I received an email last week from a student of the YTC Price Action Trader, which I ABSOLUTELY LOVE.
Actually, I receive a lot of email which I absolutely love. But sometimes they just stand out immediately as something really special.
It was a simple email, containing just one image (shown below).
And the only text was in the subject line: Thank You
Yeah, that made my day! 🙂
Let’s look at the trade, using this 1 minute timeframe as the Trading Timeframe (noting that this is more a YTC Scalper timeframe than YTC Price Action Trader). If you use a higher timeframe, that’s fine. Don’t discount the lesson. Look to the ideas and concepts and apply them to your own trading timeframe.
What I love is the simple fact that to most newbies, or most traders of simple text-book style technical analysis, there is no obvious reason to short.
Let’s look at how I see this price movement.
What immediately excited me was WHEN this trade occurred. So we’ll start with that.
Always treat any significant price move just prior to a key market timing as suspect, until proven otherwise.
What is a significant move? The easiest and most common of these is a breakout.
That’s what occurred here. Let’s zoom out a little to see where this move was occurring in the wider market structure.
So we have a breakout occurring just prior to the UK Session Open, into an area that will still offer potential resistance.
Just like we discussed here and here, I’m anticipating breakout failure unless price can prove otherwise.
Let’s check the quality of the movement throughout the whole sequence.
This was a really nice YTC Price Action Trader BOF trade.
Could it have failed?
Of course it could.
But the absolute worst case would have been a 1R loss, compared with the multiple-R profit that was attained. And I can see many ways that price could have moved, such that the loss would be less than 1R.
It was a risk worth taking.
Professionals don’t seek to win on every trade. They seek to trade good quality reward:risk bets with the aim of profiting over a longer series of trades.
This was a good reward:risk opportunity!
For me… what I particularly liked was the timing of the trade, being a false break in the opening sequence following the UK open.
That was what said to me… “I MUST SHARE THIS ONE ON YTC”!  🙂
But really everything else is just beautiful too.
To the guy who sent me this great trade – I love it!
Congratulations!
Keep up the good work.
Happy Trapping,
Lance Beggs