Institutional Equivalent Education?

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Yes, this is a breakout pullback. Very aggressive in that the pullback is all within one candle (hidden on this timeframe). But in an opening drive, this may be all the market offers.

Let's see how it plays out.

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Again, here's how an exit works:

1. Your position is flat either through scratching the position or execution of a stop or target order.
2. Do not relax focus. Reassess now with a clear mind and no risk exposure. Is the exit premature? Is the premise still valid?
3. If the trade idea is no longer valid, ONLY THEN IS THE TRADE OVER.
4. If the trade idea is still valid, then find a way to re-enter.

Remain focused and alert.

EXPECT RE-ENTRY, until the market proves otherwise.

This is the mindset required for effective re-entry, to ensure that you're not sitting on the sidelines watching frustrated as the move happens without you.

Happy trading,

Lance Beggs
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And more from Lance Beggs
Again without comment except to say I have also heard this called 3 hills and that Ray has another name for it based upon a Lionel Ritchie hit song - 3 times a Lady!
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Hi Traders,

I don't trade classic charting patterns. But sometimes they jump out of the charts as completely obvious. And if they line up with one of my setups, that's great. The more people finding reason to trade in my direction, the better.

Let's look at an example, with Three Pushes into S/R.

Happy Trading,

Lance Beggs.

Three Pushes into S/R

There is a reversal pattern within technical analysis called Three Pushes, or sometimes Three Drives.

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There are a number of variations which specify requirements for the distance that each push extends, or for the depth of each pullback.

Personally I'm not too concerned with this. But do like to see the trend clearly weakening into the third push (See YTC Price Action Trader Vol 2 Ch 3 P116 onwards).

And context is essential. Look beyond the pattern to where it is occurring within the wider market structure.

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As with all counter-trend patterns, it's not a guarantee of reversal. Consider playing them with an initial target of mean reversion, in expectation that the market will just pause for a sideways rest before resuming the original trend. You can then assess further potential as you see the reaction off the level. If there is potential for a complete trend reversal, keep at least a partial position open for that possibility.

Now, if you've been around my site for a while you will know that I don't trade patterns such as the Three Pushes. I trade price behaviour around S/R and in pullbacks within a trend.

However, when one of my setups happens to coincide with Three Pushes into a support level, it's hard not to notice. And this extra confluence of ideas makes the trade so much easier to take.

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I don't trade classic technical analysis patterns. But some of them are quite obvious at times. And if the pattern (or pattern failure) happens to support my trade idea, then that is all right by me. The more people finding reason to add to the orderflow, at the time of my entry or immediately after, the happier I feel.

Happy trading,

Lance Beggs
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And yet another one from Lance Beggs - wow he has put out some good emails while I have been busy elsewhere!

Please remember that Lance uses his own trading style - different from the ones that Ray uses, but there are many similarities about the attitude of the trader and the approach to the market:
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Hi Traders,

Today, let's look at why I delayed this session start and waited for the opening swing to play out first.

Happy Trading,

Lance Beggs.

One Minute to Market Open

This one is for day-traders on low timeframes.

Traders who make discretionary decisions.

Traders who rely strongly on being able to FOCUS. Being present with the market. And fully immersed in the the price movement as it flows from bar to bar.

Sounds awesome, right!

Until we realise that sometimes life just doesn't give a damn about our desire to "trade in the zone".

I sent this image out by social media during the week, based upon my experience on Monday.

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I highly recommend you adopt this practice - a quick self-check in the final minute prior to the market open. Just to confirm that you are actually fit to trade. And that you're focussed and fully engaged with the task at hand.

Most days you will be.

But sometimes, you will catch yourself, and realise that your mind is elsewhere. Distracted... and at risk of poor decision making.

So here I was on Monday...

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I had been alerted an hour prior about yet another scammer operating on twitter, impersonating me and contacting traders by direct message to try to scam them out of money. (This seems like a good time to remind you all - I will never DM you to sell you any products or services. See here for more details. And always contact me through my website or legitimate social media pages, if you've been contacted and want to confirm it's not me.)

Twitter had been notified. And the trading community on twitter were actively reporting and blocking the account. So really it had been dealt with as best it could be at the time.

And yet... I was pissed off.

And distracted.

And constantly watching twitter instead of the charts.

So here's the important thing to realise... you don't have to trade everything. Sometimes you can take a day off. Or even just delay the start of the session.

I chose option (b).

Delaying the start. Really, this was a minor issue. And it had been dealt with, for now. There was nothing more I could do.

But my mind wasn't in the game and I needed to correct that. So here was the plan:

(1) I acknowledged the distraction, (2) I confirmed there was nothing I could action right now, (3) I committed to checking in on this issue again at midday.

Sometimes this is all it takes - a conscious reminder that it's dealt with and can be put aside for now, with a firm commitment to address the distraction again once trading is done.

(4) I then delayed the start of my session. Just watching price for a bit and seeing if I could get in sync with the market flow. And then reassess, standing aside if I wasn't happy with my ability to focus. And commencing trading if I was.

Let's see how it played out.

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Key point today...

You don't have to trade everything. Sometimes you can take a day off. Or even just delay the start of the session.

Check in on yourself just prior to the market open. And if you find yourself distracted, but still keen to trade, just step back for a short period. Let some structure develop. Confirm you're reading it well. And then get to work.

It seems strange that I have to suggest delaying a session start. But I know so many are keen to go right from the open. I get it - I love market opens. But I'm also completely ok with delaying. Especially if it's only a short period of time.

And anyway, trading is often easier after some structure has developed.

One minute before the market opens, pause and check in on yourself. Where is your focus? Is it on the charts? Is it on your trading process? Or is it elsewhere, stuck on non-trading related problems?

If the latter... consider either standing aside entirely... or delaying the start just a little to confirm that you're right to trade.

Happy trading,

Lance Beggs
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A follow-up from Lance Beggs (of Your Trading Coach) to his email about 'The trade isn't over when you exit':

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1. Watching the Trade Continue Without Me
2. YTC Price Action Trader - Feedback
3. Learning from Must-Trade Price Sequences

Hi Traders,

Today we look at lessons from a good trade. One that reached the preplanned target area. But one which had a WHOLE LOT MORE available.

I'm sure you know the frustration!

Happy Trading,

Lance Beggs.

Watching the Trade Continue Without Me

Just three weeks ago we discussed The Mindset Required for Re-Entry.

And the fact that a trade should NOT be considered over when your exit order is filled.

You need to reassess the situation. Because sometimes you can see more clearly as you sit on the sidelines with no risk exposure. And sometimes... the move is not actually done.

The trade is only finished when the trade idea is confirmed to show NO signs of potential edge through re-entry.

In that prior article I also made the comment that, "I can promise you I don’t always get it right! And I don’t always catch a re-entry opportunity."

Well, this is one of those times...

A good trade. Out at the pre-planned target level.

But there was SO MUCH MORE available. And I just sat and watched.

Let's start pre-session with a look at the Higher Timeframe charts.






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And the session begins.

So let's move now to the Trading Timeframe.





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As per the prior prior article, "I can promise you I don’t always get it right! And I don’t always catch a re-entry opportunity."

But that is ZERO excuse.

An exit does not mean "trade over", until I've taken the time to reassess the situation and check that the trade idea is no longer valid.

And sometimes, as in this trade, that means maintaining focus and watching the reaction for the next couple of candles.

More work is required to reinforce my procedures, creating a post-exit routine that does not relax until the trade idea is PROVEN to no longer show any potential for edge.

The never-ending-work-in-progress, continues.

Happy trading,

Lance Beggs
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Hi ian,

how would you know if the previous resistance.??
.lets say a previous high in daily chart..what tools or info we have to know if it going to break that level or will fade?
volume bid and ask in futures market?sentiment?

Hi juangecko
You are asking a very difficult question. Nobody can know if a supposed resistance or support will hold when tested!

So what I can answer is what I look at for clues and my basic presumption. Note that since I don't delve deep into OrderFlow, I'm sure that my answer isn't the same as some other Sharp Edge students who focus on much smaller timeframes.

The way I look at levels is that there are different definitions of 'holding' versus breaking.
Is a fairly short duration break during which hardly any volume is transacted really a break even if it 'broke' by a decent distance?
Or how about a break that was comprehensively rejected by high volume?

If you say that all those are still breaks, then you could say that in such a case then I expect a level to break when tested almost regardless of other factors. I expect a Stop Run which is market dependant based upon typical Stop Run size and whether it is close to a 'round number', even if it is only 1 to 3 ticks/pips!
So I don't set a Limit Order fade right at the level because A). The level may not actually be tested. B). If is is then I expect I could get a better price!

There are 3 basic reasons for the action of price around support/resistance levels (or you might more accurately say at support/resistance areas):
1. Value.
2. Liquidity.
3. Fear of being on the wrong side.

The first two are the main considerations for the big Commercials (who are the only ones who can drive price on a timeframe such as the Daily timeframe you suggested. While the third one is more of a consideration of the Market Makers who by definition would be most short when approaching a top and most short approaching a bottom. Thus they may withdraw their liquidity, making price more volatile - small orders move price much further when liquidity is very low!

So there you have it - those three are what I look at before price tests support/resistance in order to try to gauge what is likely to happen. Though in most cases I tend to wait and see what is happening before entering on the side of my expected 'winners' - but that's a reflection of my 'news trading' style!

I recognise that Ray isn't the only decent educator for retail traders out there, though I happen to think he is the most knowledgeable and the best for me, but we are all different.

So this post is sharing information from another one Peter Davies of Jigsaw tools.
The email came with a warning that the video may only be up for a relatively short time so I'm posting it even before I've had time to view it all.

He is talking about the following:

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Here is the link to the recording:

https://www.youtube.com/watch?v=BK-qr-2OQW4&ab_channel=JigsawTrading&mc_cid=49667ead5c&mc_eid=e93edf0386

Having now viewed the whole video, they are selling a course which includes lifetime access to Jigsaw Tools. I think that the special offer price on the course may have already gone since they were only offering it for a limited number of students (unlike Ray).

Note that there is nothing special about their 'zeros' trade. These happen very frequently on the Oil markets - almost guaranteed on the Oil Inventories release each week.

Ray calls the 'zeros' a liquidity provider 'Withdrawal Of Liquidity' - basically those making a 2-way market on the Limit Order Book get concerned that there are signs of big commercial Buys or Sells. So they pull their Limit orders (so as not to get stuck on the wrong side of a trend). This makes price move much faster in that area because there is nothing to oppose the commercial buying/selling in that area.

Here is yet another one via Peter Davies.
This is a Brazilian Trader interviewing Gary Norden who is known for Market Making/Scalping.

One of the things they talk about the dangers of getting educated by Brokers who make markets (e.g. CFD Brokers) because they make markets thus they trade against you - so naturally they only teach a style that suits their house traders to trade against.

https://blog.jigsawtrading.com/pro-trader-gary-norden-interview-english/portuguese-subtitles?mc_cid=49667ead5c&mc_eid=e93edf0386

The interview is in English with Portugese subtitles except the first 50 seconds which is all in Portugese.


Overview

1. Up to 0:50 is Portuguese, after that it's English with Portuguese subtitles.
2. How professionals can spot fake vendors "Those that have been traders our whole lives, we can tell the sell side very quickly, The things they say and the way they talk a professional trader can see straight away, that they are not a trader. New Retail traders cannot tell the difference."
3. Behavioral finance - and whether it fits TA or disproves it. Gary discusses heuristic shortcuts humans make (e.g. tiger, run) which served us well historically but don't help in trading. Gary discusses Representative Bias as an example.
4. Random rewards, the outcome & the potential addiction to random rewards..
5. The cycle of trader improvement. The impact of trading frequency.
6. Gary's experience in the pits before screen trading existed and the difficulties pit traders had with early trading platforms. He discusses how he and a number of traders transitioned to screen trading when it started.
7. The key differences/edges on the floor. Why Gary pines for the floor days & why the banks didn't like them.
8. What a market maker actually is - what they do. The difference between the options pit market makers and the futures pit traders. Also discusses the Market Making in banks.
9. How Gary and Jigsaw came to collarborate on the Market Making Manual.
10. How Gary researched and created his book on Techincal Analysis.
11. The difference between focusing on large trader activity vs picking off small trader activity.
12. The parallels he sees with playing poker.

It has been a while since I posted something from Boris Schlossberg in here.
That is because he seems to have stopped emailing out crazy stuff to his list, while also not sending out anything that valuable either.

But that has changed and his latest email is about the really hard part of trading which is self awareness, particularly of ones weaknesses and how well one is trading at the moment. Note there is a huge difference between how well you are trading and how good your P&L looks because good or bad luck has a bigger impact than skill over the short term!

So here is the email from Boris (of BKForex):

*********************************************************************************************************
Rehab - How I am Trying to Fix My Worst Trading Habits

Most rehab does not work.

We are all dopamine addicts one way or another and “talking through” our problems almost never gets us to change our behavior. Furthermore, determination to change is the surest way to failure.

In all other aspects of life - the harder we try the more likely we are to succeed. Rewrite an article ten times and it almost always read better - at very least spelling and grammar errors will be gone. Bake a cake ten times and you are practically guaranteed to have it taste better than your first burnt attempt.

Not so with our behavior and certainly not with trading. If there is ever a perfect example of the failure of discipline to achieve results - it’s trading. The harder you try the worse you do. “I should”, “I should”, “I should” - is the self-loathing mantra of everyone who day trades. More situps may get you washboard stomach, more reading may make you an expert on macro but more trading ain’t gonna do a damn thing no matter how hard you try.

To do well in trading you need two things. A system with an edge and an honest assessment of all the way you will sabotage it. In short, you need to figure out how to make the system adapt to your personality flaws rather than trying to adapt your personality to the system.

I’ve long ago decided to never dispense generalized advice because everyone has different demons to fight, so all I can do is discuss mine in the hope that you may learn something from them or at very least be amused.

I have three bad habits that I continue to combat. I revenge trade in size whenever I lose. I overtrade. And I deviate from setup. Trying to fix these problems has not been easy, but at least for me, it’s clear that I need to work on one issue at a time.

By far the single most important thing for me to fix is variable size. You cannot day trade with 1 unit one time and 12 units at another time and expect to generate consistent returns. But that’s easier said than done. I noted last week that for my setup to work for me I need to trade with 10 stop and 3.5 point target. Of course, anyone who reads that sentence will say oh that’s a ridiculous risk/reward you should improve it. And of course, after doing well for more than one hundred trade with that structure I said that same thing to myself. And of course, I immediately fell off the bandwagon and like relapsed went into a wild overtrading, overleveraged bender and the only happy ending from the whole sordid affair was that I managed to end up the week at break-even after taking my account by -20% at one point.

So what’s the moral of this week’s story? Rules only matter if you can follow them. That’s why in trading, the only thing that you can learn from other people’s systems (including even your own) is the principles behind the mechanics. But execution must always be a personal choice - regardless of what is sanctioned by society.
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My only comment is that with the right win ratio, there is nothing wrong with a SL of 10 and a Target of 3.5 !

In a coincidence, I got 2 emails about the same thing (roughly) from different sources.
Both Lance Beggs (of Your Trading Coach) and Boris Schlossberg (of BK Forex) emailed about 'Profiting from Failure'.

This resonates with me because as those wh actually read this thread know, I'm basically a 'News trader'.
That means that i attempt to profit from traders being caught out by unexpected economic (or sometimes political) news.
The 2 great thing about these situations are:-
1. They (the ones I trade) are at times which are known in advance - so I don't need to be sitting with laser focus all day waiting for a trade.
2. They have high volatility (admittedly a two edged sword), which means I can make (or lose) a relatively large amount quite quickly.

So here is Boris' email (which arrived 2nd) then in my next post(s) I will reproduce Lance's email with all its usual charts.

"
Dear Ian
I Profit from Failure How do you Trade?

Jack Schwager has a new Wizards book out and I spent my dog walking time this week listening to it on Audible. Unlike the prior Wizards books this one does not interview hedge fund managers or big bank traders but ordinary retail and prop traders who have managed to generate extraordinary results for a decade or more. The book is full of gems and in the future, I’ll be sure to summarize its best ideas, but for now, I just want to focus on one simple theme.

Regardless of what style they employed, regardless of whether, they used technicals or fundamentals, whether they worked systematically or discretionarily all the successful traders basically traded just one thing - surprise.

It seems obvious - after all if there is no surprise the markets are in equilibrium and prices remain flat. Surprise causes dislocation in the markets and creates price movement. But few retail traders actually appreciate the value of this dynamic and more often than not ignore its implication by fighting the tape and losing money as a result.

I was pleasantly “surprised” to learn that this is really the essence of everyone’s profits. For quite some time I’ve been developing a day trading strategy in our live chat room that utilizes this dynamic although I always referred to it with a much more crass term of “failure”.

All of our day trading setups - be they trend or mean reversion are essentially based on the idea of failure - that is shorts who fail to hold a level and are, therefore “surprised” and forced to cover or longs who fail to hold support and are forced to bail. This is our bread and butter setup and it is amazing how well it works.

I used to try to buy breakouts or fade parabolic moves with very mediocre results, but trading failure has been a gamechanger because as I realized from listening to the Schwager interviews the key to successful trading is to exploit human behavior.

There are a million ways to do that and the interviews offer a wide variety of tactics and strategies but the common theme that unites them all is - surprise. Without surprise, there is no profit and that is perhaps the most interesting takeaway from the interviews.

In addition to the element of surprise, there was uniform agreement amongst the interviewees that you should trade your personality. I found this particularly amusing as all the interviewees then proceed to lecture about the need for discipline, patience, journaling, self-awareness, “mental happy place” and high reward to risk trades in order to achieve success.

I do none of those things.

As anyone who trades with me in my live trading room knows patience for me is that rare ability to hold a trade for longer than a minute. Discipline is me staying out of the market for longer than a quarter of an hour and my “happy state” is when I drop 2 or 3 f-bombs during our trading session rather than my usual 20.


But there is one thing I absolutely do. I definitely trade my personality. Although my setup is well defined, exploits the key element of surprise is executed with the help of my entry and risk management software but is very much my own thing. I trade with a horrible risk-reward ratio, exit trades too early, pay an enormous amount in commissions and do what almost everyone in the book tells you NOT to do - try to make money consistently every day.

Does that mean that all of these great traders are wrong? Absolutely not. Their advice is terrific and if you can implement their approach all the power to you. But the single most important element of trading is to make it your own. To succeed within your own means. In the end, if Schwager’s latest book teaches us anything it’s that trading isn’t about making money it’s about mastering yourself.

"

Now the email from Lance Beggs:

"
Hi Traders,

The first pullback after a break of structure can be a GREAT trade. But there is something I like even better. Let's check it out below...

Happy Trading,

Lance Beggs.

Failure Scenarios

I love this comment from David on last week's article - Long is Wrong 2. The key part is highlighted.

I'm actually really excited to see someone recognise the importance of watching for failure scenarios.

Opportunity exists at the places where large numbers of traders get something wrong.

The times and places where obvious expectations fail.

The most common example being breakouts of OBVIOUS higher timeframe structural features (levels or patterns).

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"
Let's look at an example from last Friday - a clear and obvious break of a key overnight level - which fails right on the market open.

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This was ONE AND DONE for me. It's late in what has been a long and challenging week. And approaching 1:00am my time.

Thankfully, the market offered an opening move which was smooth and one directional.

When there is a clear and obvious change in the structure, make sure you consider and visualise multiple scenarios. The break may hold. And opportunity may be present in the breakout direction. But consider the failure scenario as well. Assess the structure and ask whether or not a higher timeframe structural trap could provide even better opportunity.

Because if it can, you want to be ready for it. The entry can come quickly. And may not give a second chance.

Happy trading,

Lance Beggs
"

A follow-up to the prior email from Boris Schlossberg (which I posted a week ago):

"
Dear Ian
The Only True Trading Strategy There Is

As you know I’ve been listening to Schwager’s new book and starting next week I am going to do a series of end-of-the-year summaries on the best interviews in that book, but for now, I just want to focus on the key takeaway from his work.

It’s doesn’t matter if the trader traded trend or mean reversion. It doesn’t matter if they used fundamentals or technicals. It doesn’t matter if they were wholly systematic or fully discretionary. All successful traders in the book did this one thing.

They traded their personality instead of a set strategy.

I’ve been ranting and raving for weeks about how we never really change as human beings and any attempts at “discipline” are futile. And yet...last week after having a relatively successful week of trading I decided I needed to “improve” my R/R. The results were as depressing as they were predictable. I went on such a tilt that I nearly killed 50% of my trading account (fortunately it was small) before I finally stabilized and started to make money again.

How did I stop the bleeding? By going back to the tried and true method of scalping that made me money day after day after day.

Yes, that crazy day trading strategy where I go for just 3 NQ points per trade. Is it utterly insane? Of course. Is it stupid? Absolutely not. It works for ME. And at the end of the day what does it matter if make 30 points from one trade or from 10 small ones. The key is to be positive and profitable. And the only way to achieve that is to trade the way you are not the way you are supposed to be.


Which brings me to the key question you need to ask yourself before you even start trading.

What do you find more painful - getting stopped out for 200 pips or missing out on a trade that made 200 pips? If the answer is the former then you probably need to trade more like me. If the answer is the latter then you should consider trading like my partner.

K hates missing out on good trades and always wants to milk the idea for every possible pip it can give. I on the other hand could care less about the upside and am always mindful of the downside.

I like the predictability of insurance premiums like income. K - who by the way trades very consistently - would love to bank a few lottery-like winners.

The key is to understand the limitation of each approach. I trade with tiny take profits but also tiny stops. I peck at the market the way a pigeon pecks at seeds. K will trade with a bigger risk but she will also reap the bigger reward.


Trading is an amazing discipline if for no other reason than it helps you to really know yourself. It strips you bare and forces you to be brutally honest with who you really are. That’s why all traders who create some idealized version of themselves inevitably fail.

The key in trading is to understand your weakness, accept it, and turn it into a strength. That’s how all the Schwager interviews succeeded, even if they may not recognize it themselves.
"

All I can say is that I agree with Boris that each trader must trade according to their own personality. Like Boris, I found this out the hard way and like him I still get occasional reminders that it's still true for me.

This video is about Market Making, business models and manipulation (both legal and illegal) in general but specifically about Stocks.
There have been several of guys like this write books or do reveals (boasting) of what they used to get up to, so there is no excuse for not knowing it happens.

But several of the newer members of the student support group I run have apparently only heard a little about this from Ray (De Medici) and seem amazed that it is fairly common knowledge.

This guy is known as JJ : Ep 179: Former Market Maker Shares Must-Know Trading Secrets! - YouTube

What do you lean your trades against?
Ray (through CompassFX) is starting his first full course since 2018 on Monday.

This is for hardworking traders only - Ray is definitely NOT the easy button.

Here is a video released by Compass to give you a flavour of some of the things he covers (note that you may find his charts confusing since he shows lines which are the inverse of the Dow Jones Index, the S&P500 index and the Nasdaq Index).