Until you have a good read of the market, there is NO TRADE.
- Confidence in your real-time understanding of the market structure.
- Confidence in your real-time understanding of the nature of price movement.
- Confidence in your real-time assessment of market bias.
- Confidence in your projection of that market bias forward in time and price.
And most importantly:
- An understanding of how future price movement should behave if your forward projection has some validity.
- And confidence in your ability to adjust your understanding (and your trading decisions) should price movement offer something unexpected.
In simpler language… if you don’t know what’s going on… you have no business trading.
Watch and wait until some clarity appears, in terms of structure, price movement and opportunity.
The market open is one time which has great potential for confusion, doubt and uncertainty.
I remind myself before the open that there is no need to rush the first trade. If it screams out to be taken, then take it. But otherwise, be patient and allow myself time to get in sync with the flow of price.
Here are two of the market opening “warning signs” that have me keeping my trigger finger well clear of the mouse.
1. Bias Conflict
During the session I maintain a sense of the bias through the YTC Price Action Trader rules for trend projection.
At the session open though, I like to complement this with a really simple and objective method – the opening range breakout.
If they’re in agreement, it’s game on.
But if they conflict, it’s a sign to be patient and wait till they come into alignment.
2. Seriously BAD LOOKING Price Action
Not just bad looking price action. We’re talking seriously bad looking price action.
Remain Patient. Watch and Wait.
Happy trading,
Lance Beggs