I want to revisit the trades we discussed in last week’s article – Trading with Multiple Forward Projections.

I really like this series of trades. Because there is a lesson in trader performance that I think is worth discussing.

<image: A Sign of Good Trading>

Something that I would suggest is a sign of good trading.

“Wait? What?”

I can hear your objections already!

“How can that be good trading? In just six entries I can count four losses!”

Ok, nice counting!

Let me clarify.

We are not talking here about the outcome. This has NOTHING to do with the outcome. The sequence profited in the end. In fact, it’s quite a nice profit. But that’s not the point.

And I’m not talking about perfect performance. I’m clearly not aligned with the market at all for the second and third losses. And I misjudged the conditions at the entry zone for the first and second. Perfect performance would look different.

But there is an aspect of good trading on display here, in particular in the first and last trade setups.

Something that is typically only evident when you’re trading well. When you’re confident in your strategy and have full belief in your ability to profit in the markets.

  • When initial expectations were not met, HOW DID YOU REACT?

Were your immediate follow-up decisions an emotional reaction to loss? Or were they made from a proper assessment of price, risk and opportunity?

The first sequence:

<image: A Sign of Good Trading>

<image: A Sign of Good Trading>

<image: A Sign of Good Trading>

<image: A Sign of Good Trading>

The last sequence:

<image: A Sign of Good Trading>

<image: A Sign of Good Trading>

<image: A Sign of Good Trading>

<image: A Sign of Good Trading>

Having the confidence to objectively reassess and re-enter a position that has just stopped out or been scratched – that IS a sign of good trading.

That is a sign in confidence in both your strategy and your own ability as a trader.

The idea applies just as well in other situations, where your initial expectations are unmet.

Check your response. Was subsequent decision making a reaction to emotion? Or was it a sign of good trading?

Applying the idea to the two straight losses:

<image: A Sign of Good Trading>

Again… a sign of good trading.

This is something that you can search for in your daily reviews.

When expectations were unmet, did you follow this up with a quality and professional response or an emotional and amateur response?

There is potential for growth in assessing how you react to unmet expectations.

In particular when you find yourself stopped or scratched out of a position and the premise is actually still valid. Were you able to recognise this? Were you able to get back in? Was this re-entry a rational and objective decision, rather than an emotional display of FOMO?

I’d suggest that regardless of trade outcome, if your session review shows examples of re-entry, as we’ve seen today, then it is a sign of good trading.

And if not, then you’ve found a source of learning and growth. Dig deeper into why you failed to recognise subsequent opportunity. Or why you failed to capture it.

Happy trading,

Lance Beggs

 


 

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6 Comments

  1. Hi Lance,
    Excellent article!
    I’ve noticed that some of the exits that you’ve taken are discretionary and perhaps on the lower timeframe, not at TTF swing HI or LO. If that is true, what would steer you into making those LTF exit decisions and not the TTF exit?

  2. Awesome post Lance. I gotta admire how perfectly timed your trade was around 10:20, (despite the initial loss) and how you were able to not get caught up in all that chop before. What was it in that sequence of candles that had you taking the trade when you did, and not before?

    1. Thanks Marcus. Entry into the pullback for continuation lower only happens when I sense that the pullback cannot go any higher. So the move up from 10:11 clearly stalls at around 1:16. But we see that with hindsight. While live, I wasn’t convinced that was where it’s stopping. So entry is delayed either until I sense the top (which didn’t happen) or until it rolls over and I can get in on the other side through a retest (that did happen).

      In other words, if I can’t time the pullback exactly, I’ll let it roll over and then get in on a retest (if it is offered).

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