A key feature of the YTC Price Action Trader method is timing trade entries through awareness of the emotion of “other traders”.
In particular when you sense heightened levels of frustration, anxiety or even fear.
Place yourself in the mindset of someone trapped in a really poor position. Feel the fear.
And find opportunity at or before the point of maximum pain, where they NEED to exit the trade to save themselves from these feelings.
It’s a model, of course. We don’t actually know who is on the other side of our trades. But it is quite an effective model for market timing.
One question I get from time to time in varying forms is, “How can I know what others are feeling?” or “How can I develop this skill in feeling someone trapped in a poor position?”
The simple answer is that it comes with experience.
And the best teacher to provide this experience… is through studying YOUR OWN emotions and reactions when you find yourself trapped in a position under threat.
Feel YOUR OWN fear.
And learn from it.
I still get trapped in losing trades. But having done this for such a long time I find that succumbing to emotion is far less of an issue for me. The fact that a trade is not working as planned, is just information. And I adapt.
But as a new or developing trader… I know you feel it. Because I did. And we all do.
So feel that fear. And learn from it.
The best scenario for learning occurs when you take a very high conviction trade, only to find it not working.
Let’s look at one that caught me on the wrong side of the market.
As mentioned… the earlier sequence was not relevant to the topic. Except that it sets the scene.
I was excited by potential trade opportunity. If this can break higher and hold those levels, I’m entering LONG at the first chance I can get.
This is why I set the scene.
THIS is exactly the scenario which can provide you with great opportunity to learn to feel the emotion of someone caught in a losing position.
Any time YOU enter a really high conviction trade, only to find it doesn’t work, STUDY IT.
Note the path that price followed. And the ACTUAL emotion you felt.
Obvious, high-conviction breakouts.
You will get caught from time to time.
But that’s fine.
Use it as a learning opportunity.
The absolute best way to learn to feel the emotion of other traders, is through studying your own.
And taking your understanding to a level beyond those who see this game simply as one of “price and patterns”.