How nice is this market open…
And I’ll admit it looks damn tempting.
But wait!
I’m not just playing price action.
I’m playing the metagame.
I’m viewing the market not just as price movement and patterns, but also as PEOPLE whose trade decisions create the price movement and patterns. I’m trading AGAINST those traders who find themselves on the wrong side of the market. And timing my entry at or before the point of maximum pain, when they’re forced to exit the market.
I’m looking for someone trapped in a poor position.
I’m looking for someone under severe stress.
And even better… someone trapped in a poor position and under severe stress… having been suckered into their trade through incredibly tempting price action.
You’ll recall a fortnight ago we discussed the fact that a good trade requires all three components – context, setup & execution.
These traders have failed to consider context. We’ll get to that shortly.
Let’s look a little deeper.
Here’s why I was not tempted to enter short.
This was a highly visible level. We’d discussed it a couple of times via YTC social media. And it was clearly visible to participants on all timeframes from the lowest through to the weekly.
Lessons:
1. Never underestimate the ability of the market to deceive you, especially when it presents what looks like a certainty.
2. Know that others are also prone to this deception. And so when you see price action that screams out for the emotional FOMO traders to enter, make sure you pause and consider: Does the entry fit the context? Or are they perhaps wrong?
Happy trading,
Lance Beggs
PS. For those new to the concept there are dozens of articles on the website. The simplest way to find them might be to work through all articles with the Tag of either Metagame or Traps.
- Metagame articles
- Trap articles
- Or even better… get the strategy built upon this concept.