not the only one. Others will sense it too.

And the stronger the feeling, the better. Because more people will act on it.

And then when it fails… there's your opportunity.

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

<image: Opportunity exists at the times and places where obvious expectations are wrong.>

Opportunity exists at the places where a lot of people get it WRONG.

So when you sense a sudden shift in the market sentiment… that surely must lead to obvious movement (through a key level or in a new direction), take a pause for a second.

Maybe it will follow through with these obvious expectations. Project ahead and plan how you will react.

But also – keep in the mind the fact that obvious expectations also fail.

And that can provide exceptional opportunity.

Project that forward as well. Visualise where and how that might provide opportunity. And focus. Hopefully you will be ready to act, a little quicker than I was with this one.

Happy trading,

Lance Beggs

 


 

Recognise the Current Conditions. And Adapt.

 

I'm displaying charts without any trade markers here, so that you can focus on the price action without any distraction.

Because there is a very important fact that not everyone gets. And rarely is it displayed in such a simple and obvious manner, as it is with the two charts we'll discuss today.

That fact is that NOT ALL DAYS ARE EQUAL.

Regardless of your approach to trading, some sessions will provide structure and conditions which are highly favourable. In these sessions you want to actively and aggressively engage the markets. You want to press your advantage.

Some sessions will be highly unfavourable. In these sessions you want to step back and limit engagement. Your primary aim is to minimise any damage and survive to trade another day.

And of course the majority of sessions will fit somewhere in-between – at times slightly more favourable – and at times slightly more unfavourable.

Your job is to recognise the current conditions. And adapt.

Most people focus far too much on their setups. And focus far too little on the context of the market – the background structure and conditions within which they're seeking to trade their setups.

The following two charts display the E-mini NASDAQ (NQ) 1-minute chart from 09:30 till midday. This is my primary trading period. The two charts cover Monday the 2nd and Tuesday the 3rd of December. Of note, the vertical price scale (RHS) is the same on each chart.

<image: Recognise the Current Conditions. And Adapt.>

<image: Recognise the Current Conditions. And Adapt.>

Perhaps what you consider favourable and unfavourable will differ from my preferences Perhaps if you have a preference for counter-trend mean-reversion scalping, then you'll prefer Tuesday's action to Monday's.

Regardless… the same point still applies.

Most people focus far too much on their setups. And focus far too little on the context of the market – the background structure and conditions within which they're seeking to trade their setups.

Spend some time identifying the structure and conditions in which you're most in sync with the market and most easily able to trade. And also, the structure and conditions which cause you problems.

Set up "rules" to allow quick recognition of the current state of the market. And guidelines for how you will trade.

The sooner you can recognise the current state of the market, the sooner you can adapt.

And perhaps you can stop giving back all of your "favourable day profits" when you find yourself chopped up in an unfavourable session.

Happy trading,

Lance Beggs