How nice is this market open…

<image: Metagame Deception>

<image: Metagame Deception>

<image: Metagame Deception>

And I’ll admit it looks damn tempting.

But wait!

I’m not just playing price action.

I’m playing the metagame.

I’m viewing the market not just as price movement and patterns, but also as PEOPLE whose trade decisions create the price movement and patterns. I’m trading AGAINST those traders who find themselves on the wrong side of the market. And timing my entry at or before the point of maximum pain, when they’re forced to exit the market.

I’m looking for someone trapped in a poor position.

I’m looking for someone under severe stress.

And even better… someone trapped in a poor position and under severe stress… having been suckered into their trade through incredibly tempting price action.

<image: Metagame Deception>

You’ll recall a fortnight ago we discussed the fact that a good trade requires all three components – context, setup & execution.

These traders have failed to consider context. We’ll get to that shortly.

<image: Metagame Deception>

<image: Metagame Deception>

Let’s look a little deeper.

Here’s why I was not tempted to enter short.

<image: Metagame Deception>

<image: Metagame Deception>

This was a highly visible level. We’d discussed it a couple of times via YTC social media. And it was clearly visible to participants on all timeframes from the lowest through to the weekly.

<image: Metagame Deception>

<image: Metagame Deception>

<image: Metagame Deception>

<image: Metagame Deception>

Lessons:

1. Never underestimate the ability of the market to deceive you, especially when it presents what looks like a certainty.

2. Know that others are also prone to this deception. And so when you see price action that screams out for the emotional FOMO traders to enter, make sure you pause and consider: Does the entry fit the context? Or are they perhaps wrong?

Happy trading,

Lance Beggs

PS. For those new to the concept there are dozens of articles on the website. The simplest way to find them might be to work through all articles with the Tag of either Metagame or Traps.

 


 

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2 Comments

  1. Some many thoughtful scalps (using Al Brooks terminology) from 9:40. Almost fell from my chair!
    Wish I will have this skill someday! I would maybe dear to take the fist long (bump on support) then the last short by 9:54 (looks like a TST on resistance). Really impressed.

    1. There was definitely opportunity for those who could pick the right entries. But this sequence was a lot tougher than it appears with hindsight, as often happens when initial strong momentum gives way to a weaker grind higher at the top. I managed a slight profit here, to add to the original larger move. It could easily have been a slight loss though, if not for the final scale out on the last trade.

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