I received an email last week from a student of the YTC Price Action Trader, which I ABSOLUTELY LOVE.
Actually, I receive a lot of email which I absolutely love. But sometimes they just stand out immediately as something really special.
It was a simple email, containing just one image (shown below).
And the only text was in the subject line: Thank You
Yeah, that made my day! 🙂
Let's look at the trade, using this 1 minute timeframe as the Trading Timeframe (noting that this is more a YTC Scalper timeframe than YTC Price Action Trader). If you use a higher timeframe, that's fine. Don't discount the lesson. Look to the ideas and concepts and apply them to your own trading timeframe.
What I love is the simple fact that to most newbies, or most traders of simple text-book style technical analysis, there is no obvious reason to short.
Let's look at how I see this price movement.
What immediately excited me was WHEN this trade occurred. So we'll start with that.
Always treat any significant price move just prior to a key market timing as suspect, until proven otherwise.
What is a significant move? The easiest and most common of these is a breakout.
That's what occurred here. Let's zoom out a little to see where this move was occurring in the wider market structure.
So we have a breakout occurring just prior to the UK Session Open, into an area that will still offer potential resistance.
Just like we discussed here and here, I'm anticipating breakout failure unless price can prove otherwise.
Let's check the quality of the movement throughout the whole sequence.
This was a really nice YTC Price Action Trader BOF trade.
Could it have failed?
Of course it could.
But the absolute worst case would have been a 1R loss, compared with the multiple-R profit that was attained. And I can see many ways that price could have moved, such that the loss would be less than 1R.
It was a risk worth taking.
Professionals don't seek to win on every trade. They seek to trade good quality reward:risk bets with the aim of profiting over a longer series of trades.
This was a good reward:risk opportunity!
For me… what I particularly liked was the timing of the trade, being a false break in the opening sequence following the UK open.
That was what said to me… "I MUST SHARE THIS ONE ON YTC"! 🙂
But really everything else is just beautiful too.
To the guy who sent me this great trade – I love it!
Keep up the good work.
Thank you very much for sharing another precious subject. As there is no pullback and retest of UK session low breakout, how can we know that it would not be a false breakout? Is it by the breakout candle structure?
You can never know with certainty. We deal in probabilities. Had the break of the low of the UK session failed, the end result may well have been somewhere in the vicinity of breakeven, given the original entry profiting and the second entry losing. Higher timeframe structure can sometimes give clues as to a likely outcome. The nature of price action can sometimes give clues. Ultimately it comes down to you assessing how big a pool of stops will be in this new breakout area and how much potential they will have in driving price further (beyond breakout failure potential).
asian range? what is this please? and what time ik open?
The Asian session can (for the purposes of practicality) be considered the time period from the close of the US session (17:00 New York) to the UK open (08:00 London). There may be some variation in talking with other traders. Some may consider the Euro open an hour earlier to be more significant. The Asian Session Range is defined by a lower support level (the lowest price achieved during the Asian Session) and an upper resistance level (the highest price achieved during the Asian Session).
Hello Lance Beggs,
I don’t look for these kind of entry point at UK open only, but when i find the price rejection at recent top or bottom like similar kind of price action entry point as you mansion in above article, then i trigger it with duel similar candle confirmation especialy in M15 tf with 3rd wave end position. Thanks for your valuable article. Looking for another one 🙂
Mohammad, Absolutely right. These setups can occur at many times, not just UK open. It just happens that this is a time when I particularly love to see them. Right when there is a new group of traders in the market, all keen to trade. 🙂
All the best,
Lance, would it have been wrong to enter somewhere in bar E? Thanks very much.
I see no problems with any entry at E, being a second rejection of the break higher. The only issue is whether or not you were able to hold through the third attempt to push higher, or were able to scratch and re-enter. The entry is fine. Profit or loss will depend upon management decisions.
Dear Lance sir,
i just want to say one thing to you.. You are not the king of this arena but your the are the kingmaker…..
Ha ha. Thank you Vivek. Much appreciated.
I’m pleased you’re finding value in my work.