I'm always VERY interested in these places on the chart – the places where price can't go. The places where it tries… it pushes… but it just can't go there.
This is opportunity.
Let's start with the Higher Timeframe chart…
Let's switch now to the trading timeframe…
Reference… this is a BOF Setup as described in YTC Price Action Trader Volume 3, page 28.
Happy trading,
Lance Beggs
I received an email during the last week seeking some clarification about a prior series of articles. I thought it best that I share this with you all, as my experience shows that if I’ve failed to adequately explain a concept to one person then there are likely many others who didn’t get the message…
Let's continue with a series we started last year – the metagame – trading AGAINST other traders who find themselves on the wrong side of the market. Because… If I can't feel someone on the other side of the market getting it really wrong, there is no trade. You can see the prior articles…
I don't often trade after midday Eastern Time. It's the middle of the night here and I'd much prefer to get some sleep. But from time to time I'm alert and awake and there is no chance I'd be able to sleep even if I tried. So I'll complete some of my post-session review…
In recent months we looked at a number of metagame examples – trading at places where the "the other trader" feels extreme stress or fear. You'll find some of these articles, if you missed them, here, here and here. Today, I thought we could look at another one. Because I just LOVE these setups….
Take note of the way that price approaches an S/R level. The more that price has to stretch to reach it, the better. This is a time to FOCUS. Because if this move stalls, unable to attract sufficient buying to continue higher, it can potentially set up a very nice TST/BOF trade for reversion to…
The plan was simple. Catch the opening drive. And bask in the glory of a winning start to the new session! Three failures… compulsory time-out! Note that this doesn't necessarily mean three losses. The first two were small wins. The last was a small loss. I'm still in front. And now have some important…
Hi Lance,
great trade! I think it’s worth noting also that patience was needed in order to wait for the setup to materialize. so your post works also as a “Patience part 3” of sorts! 🙂
I’m curious about what your assessment was after your final exit at point 5: looking at the last higher timeframe chart, it seems to me that 4830 just started to work as resistance, after working as support up until about 14:00.
Full disclosure: I also looked at this chart in my own charting software, so I’m trying to reason only based on your last chart, but I may still be biased by 20/20 hindsight.
In real time, I would certainly take profit the way you did at point 5, but right after that I would be looking to enter a new position short on BOF of 4830 – not right away, but I would want to see one or two more bars expecting a marked bullish weakness. Is my thinking correct, here?
Michael
The patience was a little different here. My “active” trading session only runs till midday ET. However I’ve started following price beyond that, although not actively trading. More just passively setting alerts at certain prices that I might be interested in and then getting on with other work. So if it’s an exceptional opportunity like this one (break of HOD), I might take it. Otherwise I’m happy to let it go. Anything after 12:00 is a bonus.
This is why I also did not take anything beyond point 5. You’re right that there was follow through SHORT after the exit at point 5. It wasn’t something that interested me though.