Active trade management is a constant process of reassessing risk and opportunity.
Active trade management has ensured that these trade sequences always operated with a minimum of risk. And that maximum opportunity was taken despite a failure to achieve the second target.
The key points to take away:
- Two failed attempts to do something means you're probably wrong.
- If the market is doing something you don't expect, reduce risk!
- Never be afraid to scratch and reassess risk and opportunity, with a clear and objective mind.
great article, so many things to learn here on trade management. I also love that TTF chart with the upmove that was not traded, love it because it shows a move that was not traded (the fact that it is YM and gap day add additional value for me)
It’s so interesting that I read this article. You do a great work.
I do not understand why you assess that D is the first failure? It breaks below the swing low.
Thank you so much.
It’s not D that is a failure to go lower. It’s the combination of both D and E. By itself D looks good for continuation lower. But then the pullback higher from D retests above the level. E then breaks lower a second time, but is unable to push even as low as D. From a pattern perspective this forms a lower timeframe 123 low.
The combination of D and E form “two failed attempts to push lower”.
That being said, you’re right that it’s perhaps not the greatest example. The stall following E is still below the swing low level. Were it at or above the level this would be a much nicer text-book example of the concept. But I trail aggressively, perhaps more than most, so I used this to make my exit decision. And as always, with a plan to then reassess and get back in if I’m proven wrong.
Thank you so much.
Your methodology of active management is absolutely superb.
I learned a lot of from you. Have a good day.