Monday… let’s start with some higher timeframe action…

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

Error 1: I was blinded by one of my favourite pre-session signals; a trap right before the open. And an expectation that this trap would spring completely and help to drive price higher.

Error 2: I failed to consider the alternative – “What if I’m wrong? What else could occur? And could that also provide trade opportunity?”

You ARE ALLOWED to have multiple IF-THEN scenarios in play at one time.

Tuesday… let’s start with some higher timeframe action…

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

<image: The Market Rhymes>

I am amazed at how often similar scenarios set up across multiple days.

When you see it occurring, learn from the first occurrence.

There is no guarantee that it will play out the same way. Project forward with multiple IF-THEN scenarios.

But most of all, be sure that if it does play out the same way, you do not screw up the second opportunity.

Happy trading,

Lance Beggs

 


 

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4 Comments

  1. Hi Lance.
    Great article as always.

    Regarding tuesday first trade, could you explain your thoughts and reasons for taking this trade please?

    I think I get the point of having multiple IF-THEN scenarios in play at one time. But in this particular case, I cannot see the setup.
    I mean, just before open (9:30) we have price above support, the trend was turning bullish and also the forces seemed to be bullish (failed to continue with rapid rejection at 9:15, and shallow slop in the next bearish swing). And ok, we’ve got a quick change of the market sentiment to bearish in the first few seconds after open, but anyway, I can’t see your setup.
    Even watching LTF (15 seconds) looking for some kind of intra-candle PB structure I cannot identify some kind of YCP PAT setup…

    Thank you very much.
    Regards.

    1. Sergio,

      Let me start by saying that outside of the market open you should not see me taking any trades that don’t fit YTC PAT structure and setup definitions.

      Market open though… you may see some. This has evolved simply through recognising that NQ so often explodes from the open with a strong momentum move. Sometimes this is in the direction of pre-open trend and s/r structure. But often it instead breaks the prior structure and completely shifts the sentiment within the market. I used to only take these when this momentum move matched the YTC PAT structure. Now I’m leaning towards taking them anyway and seeing it as “not so much YTC PAT” but rather an initial momentum move from which YTC PAT structure will then rebuild.

      You’ll most often see this occur in the following scenarios:

      (1) Traps just before RTH Open – when price has broken a significant level in the last half hour of pre-session
      (2) Traps just after RTH Open – through recognising a significant pre-session level, not yet broken, but which could in the opening couple of minutes and which has the potential to set up a trap.

      But there may be other reason to expect a strong momentum drive.

      Entry will be on a break of 1m structure that is essentially LWP for anyone caught the other way.

      If I miss this, I’ll attempt later entry into any subsequent momentum move through an LTF pullback.

      Otherwise, let it go and wait till new structure is formed. Then standard YTC PAT.

      I’m not sure of the relevance of this to other markets. NQ has been my focus for quite a few years now and this is certainly a feature of this market. Others maybe not, or at least not to the same extent, so standard YTC PAT might be the best option for those markets.

      1. Hi Lance.
        Thanks for your clear response.
        I think I got it. Here you are trading against the early longs.
        The stops order at around your entry (LWP) added to the initial bearish orderflow, and you profited from it (and from the subsequence bearish pressure).

        Cheers.

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