Long is Wrong – 3

I thought I’d finished the “Long is Wrong” articles for now.

But then I received an email from a reader of the YTC Newsletter that I absolutely LOVED.

And I thought that maybe “Long is Wrong – 3” would be a good way to share some of that love!

If you missed the prior articles, you can read them both here:

• https://yourtradingcoach.org/trading-process-and-strategy/long-is-wrong/
• https://yourtradingcoach.org/trading-process-and-strategy/long-is-wrong-2/

The concept is incredibly simple. The market makes a reasonable attempt to push higher from the open, but is unable to find sufficient buying to continue in that direction. Opportunity is found as price crashes through the low of day.

Before we get to the email, the following is the market in NQ last Monday, 23rd November 2020.

See if you can identify the setup location.

So here we go…

Excerpt from Email received 24th November, from TK:

Hi Lance,

How are you doing?

I just thought I would share a sequence from yesterday´s trading. It was exactly the concept that you explained in your two recent articles “Long is Wrong”.

I could see the opportunity coming well ahead and was ready to enter on the first pullback should price break through the Low of Day and hold.

Attached Image:

Note: I’ve had to shrink the image to fit within the blog. If you can’t read the text, click on the image to open a full-size copy in your browser.

Did you identify area B as the trade location, when you looked at the clean chart earlier?

If not, please review the prior articles in this series.

Did TK catch the trade?

Even better!

He got in early, recognising the failure of the topping pattern and then holding throughout the full move lower, taking advantage of the bearish orderflow on a break of the Low of Day to continue pushing his trade into greater profits.

His email comments:

I was finally able to catch an earlier entry as price broke through the overnight high resistance, could not continue and rolled over. So I did not enter on the pullback lower, but I thought it was just a beautiful opportunity.

His chart with trade markers:

What did I love so much about this?

This comment in particular brought a smile to my face:

I could see the opportunity coming well ahead

It’s always great to see trade ideas from my site being put into practice.

But this is when you know someone has really understood and internalised the idea – when instead of seeing it happen in real-time – they actually sense it well before it happens and can then just watch as price moves in the way they anticipated.

This is next-level understanding.

The icing on the cake being the fact that he was able to enter earlier, seeing the Long is Wrong setup not as an entry but as a reason to hold his trade as it gets another push from a new source of bearish orderflow.

Well done TK! And thanks for sharing your trade.

Happy trading,

Lance Beggs