Many traders place extra emphasis on trade entry. They look to buy as near as possible to the low tick or sell near the high. If a market starts to move and the trader missed getting in near the extreme tick, they look elsewhere thinking opportunity has passed them by. Too bad.
Sometimes, it is difficult to get in near the high or the low. Markets have become more volatile in recent years and we don’t always see the testing around a high or low that has been common in the past and has allowed for entries near tops or bottoms. But that doesn’t mean we can’t profit from the move.
Two Examples
Today’s market give us two examples. The first is in the S&P e-minis. It was tough making a short entry near the high of the day this morning. We didn’t see much weakness there. If you were on your toes, a short entry was available (first arrow) after the market had made both a lower high and a lower low — always a good place to look for a short. But you had to be quick; it was easy to miss. A clearer trade emerged for those who patiently waited (second red arrow). We have a nice UpThrust after clear weakness and where we would expect more selling to come in. It yielded a nice trade even though getting short near the day’s high or even as the market started to fall were missed.
In the British Pound, we have a similar situation. The market was choppy and in the early part of the American session, it did dip back and test the overnight low. I was looking for a Spring, but that didn’t happen and no trade was taken. We do see demand come in and then a pullback where the market started to hold (first green arrow). Clear buying took place as seen in the bars in the 1.6340 area and when it had a Spring it signaled a nice long trade. A later Spring opportunity also set up.
Lesson
Again, the point being that it is not always possible to buy the low. Be patient, continue to read the price, volume and structure, and wait for the market to line up for your type of play. Springs and UpThrusts are the daily bread and butter trades for Wyckoff Method practitioners. You will usually get an opportunity every day by watching only 2-3 markets. As David Weiss says, you can trade nothing but Springs and UpThrusts and make money. Think in these terms rather than in terms of trading near the high or low tick.
For more on Springs: Wyckoff Spring Trade Setup
For more on UpThrusts: Wyckoff UpThrust Trade Setup
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