3 min read

BIPTJ Challenge Day #1

BIPTJ Challenge Day #1
Tues June 01, 2021: +277 ticks total

Performance Summary:

  • +277 ticks
  • 38% W
  • RaWaL: 2.80
  • PF 14.58

Couple of takeaways from today:

#1) Clear premarket trade idea.

The premarket high lined up closely with the top of the recent range. Here's what it looked like on the H1:

Red = premarket levels
Blue = H1 range

There was a ton of white space above/below the level, so could this have turned into a huge breakout?

Sure. Maybe.

Let's step through it:

  • Minute #1: Weak BO fail. Control flips from aggressive bulls to strong bears.
  • Yellow circles #1 and #2: Bear traps. Control flips from bears to bulls. Traps are tiny +1 tick triggers.
  • Bear traps lead to what looks like a big breakout. Bulls are super strong and picturing a giant move up into that space.
  • But...bears come in real strong and push price back down below the H1 range high AND the premarket high. The size of the trap is significantly bigger than the preceding bear traps.
  • Yellow circle #3: Bulls try to come in one more time and remount the premarket high....but the attempt fails. This flushes them out and adds selling pressure.
  • Suddenly all that white space DOWN looks really good to the bears....and price drops.

It reminded me of the SFPs (Swing Failure Pattern) that Tom Dante was known for. It's basically a breakout fail at a major swing high/low.

Webinar 03: Revisiting The SFP - Advanced Techniques For Trading The Setup - Trader Dante - Professional Mentoring for Serious Traders
Module 2: Webinar 03 Revisiting The SFP - Advanced Techniques For Trading The Setup Webinar Details Date held: 24th March, 2013 Run Time: 77 minutes Topics Covered This webinar takes another look at the Swing Failure Pattern and covers advanced techniques for trading it. I discuss: An overview of th…

You can also dig around the Trade2Win forum and search for his original thread on the topic.

#2) Goofing one exit can hurt the whole trade.

I don't think there's any one perfect trade management system, but my general approach is:

  • Try to cover part on the first push/leg. Hopefully this lines up with a basic S/R level (the J16 crowd would call this a first trouble area, FTA).
  • Try to cover part after a pullback (wait for an extended move, hopefully pushing past basic S/R and continuing to the next level).

Long story short, I totally got spooked with my second cover in this trade.

Here's a closer look at my entries/exits:

BOF fail entries + exits

Yellow circles = Traps/BOFs.
Red circle = My goofed cover (P2).
Red arrow = The leg I missed because I "lost" a contract.

Entries were "B".

But let's focus on the exits.

Exit #1 Target:  Bottom of the range.
Exit #1 Reality: Great exit here, exactly according to plan.

Exit #2 Target: Should have targeted a push down (a 1m trail would have been fine).
Exit #2 Reality: Got spooked and covered as price pulled back up to the BO level.

IF price had totally shot back up into the range, that'd be completely fine - but stops should have been inside the range. The breakout isn't invalidated until price eclipses the BO bar's high (in this case) by a tick.

Exit #3 Target: Hold for the big picture S/R (or as long as possible)
Exit #3 Reality: Held through the pullback (good), but covered early once price broke past the swing low and started to look weak (not that good).


Today's Strength: Great job with the big picture analysis and first cover.

Today's Weakness: Screwed up my second exit by covering in no-man's land. Should have either covered inside the range or on the second leg push.

Tomorrow's Goal: Use an actual resting stop order and manually trail it along with the larger move.