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Trading Process and Strategy

Expecting a Breakout Failure

ByLance Beggs

I recently posted the following image on the YourTradingCoach Facebook page. For the sake of this article, ignore the text in the yellow box. Actually… don't ignore it… put it aside for now but do think about it later. It's incredibly important and may well reveal to you the real essence of trading psychology. But…

Trading Process and Strategy

Wrong Wrong Wrong Right

ByLance Beggs

This was an interesting sequence of trades – three which I got completely wrong, followed by one which I finally got right. The key takeaways: You won’t always get it right. Sometimes your timing is out. Other times, like in this sequence, your assessment of bias is just wrong. Good entry location and good active…

20 Comments

  1. Hi,

    I searched the tag section for “Weakness” but I failed to find one. I doubted myself, may “the weakness” not be worth for tag?

    Tnx,

    Reply

  3. Thanks Lance,you are just a genius in this game,your analysis are so good that i find it so difficult to study someone else,i just went through your volume analysis now & did some back testing & it so awesome,to be quit honest never read any other book on trading since i came in contact with your E-book & your web through Gregski,apart from the art of the science of trading you recommended when i asked if it was great,I have grown as a trader studying you only,i do this just because you have studied those other guys that i needed to study & put their ideas in your E-book so that ok for me,i might read some more later but for now i cool with your e-book & your web,thanks for making yourself valuable for us who wants to be free from the clutches of wages for living into the realms of profits that brings the fortunes,God bless.YOU ANALYSIS HAVE MADE ME HAVE MORE PASSION & HUNGER FOR TRADING.

    Reply

    1. Hi Edobor,

      Thank you! You’re too kind.

      An essential ingredient for survival of the trading journey is to have a passion and hunger for trading. So you’re well positioned to make good progress from here. 🙂

      I’m pleased you’ve found value in my work so far. And hope that I am able to continue to offer further insights, to help take your trading to new levels.

      Thanks again! And all the best,

      Lance.

      Reply

    1. Good find. I guess that could be it. It’s fairly basic and only just touching on the topic of volume. But given the name I gave to the article, it could well be what Edobor was referring to.

      Reply

  6. Man, another great article, these are gold once you’ve read the ytc ebook.

    Quick question though, what is it about that area of compression (wedge)
    on the LTF that would have you expecting a pop higher?

    I jumped into your ebook very early once I decided day trading was the approach to the marked which fits me best. I know just enough about these patterns to see them and know their names, but I don’t understand why alot of other retail traders place so much emphasis on them when price action analysts is clearly superior. Am I missing out on something that could be considered key in understanding markets by not being that familiar with common technical analysis patterns?

    Reply

    1. Volatility contraction often leads to volatility expansion. So as the market compresses it builds up tension in the market participants. Orders will get pulled tighter in. Triggering these orders can then lead to a cascading effect which leads to good follow through.

      All timeframes!

      So when price sets up like this and the contraction breaks against the market bias, I won’t enter until I’ve confirmed it’s not expanding in that new direction.

      Reply

      1. Awesome thank you, so let’s say the market broke out of the compression in the direction of the trend instead, would you want to wait to enter until a pullback (preferably demonstrating weakness) back to the area of breakout?

        Reply

  7. Hi Lance,

    Great article!
    I have a question about the time frames.
    You’re showing us the 1 min timeframe and then you zoom in on lower time frame 2-range.

    Can you explain what is 2-range?

    I use tradestation and interactive brokers

    Can you explain to me, if you were using these, how would you see this 2 range chart ?

    Thanks so much!
    Look forward to reading more of your work.

    Reply

      2. Also Lance what if I use interactive brokers.
        Do you know them? This firm I believe has the lowest rates. Since you trade low time frames I wonder if you use them.

        I don’t think they have 2 range bars. Do you know if they do?

        If they don’t have range bars, what would you substitute it for 30 sec bars? 15 sec bars?

        Appreciate your help and answers.

        Reply

        1. Jason,

          It’s been many years since I last charted through IB. If I recall right they didn’t have range charts then. I don’t know about now. But you can use the IB data feed through a third party platform such as NinjaTrader. That will provide range charts.

          Tradestation… I’ve never used. But if I understand it correctly you set the parameters as follows. (Settings based upon NQ 2 range, since you asked about that).

          Select Interval = Momentum
          Range = 0.5 (ie. 0.5 being 2 ticks)
          Using Interval = 1 Tick

          For info, I don’t mind helping where I can, but you’ll probably get basic platform info quicker through user guides, help pages or a simple google search.

          Cheers,
          Lance

          Reply

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