al-brooks-course
48J - Trading the End of the Day
Raw transcript and slide notes for 48J - Trading the End of the Day.
Overview
- Slides: 8
- Transcript segments: 356
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Transcript 001
Time: 00:02
Bilingual Transcript
00:02 - 00:03
EN: This is Al Brooks.
00:03 - 00:07
EN: This is the second of three videos on trading at the end of the day.
Slide 001
Time: 00:09
Bilingual Transcript
00:11 - 00:15
EN: I want to talk about Buying The Close type rallies at the end of the day,
00:15 - 00:18
EN: or Sell The Close type bear trends at the end of the day.
00:18 - 00:20
EN: They’re common and they’re important.
Slide 002
Time: 00:22
Bilingual Transcript
00:29 - 00:32
EN: You can see there are rallies here at the end of the day.
00:32 - 00:35
EN: This is a Buy The Close finish.
00:35 - 00:36
EN: Traders are buying closes.
00:36 - 00:38
EN: They’re buying at the market,
00:38 - 00:41
EN: but it’s easiest to think of it as buying the close.
00:41 - 00:43
EN: The close of the bars are important.
00:43 - 00:45
EN: The same with this, Buy The Close market.
00:45 - 00:47
EN: Here, Buy The Close market.
00:47 - 00:52
EN: Whenever you have a Buy The Close market, the market is going toward resistance.
00:52 - 00:55
EN: Resistance is always a magnet, even if it’s not obvious.
00:55 - 01:00
EN: These Buy The Close rallies are always being pulled up to some resistance level.
01:02 - 01:05
EN: So, it’s helpful to know where the resistance is
01:05 - 01:08
EN: because you don’t want to be buying right below the resistance.
01:08 - 01:11
EN: So, for example, if you know there’s a Measured Move target here,
01:11 - 01:14
EN: you might not want to buy closes once you get
01:14 - 01:16
EN: within a couple points of that target.
01:17 - 01:21
EN: You want to be buying down here and looking to take profits somewhere up here.
01:24 - 01:27
EN: We have a selloff, a pullback, and a bear trend.
01:27 - 01:31
EN: Any rally up here has the potential to create a Double Top bear flag
01:31 - 01:33
EN: or a Double Top Lower High Major Trend Reversal,
01:33 - 01:38
EN: and therefore this is resistance and the rally might simply be a test
01:38 - 01:41
EN: of that resistance, and then when it gets there, it could go sideways.
01:41 - 01:43
EN: So, you don’t want to be buying closes
01:43 - 01:45
EN: when the market starts to get very close to the rally.
01:45 - 01:47
EN: You want to be buying them early.
01:50 - 01:52
EN: The high of the open, the low of the open.
01:52 - 01:54
EN: We have a breakout.
01:54 - 01:56
EN: We have a gap between this low and that high.
01:56 - 01:59
EN: Therefore, there’s a potential Measured Move up.
01:59 - 02:02
EN: If you see the market starting to rally at the end of the day,
02:02 - 02:04
EN: it might be rallying toward that resistance.
02:07 - 02:10
EN: Also, the top of the bull channel is there as well,
02:10 - 02:13
EN: and therefore you don’t want to be buying closes up here.
02:13 - 02:17
EN: If you’re going to be buying closes, you going to be buying here or here,
02:17 - 02:21
EN: and then looking to take profits near the end of the day at resistance.
02:31 - 02:34
EN: When the market gets near resistance,
02:34 - 02:37
EN: it often gets pulled up there very quickly,
02:37 - 02:39
EN: even if it looks like it’s starting to stall.
02:39 - 02:41
EN: Here we have a couple dojis and then we have a big bull bar.
02:41 - 02:44
EN: Here we have a couple small bars below resistance,
02:44 - 02:49
EN: but the market is within the gravitational pull of that magnet.
02:49 - 02:53
EN: Very often it cannot escape that pull and it accelerates up to the magnet.
02:53 - 02:55
EN: Everyone believes it’s going there.
02:55 - 02:58
EN: The bears don’t want to sell here if they know it’s going here,
02:58 - 03:00
EN: so the bears stop selling.
03:00 - 03:03
EN: The bulls know it’s going there, so the high frequency trading firms
03:03 - 03:05
EN: will buy even to make just a few ticks.
03:06 - 03:09
EN: A lot of times the market accelerates up toward a magnet,
03:10 - 03:12
EN: accelerating up toward resistance.
03:15 - 03:16
EN: We have a Trading Range.
03:16 - 03:18
EN: Bull trend resumption toward the magnet.
03:25 - 03:30
EN: Once it gets to the magnet, the magnetism gets turned off, at least briefly.
03:30 - 03:33
EN: Sometimes the trend will continue up, sometimes it’ll reverse,
03:33 - 03:35
EN: sometimes it’ll go sideways, but in any case,
03:35 - 03:38
EN: you have to be ready for the price action to change
03:38 - 03:41
EN: - change from a strong bull trend into something else.
03:42 - 03:44
EN: Therefore, you have to be prepared to take profits.
03:48 - 03:50
EN: Here we got up to the magnet.
03:50 - 03:53
EN: Instead of continuing up or reversing down,
03:53 - 03:55
EN: it became a Trading Range, a limit order market.
03:56 - 03:59
EN: Traders should not be trading with limit orders at the end of the day.
03:59 - 04:02
EN: Too often, they will run out of time and they will not make money.
04:02 - 04:04
EN: They’ll lose money.
Slide 003
Time: 04:10
Bilingual Transcript
04:13 - 04:17
EN: My general rule is once a market becomes Buy The Close,
04:17 - 04:20
EN: get out 1 tick below any bear bar – for example,
04:20 - 04:24
EN: below this bar – or 3 to 5 ticks below any bull bar.
04:27 - 04:30
EN: Therefore, here we have a Buy The Close finish
04:30 - 04:35
EN: - you get out 1 tick below a bear bar or 3 to 5 ticks below a bull bar.
04:36 - 04:38
EN: We have a bull bar here.
04:38 - 04:40
EN: Bulls will get out 3, 4, 5 ticks
04:40 - 04:44
EN: below the bull bar depending on how big the rally is.
04:44 - 04:47
EN: If the bars are small and the rally is small, they’ll get out sooner.
04:47 - 04:51
EN: If the bars are big and the rally is big, they’ll allow more room
04:51 - 04:53
EN: and they’ll get out 1 tick below a bear bar.
04:53 - 04:54
EN: Here’s a bear bar.
04:54 - 04:57
EN: If they’re still long, they’ll get out below that bear bar.
05:02 - 05:06
EN: The bears know the bulls are getting out, and the bears know it’s at resistance.
05:06 - 05:10
EN: They know the bulls will not buy again, and therefore aggressive bears
05:10 - 05:13
EN: will sell exactly where the bulls are getting out,
05:13 - 05:15
EN: and the bears are hoping to get a scalp down.
05:15 - 05:19
EN: Sometimes they get a swing down, a reversal at the end of the day.
05:22 - 05:26
EN: A bear bar closing on its low, a Buy The Close bull should get out there,
05:26 - 05:28
EN: especially since we’re at resistance.
05:28 - 05:31
EN: We’re a little bit above this major Lower High.
05:34 - 05:37
EN: Many bears will sell, taking a chance that we’ll get a selloff
05:37 - 05:41
EN: at the end of the day that will fall far enough for them to make a scalp.
05:46 - 05:49
EN: If a bear did sell that and then we have a bull bar following it
05:49 - 05:53
EN: or soon following it, the bears will get out above the bull bar.
05:53 - 05:57
EN: Some bulls will buy, knowing that the bears will get out, for a small scalp up.
05:57 - 06:01
EN: Most traders should not be doing this – taking the sell or taking the buy.
06:02 - 06:06
EN: About once or twice a month you’ll have a Buy The Close finish
06:06 - 06:09
EN: and a reversal that leads to a profitable trade.
06:09 - 06:12
EN: If you’re an experienced trader, you can take that trade.
06:19 - 06:21
EN: Look at the time here.
06:21 - 06:25
EN: It’s around 11:00 and we’re beginning to get a Buy The Close finish.
06:25 - 06:29
EN: Whenever you have a Buy The Close finish that starts too early, like 11:00,
06:29 - 06:32
EN: it’s usually not going to make it to the end of the day,
06:32 - 06:35
EN: and therefore if you do get a Buy The Close finish that’s starting early,
06:35 - 06:40
EN: be prepared for it to end and enter a Trading Range or reverse
06:40 - 06:42
EN: - especially in a Trading Range day.
06:42 - 06:46
EN: If it was a strong bull trend day, then you could get a Buy The Close
06:46 - 06:47
EN: finish that could start at any time.
06:47 - 06:49
EN: We could just rally all day long.
06:49 - 06:53
EN: But if the day is mostly sideways and you get a Buy The Close
06:53 - 06:55
EN: finish that’s starting with more than an hour left to the day,
06:56 - 06:58
EN: it’s probably not going to make it to the end of the day.
06:58 - 07:01
EN: Usually a Buy The Close finish, if it’s going to last
07:01 - 07:04
EN: to the end of the day, will start around 12:30.
07:09 - 07:10
EN: Buy The Close.
07:10 - 07:14
EN: Bulls will exit below a bear bar, especially a bear bar closing on its low,
07:14 - 07:19
EN: especially at a resistance level like a prior high in a Trading Range day.
07:25 - 07:28
EN: Now, why would bulls not buy above a bull bar here?
07:28 - 07:33
EN: Because we’re at resistance and the bull bar did not even close on its high.
07:33 - 07:36
EN: They could wait for a second signal, but it never came.
07:36 - 07:39
EN: Here’s potential second signal, potential second signal
07:39 - 07:41
EN: above this bull bar, but it never triggered.
07:41 - 07:43
EN: The market never went above the bull bars,
07:43 - 07:45
EN: and in fact it became Sell The Close here.
07:51 - 07:54
EN: Some bears would take that second signal short below this bear bar
07:54 - 07:59
EN: - not the doji, but the bear bar closing on its low – hoping for a swing down
07:59 - 08:03
EN: and a Trading Range day and possibly a Sell The Close strong bear selloff.
08:08 - 08:12
EN: Once you start getting dojis here, it becomes very difficult to trade
08:12 - 08:13
EN: and it’s usually better to get out
08:13 - 08:16
EN: - for example, above the high of this doji bar.
Slide 004
Time: 08:20
Bilingual Transcript
08:20 - 08:24
EN: At the end of the day you’ll often see a Sell The Close bear trend,
08:24 - 08:27
EN: a series of bear bars closing at or near their lows.
08:32 - 08:36
EN: It’s always a test of support, even if the support is not obvious.
08:40 - 08:42
EN: I always look for the support because I know that
08:42 - 08:45
EN: if the Sell The Close trend lasts 4 or 5 bars,
08:45 - 08:48
EN: it’s probably not going to last much more,
08:48 - 08:51
EN: and I look for support after around the fourth bar.
08:51 - 08:54
EN: If it’s nearby, I stop selling closes.
08:55 - 08:58
EN: For example, support for a Measured Move down.
08:58 - 09:00
EN: We have a Trading Range and we have an acceleration down.
09:03 - 09:06
EN: Trading Range, market accelerated down.
09:06 - 09:10
EN: Therefore, once it starts to get near that Measured Move target
09:10 - 09:15
EN: at the end of the day, I usually stop selling closes – here or here.
09:15 - 09:17
EN: These 2 bear bars.
09:20 - 09:24
EN: Testing a major Higher Low, so it’s good Sell The Close through here,
09:24 - 09:30
EN: but when it gets down near there, it’s usually better to stop selling closes.
09:30 - 09:31
EN: A bull bar.
09:31 - 09:34
EN: Most traders would get out above the high of that bull bar,
09:34 - 09:36
EN: especially since we’re starting to form a Trading Range,
09:36 - 09:38
EN: even though there’s room down to support.
09:38 - 09:39
EN: It might not get there.
09:39 - 09:41
EN: It might form a Higher Low.
09:41 - 09:42
EN: We have a low, Higher Low.
09:42 - 09:44
EN: This might be another Higher Low.
09:47 - 09:51
EN: We have a little bit of overlap with a pair of dojis.
09:51 - 09:56
EN: Possibly a Measuring Gap, and therefore when the market starts to get
09:56 - 10:00
EN: near the Measured Move target, even though it’s a big bear bar,
10:00 - 10:02
EN: I usually do not sell that close.
10:03 - 10:06
EN: Remember, when the market starts to get near support,
10:06 - 10:08
EN: if traders start to believe it’s going to get to support,
10:08 - 10:11
EN: are the bulls going to buy above support?
10:11 - 10:11
EN: No.
10:11 - 10:13
EN: They’re going to wait until it gets to support.
10:14 - 10:18
EN: Therefore, there’s an absence of buyers, and the market can accelerate down.
10:19 - 10:22
EN: Also, when it gets near support, the high frequency trading firms believe
10:22 - 10:25
EN: it’s going to get to support, and they’ll sell aggressively
10:25 - 10:27
EN: to make a 1 or 2 tick profit.
10:27 - 10:31
EN: The result is the market can accelerate down to support
10:31 - 10:34
EN: and then stop going down, and sometimes reverse.
10:43 - 10:46
EN: The closer to the magnet, the stronger the magnetic pull,
10:46 - 10:52
EN: and you’ll often get a big bear bar right at support, and then the market stops.
10:55 - 10:59
EN: The magnet gets turned off and the price action changes.
10:59 - 11:02
EN: So instead of a Sell The Close finish, it either reverses
11:02 - 11:06
EN: into a bull trend, maybe a Buy The Close finish, or a Trading Range.
11:06 - 11:09
EN: Sometimes it’ll collapse through it, but usually not.
Slide 005
Time: 11:15
Bilingual Transcript
11:19 - 11:22
EN: Remember, when you’re trying to trade a Buy The Close finish
11:22 - 11:25
EN: or a Sell The Close finish, you’re trading in the final hour
11:25 - 11:29
EN: or even the final half hour, and therefore you don’t have a lot of time left
11:29 - 11:33
EN: to make money and you do not have a lot of bars that will allow you to enter.
11:33 - 11:37
EN: Typically, you’ll be able to enter once or twice and that’ll be it.
11:44 - 11:49
EN: Since there’s usually a reversal or a pause after 4, 5, or 6 bars,
11:49 - 11:52
EN: traders should not be looking to enter on the sixth
11:52 - 11:56
EN: or seventh bar of a Buy The Close or Sell The Close market.
11:56 - 11:59
EN: If you enter early, like after the first,
11:59 - 12:01
EN: second, or third bar, you should be getting ready
12:01 - 12:05
EN: to exit quickly after the fourth, fifth, or sixth bar.
12:09 - 12:12
EN: Usually you need at least a couple bars before you’re confident
12:12 - 12:16
EN: that it’s going to be a Sell The Close finish or a Buy The Close finish,
12:16 - 12:19
EN: and therefore you’re usually entering on the third or fourth bar.
12:21 - 12:24
EN: Nobody’s going to be selling every close,
12:24 - 12:27
EN: but you might be able to sell one or two closes, sometimes three.
12:32 - 12:36
EN: If you get a bull bar closing on its high, get out 1 tick above that bull bar
12:36 - 12:39
EN: because the Sell The Close finish typically will end
12:39 - 12:42
EN: and the market will either go sideways or reverse up.
12:43 - 12:48
EN: After 4 or 5 Sell The Close bars, especially if the market’s near support,
12:48 - 12:51
EN: it’s usually better not to sell closes.
12:51 - 12:55
EN: For example, had you sold these final two closes,
12:55 - 12:58
EN: you would’ve gotten out above the bull bar and you would’ve lost money.
13:04 - 13:05
EN: Buy The Close.
13:05 - 13:07
EN: Certainly, by this second close and third close,
13:07 - 13:09
EN: it’s going to be a Buy The Close rally.
13:09 - 13:11
EN: A good opportunity to make money.
13:11 - 13:14
EN: Probability high that you will make money.
13:21 - 13:25
EN: A lot of bulls will exit on the first reversal down if there’s a bear bar.
13:25 - 13:28
EN: This is only a bear doji, and therefore there probably
13:28 - 13:30
EN: will even be buyers below the low of that bar.
13:30 - 13:33
EN: So, a lot of bulls will not get out below a little bear doji,
13:33 - 13:37
EN: but they will get out below a bear bar with a decent body closing on its low.
13:39 - 13:41
EN: Some bulls will even buy with a limit order
13:41 - 13:45
EN: at the low of that bear doji and risk about 4 ticks down
13:45 - 13:50
EN: because they know that a lot of Buy The Close bulls will get out 4 ticks down.
13:50 - 13:53
EN: Therefore, if it falls 4 or 5 ticks down,
13:53 - 13:56
EN: it’s probably not going to remain Buy The Close.
13:57 - 14:00
EN: However, if it only falls 1 or 2 ticks below that bear bar,
14:00 - 14:03
EN: a lot of bulls will buy looking for at least a little bit more up.
14:12 - 14:14
EN: Here we have a big bull bar.
14:14 - 14:16
EN: It looks like a resumption of Buy The Close,
14:16 - 14:18
EN: but you’re at an important resistance level,
14:18 - 14:23
EN: and you’ve already had 5 or 6 Buy The Close bars in the rally
14:23 - 14:26
EN: and you’re near the top of a Trading Range day as well.
14:26 - 14:29
EN: Usually better not to buy it, especially if you have a big bar.
14:29 - 14:33
EN: Whenever you get a big bar late in a Buy The Close rally or late
14:33 - 14:38
EN: in a Sell The Close bear trend, it might be a vacuum test of a target.
14:39 - 14:41
EN: Therefore, it might be the end of the trend
14:41 - 14:44
EN: instead of the start of an even stronger leg up.
14:48 - 14:52
EN: Always get out below a strong bear bar in a Buy The Close finish.
Slide 006
Time: 14:57
Bilingual Transcript
15:00 - 15:04
EN: The best time to look for a Buy The Close rally at the end of the day?
15:04 - 15:05
EN: 12:00.
15:05 - 15:08
EN: Usually after 12:30, 12:35.
15:13 - 15:16
EN: Here we’re getting a Sell The Close finish,
15:16 - 15:20
EN: but it’s only 11:00 and it’s a bull trend day.
15:20 - 15:23
EN: You have to be suspicious that it’s not going to make it all the way
15:23 - 15:25
EN: to the end of the day.
15:29 - 15:31
EN: Here you’re getting a Buy The Close finish,
15:31 - 15:33
EN: but there are only a few bars left to the day.
15:33 - 15:36
EN: Therefore, not much time for profit potential.
15:36 - 15:38
EN: This is too late to be buying closes.
15:38 - 15:42
EN: This is too early for a Sell The Close finish to make it to the end of the day,
15:42 - 15:45
EN: and therefore if you’re taking this as a Sell The Close market,
15:45 - 15:47
EN: you definitely have to get out above a bull bar.
15:53 - 15:56
EN: Bears trying to get a Sell The Close finish.
15:56 - 15:58
EN: You might conclude that it’s Sell The Close
15:58 - 16:02
EN: after this second or third bar, but not enough bars left in the day
16:02 - 16:05
EN: to be trading this late as a Sell The Close swing trade.
Slide 007
Time: 16:10
Bilingual Transcript
16:12 - 16:17
EN: A lot of days have basically a limit order finish to the day.
16:17 - 16:19
EN: Trading Range, a fairly Tight Trading Range.
16:19 - 16:23
EN: Most traders should not trade that at all.
16:24 - 16:27
EN: Traders who do trade Tight Trading Ranges prefer
16:27 - 16:30
EN: to have them earlier in the day, not in the final hour,
16:30 - 16:33
EN: and they’ll trade them with limit orders – selling above bars,
16:33 - 16:37
EN: using wide stops, scaling in, and scalping, and buying below bars,
16:37 - 16:40
EN: using wide stops, scaling in, and scalping.
16:40 - 16:44
EN: Late in the day, you do not have enough time to use wide stops,
16:44 - 16:48
EN: scale in, and scalp, and therefore that strategy is a losing strategy.
16:53 - 16:55
EN: Finally, it’s late in the day.
16:55 - 16:56
EN: You’re tired.
16:56 - 16:58
EN: You’re more prone to make mistakes.
16:58 - 17:02
EN: You’re also more likely to make decisions too slowly,
17:02 - 17:04
EN: and therefore trading at the end of the day
17:04 - 17:07
EN: in a Tight Trading Range is a losing strategy for most traders.
17:07 - 17:11
EN: Experienced traders will sometimes do it, but for the most part
17:11 - 17:14
EN: if you see the market starting to go sideways in the final hour,
17:14 - 17:16
EN: you’re probably not going to be able
17:16 - 17:18
EN: to get any good trading for the remainder of the day.
17:24 - 17:28
EN: At the end of the day, final hour or so, you should only be looking for trades
17:28 - 17:31
EN: where you can enter on the close – like Buy The Close,
17:31 - 17:35
EN: Sell The Close, which is a market type of order – or with a stop.
17:35 - 17:38
EN: For example, if you have a bull trend and you’re getting a pullback,
17:38 - 17:42
EN: you can buy on a stop as the pullback resumes up.
17:43 - 17:46
EN: About once a month you’ll have a Buy The Close rally
17:46 - 17:50
EN: with a good reversal bar and enough time left for a sell.
17:50 - 17:51
EN: You can take that sell.
17:51 - 17:54
EN: Or you’ll have a Sell The Close finish with a good bull bar,
17:54 - 17:56
EN: and you can take that buy for a scalp.
17:56 - 17:58
EN: But that’s only about once a month.
18:03 - 18:06
EN: You’ve got a lot of abrupt reversals, a lot of big bars.
18:06 - 18:09
EN: Here you’ve got a big bear bar closing on its low and it reversed up.
18:09 - 18:12
EN: Then you get a couple bull bars and it reverses down.
18:13 - 18:15
EN: Most traders should not be trading that.
18:15 - 18:16
EN: They will lose money.
18:21 - 18:24
EN: Let’s say you see a Trading Range at the end of the day,
18:24 - 18:27
EN: you think it might be a Final Flag, maybe a Triangle.
18:27 - 18:30
EN: Push up, push up, push up, push up.
18:30 - 18:31
EN: You get a reversal like that.
18:31 - 18:34
EN: You might take that for a scalp up,
18:34 - 18:36
EN: but chances are it’s only going to be a scalp
18:36 - 18:40
EN: and the market will probably end up continuing mostly sideways.
18:40 - 18:41
EN: A very Tight Bear Channel.
18:41 - 18:44
EN: The first reversal up probably will be minor.
18:45 - 18:46
EN: Very strong bull bar.
18:46 - 18:50
EN: Some bulls might buy at the low of that bar, betting on a Trading Range.
18:50 - 18:52
EN: Not good trading for most traders.
18:53 - 18:56
EN: Also, a lot of times when you have a setup like this,
18:56 - 18:58
EN: some traders will try to use a tight stop.
18:58 - 19:00
EN: They’ll buy here, put a stop here.
19:00 - 19:02
EN: It’s just a losing strategy.
19:02 - 19:05
EN: If you’re using stops in a Trading Range
19:05 - 19:08
EN: at the end of the day, you have to use the widest stop
19:08 - 19:12
EN: because the market almost always triggers the nearby stop.
19:12 - 19:15
EN: So, if a bull bought here and he gets this breakout and he decides,
19:15 - 19:18
EN: “I don’t want to risk much; I’ll put my stop below here,”
19:18 - 19:20
EN: he’s just asking to get stopped out.
19:20 - 19:22
EN: You have to use the widest stop.
19:24 - 19:26
EN: If a bull buys there
19:30 - 19:32
EN: and then he gets the reversal up,
19:32 - 19:35
EN: he still should use a wide stop because it might go above the bear bar
19:35 - 19:38
EN: and get one more small push down before going up.
19:38 - 19:40
EN: This is really difficult trading,
19:40 - 19:43
EN: and most traders should not be taking this type of trading.
19:43 - 19:44
EN: Tight Trading Range, end of the day.
19:44 - 19:45
EN: Wait for tomorrow.
19:48 - 19:51
EN: A bear selling at this high, betting on a Double Top,
19:51 - 19:53
EN: he sells below that bear bar.
19:53 - 19:56
EN: If he’s taking that trade, he’s got to use a wide stop, like a Measured Move up
19:56 - 20:02
EN: or above this high, not simply above the sell signal bar high.
20:04 - 20:07
EN: Bulls betting that this is going to be a two-legged pullback
20:07 - 20:11
EN: and the bear reversal will fail and this will be a Trading Range.
20:11 - 20:16
EN: If he’s buying here, putting a stop below his buy signal bar, that’s risky.
20:16 - 20:21
EN: Of all the setups here, this one is the most reasonable one
20:21 - 20:23
EN: for putting a stop below the low of the buy signal bar
20:23 - 20:27
EN: because you got two legs down, a 50% pullback in a bull trend.
20:30 - 20:34
EN: What about selling this high, betting on a reversal down?
20:35 - 20:37
EN: I would not do that that late in the day.
20:37 - 20:39
EN: You have a bull trend.
20:39 - 20:41
EN: It could resume up to the end of the day.
20:47 - 20:49
EN: Probability is not high enough.
20:49 - 20:52
EN: The stops have to be far; the risk is great.
20:52 - 20:54
EN: So, you have bad risk/reward.
20:54 - 20:59
EN: Not enough time left for a swing, and therefore you’ve got little reward,
20:59 - 21:01
EN: you’ve got big risk, and the probability is low.
21:02 - 21:06
EN: That means you have both bad risk/reward and bad probability
21:06 - 21:08
EN: whether you’re entering with stops or limit orders,
21:08 - 21:12
EN: and very difficult to structure a profitable trade.
Slide 008
Time: 21:15
Bilingual Transcript
21:17 - 21:19
EN: Traders should always look for Buy The Close
21:19 - 21:21
EN: and Sell The Close trends at the end of the day.
21:21 - 21:25
EN: They typically start around 12:30 Pacific Time, maybe 12:35.
21:25 - 21:29
EN: If they start too early, they usually do not make it to the end of the day
21:29 - 21:31
EN: - unless the day has been a strong trend day.
21:31 - 21:34
EN: For example, if it’s a strong bull day and you’re starting
21:34 - 21:38
EN: to get a series of strong bull bars, even at 11:00 it’s reasonable
21:38 - 21:41
EN: to buy it and trade it like a swing trade.
21:41 - 21:45
EN: However, if the market’s been mostly sideways and you’re getting a reversal
21:45 - 21:48
EN: or a breakout and the breakout occurs too early,
21:48 - 21:51
EN: like with more than an hour left in the day,
21:51 - 21:55
EN: the trend probably will not last until the end of the day.
21:56 - 21:59
EN: Most Buy The Close finishes or Sell The Close finishes
21:59 - 22:05
EN: that begin after 12:00 or 12:30 are only going to last 4, 5, or 6 bars.
22:05 - 22:08
EN: The Buy The Close rallies always end at resistance;
22:08 - 22:11
EN: the Sell The Close bear trends always end at support.
22:11 - 22:14
EN: Usually it’s better not to enter after the fourth or fifth bar
22:14 - 22:17
EN: because it’s probably right at the target
22:17 - 22:19
EN: and it’s probably not going to go much further.
22:20 - 22:23
EN: If the market’s in a Tight Trading Range at the end of the day,
22:23 - 22:27
EN: in the final hour, especially the final 30 minutes, it’s better not to trade.
22:31 - 22:32
EN: I’m Al Brooks.
22:32 - 22:34
EN: Thank you for watching the Brooks Trading Course.
22:34 - 22:38
EN: This is the second of three videos on trading at the end of the day.