Today I want to take the concept of Project-Confirm-Trade up a level.

First though, a quick review of the general concept, borrowing one of the images from that prior article.

<image: Forward Projection>

<image: Forward Projection>

<image: Forward Projection>

<image: Forward Projection>

<image: Forward Projection>

The rules I use for projection are outlined in the the YTC Price Action Trader.. See Volume 2 Section 3.3.3.

And then it’s simply a matter of…

  • Project -> Confirm -> Trade.

  • Project -> Non-Confirmation -> NO TRADE.

Simple, right.

Now, let’s take it up a level.

There are times and places on the chart where I can see TWO potential scenarios that I like.

And so, why not allow TWO forward projections at one time?

It’s not as hard as it sounds. And it’s usually only temporary. One (or both) will soon be dropped as further price unfolds. But until then I visualise two potential paths, each offering different trade opportunity.

Let’s look at a couple of examples from a recent session.

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>

<image: Trading with Multiple Forward Projections>Ā 

Keep part of your focus AHEAD of price.

Project -> Confirm -> Trade.

Project -> Non-Confirmation -> NO TRADE.

The simplest way to make sure you’re playing YOUR game rather than getting suckered into playing the market’s game, is to ensure that you ONLY trade setups that you saw setting up well in advance. Project, confirm, and then only trade if the movement into the setup area makes sense when compared with your forward projection.

Happy trading,

Lance Beggs


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5 Comments

  1. I really like this article as you show your steps/trading method as a process. It is of great value for getting a better feeling for applying your teachings. Thank you for the insight!

  2. Hi Lance.
    Great article.

    One question regarding to the image containing only the text “Something like this”:

    In that moment (after the breakout failure), why did you consider the complex correction scenario instead of a simple pullback?
    As I see it, downtrend is still strong. Ok, the first green candle at support level indicates some bullish pressure (although still a range candle), but I cannot see yet the weakness in the bearish side. Why not to expect a single pullback and a retest of the support level?

    Thanks!

    1. Hi Sergio,

      The market could well provide a single leg pullback. If that happens I’ll just miss it. (Although subsequent movement into that pullback may have me change the plan).

      This is not just a standard pullback. It’s coming off a failed break of the PDH level, so there is trap orderflow. And possibly more to come as wider stops get triggered (eg. on a break of the red candle). And potential to attract additional buying as the 2m closes, 3m, 5m etc. There is potential bullish strength here.

      Before I get short I need to be able to see a stop location. A place that the bulls are exhausted and have no more fight. A place that price cannot go, if the premise is valid. And I need to see an LWP that would indicate they will start abandoning their position.

      This is a whole lot easier to see in a multiple leg pullback than one single leg.

      As you say, current application of principles does not rule out a single leg pullback. But there is more to taking a trade than just the principles. If a subsequent single-leg pullback can show me those elements above (stop/lwp) and still offer suitable R:R back to the level, maybe I’ll amend the plan. But while I’m sitting in a session drawdown, in an environment where all recent pullbacks provided choppy multiple leg turns (see D through F and G through J), it’s not something I want to bet on. I’d rather wait for something that provides more certainty.

      You don’t have to take every “potential” trade. Sometimes, and especially when in drawdown, it’s best to skip those that don’t set up with all the factors in your favour.

      Cheers,
      Lance.

  3. Wow, much to learn about your comment. A great example of real time context analysis, taking into account not only the market environment itself but your own circumstances as a trader (session drawdown).

    This response suggests me that I need to improve a lot my real-time contextual decision making.

    Thanks.
    Sergio.

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