al-brooks-course
49D - Swing Trading Examples
Raw transcript and slide notes for 49D - Swing Trading Examples.
Overview
- Slides: 21
- Transcript segments: 572
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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.
00:05 - 00:09
EN: This is the fourth of six videos on swing trading.
Slide 001
Time: 00:12
Bilingual Transcript
00:13 - 00:16
EN: In this video, I’m going to give some more examples
00:16 - 00:18
EN: of swing trading for day trades.
Slide 002
Time: 00:19
Bilingual Transcript
00:22 - 00:26
EN: Here we have a gap down and a rally that has pullbacks every few bars,
00:26 - 00:29
EN: and a lack of consecutive big bull trend bars.
00:29 - 00:31
EN: Bull bar here, doji.
00:31 - 00:34
EN: We have a couple bull bars here, but not all that big.
00:40 - 00:44
EN: We have a gap down and now we have a reversal up – an outside bar.
00:44 - 00:47
EN: It traded below the low of the prior bar and then above the high
00:47 - 00:50
EN: of the prior bar, and it closed above the high of the prior bar.
00:51 - 00:52
EN: Now we have consecutive bull bars.
00:52 - 00:55
EN: The market’s Always In Long at this point.
00:55 - 00:57
EN: Higher prices are likely.
01:01 - 01:04
EN: A lot of traders will buy the close of that bar, put a stop below its low,
01:04 - 01:08
EN: and hold on as long as it remains Always In Long.
01:08 - 01:12
EN: No reason to get out at any point up to here.
01:12 - 01:14
EN: It’s still Always In Long.
01:19 - 01:22
EN: At this point we’ve had 4 bars without a pullback,
01:22 - 01:25
EN: and we’ve had 6 bars without a bear body.
01:25 - 01:28
EN: These 4 bars without a pullback make this a trend
01:28 - 01:32
EN: from the open bull trend even though it began on the second bar.
01:32 - 01:36
EN: However, doji, doji, doji, doji, and doji here.
01:36 - 01:40
EN: Of those first 6 bars, 5 are dojis.
01:40 - 01:44
EN: That is not a strong trend, and after this good-looking bull bar,
01:44 - 01:46
EN: we have bad follow-through.
01:51 - 01:55
EN: Good bull bars, but look at the follow-through after every good bull bar.
01:55 - 01:56
EN: Not good.
01:56 - 01:57
EN: The gaps close.
01:57 - 02:01
EN: We have a gap – this close, that high – and it closed.
02:01 - 02:05
EN: We gapped here – this close, that high – and it closed.
02:05 - 02:06
EN: The same here.
02:06 - 02:09
EN: Closed above this high, but the gap closed.
02:13 - 02:15
EN: The bulls see this as a spike, pullback, channel.
02:15 - 02:18
EN: Three or four pushes up – one, two, three, four.
02:19 - 02:24
EN: It’s a weak rally, but still Always In Long.
Slide 003
Time: 02:25
Bilingual Transcript
02:29 - 02:30
EN: Look at this.
02:30 - 02:36
EN: If you’re a bear and you look at this and see 5 bars up, 4 are dojis,
02:36 - 02:39
EN: you might think probably bull leg in a Trading Range,
02:39 - 02:41
EN: and therefore you sell at the high of the prior bar
02:41 - 02:44
EN: and you sell more higher, looking for a scalp.
02:44 - 02:47
EN: If the market falls back below the original entry price,
02:47 - 02:49
EN: you can get out breakeven on your first sell
02:49 - 02:51
EN: and with a profit on your second sell.
02:54 - 02:57
EN: These limit order bears are making money.
02:57 - 03:00
EN: They sell here with a limit order at that high.
03:00 - 03:04
EN: They sell more higher, and it comes down to their original entry price.
03:04 - 03:06
EN: The limit order bears are making money.
03:07 - 03:11
EN: Typically, if it’s a strong bull trend, it’s very difficult to make money
03:11 - 03:13
EN: selling above prior highs and scaling in higher.
03:16 - 03:19
EN: Limit order bears selling at this high can scalp out.
03:19 - 03:22
EN: Limit order bears selling at that high can scalp out.
03:22 - 03:26
EN: They sell here, sell more higher, comes back to their first price
03:26 - 03:28
EN: - they can get out breakeven on their first
03:28 - 03:30
EN: and with a scalp profit on their second.
03:37 - 03:42
EN: We have a bull trend, but we’re also in a gap down
03:42 - 03:45
EN: in a sloped down Moving Average.
03:45 - 03:48
EN: You can argue that this entire rally is a bear flag
03:48 - 03:52
EN: - a bull channel after a gap down, so it could be a gap, spike,
03:52 - 03:55
EN: and then pullback and then trend resumption down.
03:55 - 04:01
EN: Now we have gap bars – gaps between the low of the bar and the Moving Average,
04:01 - 04:06
EN: and therefore we might test back down to any of these Higher Lows.
04:10 - 04:12
EN: 5 dojis in the first 6 bars.
04:12 - 04:14
EN: Bad follow-through after every bull bar.
04:14 - 04:17
EN: Limit order bears making money during a rally.
04:17 - 04:22
EN: Those are all signs of Trading Range price action, and they increase the chances
04:22 - 04:25
EN: that there will be a lot of Trading Range price action today.
04:30 - 04:34
EN: Therefore, traders will look at this rally and conclude it’s probably a bull leg
04:34 - 04:38
EN: in what will become a Trading Range, and if it’s a Trading Range,
04:38 - 04:42
EN: the bulls will look to take profits earlier than they might otherwise.
04:44 - 04:47
EN: If you have a bull leg in a Trading Range
04:47 - 04:50
EN: - a Trading Range requires bull and bear legs
04:50 - 04:53
EN: - chances are there’ll soon be a bear leg in a Trading Range.
Slide 004
Time: 04:55
Bilingual Transcript
04:55 - 04:59
EN: Typically, a Trading Range has legs that last about 2 hours,
04:59 - 05:02
EN: maybe 3 hours, so 20 or 30 bars.
05:02 - 05:05
EN: This has gone on for more than 20 bars at this point.
05:08 - 05:09
EN: This is what followed.
05:14 - 05:17
EN: We have a bear bar and a follow-through bear bar.
05:17 - 05:20
EN: This is a sign that the final bulls gave up.
05:20 - 05:24
EN: If they did not exit below this bear bar or below this bear bar,
05:25 - 05:29
EN: this is telling us that they exited on that bear bar or this bear bar.
05:29 - 05:34
EN: This is probably the start of a bear swing in a Trading Range day.
05:34 - 05:38
EN: The bulls who bought this close, I think they have to get out
05:38 - 05:41
EN: below the low of this bear bar or the low of this bear bar.
05:41 - 05:44
EN: This is good enough so that the market would probably get
05:44 - 05:47
EN: at least a small second leg up, but this little rally above the high
05:47 - 05:50
EN: of this bar might be the end of the second leg up,
05:50 - 05:53
EN: and now we have a Micro Double Top and we have a weak rally
05:53 - 05:57
EN: with three or four pushes up – one, two, three, four.
05:57 - 06:01
EN: It’s probably a bull leg in a Trading Range, and after three or four legs up,
06:01 - 06:05
EN: we’ll probably soon get a bear leg in a Trading Range.
06:05 - 06:09
EN: Therefore, the swing bulls who bought here, original stop here,
06:09 - 06:12
EN: would get out either below here or below here.
06:17 - 06:23
EN: For the bulls, can they argue that this is a Higher Low Major Trend Reversal?
06:23 - 06:27
EN: We have a bear trend and a bull breakout of the bear trend,
06:27 - 06:29
EN: and now we have a Higher Low.
06:29 - 06:33
EN: But it’s a Higher Low coming in an endless pullback,
06:33 - 06:35
EN: a Tight Bear Channel with a lot of dojis.
06:35 - 06:37
EN: Not much Buying Pressure.
06:37 - 06:41
EN: Yes, it’s a Higher Low Major Trend Reversal above this bar, above that bar,
06:41 - 06:44
EN: above this bar, above this Micro Double Bottom
06:44 - 06:48
EN: - but when the channel is tight like that, it’s a low probability buy.
06:48 - 06:51
EN: More likely the best the bulls get is a minor reversal
06:51 - 06:53
EN: and a Trading Range or a bear flag.
06:59 - 07:04
EN: You can argue Wedge – one, two, three or one, two, three, four.
07:05 - 07:07
EN: We have a bear sell signal bar.
07:07 - 07:11
EN: Bulls will take profits there and bears will sell there, or,
07:11 - 07:16
EN: because they think the bull rally will result in a Trading Range,
07:16 - 07:19
EN: they might wait for a second entry sell and sell below this bar.
07:19 - 07:24
EN: Some sold there and some sold below this bar, second entry short.
07:30 - 07:34
EN: Higher probability to sell after you see a bear breakout bar
07:34 - 07:37
EN: and a bear follow-through bar, which is often small.
07:37 - 07:41
EN: You could sell here; you could sell below this bear bar here.
07:41 - 07:45
EN: Those are not high probability sells, but once you have a decent size bear bar
07:45 - 07:49
EN: and a follow-through bar and the context is good for a swing down,
07:50 - 07:54
EN: it’s higher probability to sell here even though your stop is further away.
07:55 - 07:58
EN: The bears who sell here are looking for a swing down.
07:58 - 08:04
EN: They’re selling fairly low below the high, so their risk is relatively big.
08:04 - 08:07
EN: They sell let’s say that close and stop above this bear bar
08:07 - 08:11
EN: or above the high of the day, and they just hold through all
08:11 - 08:15
EN: of these reversals up, because none of them was enough
08:15 - 08:17
EN: to make the market Always In Long.
Slide 005
Time: 08:20
Bilingual Transcript
08:23 - 08:26
EN: Some bears will sell the close of the bear breakout.
08:26 - 08:29
EN: Most bears like to sell the close of the follow-through bar,
08:29 - 08:33
EN: or even sell above a bar, betting that the first reversal up will fail.
08:34 - 08:38
EN: The bears taking the sell are selling for a swing.
08:38 - 08:41
EN: The probability is not high enough for a scalp.
08:41 - 08:47
EN: Selling here, stop up here, you have to risk too much to take this for a scalp.
08:47 - 08:48
EN: It’s a reasonable swing trade.
08:48 - 08:50
EN: We’re breaking below the bull channel.
08:50 - 08:54
EN: The bull channel was probably a bull leg in a Trading Range.
08:54 - 08:56
EN: We have a Wedge, three or four pushes up.
08:56 - 09:00
EN: We’re probably going to get at least a couple legs down – one, pullback, two.
09:00 - 09:03
EN: We might trend down for 3 or 4 hours.
09:07 - 09:11
EN: Some bears, instead of selling that close, will sell above the high of this bar
09:11 - 09:16
EN: or above the high of any of these bars, betting that they are bad buy signals
09:16 - 09:20
EN: and that the market went Always In Short on the close of this bar.
09:20 - 09:24
EN: All of these reversal attempts probably will result
09:24 - 09:27
EN: in a Lower High and then lower prices.
09:34 - 09:37
EN: Some bears will also sell the close of a bull bar,
09:37 - 09:41
EN: thinking that the bulls need at least a couple consecutive good bull bars
09:41 - 09:44
EN: to convert the market to Always In Long, and therefore they’ll sell
09:44 - 09:47
EN: the close of one, especially near the Moving Average,
09:47 - 09:49
EN: betting that the bulls will not get two.
09:50 - 09:53
EN: They sell that close, again, stop above here,
09:53 - 09:55
EN: and they just hold on until either the market
09:55 - 09:59
EN: clearly becomes Always In Long or until the end of the session.
10:03 - 10:07
EN: The bears who did not sell here could sell below this bear bar.
10:07 - 10:10
EN: It’s a failed bull reversal and a Lower High.
Slide 006
Time: 10:15
Bilingual Transcript
10:21 - 10:25
EN: Again, consecutive bear bars, decent size, closing near their lows.
10:26 - 10:29
EN: We’re more than 20 bars into the bear leg.
10:30 - 10:33
EN: This breakout could be a Measuring Gap.
10:33 - 10:35
EN: It could lead to a Measured Move down.
10:36 - 10:39
EN: The bulls were hoping for a Higher Low Major Trend Reversal.
10:39 - 10:42
EN: The gap down is a bear trend and this was a bull breakout,
10:42 - 10:44
EN: and they’re hoping this is a Higher Low.
10:45 - 10:49
EN: They can buy there, but they’ll probably give up below that bear bar
10:49 - 10:52
EN: or second or third failure and reversal down.
10:52 - 10:57
EN: These 2 consecutive bear bars make it likely that we’re going lower
10:57 - 11:00
EN: - maybe a Measured Move down from this high to that low.
11:03 - 11:08
EN: For the bulls, this bear breakout is forming a Wedge bull flag.
11:08 - 11:11
EN: Three pushes down – one, two, and three.
11:12 - 11:16
EN: You can call it a Double Bottom over here – this low, that low.
11:17 - 11:21
EN: They can buy for a swing up, and the bears can be holding short.
11:21 - 11:23
EN: They sell here, stop above here.
11:28 - 11:30
EN: Some bears will exit here.
11:30 - 11:32
EN: We have a failed breakout below this low,
11:32 - 11:34
EN: a possible Trading Range, and a reversal up.
11:34 - 11:36
EN: It’s reasonable to exit here.
11:36 - 11:37
EN: We have a Micro Double Bottom.
11:37 - 11:41
EN: You expect a second leg down after this, so one, pullback, two.
11:41 - 11:43
EN: We tried to reverse up.
11:43 - 11:45
EN: We’re trying to reverse up a second time.
11:45 - 11:49
EN: It is reasonable to get out of shorts, either above this bull bar
11:49 - 11:53
EN: or above this bull bar, which would be about breakeven there.
11:53 - 11:57
EN: Bears could also continue to hold short and rely on a stop
11:57 - 12:00
EN: above the most recent major Lower High, which is here.
12:01 - 12:04
EN: Bulls, they could buy this hoping for a swing up,
12:04 - 12:06
EN: but when a channel is this tight,
12:06 - 12:10
EN: I like to wait for a strong reversal up and then buy.
12:10 - 12:12
EN: This is just not strong enough.
12:14 - 12:19
EN: The bears who do exit here will look to sell again below a bear bar.
12:19 - 12:20
EN: We’re still Always In Short.
12:20 - 12:23
EN: That means traders still believe it’s more likely
12:23 - 12:26
EN: that we’re going to go down than it is that we’ll reverse.
12:26 - 12:29
EN: The bulls have not yet done enough to take control.
12:29 - 12:34
EN: We’re still forming Lower Highs, and therefore if the bears do get out,
12:34 - 12:38
EN: they have to sell again below a bear bar, like below this bar, get short here.
12:38 - 12:40
EN: Below that bar, get short here.
12:43 - 12:47
EN: After a breakout like this and a Lower High,
12:47 - 12:50
EN: a lot of traders will put their stop here instead of up here.
Slide 007
Time: 12:55
Bilingual Transcript
12:58 - 13:02
EN: Again, if a swing bear sold here and they exited
13:02 - 13:06
EN: on the second or third reversal up – one, two, three
13:06 - 13:10
EN: they have to be prepared to sell again below a bear bar
13:10 - 13:12
EN: unless the market becomes Always In Long.
13:12 - 13:16
EN: This is not enough yet to make it Always In Long.
13:19 - 13:21
EN: It’s a weak bear channel.
13:21 - 13:24
EN: We keep getting reversals, and traders buying at the low
13:24 - 13:27
EN: and adding on lower are able to make money.
13:27 - 13:31
EN: This is probably a bear leg in what will become a Trading Range.
13:37 - 13:42
EN: But if the bears did get out here, they’ll sell again on a reversal down.
13:42 - 13:44
EN: We have a bull bar, a bear bar.
13:44 - 13:45
EN: A pair of bull bars, a bear bar.
13:45 - 13:48
EN: A bull bar and then a bear bar.
13:48 - 13:51
EN: So, this is a slight Wedge Lower High.
13:51 - 13:54
EN: You can also call it a Double Top with that high.
13:54 - 13:58
EN: It’s certainly below your stop, and a lot of bears will look to sell again
13:58 - 14:02
EN: on a reversal down – either here, arguing Wedge
14:02 - 14:07
EN: - one, two, and then three – or they’ll sell below bear bars.
14:07 - 14:09
EN: You can see a lot of traders sold here.
14:16 - 14:19
EN: Selling below the bear bar, or selling the breakout bar,
14:19 - 14:21
EN: betting that we’ll get at least a little bit more down.
14:22 - 14:28
EN: Therefore, swing bears who sold for any reason here or here, or here or here,
14:29 - 14:33
EN: are holding short until there’s a reasonably good reversal up
14:34 - 14:36
EN: or until the end of the session.
Slide 008
Time: 14:40
Bilingual Transcript
14:43 - 14:45
EN: A big bear breakout and a good follow-through.
14:47 - 14:50
EN: Might get a Measured Move down, but it’s the strongest pair
14:50 - 14:53
EN: of bear bars more than 20 bars into a bear trend.
14:54 - 14:58
EN: Therefore, this is more likely an exhaustive end of the bear trend
14:58 - 15:01
EN: than it is the start of a Measured Move down.
15:02 - 15:05
EN: So, you have to be prepared for a reversal up.
15:10 - 15:13
EN: We’re getting a bear breakout of a bear channel.
15:13 - 15:16
EN: Usually that fails within 5 bars or so.
15:19 - 15:22
EN: Usually there’s at least a small second leg down
15:22 - 15:27
EN: after a strong breakout like that, and this meets the minimum requirement.
15:27 - 15:30
EN: We have a bear breakout and a pause, and then we have an attempt
15:30 - 15:32
EN: at trend resumption, even though it’s small.
15:32 - 15:34
EN: This might be the second leg down.
15:34 - 15:39
EN: So, first leg down, a pause, a doji bar, and then a small second leg down,
15:39 - 15:41
EN: and now we’re trying to reverse up.
Slide 009
Time: 15:45
Bilingual Transcript
15:47 - 15:50
EN: If you’re a Sell The Close bear and you sold this close
15:50 - 15:53
EN: and you see this bull bar, what are you thinking?
15:53 - 15:55
EN: You’re thinking, “Gosh, that’s not what I wanted.
15:55 - 15:58
EN: I don’t want a reversal on a breakout to a new low of the day
15:58 - 16:00
EN: after a bear breakout below a bear channel.”
16:06 - 16:09
EN: Sell The Close bears will give up.
16:09 - 16:11
EN: They see a bull bar here closing on its high.
16:11 - 16:14
EN: They’ll buy back their shorts above, and aggressive bulls
16:14 - 16:18
EN: will buy as well for a failed breakout below a channel,
16:18 - 16:22
EN: a failed breakout below the low of the day – and this is probably a bear leg
16:22 - 16:26
EN: in a Trading Range, which means that after it goes down, it will go up.
16:26 - 16:29
EN: Close on the high, Micro Double Bottom.
16:29 - 16:31
EN: Went down on this bar, up on this bar.
16:31 - 16:33
EN: Down again, up again.
16:33 - 16:36
EN: So, a Micro Double Bottom, failed breakout low of the day,
16:36 - 16:38
EN: failed breakout below the bear channel.
16:38 - 16:44
EN: I think the bulls will buy, and certainly the bears will finally exit here.
16:44 - 16:46
EN: Too much risk of some kind of a swing up.
16:53 - 16:57
EN: If you want higher probability, instead of buying above this bull bar,
16:57 - 17:01
EN: you wait for 3 or 4 consecutive bull bars and then you buy closes.
17:02 - 17:06
EN: The swing bears who sold for any reason, either up here or here,
17:06 - 17:09
EN: if they got out here and they sold again here,
17:09 - 17:13
EN: they’d get out either above this bar or on the third bull close.
17:13 - 17:18
EN: The swing bulls who want higher probability wait for three or four bull closes
17:18 - 17:22
EN: and then buy the close, looking for two legs up – one, pullback, two.
17:27 - 17:30
EN: The bulls who bought after a reversal up like this,
17:30 - 17:33
EN: they’ll put their stop down here and they’ll hold
17:33 - 17:36
EN: as long as the market remains Always In Long.
17:36 - 17:39
EN: It probably became Always In Long on the third bull close,
17:39 - 17:43
EN: meaning that the market was probably going at least a little higher.
Slide 010
Time: 17:45
Bilingual Transcript
17:49 - 17:51
EN: We’re getting a reversal up from a breakout
17:51 - 17:54
EN: below a bear channel and below the low of the day,
17:55 - 17:58
EN: and now we’re getting a Buy The Close rally at the end of the day.
17:58 - 18:00
EN: Bulls will buy closes.
18:00 - 18:04
EN: Most bulls will not buy every close, but they’ll try to buy
18:04 - 18:07
EN: at least one close and then either hold until the end of the session
18:07 - 18:10
EN: or until there’s a good reason to exit.
18:10 - 18:14
EN: Some will buy and buy more two or three buy signals later.
18:14 - 18:17
EN: For example, they might buy here and hold long
18:17 - 18:20
EN: and then add to their position here or here, stop down here,
18:20 - 18:24
EN: looking for a swing up, and then they’ll exit at the end of the session.
18:27 - 18:30
EN: A lot of bulls exit below a bear bar.
18:30 - 18:33
EN: If you have a bear bar closing below its midpoint
18:33 - 18:35
EN: and you have a Buy The Close bull trend,
18:35 - 18:39
EN: a lot of the bulls will get out below the low of the bear bar
18:39 - 18:42
EN: because sometimes you’ll get a violent reversal down.
18:46 - 18:50
EN: Other bulls know that we’re getting a bear break
18:50 - 18:52
EN: below a bear channel and we’re reversing up.
18:52 - 18:55
EN: 75% chance we’re going to the top of the channel,
18:55 - 19:00
EN: and therefore they’ll hold long even though it trades below this bar
19:00 - 19:03
EN: because this did not quite reach the top of the channel,
19:03 - 19:05
EN: and they assume that we’ll get there.
19:11 - 19:16
EN: If bulls do buy closes and they know the market’s probably going to touch
19:16 - 19:22
EN: the top of the channel, their final buy has to be at least the size of a scalp
19:22 - 19:26
EN: below their target because the market might reach their target and reverse down,
19:26 - 19:28
EN: and they want to make at least a scalp profit.
19:28 - 19:33
EN: Therefore, if the market is near a magnet, you don’t want to buy
19:33 - 19:35
EN: unless the distance between your entry price
19:35 - 19:39
EN: and the target is at least as big as a scalp.
19:44 - 19:49
EN: You could argue this is Buy The Close as well as all of these bars, and it is.
19:49 - 19:51
EN: But we have a bigger bar, a Buy Climax.
19:51 - 19:54
EN: We’re getting a buy vacuum up to resistance,
19:54 - 19:56
EN: and now we’re very close to resistance.
19:56 - 20:00
EN: A lot of bulls will not buy that close to resistance
20:00 - 20:04
EN: because other bulls will be taking profits and aggressive bears will sell,
20:04 - 20:07
EN: betting that there’ll be at least a pullback from resistance.
20:07 - 20:12
EN: This is not a good Buy The Close bar because it’s right next to resistance.
Slide 011
Time: 20:15
Bilingual Transcript
20:22 - 20:25
EN: Today we have a gap up and we have a doji bar, and a bull bar,
20:25 - 20:27
EN: not too big, and it’s followed by a bear bar.
20:27 - 20:30
EN: The bears tried to sell off and now we have a couple dojis.
20:30 - 20:33
EN: Can you buy above this bar or above this bar?
20:34 - 20:38
EN: I think it’s probably better to wait for more information.
20:41 - 20:42
EN: We gapped up.
20:42 - 20:43
EN: We have a bull bar.
20:43 - 20:45
EN: It traded a little bit above the bull bar.
20:45 - 20:49
EN: It traded above that doji, but it immediately reversed down.
20:49 - 20:51
EN: That is not very bullish.
20:58 - 21:02
EN: For the bears, we traded below the low of the first bar
21:02 - 21:06
EN: - a failed breakout of yesterday’s high – and then we now have
21:06 - 21:11
EN: a second sell signal bar, and we’re trading below its low.
21:11 - 21:16
EN: So, this is the second reversal down from above yesterday’s high,
21:16 - 21:18
EN: and it’s a decent sell signal bar.
21:18 - 21:21
EN: This is a reasonable short for a possible high of the day,
21:21 - 21:24
EN: even though initially we’re getting bad follow-through.
21:30 - 21:35
EN: 3 consecutive bear bars, 2 with closes on their lows.
21:35 - 21:36
EN: The market’s Always In Short.
21:36 - 21:41
EN: 60% chance that there’ll be sellers above the high of the prior bar
21:41 - 21:44
EN: - here or here – and that we’ll get at least a little bit more down.
21:49 - 21:54
EN: Once we get that third consecutive close, some bears who did not sell
21:54 - 21:57
EN: below this bear bar will conclude we’re Always In Short.
21:57 - 22:00
EN: They’ll sell the close of the third consecutive bear bar.
22:00 - 22:05
EN: Others will sell the reversal up, especially with a weak buy signal bar,
22:05 - 22:09
EN: betting that it’s a weak bull flag, probably more sellers than buyers
22:09 - 22:12
EN: above the high of this bar, and that we’ll trade down.
22:15 - 22:17
EN: It does not matter where you shorted – below this bar,
22:17 - 22:20
EN: selling that close, above the high of this bar
22:20 - 22:24
EN: - your stop is above the top of the Sell Climax, the top of the bear breakout.
22:27 - 22:32
EN: You hold short until there’s a clear buy signal or until the end of the session.
Slide 012
Time: 22:30
Bilingual Transcript
22:39 - 22:41
EN: Here we’re selling off for about 20 bars,
22:41 - 22:44
EN: but we’re not getting consecutive big bear bars.
22:46 - 22:51
EN: We get some decent size bear bars here, here, and here, but look what followed.
22:51 - 22:52
EN: The follow-through is bad.
22:52 - 22:54
EN: Not particularly bearish.
22:54 - 22:58
EN: So, this selloff is probably a bear leg in what will become a Trading Range,
22:58 - 23:01
EN: which means it’ll probably be followed by a bull leg.
23:06 - 23:08
EN: There’s something interesting about this.
23:09 - 23:12
EN: We have a bear breakout, and then look at this high.
23:12 - 23:15
EN: It barely pulled above the breakout point – this low or that low.
23:16 - 23:19
EN: We broke again to a new low and pulled back here.
23:19 - 23:21
EN: Did not get above the breakout point there.
23:21 - 23:24
EN: It did get above this breakout point, but it looks like
23:24 - 23:26
EN: we’re getting a gap there, or a slightly negative (body) gap.
23:26 - 23:27
EN: Very little overlap.
23:35 - 23:38
EN: When you get a weak bear trend like this with bad follow-through
23:38 - 23:42
EN: but you’re getting gaps or negative gaps – gaps where there’s slight overlap
23:42 - 23:44
EN: - you have to be thinking about the possibility
23:44 - 23:49
EN: that this could become a Small Pullback Bear Trend that could last all day.
23:55 - 24:00
EN: These gaps and negative gaps are important, and they increase the chances
24:00 - 24:05
EN: that even though this is a weak selloff, it might be an endless selloff
24:05 - 24:08
EN: and the early part of a Small Pullback Bear Trend.
Slide 013
Time: 24:10
Bilingual Transcript
24:12 - 24:14
EN: Eventually we get a breakout
24:14 - 24:17
EN: and a very Tight Bear Channel, a relentless selloff.
24:17 - 24:22
EN: So, traders who sold here or here, relied on their stop, or if they sold here,
24:22 - 24:27
EN: a Double Top here, Double Top here, they hold short.
24:27 - 24:30
EN: At some point after a number of bars, maybe here,
24:30 - 24:33
EN: they tighten their stop to here and they just hold on
24:33 - 24:37
EN: until the market is likely to reverse.
24:44 - 24:47
EN: A lot of dojis, bars with very prominent tails
24:47 - 24:50
EN: and small bodies, but we’re getting gaps.
24:50 - 24:55
EN: That is a warning that, as weak as the bear trend appears to be,
24:55 - 24:58
EN: it might be much stronger than what you think.
24:59 - 25:02
EN: Whenever you have a leg that looks like a bear leg in a Trading Range
25:02 - 25:06
EN: but you’re getting gaps or negative (body) gaps, you have to be thinking
25:06 - 25:10
EN: that it might be a bear leg in a Small Pullback Bear Trend.
25:10 - 25:14
EN: Pullbacks small all day, and the trend lasts all day.
25:18 - 25:20
EN: Again, the bulls are trying to reverse here.
25:20 - 25:21
EN: They could not close the gap.
25:21 - 25:25
EN: They could not get above the breakout point, and then they sold off there.
25:25 - 25:27
EN: This looks like a Small Pullback Bear Trend,
25:27 - 25:30
EN: and it could last for the entire day.
25:30 - 25:31
EN: So better to hold short.
Slide 014
Time: 25:35
Bilingual Transcript
25:36 - 25:38
EN: We’re trying to get some kind of a bottom.
25:38 - 25:39
EN: Maybe a Wedge Bottom.
25:39 - 25:41
EN: Maybe a failed breakout below a Double Bottom.
25:42 - 25:46
EN: But instead of going above the breakout point, it turned back down.
25:47 - 25:49
EN: Now we have a bear bar, consecutive bear bars,
25:49 - 25:52
EN: one of the bars being relatively big.
25:53 - 25:55
EN: We’re probably going to get a Measured Move down.
25:55 - 26:00
EN: This is probably going to be a Measuring Gap, from this high to that low.
26:05 - 26:07
EN: Traders will either sell the close of the breakout bar
26:07 - 26:12
EN: or the close of the follow-through bar, or they’ll sell for any reason
26:12 - 26:15
EN: - at the market, above bars, sell bear closes, sell bull closes,
26:15 - 26:17
EN: and use a stop maybe up here at this point.
26:23 - 26:26
EN: Some bears will sell at the high of the prior bar,
26:26 - 26:30
EN: betting that it’s a Small Pullback Bear Trend, and therefore pullbacks
26:30 - 26:35
EN: will probably only last 1 or 2 or 3 bars and then the bear trend will resume.
26:35 - 26:39
EN: So, some bears place limit orders to sell at the high of the prior bar.
26:39 - 26:44
EN: Again, stop above the most recent strong bear leg.
26:47 - 26:50
EN: Now we’re starting to get consecutive closes in a very Tight Channel.
26:50 - 26:53
EN: Some bears will just sell closes – any closes.
26:53 - 26:56
EN: Here are three, but they could sell any close.
26:56 - 26:57
EN: They could sell at the market.
27:01 - 27:04
EN: Other bears prefer stop entry shorts,
27:04 - 27:08
EN: so they’ll sell below Low 1 and Low 2 bear flags.
27:08 - 27:11
EN: Here we have a small Double Top bear flag.
27:11 - 27:14
EN: Therefore, this is a Low 2, and they’ll sell below the low of that bar.
27:14 - 27:16
EN: Here we’re trying to reverse up.
27:16 - 27:20
EN: Therefore, it’s a pullback and it’s a Low 1 short below its low.
27:20 - 27:23
EN: Again here, small Double Top – one, two.
27:23 - 27:25
EN: This is a Low 2.
27:25 - 27:29
EN: Here we’re trying to reverse up, and instead we broke to the down side.
27:29 - 27:31
EN: So therefore, it’s a Low 1.
27:34 - 27:36
EN: Traders do not take all of those trades.
27:37 - 27:41
EN: Many traders will just take one, especially early on, relying on their stops,
27:41 - 27:43
EN: and then swing trade until the end of the session.
27:45 - 27:48
EN: Now we’re getting extremely strong selling,
27:48 - 27:53
EN: but about 70 or 80 bars into a bear trend.
27:53 - 27:56
EN: Is it more likely that the bear trend is suddenly becoming stronger,
27:56 - 28:01
EN: or that this is a final, exhaustive Sell Climax?
28:02 - 28:05
EN: More likely after 20 or 30 bars in a bear trend,
28:05 - 28:06
EN: if the trend starts to accelerate
28:06 - 28:09
EN: and get the biggest bear bars of the entire bear trend,
28:09 - 28:13
EN: it’s a sign that the bear trend will exhaust and reverse.
28:17 - 28:21
EN: Now we’re getting a Micro Double Bottom – down, up, down, up.
28:21 - 28:25
EN: Bull bar closing on its high, bull bar closing near its high.
28:25 - 28:27
EN: The final bears will exit above this bar,
28:27 - 28:31
EN: arguing probable exhausting Sell Climax late in a bear trend.
28:31 - 28:35
EN: The bulls will buy with a stop, looking for at least a scalp up,
28:35 - 28:38
EN: a couple legs up, maybe a test of the top of the Sell Climax.
Slide 015
Time: 28:45
Bilingual Transcript
28:47 - 28:50
EN: Yesterday ended with a Sell The Close Sell Climax,
28:50 - 28:54
EN: about 8 or 9 consecutive bear bars, many closing on their lows.
28:58 - 29:02
EN: Then we had weak follow-through – doji, doji, bull bar, doji, doji.
29:03 - 29:05
EN: The market is uncertain at this point.
29:05 - 29:09
EN: You can call it an ii pattern, a Triangle, small Triangle.
29:09 - 29:12
EN: You can simply call it a Tight Trading Range.
29:15 - 29:17
EN: Bears will look to sell the bear breakout,
29:17 - 29:20
EN: betting that we’ll get trend resumption down.
29:20 - 29:23
EN: Bear trend, Trading Range, at least a little bit more down.
29:23 - 29:27
EN: It’s a Low 2 bear flag because we have a small Double Top.
29:27 - 29:30
EN: We went down, we went up, we went down, we went up.
29:38 - 29:42
EN: Some bears prefer higher probability, and they wait for a bear breakout
29:42 - 29:46
EN: and follow-through and then sell closes, or they’ll sell above the high
29:46 - 29:49
EN: of the prior bar, betting that the bull reversal will fail.
29:51 - 29:53
EN: All of these bears have the same stop
29:53 - 29:56
EN: - up here at the top of this most recent bear leg.
30:01 - 30:03
EN: Now we have a pullback, a reversal attempt,
30:03 - 30:05
EN: and we have a bear bar closing on its low.
30:06 - 30:08
EN: Bears will sell on a stop just below its low,
30:08 - 30:11
EN: betting on at least minimum trend resumption.
30:14 - 30:18
EN: Stop for the bears selling down here, probably at the top of this selloff
30:18 - 30:20
EN: - just above, which is right here.
Slide 016
Time: 30:25
Bilingual Transcript
30:27 - 30:30
EN: The bears had a very strong bear trend here, but now we’re getting
30:30 - 30:33
EN: a bunch of dojis and a lot of little reversals.
30:35 - 30:39
EN: This is disappointing for these bears, and it increases the chances
30:39 - 30:40
EN: that we’re going to go sideways.
30:45 - 30:47
EN: A tight bear Spike and Channel.
30:48 - 30:49
EN: This is the spike down.
30:50 - 30:55
EN: These 4 bars, maybe these 8 bars, spike down, and then a pullback.
30:56 - 30:57
EN: It’s a channel.
30:57 - 30:58
EN: Not all that strong.
30:59 - 31:01
EN: A lot of times when you get a Spike and Channel pattern,
31:01 - 31:05
EN: the market will rally to test the top of the channel.
31:05 - 31:09
EN: This is in such a Tight Channel that the first reversal up is minor,
31:10 - 31:12
EN: and we’re probably still going lower.
31:18 - 31:21
EN: We’re getting a bull breakout above a bear channel.
31:21 - 31:23
EN: The odds are we’re going to go sideways.
31:25 - 31:28
EN: Can you buy above the high of this inside bar?
31:29 - 31:31
EN: I think it’s not a very high probability buy
31:31 - 31:33
EN: because the channel down is so tight.
31:33 - 31:36
EN: It’s okay to take profits on shorts.
Slide 017
Time: 31:40
Bilingual Transcript
31:44 - 31:48
EN: For the bears, we have a very Tight Bear Channel after a strong bear breakout,
31:48 - 31:51
EN: and now we have a Double Top at the Moving Average.
31:51 - 31:53
EN: We tried to reverse down.
31:53 - 31:54
EN: We’re at the same price.
31:54 - 31:56
EN: We’re trying to reverse down a second time.
31:58 - 32:01
EN: A small Double Top like this is always a Low 2 short.
32:01 - 32:04
EN: We’re at the Moving Average and we have a bear signal bar.
32:04 - 32:06
EN: It’s a reasonable short.
32:06 - 32:09
EN: We might still go sideways – here we went sideways for over 2 hours
32:09 - 32:12
EN: - yet we ultimately went down.
32:12 - 32:15
EN: So, the bears taking that short, stop above the high
32:15 - 32:17
EN: of the entry bar or signal bar.
32:22 - 32:23
EN: Pretty good Buying Pressure.
32:23 - 32:27
EN: We have 7 bars in a bull Micro Channel with 5 bull bodies,
32:27 - 32:29
EN: but the bodies are not all that big.
32:29 - 32:31
EN: Plus, it’s a 20 gap bar sell.
32:31 - 32:35
EN: We’ve been entirely below the Moving Average for more than 20 bars,
32:35 - 32:39
EN: and therefore traders who were selling below the average price
32:39 - 32:43
EN: will be very happy to sell at the average price, which they got to do here.
32:50 - 32:55
EN: Other bears prefer higher probability and wait for breakouts and follow-through.
32:55 - 32:59
EN: Every reversal attempt up is probably going to be a bear flag.
32:59 - 33:02
EN: It’ll probably fail, so bears will look to sell
33:02 - 33:05
EN: on a reversal down, especially below a bear bar.
33:14 - 33:15
EN: We have a Tight Trading Range,
33:15 - 33:18
EN: and in that Tight Trading Range we have a Double Bottom.
33:19 - 33:21
EN: Whenever you have a Tight Trading Range in a bear trend
33:21 - 33:25
EN: and a small Double Bottom like this, there’s maybe a 50% chance
33:25 - 33:28
EN: that we’re going to attempt to get a swing up.
33:29 - 33:33
EN: Therefore, the bears will exit, especially above a bull bar,
33:33 - 33:34
EN: like maybe above this bar.
33:34 - 33:37
EN: We have the Double Bottom and then a bull bar,
33:37 - 33:40
EN: and a lot of bulls will take profits above the high of that bull bar.
33:47 - 33:51
EN: Some bears will sell, looking for a reversal back down.
33:51 - 33:54
EN: We have a breakout above a neckline of a Double Bottom,
33:54 - 33:57
EN: bad follow-through, and now we have a second reversal attempt
33:57 - 34:01
EN: from the breakout above this Double Bottom neckline.
34:01 - 34:03
EN: First reversal down failed.
34:03 - 34:07
EN: Second reversal down, higher probability, either selling below the bull bar
34:07 - 34:10
EN: or below one of these 2 bear bars.
34:10 - 34:14
EN: Again, stop above the most recent major Lower High.
Slide 018
Time: 34:20
Bilingual Transcript
34:20 - 34:22
EN: The bulls rallied strongly here.
34:22 - 34:26
EN: We got a second leg up here, and today’s high is slightly above that high,
34:26 - 34:30
EN: and therefore we have three reversals down – one, two, three.
34:30 - 34:32
EN: Even though it does not look like a Wedge,
34:32 - 34:35
EN: it’s a Wedge Top after a bull breakout.
34:42 - 34:46
EN: Because yesterday ended with a bull breakout, a Buy Climax,
34:46 - 34:50
EN: there was a 75% chance of sideways to down trading
34:50 - 34:54
EN: for 2 hours starting by the end of the second hour.
34:54 - 34:57
EN: We got sideways to down trading right on the open.
35:05 - 35:07
EN: We have 2 consecutive big bear bars
35:07 - 35:09
EN: on the failed breakout above yesterday’s high.
35:09 - 35:15
EN: Also, a third push up – one, two, three – so it’s a Wedge high as well.
35:15 - 35:17
EN: It’s a possible Spike and Channel bear trend.
35:17 - 35:22
EN: We got a spike, pullback, and channel, and we have a second leg down later.
35:22 - 35:25
EN: But in any case, 2 consecutive bear bars like that,
35:25 - 35:29
EN: it’s reasonable to sell the close of the second bear bar,
35:29 - 35:33
EN: taking a chance that it will lead to a bear trend day.
35:39 - 35:43
EN: Some bears will sell below the low of this bar, arguing Wedge
35:43 - 35:45
EN: - one, two, three – failed breakout, yesterday’s high.
35:45 - 35:50
EN: Others will start to sell closes after the second or third consecutive bear bar.
35:52 - 35:56
EN: They have a higher probability short, but their stop is further away.
35:56 - 36:00
EN: You always pay for higher probability with worse risk/reward,
36:00 - 36:03
EN: which means the stop is usually further away.
36:11 - 36:16
EN: Can you buy this reversal up after these 3 bear bars? I would do the opposite.
36:16 - 36:21
EN: After 3 decent bear bars, probably the first reversal up will fail.
36:21 - 36:24
EN: So, I’d rather sell at the high of the prior bar.
36:24 - 36:28
EN: So rather than buying this as a Double Bottom here or Double Bottom here,
36:28 - 36:31
EN: I’m going to look to sell at the high of that bar.
Slide 019
Time: 36:35
Bilingual Transcript
36:38 - 36:40
EN: Four consecutive Sell Climaxes.
36:40 - 36:44
EN: Every trend bar, every series of trend bars, is a breakout and a climax.
36:45 - 36:50
EN: This is a Sell Climax, a Sell Climax, Sell Climax, Sell Climax.
36:51 - 36:57
EN: Very Tight Bear Channel, and therefore each reversal up probably will be minor.
37:05 - 37:06
EN: The gaps are closing.
37:06 - 37:08
EN: We have a breakout point; we went above the high.
37:08 - 37:10
EN: Breakout point, we went above the high.
37:10 - 37:14
EN: Here we have an open gap, so possible Measured Move down.
Slide 020
Time: 37:20
Bilingual Transcript
37:21 - 37:23
EN: The bears were trying to reverse up.
37:23 - 37:26
EN: Low 1, Low 2, reasonable to short.
37:26 - 37:28
EN: It’s also a Double Top.
37:28 - 37:32
EN: Here, you can call it a Double Top with these two highs or a Triangle.
37:32 - 37:35
EN: In any case, it’s a reasonable short,
37:35 - 37:37
EN: betting on at least a little trend resumption down.
37:37 - 37:40
EN: So, you sell here below that bear bar.
37:45 - 37:50
EN: The bulls see this as a Trading Range as well, and therefore they’re looking
37:50 - 37:53
EN: to buy a reversal up – and we have a reversal up here.
37:53 - 37:55
EN: You can call this a Triangle.
37:55 - 37:57
EN: Reversal down, reversal down, reversal down.
37:57 - 38:00
EN: I don’t have the trend line, but this is a bear break
38:00 - 38:03
EN: below a channel late in a bear trend.
38:03 - 38:08
EN: Therefore, most bears will exit on a reversal up.
38:14 - 38:19
EN: We’re rallying here, and traders will look for reasons to sell,
38:19 - 38:23
EN: betting that a Trading Range is more likely than a bull trend.
38:29 - 38:30
EN: Different ways to count this.
38:30 - 38:33
EN: You can count it as a Low 1, Low 2, Low 3,
38:33 - 38:37
EN: a failed breakout above the top of this Tight Trading Range.
38:37 - 38:41
EN: The math is reasonable for at least a scalp down.
38:45 - 38:47
EN: We got a bear breakout and then we’re testing back
38:47 - 38:50
EN: above the sell entry price, the signal bar low.
38:52 - 38:56
EN: A lot of bears will sell below that test bar, below this bear bar,
38:56 - 39:00
EN: betting that the bulls failed and that we’re going lower.
39:04 - 39:07
EN: Here’s a Low 2 – Low 1, Low 2.
39:07 - 39:08
EN: Okay to sell that.
39:08 - 39:11
EN: If you take a sell either below this bar or that bar,
39:11 - 39:16
EN: stop is probably up here because we could get a slightly Higher High.
39:16 - 39:17
EN: Fairly common.
39:17 - 39:20
EN: It’s okay to short instead below this bar.
Slide 021
Time: 39:25
Bilingual Transcript
39:26 - 39:29
EN: I gave some day trading examples for swing trades today,
39:29 - 39:31
EN: and I talked a little bit more about management.
39:36 - 39:37
EN: I’m Al Brooks.
39:37 - 39:39
EN: Thank you for watching the Brooks Trading Course.
39:39 - 39:43
EN: This is the fourth of six videos on swing trading.