al-brooks-course
48G - Trading the Middle of the Day
Raw transcript and slide notes for 48G - Trading the Middle of the Day.
Overview
- Slides: 17
- Transcript segments: 579
- Status: 自动按 slide 时间线归档；核心概念和长期笔记可以在每个 slide 的
Study Notes下继续整理。
Source Media
Transcript 001
Time: 00:02
Bilingual Transcript
00:02 - 00:03
EN: This is Al Brooks.
00:03 - 00:05
EN: Thank you for watching the Brooks Trading Course.
00:06 - 00:10
EN: This is the first of two videos on trading in the middle of the day.
Slide 001
Time: 00:12
Bilingual Transcript
00:13 - 00:16
EN: After the initial hour or two of the day,
00:16 - 00:18
EN: traders start to look for some kind of a change.
00:19 - 00:21
EN: Is a bull trend becoming a Trading Range?
00:21 - 00:23
EN: Is a Trading Range breaking out up or down?
00:24 - 00:28
EN: If there is an initial trend up or down, traders need to decide
00:28 - 00:31
EN: if it looks like it’s a leg within a Trading Range
00:31 - 00:33
EN: or the start of an actual trend.
Slide 002
Time: 00:35
Bilingual Transcript
00:42 - 00:46
EN: Every market has three parts to the market cycle:
00:46 - 00:49
EN: a bull trend, a bear trend, and a Trading Range.
00:52 - 00:56
EN: Most days change behavior after the first 1 to 3 hours.
00:57 - 01:00
EN: That is the end of the opening range, the opening third of the day,
01:00 - 01:03
EN: and the start of the middle of the day or middle third of the day.
01:03 - 01:04
EN: It’s not really thirds.
01:04 - 01:07
EN: It’s not like each segment is 2 hours long.
01:07 - 01:11
EN: It’s that after the first 1 to 3 hours the market changes behavior,
01:11 - 01:14
EN: and then toward the end of the day, the final hour or two,
01:14 - 01:16
EN: it often changes behavior again.
01:21 - 01:24
EN: Because most days change behavior at least once,
01:24 - 01:27
EN: traders always have to be ready to change how they’re going to trade.
01:30 - 01:33
EN: Here we have a bull trend on the open,
01:33 - 01:35
EN: but it became a bear trend in the middle of the day.
01:42 - 01:44
EN: Here we have a bear trend on the open,
01:44 - 01:47
EN: and it became a bull swing lasting a couple of hours.
01:47 - 01:49
EN: A Tight Trading Range and then the bear trend resumed.
01:54 - 01:58
EN: The entire day ended up as a Broad Bear Channel
01:58 - 02:02
EN: with Lower Lows and Lower Highs, and the market was actually Always In Long
02:02 - 02:03
EN: a couple times during the day.
02:04 - 02:08
EN: That’s one of the features that distinguishes a Broad Channel from a Tight Channel.
02:08 - 02:11
EN: A Broad Channel, a Broad Bear Channel,
02:11 - 02:13
EN: often is Always In Long for part of the day.
02:17 - 02:20
EN: We had an early Trading Range and then a bull trend.
02:24 - 02:27
EN: We have a Trading Range and then a bear trend.
02:30 - 02:31
EN: You trade them differently.
02:31 - 02:35
EN: When it’s in a Trading Range, you trade it one way, looking to buy low,
02:35 - 02:38
EN: sell high, take quick profits, and once it starts to become a trend
02:38 - 02:42
EN: - either down or up – you look to swing part or all of your trade.
02:45 - 02:47
EN: Trading Range on the open.
02:47 - 02:49
EN: Continued sideways for most of the day.
02:49 - 02:51
EN: Became a bear trend late in the day.
02:57 - 02:59
EN: We have an early strong selloff,
03:02 - 03:03
EN: and then it became a Trading Range
03:03 - 03:06
EN: for most of the day, and at the end of the day it had a small reversal up.
03:07 - 03:11
EN: Always be prepared to trade what the market is currently doing,
03:11 - 03:15
EN: and always be prepared for a transition into a different style of trading,
03:15 - 03:18
EN: and then trade appropriately for what the market is doing.
03:24 - 03:25
EN: Middle of the day.
03:25 - 03:26
EN: Sometimes it’s a third of the day,
Slide 003
Time: 03:25
Bilingual Transcript
03:26 - 03:29
EN: sometimes it’s less than a third, sometimes it’s more than a third.
03:30 - 03:32
EN: After the market does something on the open
03:32 - 03:35
EN: - here, a bull trend – it transitions into something else.
03:36 - 03:39
EN: You have to be prepared for the transition and then trade appropriately.
03:43 - 03:47
EN: Bulls tried to get a late rally, but it became a small Wedge bear flag,
03:47 - 03:50
EN: and the bear trend resumed at the end of the day.
03:50 - 03:52
EN: But the end of that behavior that takes place
03:52 - 03:56
EN: in the middle of the day can fail or it can continue.
03:57 - 04:01
EN: You only change how you’re trading if the market changes what it’s doing.
04:01 - 04:04
EN: Here, the bulls tried to get a reversal up
04:04 - 04:07
EN: - so rally, selloff, they tried to get a reversal up.
04:07 - 04:11
EN: Instead it became a Wedge bear flag and the bear channel continued.
04:18 - 04:22
EN: Market was sideways for most of the day and then it tried to break out
04:22 - 04:25
EN: into a bull trend late in the day, but it failed.
04:29 - 04:31
EN: The bears look to sell after the reversal down,
04:31 - 04:34
EN: looking for a selloff into the close.
04:34 - 04:39
EN: The final third of the day often begins with a breakout one way or the other.
04:39 - 04:44
EN: Here we have an up side breakout, and then we also had a down side breakout.
04:52 - 04:55
EN: First two-thirds of the day sideways and then we have a breakout,
04:55 - 04:58
EN: and that breakout began the final segment of the day,
04:58 - 05:00
EN: the final third of the day.
05:05 - 05:09
EN: The bulls tried to get a Wedge Bottom here to end the middle third of the day
05:09 - 05:11
EN: and begin the final part of the day.
05:11 - 05:15
EN: It failed, and then they got another Wedge Bottom attempt here.
05:15 - 05:19
EN: Once they had this strong reversal, they started to look to swing part
05:19 - 05:22
EN: or all of their trade, looking for a trend up into the close.
05:22 - 05:25
EN: Here there was profit-taking at the end of the day.
05:30 - 05:31
EN: A Wedge Bottom.
05:31 - 05:33
EN: 2 consecutive good bull bars.
05:33 - 05:35
EN: Looks like the start of a possible swing up.
05:39 - 05:41
EN: First two-thirds of the day was a Trading Range,
05:41 - 05:43
EN: but then we have a big bear breakout,
05:43 - 05:47
EN: consecutive big bear bars, a third, fourth bear bar.
05:47 - 05:49
EN: It looks like we’re going down for at least a Measured Move
05:49 - 05:51
EN: based upon the height of that range.
05:51 - 05:54
EN: It turned out to be a strong trend for most of the remainder of the day.
06:03 - 06:05
EN: Trading Range for most of the middle of the day
06:05 - 06:08
EN: and then a brief breakout at the end of the day.
06:08 - 06:11
EN: Very little opportunity to make money for the bulls at the end of the day.
06:11 - 06:14
EN: Once it was clearly long, it went sideways.
Slide 004
Time: 06:20
Bilingual Transcript
06:20 - 06:21
EN: Very strong trend.
06:21 - 06:24
EN: Is it strong enough to last the remainder of the day?
06:24 - 06:26
EN: Here, very strong bear trend.
06:26 - 06:29
EN: Is it strong enough to last for the remainder of the day?
06:34 - 06:39
EN: Well, only a couple days a month you see a bull trend day that looks like this.
06:39 - 06:42
EN: Only a couple days a month you see a bear trend day that looks like this.
06:43 - 06:48
EN: A Small Pullback Bear Trend, very small pullbacks, and the trend lasts all day.
06:52 - 06:55
EN: This happens a couple days a month, about 10% of the time.
07:00 - 07:05
EN: 90% of days that begin with a strong trend either lead to a Trading Range
07:05 - 07:09
EN: or an opposite trend, and therefore you have to be prepared
07:09 - 07:10
EN: for some kind of a transition.
07:11 - 07:16
EN: Began as a strong bull trend but then converted into a strong bear trend.
07:23 - 07:27
EN: Sometimes you’ll have a very strong trend that is so strong
07:27 - 07:31
EN: that it’s unsustainable, and here there’s a Parabolic Wedge Top.
07:31 - 07:33
EN: Different ways to draw it, but three pushes up
07:33 - 07:36
EN: - one, pullback, two, pullback, three, and then four.
07:37 - 07:40
EN: We’re getting a bull breakout above a very Tight Bull Channel.
07:40 - 07:45
EN: It’s too strong, and it could be a climactic end of the rally.
07:47 - 07:50
EN: Very strong bear trend, but we got a reversal
07:50 - 07:53
EN: and then a Higher Low Major Trend Reversal.
07:54 - 07:56
EN: Sell Climax, pause.
07:56 - 07:57
EN: Sell Climax.
07:57 - 07:59
EN: Sell Climax, pause.
07:59 - 08:00
EN: Sell Climax.
08:00 - 08:02
EN: A series of Sell Climaxes.
08:02 - 08:06
EN: Sometimes it’s just too much selling for it to continue.
08:06 - 08:10
EN: No one left to sell at that price, and once the final weak bear has sold
08:10 - 08:12
EN: and the final weak bull has given up,
08:12 - 08:16
EN: all that’s left are the strong bulls, and they’re going to buy.
08:16 - 08:18
EN: The strong bears don’t want to sell down here.
08:18 - 08:21
EN: They want to sell up here or up here,
08:21 - 08:25
EN: and then all we’re left with are strong bulls looking for a rally.
08:29 - 08:31
EN: We had an ii Final Flag.
08:31 - 08:34
EN: Two inside bars inside that bar.
08:34 - 08:39
EN: When you have an ii and the strong selloff, it often becomes the final bear flag,
08:39 - 08:42
EN: especially after a series of Sell Climaxes.
08:42 - 08:45
EN: This breakout, bear breakout is strong enough
08:45 - 08:47
EN: to get at least a small second leg down,
08:47 - 08:51
EN: but in a series of Sell Climaxes like this, there’s a significant risk
08:51 - 08:55
EN: that it’s going to be the final leg down and we’ll get a reversal either
08:55 - 08:58
EN: into a Trading Range or into an opposite trend.
09:03 - 09:06
EN: We have a strong bear bar, but it’s followed by a bull bar.
09:06 - 09:08
EN: Another strong bear bar followed by a bull bar.
09:08 - 09:11
EN: Strong bull bar followed by a bear bar.
09:11 - 09:13
EN: Strong bull bar followed by a bear bar.
09:13 - 09:17
EN: We’re getting strong trend bars up and down but terrible follow-through,
09:17 - 09:20
EN: and that usually means the market is balanced.
09:20 - 09:22
EN: Neither side can maintain control,
09:22 - 09:26
EN: and the result usually is a conversion into a Trading Range.
09:29 - 09:32
EN: Bad follow-through after trend bars up and down.
09:36 - 09:40
EN: That’s more common when the rally is going to end up
09:40 - 09:44
EN: as a bull leg in a Trading Range or it’ll lead to a Trading Range.
09:50 - 09:54
EN: A Trading Range day has at least one leg down and one leg up.
09:54 - 09:56
EN: Either one can come first.
09:56 - 09:59
EN: Here we have a leg up and a leg down.
09:59 - 10:01
EN: Here we have a leg down and a leg up.
10:01 - 10:06
EN: This turned out to be a bear reversal day and a bear trend day.
10:06 - 10:09
EN: However, if it stopped going down here,
10:09 - 10:11
EN: it would’ve remained as a Trading Range day.
10:11 - 10:14
EN: Big up, big down, big confusion and sideways.
10:14 - 10:18
EN: Here, the bears were strong enough to get a trend down.
Slide 005
Time: 10:30
Bilingual Transcript
10:32 - 10:36
EN: Only 10% of the days trend strongly from the open until the close.
10:36 - 10:38
EN: Even if the day is a strong trend day,
10:38 - 10:42
EN: it usually ends up having a Trading Range somewhere in the middle of the day.
10:45 - 10:49
EN: Strong trend early on, lots of good bull bars, not much in terms of pullback,
10:49 - 10:52
EN: and then the market went sideways for the middle of the day.
10:53 - 10:57
EN: Odds favor resumption of the bull trend, but once a Trading Range lasts 20
10:57 - 11:03
EN: or more bars, the probability of a resumption up starts to fall close to 50%.
11:03 - 11:06
EN: It’s still better than 50/50 that we’re going to go up,
11:06 - 11:10
EN: but it’s close to 50/50 that if we get a breakout, it could be down.
11:13 - 11:14
EN: Same thing.
11:14 - 11:15
EN: Strong rally, Trading Range.
11:15 - 11:17
EN: Strong rally, Trading Range.
11:17 - 11:20
EN: After the first 5 or 10 bars, the probability is 60%
11:20 - 11:25
EN: or more that we’re going higher, but once you start to get 10 or 20 bars,
11:25 - 11:27
EN: it becomes close to 50/50.
11:30 - 11:31
EN: Strong selloff.
11:31 - 11:34
EN: A bear flag, but then we went sideways.
11:34 - 11:39
EN: The odds favored more down, but once you start to get 20 bars or so,
11:39 - 11:42
EN: it becomes equally likely that we’re going to reverse up
11:42 - 11:44
EN: as it is that we’re going to continue down.
11:45 - 11:48
EN: It’s still always slightly more likely that the trend will resume,
11:49 - 11:53
EN: but the more bars that get added, the closer and closer the probabilities get
11:53 - 11:56
EN: to being 50/50 that the breakout will be up versus down.
11:59 - 12:00
EN: Same thing here.
12:00 - 12:02
EN: Bear trend, bear flag.
12:02 - 12:05
EN: Pretty good reversal, but still possibly a bear flag up here.
12:05 - 12:06
EN: Wedge bear flag, one, two, three.
12:06 - 12:09
EN: But mostly sideways for 30 or 40 bars.
12:10 - 12:11
EN: BreakOut Mode.
12:11 - 12:15
EN: All of these are BreakOut Modes, looking for trend resumption or trend reversal.
12:25 - 12:30
EN: Once it’s sideways for 30 or 40 bars, the probability is probably 50/50
12:30 - 12:33
EN: that you’ll get trend reversal instead of trend resumption.
12:36 - 12:40
EN: Here we got trend resumption up in the final third of the day,
12:43 - 12:45
EN: and here we got trend reversal down.
12:45 - 12:49
EN: Bull trend, Trading Range, trend reversal down in the final third of the day.
12:53 - 12:57
EN: Here we got a little bit of trend resumption down, but it stayed mostly sideways.
13:00 - 13:05
EN: Here, we got a strong breakout and some trend resumption up late in the day.
13:05 - 13:08
EN: When I see a reversal day like this, down and then up,
13:08 - 13:12
EN: and it does not get much above the open, I think of it as a Trading Range day.
Slide 006
Time: 13:15
Bilingual Transcript
13:21 - 13:23
EN: Weak bull trend on the open.
13:23 - 13:25
EN: Bull breakout, but tail.
13:25 - 13:26
EN: Bad follow-through.
13:26 - 13:30
EN: Bull breakout, bad follow-through, doji bars, bear bars.
13:30 - 13:30
EN: The same here.
13:30 - 13:33
EN: Bad follow-through after bull bars.
13:33 - 13:38
EN: Big bull bar and bad follow-through, more bull bars, doji, doji, bear bar.
13:38 - 13:39
EN: Bad follow-through.
13:40 - 13:43
EN: Is this more likely a bull trend,
13:43 - 13:46
EN: or is it more likely a bull leg in what will become a Trading Range?
13:52 - 13:53
EN: No pullbacks here.
13:53 - 13:58
EN: Small pullback here, small pullback here, and look at this.
13:58 - 14:01
EN: This low did not fall below the breakout point.
14:01 - 14:02
EN: There’s a gap.
14:02 - 14:05
EN: This low did not fall below the buy signal bar high.
14:05 - 14:06
EN: A gap.
14:07 - 14:09
EN: There are bear bars, but they’re not particularly big.
14:14 - 14:18
EN: Small pullbacks, not many bear bars, not big bear bars, and gaps.
14:19 - 14:22
EN: Even though it looks like a weak rally because of the bad follow-through,
14:22 - 14:25
EN: it could be a Small Pullback Bull Trend day.
14:30 - 14:34
EN: Now every bar is gapping – the close of this bar above the high of the prior bar,
14:34 - 14:39
EN: and now we have a series of bars closing above their midpoints or on their highs.
14:39 - 14:41
EN: This is becoming a strong bull trend.
14:47 - 14:50
EN: Small Pullback Bull Trends are one of the strongest types of trends,
14:50 - 14:52
EN: and they can last all day.
14:57 - 14:59
EN: Compare that with this.
14:59 - 15:01
EN: We have a deeper pullback here.
15:01 - 15:06
EN: Deep pullback here, big bear bar, big bear bar, several decent bear bars,
15:06 - 15:09
EN: and this pullback fell below that breakout point.
15:11 - 15:14
EN: Broke to a new high, pullback below.
15:14 - 15:16
EN: There’s a breakout, pullback below that breakout.
15:16 - 15:19
EN: Broke out above here, pullback below.
15:19 - 15:21
EN: Broke out above here, pullback below.
15:21 - 15:23
EN: Broke out above here, pullback below.
15:23 - 15:25
EN: Every breakout is pulling back,
15:25 - 15:29
EN: and therefore limit order bears can make money selling in this bull trend.
15:35 - 15:39
EN: That makes it more likely a bull leg in a Trading Range
15:39 - 15:42
EN: and less likely a bear trend that will last all day.
15:46 - 15:50
EN: Because every breakout pulls back below the breakout point,
15:50 - 15:53
EN: the bears are betting that the bull breakouts will fail
15:53 - 15:56
EN: and pull back far enough for the bears to make money.
15:56 - 15:59
EN: When it’s easy for the bears to make money in a bull trend,
15:59 - 16:03
EN: the bull trend is more likely a bull leg in what will become a Trading Range.
16:06 - 16:10
EN: This evolved into a Trading Range for the remainder of the day.
16:15 - 16:19
EN: I think it’s really important to try to determine whether a rally
Slide 007
Time: 16:15
Bilingual Transcript
16:19 - 16:23
EN: or a selloff is a leg in a Trading Range or the start of a trend.
Slide 008
Time: 16:24
Bilingual Transcript
16:31 - 16:34
EN: We have bear bars, but where are the consecutive big bear bars?
16:34 - 16:37
EN: We have a bear bar, small bear bar.
16:37 - 16:39
EN: Bear bar, small bear bar, bull bar.
16:39 - 16:41
EN: Bear bar, small bear bar, bull bar.
16:42 - 16:45
EN: This looks more like a bear leg in what will become a Trading Range
16:45 - 16:47
EN: than the start of a big bear trend.
16:52 - 16:54
EN: Became a Trading Range for 10 or more bars.
16:54 - 16:57
EN: If this is a 5-minute chart, that’s an hour or more.
16:58 - 17:02
EN: The pullbacks are small, only going up a bar or two.
17:06 - 17:07
EN: Negative gap.
17:07 - 17:10
EN: This pullback overlapped the breakout point by a little bit,
17:10 - 17:14
EN: so it’s still possible that this is a Small Pullback Bear Trend day.
17:16 - 17:19
EN: If this gap stays open, that would increase the chances
17:19 - 17:22
EN: that we’re going to have a Small Pullback Bear Trend day.
17:30 - 17:31
EN: It looks like a weak selloff.
17:31 - 17:36
EN: It looks like a bear leg in a Trading Range, but we have a negative gap here,
17:36 - 17:40
EN: very little overlap, and then we have an actual gap here.
17:40 - 17:43
EN: Even though it looks like a bear leg in a Trading Range,
17:43 - 17:47
EN: those gaps increase the chances that it’s actually a bear leg
17:47 - 17:50
EN: in what will become a Small Pullback Bear Trend day.
17:55 - 17:59
EN: Eventually the bulls gave up and the pullbacks became tiny,
17:59 - 18:02
EN: and the market became a very strong bear trend.
18:07 - 18:09
EN: Strong selloff on the open.
18:09 - 18:13
EN: Lots of consecutive bear bars, but then really good-looking bull bars.
18:13 - 18:17
EN: Big bull bodies closing on their highs, and many of them.
18:17 - 18:19
EN: If the market’s going to be in a bear trend,
18:19 - 18:21
EN: you don’t want to see a lot of big bull bars.
18:21 - 18:25
EN: That reduces the chances that the bear trend will last all day.
18:29 - 18:32
EN: Some of the pullbacks lasting 5 or 10 bars,
18:32 - 18:37
EN: and the market actually looks Always In Long here and maybe even here as well.
18:37 - 18:39
EN: Broad Bear Channel.
18:39 - 18:42
EN: But a Broad Bear Channel usually evolves into a Trading Range.
18:42 - 18:45
EN: Sometimes it’ll last several days before it does,
18:45 - 18:49
EN: but when the buying is this strong, this looks much more like a bear leg
18:49 - 18:52
EN: in what will become a Trading Range day, and therefore traders
18:52 - 18:56
EN: need to be ready for a reversal into a bull leg in the Trading Range
18:56 - 18:59
EN: or a Trading Range after the bear leg.
19:07 - 19:09
EN: Broke below this low, reversed up.
19:09 - 19:11
EN: Broke below this low, reversed up.
19:11 - 19:12
EN: Reversed up.
19:12 - 19:13
EN: Reversing up.
19:13 - 19:18
EN: Bulls are able to make money all day long, for the first 30 or 40 bars.
19:18 - 19:20
EN: Not good for the bears.
19:20 - 19:22
EN: Probably a bear leg in a Trading Range day.
19:30 - 19:34
EN: Bulls buying at prior lows and/or below prior lows,
19:34 - 19:36
EN: betting that the bears are going to be unable
19:36 - 19:38
EN: to create gaps the way they had a gap here.
19:41 - 19:44
EN: The market reversed up for a couple of hours,
19:44 - 19:47
EN: and the bear trend became a Trading Range.
19:52 - 19:54
EN: If you want, you could still call it a Broad Bear Channel.
19:54 - 19:56
EN: Lower High, Lower Lows.
19:56 - 19:59
EN: But I would call all of this a Trading Range.
19:59 - 20:02
EN: Certainly, this part of the selling was a bear leg
20:02 - 20:04
EN: in what ended up as a Trading Range.
Slide 009
Time: 20:10
Bilingual Transcript
20:13 - 20:16
EN: We have a gap down and then an early Trading Range.
20:16 - 20:20
EN: At this point it’s not clear if the bears will get a resumption down
20:20 - 20:22
EN: or the bulls will get a reversal up.
20:27 - 20:30
EN: We have a Double Bottom, slightly Lower Low Double Bottom.
20:30 - 20:32
EN: Decent bull bar and then 3 bull bars,
20:32 - 20:36
EN: bull bar closing on its high above the high of the past 10 bars or so.
20:39 - 20:43
EN: Now we have three pushes down – bear bar, bull bar.
20:43 - 20:44
EN: Bear bar, doji.
20:44 - 20:45
EN: Bear bar, bull bar.
20:45 - 20:48
EN: It’s a Wedge, and it’s a Higher Low.
20:48 - 20:52
EN: It’s probably not enough bars for a Major Trend Reversal, but on the open,
20:52 - 20:55
EN: the first hour or two, sometimes you’ll get Major Trend Reversals
20:55 - 20:58
EN: that have fewer bars than what you normally would see.
20:59 - 21:02
EN: At this point it’s probably going to be a minor reversal,
21:02 - 21:04
EN: but the reversal up here was so strong,
21:04 - 21:08
EN: traders then started to look for a Higher Low Major Trend Reversal.
21:08 - 21:12
EN: It never really had a textbook Major Trend Reversal all day,
21:12 - 21:17
EN: either here or here, yet it continued up as a Major Trend Reversal.
21:17 - 21:20
EN: Bear trend, bull reversal.
21:21 - 21:22
EN: Everything looks minor,
21:22 - 21:25
EN: but at this point you have to assume that we’re going higher.
21:25 - 21:27
EN: So, traders are looking to buy pullbacks.
21:27 - 21:32
EN: A minor reversal, minor reversal became a major reversal.
21:39 - 21:41
EN: Consecutive bull bars closing on their highs.
21:42 - 21:44
EN: 3 bull bars in a row.
21:44 - 21:46
EN: 4 of the past 5 bars had bull bodies.
21:47 - 21:50
EN: Increases the chances that we’re starting to get a reversal up,
21:50 - 21:54
EN: and maybe we’ll get back to yesterday’s close or maybe have a bull trend day.
21:58 - 22:03
EN: When it’s starting to turn up, it might be attracted to this magnet,
22:03 - 22:05
EN: yesterday’s close and yesterday’s low.
22:06 - 22:09
EN: So, this might be the start of a buy vacuum up
22:09 - 22:11
EN: to test resistance – which it turned out to be.
22:19 - 22:23
EN: Close far above the breakout point and above the high of the day.
22:24 - 22:25
EN: Strong enough breakout
22:25 - 22:29
EN: so probably at least a second leg up after there’s a pullback.
22:30 - 22:33
EN: It may be many more legs up, but at least one more leg up.
22:36 - 22:40
EN: This pair of bull bars closing on their highs with decent size bodies is a sign
22:40 - 22:41
EN: that the bears are giving up.
22:42 - 22:44
EN: They doubt that it’s going to be a bear trend.
22:44 - 22:48
EN: They believe now it’s going to go up to yesterday’s close and yesterday’s low.
22:48 - 22:50
EN: Therefore, they want to sell higher,
22:50 - 22:53
EN: so not many traders willing to sell down here.
Slide 010
Time: 22:55
Bilingual Transcript
22:59 - 23:02
EN: Traders could buy the close of the breakout bar,
23:02 - 23:03
EN: especially since it’s consecutive bars,
23:03 - 23:06
EN: or they can buy the close of the follow-through bar.
23:06 - 23:10
EN: The minimum that the bulls want on the follow-through bar is the absence
23:10 - 23:13
EN: of a bear body, and here, there’s a perfect doji.
23:13 - 23:16
EN: So, some bulls will not buy the close of the breakout.
23:16 - 23:19
EN: They’ll wait for the next bar, and if it’s not a bear body,
23:19 - 23:22
EN: they’ll buy at the market as soon as that bar closes.
23:25 - 23:29
EN: Strong enough reversal up – if it’s a bull trend traders do not want it to fall
23:29 - 23:33
EN: below this low – therefore reasonable to put the stop just below the low.
23:40 - 23:43
EN: Bulls trying to get a Double Bottom with this little pullback.
23:43 - 23:46
EN: A Double Bottom bull flag, hoping for trend up.
23:46 - 23:48
EN: They have a decent bull bar.
23:48 - 23:50
EN: They can buy above this bull bar.
23:50 - 23:52
EN: Also, there’s a possible gap here.
23:52 - 23:56
EN: Therefore, this could be the start of a Small Pullback Bull Trend day.
24:01 - 24:04
EN: A bull bar, two legs down – one, pullback, two.
24:04 - 24:06
EN: Possibly a breakout test of this high
24:06 - 24:09
EN: and a test of the beginning of this little bull channel.
24:10 - 24:13
EN: Spike, pause, pullback, channel.
24:18 - 24:23
EN: Yesterday’s close and low are resistance levels, and therefore they’re magnets.
24:23 - 24:26
EN: They tend to draw the market up there.
24:26 - 24:29
EN: The bears believe at some point the market’s going to get there,
24:29 - 24:33
EN: and therefore they stop selling and the market can get up there pretty quickly.
24:34 - 24:36
EN: If it breaks strongly through it,
24:36 - 24:39
EN: the bears still are not going to sell and we’ll probably go higher.
24:43 - 24:47
EN: Bulls start to look to buy reversals up – pullbacks to the Moving Average.
24:47 - 24:49
EN: High 1, High 2.
24:49 - 24:51
EN: You can call it a Triangle, a Tight Trading Range.
24:51 - 24:53
EN: They’ll buy with stops above bars.
24:53 - 24:57
EN: They’ll buy bear closes, they’ll buy bull closes, they’ll buy below bars.
24:57 - 24:59
EN: The market’s Always In Long,
24:59 - 25:02
EN: and the odds are we’ll get up at least to yesterday’s close.
25:05 - 25:10
EN: After any strong breakout to a new high like this, traders trail their stop.
25:10 - 25:13
EN: Is this strong enough here to put your stop here?
25:14 - 25:15
EN: It probably is.
25:15 - 25:17
EN: Then another strong breakout here.
25:17 - 25:19
EN: Traders will raise their stop down here.
25:23 - 25:24
EN: Strong rally on the open.
25:24 - 25:28
EN: In fact, exceptionally strong, and whenever you see an exceptionally strong trend
Slide 011
Time: 25:25
Bilingual Transcript
25:28 - 25:32
EN: right from the open, you have to be thinking that it could be a climactic,
25:32 - 25:37
EN: brief rally that leads to a Trading Range or a reversal (a Parabolic Wedge).
25:40 - 25:44
EN: We have a strong breakout, a little pause, another breakout, pause,
25:44 - 25:48
EN: and another breakout, so three pushes up – one and then two or three.
25:48 - 25:52
EN: Other computers will say one, pullback, two, pullback, three.
25:52 - 25:55
EN: So potential Parabolic Wedge Top here.
25:56 - 25:59
EN: If computers decide it is, they’ll take profits
25:59 - 26:01
EN: and we’ll probably go sideways at least 5 to 10 bars,
26:01 - 26:03
EN: maybe slightly sideways to down,
26:03 - 26:07
EN: and possibly we could get a reversal down – which we ultimately did.
26:13 - 26:15
EN: Getting doji bars, small bodies.
26:15 - 26:17
EN: Three pushes up – one, two, three.
26:17 - 26:21
EN: Possible Parabolic Wedge rally and a climactic end of the rally.
26:28 - 26:31
EN: Expect at least 10 bars, two legs sideways to down.
26:31 - 26:33
EN: One, pullback, two.
26:33 - 26:34
EN: I don’t know if that’s enough.
26:34 - 26:36
EN: Maybe one, pullback, two.
26:36 - 26:37
EN: I don’t know.
26:37 - 26:40
EN: But once you see this, you’ve got to be thinking that there’s a risk.
26:40 - 26:45
EN: This is a climactic end of the day, and the day could be a reversal day.
26:45 - 26:49
EN: In other words, it begins as a bull trend and then reverses back down.
26:54 - 26:55
EN: Bull trend on the open.
26:55 - 26:58
EN: Transitioned into a very Tight Trading Range in the middle of the day.
26:58 - 27:02
EN: Whenever you have a parabolic Buy Climax and then a Tight Trading Range
27:02 - 27:05
EN: or a Tight Trading Range after any bull trend,
27:05 - 27:07
EN: you’ve got to be thinking about the possibility
27:07 - 27:09
EN: of a Double Top Major Trend Reversal.
27:09 - 27:13
EN: Here we have a slightly Lower Low Double Top within a Tight Trading Range,
27:13 - 27:17
EN: and then you’ve got a bear breakout and especially a stronger bear breakout here.
27:17 - 27:20
EN: It looks like we’re probably going to continue down.
27:28 - 27:30
EN: Strong rally, terrible follow-through.
27:30 - 27:32
EN: Disappointing follow-through.
27:32 - 27:34
EN: Lots of reversals, lots of dojis.
27:34 - 27:35
EN: Small bars.
27:35 - 27:37
EN: Confusing, so Trading Range.
27:37 - 27:41
EN: Once it lasts 20 or more bars, it’s almost a 50/50 chance
27:41 - 27:44
EN: that if there’s a breakout, the breakout is going to be down.
27:45 - 27:49
EN: When the range is this tight, most traders should not trade.
27:50 - 27:53
EN: Very difficult to make money even with limit orders when the range is that tight.
Slide 012
Time: 28:00
Bilingual Transcript
28:01 - 28:03
EN: Small Double Bottom bull flag.
28:03 - 28:05
EN: High 1, High 2.
28:05 - 28:07
EN: Reasonable to buy in case we get trend resumption up.
28:08 - 28:11
EN: About half the time you do get trend resumption up.
28:11 - 28:14
EN: Half the time you continue sideways.
28:18 - 28:23
EN: Since it’s a bad looking sell below this doji, probably more buyers below.
28:23 - 28:26
EN: Some traders will buy with a limit order at the low of that bar,
28:26 - 28:30
EN: betting against a bear trend after only 5 bars down.
28:30 - 28:32
EN: More likely bull flag.
28:38 - 28:40
EN: Tight Trading Range.
28:40 - 28:43
EN: Bulls expect legs up not to go very far,
28:43 - 28:46
EN: and therefore they’re looking to take profits around prior highs.
28:46 - 28:50
EN: They’ll place limit orders to sell out of their longs at the prior high.
28:55 - 28:59
EN: The bulls will also sell strong bull closes, betting the breakouts will fail
28:59 - 29:01
EN: and the Tight Trading Range will continue.
29:02 - 29:04
EN: The bears know that, and they’ll sell as well,
29:04 - 29:06
EN: knowing the bulls will probably take profits
29:06 - 29:09
EN: and the Tight Trading Range will probably continue.
29:09 - 29:10
EN: Both are scalping.
29:17 - 29:18
EN: Tight Trading Range.
29:18 - 29:21
EN: Bulls want a breakout, Measured Move up.
29:21 - 29:24
EN: Bears want a breakout to the down side and Measured Move down.
29:25 - 29:28
EN: However, most of the trading in here is scalping.
29:28 - 29:32
EN: Until you start to get a reasonably strong breakout or a very strong breakout,
29:32 - 29:35
EN: at that point traders will swing trade part of their position,
29:35 - 29:38
EN: hoping for a Measuring Gap and a Measured Move down.
29:41 - 29:45
EN: If the bulls are swing trading in here, it’s reasonable to put a stop
29:45 - 29:48
EN: just below a Measured Move down because the market may go a little bit
29:48 - 29:51
EN: below the Trading Range and then continue in the Trading Range.
29:52 - 29:55
EN: For the bears, they know the bulls wanted to get to a Measured Move up.
29:55 - 29:57
EN: If the bears are selling, they’re betting the bulls
29:57 - 30:01
EN: will not get to the Measured Move up, and therefore reasonable to put their stop
30:01 - 30:04
EN: a little bit above, allowing for a little bit of a breakout
30:04 - 30:06
EN: of the range and expecting it to fail.
Slide 013
Time: 30:10
Bilingual Transcript
30:14 - 30:17
EN: It’s fairly common for the Trading Range to continue for the rest of the day.
30:17 - 30:22
EN: However, you always have to be prepared for a transition into the close,
30:22 - 30:24
EN: the final third of the day, final couple hours of the day.
30:24 - 30:27
EN: Here we got a pretty good bear breakout.
30:32 - 30:36
EN: Once you start to get 5, 6, 7 bear bars like this,
30:36 - 30:38
EN: the bulls are not going to rely on their stop.
30:38 - 30:40
EN: They’re just going to get out somewhere in here.
30:40 - 30:43
EN: If they think the bears have clearly won,
30:43 - 30:45
EN: it does not make sense to hold onto the stop
30:45 - 30:48
EN: because if they think the bears have clearly won,
30:48 - 30:51
EN: they’re then 60% certain the market’s going to fall for a swing down
30:51 - 30:56
EN: to at least a Measured Move, and therefore you get out as soon as you conclude
30:56 - 30:58
EN: the bears now have taken control.
31:06 - 31:09
EN: This is where the final bulls gave up.
31:09 - 31:11
EN: They’re not waiting for the stop to be hit.
31:11 - 31:14
EN: They’ve decided that this is reasonably strong.
31:14 - 31:16
EN: The bull reversal up was weak.
31:16 - 31:19
EN: Maybe we are going to have a swing down for the remainder of the day.
31:25 - 31:29
EN: Bears are selling closes, they’re selling the breakout below the Trading Range,
31:29 - 31:32
EN: confident in at least a small second leg down
31:32 - 31:35
EN: and maybe a trend for the remainder of the day for a reversal day.
31:35 - 31:36
EN: Bull trend, bear trend.
31:37 - 31:40
EN: I call it a Trading Range day – big up, big down.
31:40 - 31:43
EN: Never fell far below the low of the open.
31:44 - 31:46
EN: If you want, you can call it a bear trend day.
31:46 - 31:50
EN: When I see these reversal days, I think of them as Trading Range days.
31:50 - 31:55
EN: The bulls were in control for a while, the bears were in control for a while.
Slide 014
Time: 32:00
Bilingual Transcript
32:02 - 32:05
EN: The bears got a selloff here for a couple of hours.
32:05 - 32:08
EN: Consecutive bear bars, not all that big.
32:08 - 32:10
EN: Consecutive bear bars, not all that big.
32:10 - 32:12
EN: Several dojis and small bars.
32:12 - 32:14
EN: It looks like a bear leg in a Trading Range.
32:14 - 32:18
EN: Also, it’s still above yesterday’s close and yesterday’s low,
32:18 - 32:19
EN: so this looks like a Trading Range.
32:19 - 32:21
EN: We’re up, we’re down, we’re up, we’re down.
32:26 - 32:29
EN: Trading Range needs a bull leg after a bear leg
32:29 - 32:31
EN: and then a bear leg after a bull leg.
32:31 - 32:32
EN: We’re up, we’re down.
32:32 - 32:33
EN: A bear leg.
32:33 - 32:38
EN: So, at some point it should go up again if this is going to be a Trading Range.
32:49 - 32:53
EN: Small, Tight Trading Ranges (TTR, Tight Trading Ranges).
32:53 - 32:57
EN: It’s still a Higher Low after this big gap up,
32:57 - 33:00
EN: so possible Higher Low Major Trend Reversal.
33:05 - 33:10
EN: A gap up, so a bull trend, even though you do not see any bar, and a bear channel.
33:10 - 33:13
EN: Bear channel, bull flag, and it’s a Higher Low.
33:13 - 33:18
EN: This is still a pullback from this reversal up from yesterday’s close.
Slide 015
Time: 33:19
Bilingual Transcript
33:28 - 33:32
EN: Because this is still in a Trading Range and it’s a weak selloff,
33:32 - 33:37
EN: traders have to be ready for a reversal up into a bull leg in the Trading Range.
33:39 - 33:42
EN: Sell Climax late in the range, 20 or more bars in.
33:42 - 33:45
EN: Possibly an exhaustive end of the trend.
33:45 - 33:47
EN: We may get down to yesterday’s close,
33:47 - 33:49
EN: maybe even a little bit below yesterday’s low.
33:49 - 33:53
EN: But at this point it’s probably not going to be a big bear trend day.
33:53 - 33:55
EN: Look to the left.
33:55 - 33:57
EN: We’re still within yesterday’s range.
34:02 - 34:05
EN: For the bulls, it’s a bear trend, bull breakout, Higher Low.
34:05 - 34:07
EN: Micro Double Bottom.
34:07 - 34:08
EN: We tried to go up, we went down.
34:08 - 34:10
EN: We’re trying to go up a second time,
34:10 - 34:13
EN: and we’re trying to reverse this Sell Climax.
34:16 - 34:17
EN: Sideways for a lot of bars,
34:17 - 34:20
EN: and then we started getting bull bars closing on their highs.
34:20 - 34:22
EN: Traders started buying with stops above the bars.
34:22 - 34:25
EN: They’re not expecting a bull trend
34:25 - 34:27
EN: even though it’s a Higher Low Major Trend Reversal.
34:27 - 34:28
EN: It’s a Trading Range.
34:28 - 34:30
EN: We’re up, we’re down, we’re up, we’re down.
34:30 - 34:32
EN: We’re probably going to go up, we’re probably going to go down,
34:32 - 34:33
EN: we’re probably going to go up.
34:38 - 34:40
EN: Selling off for the first third of the day.
34:41 - 34:43
EN: Bulls are looking for the market to transition
34:43 - 34:46
EN: into a bull leg, so they’re looking to buy.
34:46 - 34:47
EN: Strong reversal up.
34:47 - 34:51
EN: They can buy the close, they can buy below bars, they can buy bear closes,
34:51 - 34:53
EN: and they can buy above bull bars.
34:56 - 34:59
EN: Good reversal up, trying to find a Higher Low.
34:59 - 35:03
EN: At some point in here, you decide that if it’s going to be a swing up,
35:03 - 35:06
EN: it should not fall below this low, so you can put your stop there
35:06 - 35:08
EN: once you start to see the reversal up.
35:12 - 35:15
EN: Is it a high probability buy in here?
35:15 - 35:16
EN: Not really.
35:16 - 35:18
EN: It’s higher probability after you start
35:18 - 35:21
EN: to see a bull breakout and a follow-through bar.
35:21 - 35:27
EN: Stop is further away, either here, here, or here, but the probability gets higher.
35:27 - 35:30
EN: We have a Tight Bear Channel, bull breakout.
35:30 - 35:34
EN: Usually a minor reversal and sideways, but if it starts to continue up,
35:34 - 35:36
EN: the probability of higher prices goes up.
35:43 - 35:46
EN: Since this is probably a bear leg in a Trading Range,
35:46 - 35:49
EN: it’s usually better to enter as early as you can
35:49 - 35:53
EN: because you’re expecting a bull leg in a Trading Range and not a big bull trend.
35:53 - 35:57
EN: If you enter early, you have more profit potential.
Slide 016
Time: 36:00
Bilingual Transcript
36:03 - 36:05
EN: Lots of reversals up and down.
36:05 - 36:06
EN: Lots of overlap.
36:06 - 36:08
EN: Breakouts are not going very far.
36:08 - 36:10
EN: Bears are making money selling above bars,
36:10 - 36:12
EN: bulls are making money buying below bars.
36:12 - 36:14
EN: Probably bull leg in a Trading Range.
36:15 - 36:19
EN: We’re getting a reversal down here after the first couple of hours.
36:19 - 36:21
EN: It looks like a bull leg in a Trading Range,
36:21 - 36:24
EN: and therefore you’re expecting a bear leg in a Trading Range.
36:24 - 36:27
EN: It often begins around 8:30 or 9:30.
36:27 - 36:32
EN: This is around 8:30, about 20, 25 bars into the day, and a pretty good bear bar.
36:32 - 36:36
EN: Even though it does not look strong, if this is a bull leg in a Trading Range,
36:36 - 36:38
EN: this could be the start of a bear leg in a Trading Range
36:38 - 36:41
EN: and it could go down for 2 or 3 hours.
36:48 - 36:49
EN: Some traders will sell the close,
36:49 - 36:53
EN: taking a chance that it’s the start of a bear swing.
37:00 - 37:02
EN: It’s a Give-up Bar.
37:02 - 37:06
EN: Bulls disappointed by the tail here, by the doji here, the bear bars here.
37:06 - 37:10
EN: We tried to break to the up side and continue up; instead, we reversed down.
37:10 - 37:14
EN: Here, the bulls are giving up thinking that maybe this is the end of the rally
37:14 - 37:16
EN: and that now we’ll get a swing down.
37:16 - 37:19
EN: The bears know that, and they’ll sell as well.
37:22 - 37:26
EN: If you sell this close, stop either above the high of this bear bar
37:26 - 37:29
EN: or above the high of the early bear leg.
37:32 - 37:37
EN: The market traded down for about 30 bars, but the selloff,
37:37 - 37:40
EN: even though it had some consecutive bear bars, it had prominent tails
37:40 - 37:43
EN: and a lot of bull bars, and the bars were not all that big
37:43 - 37:46
EN: - and we did not break strongly below this low.
37:46 - 37:49
EN: Therefore, it’s probably a bear leg in a Trading Range.
37:49 - 37:52
EN: Traders will look for a reversal up at the end of the day.
37:57 - 38:02
EN: Only 10% of the days trend relentlessly from the open either up or down.
Slide 017
Time: 37:59
Bilingual Transcript
38:02 - 38:05
EN: Therefore, 90% of the days have some kind of a transition,
38:05 - 38:09
EN: and transitions are common after the first 2 or 3 hours of the day.
38:10 - 38:13
EN: Traders therefore should always be ready for a transition.
38:14 - 38:18
EN: Whenever the market is in a trend on the open – let’s say a trend up
38:18 - 38:21
EN: - you have to decide, is it a bull leg in what will become a Trading Range day,
38:21 - 38:24
EN: or is it the start of a big bull trend?
38:24 - 38:27
EN: The opposite’s true of an early selloff.
38:27 - 38:30
EN: Is it more likely the start of a bear trend, or is it simply a bear leg
38:30 - 38:32
EN: in what will become a Trading Range day?
38:37 - 38:38
EN: I’m Al Brooks.
38:38 - 38:40
EN: Thank you for watching the Brooks Trading Course.
38:40 - 38:44
EN: This is the first of two videos on trading the middle of the day.