We've previously discussed the idea of fading breaks which occur against the market bias.

Often they're a trap!

If we can anticipate that trap then we can position ourselves for a successful trade by entering at or before the point of their failure.

See here if you missed the prior articles on this concept:

This concept can play out in many forms and on different timeframes. For example:

  • TTF CPB or BOF setups
  • LTF 3SR or Spring/Upthrust triggers

Let's look at two slightly different examples from Wednesday's Crude Oil session (to take advantage of the crazy volatility that CL has offered in the last few days!).

Don't let the low timeframes freak you out. The concept applies no matter what timeframe or market you trade – failed breaks against bias can provide you with great trade opportunity.

(1) Trading timeframe CPB trade.

Breaks against bias - anticipating failure

Breaks against bias - anticipating failure

Breaks against bias - anticipating failure

Breaks against bias - anticipating failure

 

(2) Trading Timeframe PB trade.

Breaks against bias - anticipating failure

Breaks against bias - anticipating failure

Breaks against bias - anticipating failure

Breaks against bias - anticipating failure

All markets… all timeframes.

When a breakout occurs against a larger market bias, anticipate a failure.

Trending markets… find breaks of swing highs/lows against the trend.

Ranging markets… find breaks around the edges of range support and resistance.

Happy trading,

Lance Beggs

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5 Comments

  1. Hi Lance,

    Thanks for this article… this the thing I am still no able to master. I am still struggling in this area.

    One more thing always come in my MIND as a Curiosity that how the place you have setup where you do your trading?

    I mean how many screens? How the place look like? Any rules you have stick there on the walls? and what each screen is for (mean what it does have on it) and how you utilize it?

    If possible pls enlighten.

    Thanks a lot

    Regards
    SAM

  2. Hi Lance,

    First off, thank you for this amazing article. You’ve always written about acceptance of the new level following a breakout and i have a question related to that. Do you look for acceptance on the trading timeframe (TTF) or is acceptance on the lower timeframe (LTF) sufficient evidence for you to enter a breakout? Suppose you’re looking to go long on break of resistance in an uptrend, would you consider going long on the TTF breakout candle if on the lower timeframe there is a small pullback to the breakout level and a move back up or would you wait for price on the TTF to do a pull back and show acceptance above the breakout level?

    1. First let me note (for future readers of this comment who are not overly familiar with my trading) that I don’t take straight breakouts. To go LONG through resistance or SHORT through support, there must be some form of pullback structure. That’s just my personal preference though.

      To answer your question about the timeframe for this pullback structure… I’m going to have to resort to the answer that we all hate… “it depends”.

      Consider the context. By default, the vast majority of the time, I will prefer to look to the Trading Timeframe for pullback structure. But in some cases such as an opening momentum drive, or news momentum drive, it may be unlikely that the market offers this kind of pause and pullback at S/R. If I assess this as likely to be the case, I will look for pullback and acceptance on the Lower Timeframe.

      Again though, the default is that such price acceptance should be sought on the Trading Timeframe. But part of trading is knowing when to vary these sort of rules.

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