(1) Recognition of potential for unfavourable conditions
The following post was shared by social media pre-session on Monday:
Expanding a little on that image:
And adding further to this potential for unfavourable conditions:
In the absence of unexpected news that provides a clear directional bias, I don’t imagine many longer-term traders keen to take positions prior to these events.
(2) The plan – TRADE WITH CAUTION
Pause. Recognise there is no hurry. There is no urgency to trade.
I can sit back and let the opening structure develop. And then make a decision as to whether or not this is a market worth trading.
And yes, I like what I see.
While the indecision has continued into the open with moves higher, lower and now higher again, there is some nice structure to play off.
(3) Trade off the opening structure
Allowing structure to form first ensures that much of the opening uncertainty will be resolved. You now have clear structure in place. And a clear and obvious plan.
References: BOF/BPB Setups
(4) If opportunity sets up right, TAKE IT
Your aim is to trade on your terms. Not the markets terms. Just because the market opens at 9:30am (or whenever yours opens) it does not mean you have to trade from that time.
If you expect potentially unfavourable conditions, then it’s ok to delay the start of your session.
Or if the structure is unclear and you cannot sense any directional bias leading into the market open, then again it’s ok to delay the start of your session.
Let the opening structure form first.
And THEN trade. Once the structure has formed. And the plan becomes clear and obvious.
Don’t make your trading any harder than it needs to be.
PS. You may also be interested in these prior examples:
That’s an amazing trade Lance, well done! Traps on High/low of a range can yield good RR. What was RR on this trade btw? And what average RR do you have compared to win rate if you don’t mind sharing.
Also, do you always try to find out what other traders thinking? Like each candle or mostly around set up or interest areas ?
Best of luck to you,
This was a good R:R. Be careful though in thinking this is normal. It’s not. A win like this is a bonus.
R:R is a little difficult with all the adds, but if we exclude them and just take the initial entry, first scale out and last target it comes in just over 4.4.
I imagine that is less than you expected. The reason being that half the position was taken for 1R and only half run for eventual exit just under 8R. Overall 4.4.
I hope that makes sense.
My normal targets across a group (min 20 trades) are for Win% in the range of 45-70% (ideally 55-60). Anything outside of that range and I explore much more deeply than normal.
And for win/loss size ratio it’s 0.8 to 2.0 (ideally around 1.5). Again, anything outside that range means “something different is happening” and deeper exploration is required.
Other traders thinking… bar by bar at the setup areas and other areas of interest. It’s not something that can be kept up 100% of the time. Just a shortened version will be fine for all other times – a quick confirmation that there is “no significant change” to prior assessment.
Thanks Lanse. Really nice explanation as usual. Would you share why did you add to the trade (@range 11635) specially at the left is a strong support area, and new low is formed @ 11610. Also sellers already moves a lot to downside (2 legs formed). I mean it’s high odd to have a false break down specially with a new low + at support area .. Thats why I want to know why you are continuing in selling in that area !! Thanks Boss.
Essentially playing with some of the open profits from the higher trade, betting on the earlier low of day holding (approx 11630 set at 09:38). From a structure perspective it was a BPB of that early level. Targeting either the 11610 lows if I wasn’t confident of a break, or holding for overnight low if it moved nicely through 11610. It never gave me confidence that 11610 would break though, so the idea was dropped after the third attempt.