I thought I’d finished the “Long is Wrong” articles for now.

But then I received an email from a reader of the YTC Newsletter that I absolutely LOVED.

And I thought that maybe “Long is Wrong – 3” would be a good way to share some of that love!

If you missed the prior articles, you can read them both here:

The concept is incredibly simple. The market makes a reasonable attempt to push higher from the open, but is unable to find sufficient buying to continue in that direction. Opportunity is found as price crashes through the low of day.

<image: Long is Wrong>

Before we get to the email, the following is the market in NQ last Monday, 23rd November 2020.

See if you can identify the setup location.

<image: Long is Wrong>

So here we go…

Excerpt from Email received 24th November, from TK:

Hi Lance,

How are you doing?

I just thought I would share a sequence from yesterday´s trading. It was exactly the concept that you explained in your two recent articles “Long is Wrong”.

I could see the opportunity coming well ahead and was ready to enter on the first pullback should price break through the Low of Day and hold.

Attached Image:

Note: I’ve had to shrink the image to fit within the blog. If you can’t read the text, click on the image to open a full-size copy in your browser.

<image: Long is Wrong>

Did you identify area B as the trade location, when you looked at the clean chart earlier?

If not, please review the prior articles in this series.

Did TK catch the trade?

Even better!

He got in early, recognising the failure of the topping pattern and then holding throughout the full move lower, taking advantage of the bearish orderflow on a break of the Low of Day to continue pushing his trade into greater profits.

His email comments:

I was finally able to catch an earlier entry as price broke through the overnight high resistance, could not continue and rolled over. So I did not enter on the pullback lower, but I thought it was just a beautiful opportunity.

His chart with trade markers:

<image: Long is Wrong> 

What did I love so much about this?

This comment in particular brought a smile to my face:

I could see the opportunity coming well ahead 

It’s always great to see trade ideas from my site being put into practice.

But this is when you know someone has really understood and internalised the idea – when instead of seeing it happen in real-time – they actually sense it well before it happens and can then just watch as price moves in the way they anticipated.

This is next-level understanding.

The icing on the cake being the fact that he was able to enter earlier, seeing the Long is Wrong setup not as an entry but as a reason to hold his trade as it gets another push from a new source of bearish orderflow. 

Well done TK! And thanks for sharing your trade.

<image: Long is Wrong> 

Happy trading,

Lance Beggs

 


 

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8 Comments

  1. Hey Lance,

    I love your articles and they’ve really helped me in my trading journey.

    I noticed that the open on your chart is 9:30, and i wondered how that correlates with my EST time zone. What time zone are you in?

    Thank you,

  2. Hi Lance,

    Yes, long is wrong is a great concept and the trapped trader order flow potential is huge. Long is Wrong is a subset of a larger trading concept: the all important Structural Change. Although Structural Change may appear as an offensive concept, it has become very important to me as a defensive tool. 2 or 3 failed trade ideas require a mandatory wait for structural change (per your teachings).

    As you’ve stated before, trading success is largely determined by a traders ability to recognize and manage the moments when market conditions become unfavorable.

    On the other side of the coin, I don’t wait for an abundance of market conditional confirmations before I trade. To me, this would more than likely result in constantly missing the “setup” train. Because I can damn sure know if conditions are unfavorable, I”ll enter into a market structure comfortable with the (somewhat) uncertainty of the conditions. Will new structure offer favorable conditions? I don’t know. If I see a setup, I’m trading it. If my ideas are working, it’s favorable and if they are not, it’s unfavorable and I’ll proceed accordingly.

    Much of my trading sessions are spent “boxing out” substructures within the larger framework that is ultimately the first 2 hours of the RTH “master” structure. I’m seeking change in structures for both offense and defense. Market replay is an invaluable tool for practicing this and should be an extension of any MSPA studies.

    Sorry to tangent from the original post subject but I noticed the change in structure in the topping pattern prompting the PB entry short and it reminded me of how important structural change has become in running defense.

    Thanks Lance.

    1. Hi David,

      I’m glad you did take a tangent from the original post subject. There is so much value in your comments here. I highly suggest that anyone reading this in future should re-read your comment.

      “Long is Wrong is a subset of a larger trading concept: the all important Structural Change.” Absolutely true. And incredibly important. As you’ve said, from both an offensive and defensive perspective, this can form the basis from a whole strategic approach to trading the markets. Keeping you out of trouble when conditions remain unfavourable. And clearly identifying the time and place where it’s time to re-engage the markets.

      Thanks again. And best of luck with your trading.

      Cheers,
      Lance

  3. Just working through current and older posts as I unpack the YTC PAT manuals and you’ve got some great stuff on here Beggsy!

    Also enjoyed the comment from David above on ‘Boxing’ substructures.

    Look fwd to getting right into it over the Christmas break.

    Cheers
    Mate.

    ‘Two’s in’

    1. Hey mate,

      Great to hear you’re working through some of the blog. There’s somewhere in the vicinity of 1000 posts so far. If you can manage 3 a day you should be caught up by 2024. Haha.

      Take care,
      Beggsy!

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