al-brooks-course
50C - Scalping
Raw transcript and slide notes for 50C - Scalping.
Overview
- Slides: 24
- Transcript segments: 666
- 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.
00:05 - 00:08
EN: This is the third of five videos on scalping.
Slide 001
Time: 00:09
Bilingual Transcript
00:12 - 00:18
EN: Ticks are an indicator, and most brokers provide data on ticks.
00:19 - 00:24
EN: The New York Stock Exchange has about 3,000 stocks – for example, IBM
00:24 - 00:27
EN: - and if IBM goes up on the current trade,
00:27 - 00:31
EN: then it has a tick value of +1 in the ticks index.
00:31 - 00:36
EN: If Apple goes down on the current trade compared to the last trade,
00:36 - 00:38
EN: it has a value of -1.
00:39 - 00:45
EN: The ticks indicator is the sum of all of those +1’s and -1’s.
00:45 - 00:48
EN: Stocks that are unchanged have a value of zero.
00:49 - 00:52
EN: Ticks provide a tool to find some trades.
00:52 - 00:56
EN: If the ticks are constantly above zero, the market is bullish.
00:56 - 00:58
EN: Traders typically look to buy.
00:58 - 01:02
EN: If the ticks are below zero, the market is bearish and traders look to sell.
01:03 - 01:05
EN: There are also tick divergences.
01:05 - 01:10
EN: In an extremely strong market, the price can get higher and higher
01:10 - 01:14
EN: - the price of the Emini – and the tick value can get less high.
01:14 - 01:19
EN: That often signals an upcoming reversal.
01:20 - 01:23
EN: Finally, I want to talk about gap open bars.
01:23 - 01:27
EN: On the 5-minute chart of the Emini – well in fact, any timeframe
01:27 - 01:31
EN: - if the current bar opens above the close of the last bar,
01:31 - 01:34
EN: there’s a gap, and that’s a gap open bar.
01:35 - 01:39
EN: Also, if the current bar opens below the close of the prior bar,
01:39 - 01:41
EN: that is also a gap bar.
01:41 - 01:47
EN: If you have a series of gap up bars and the bars are bull trend bars,
01:47 - 01:50
EN: that is bullish and it usually leads to higher prices.
01:50 - 01:54
EN: If you have a series of gap down bars within a series of bear bars,
01:54 - 01:59
EN: that’s a sign of very aggressive selling, and it usually leads to lower prices.
Slide 002
Time: 02:01
Bilingual Transcript
02:03 - 02:09
EN: I have a 1-minute chart of the Emini, and I have the tick chart down below,
02:09 - 02:11
EN: a 1-minute chart of the ticks.
02:11 - 02:13
EN: The red line is -1,000.
02:13 - 02:20
EN: The top red line is +1,000, and then the blue lines are +700 and -700.
02:29 - 02:32
EN: The New York Stock Exchange has about 3,000 stocks on the exchange.
02:33 - 02:39
EN: If the current trade of a stock is above the last trade, that adds +1 to the ticks.
02:39 - 02:44
EN: If the current trade is the same as the last trade, it adds 0 to the ticks.
02:45 - 02:51
EN: If the stock is now trading below its last trade, it adds -1 to the ticks.
02:56 - 03:00
EN: The current tick value on the chart below is the sum
03:00 - 03:04
EN: of all the ticks for the 3,000 or so stocks.
03:04 - 03:08
EN: If the ticks equal 1,000 – here, slightly above 1,000
03:08 - 03:13
EN: - then 1,000 more stocks went up than down on the last trade.
03:19 - 03:25
EN: For example, let’s say right here, at that instant 600 stocks were unchanged
03:25 - 03:28
EN: (their last trade was the same as the trade before),
03:28 - 03:34
EN: and 2,200 stocks went up (the current trade is above the prior trade),
03:34 - 03:37
EN: and 1,200 stocks traded below their last price.
03:38 - 03:45
EN: Then the value of the ticks is 0, +2200, -1200, and you get a 1,000 tick reading.
03:45 - 03:50
EN: The opposite took place down here, where you got a -1,000 tick reading.
03:51 - 03:56
EN: You can see the low of that bar was -1,009.
03:56 - 04:01
EN: That means there were 1,009 more stocks on the New York Stock Exchange
04:01 - 04:05
EN: that went down on their last trade compared to those that went up.
04:08 - 04:13
EN: The high of this bar on the tick chart is 1,052.
04:13 - 04:16
EN: Therefore, the difference between the number of stocks
04:16 - 04:18
EN: that went up on their last trade compared to the number of stocks
04:18 - 04:22
EN: that went down on the last trade was 1,052.
04:22 - 04:24
EN: That means most stocks are going up.
04:25 - 04:30
EN: It makes sense that if most stocks are going up, then the indices would go up.
04:30 - 04:34
EN: The Emini is the futures contract based upon the S&P 500 contract.
04:34 - 04:38
EN: Not the New York Stock Exchange, but a very high degree of correlation.
Slide 003
Time: 04:40
Bilingual Transcript
04:46 - 04:51
EN: If the Emini is sideways to up and then has a bear breakout,
04:51 - 04:57
EN: traders look for the first reading below -700 or even below -1,000 as a sign
04:57 - 04:58
EN: that the momentum down is strong.
04:58 - 05:00
EN: Most stocks are going down.
05:00 - 05:04
EN: When that’s the case, usually the first reversal up will fail
05:04 - 05:06
EN: and the market will go at least a little bit lower.
05:09 - 05:11
EN: Very strong bear breakout.
05:11 - 05:15
EN: Even without looking at the ticks, you know the odds are high the first reversal up
05:15 - 05:17
EN: will fail and lead to a new low.
05:18 - 05:20
EN: Traders watch the ticks.
05:20 - 05:25
EN: When they see a new bear breakout and a tick reading below -1,000,
05:25 - 05:27
EN: some of them will sell instantly at the market,
05:27 - 05:30
EN: thinking that the market will go at least a little bit lower.
05:30 - 05:32
EN: It’s a reasonable scalp trade.
05:35 - 05:37
EN: They might sell the close of the next bar.
05:37 - 05:41
EN: They might sell at the market as soon as the tick reading hit -1,000.
05:41 - 05:43
EN: They might sell above a reversal bar,
05:43 - 05:49
EN: betting that the first reversal up will fail and you’ll have to have a Higher Low
05:49 - 05:53
EN: in ticks and a Lower Low in price before there’s much chance of a bounce.
05:55 - 05:59
EN: In the Emini, it’s a high probability trade for a 1 point scalp.
06:04 - 06:08
EN: If a trader sold that close and scaled in, sold more 1 point higher,
06:08 - 06:10
EN: his stop would be all the way up here.
06:10 - 06:12
EN: He’s never going to let that stop get hit.
06:12 - 06:14
EN: He would exit long before then.
06:14 - 06:17
EN: However, he would sell the close, sell more higher,
06:17 - 06:21
EN: and then possibly look to get out breakeven on his first entry
06:21 - 06:24
EN: and then with a 1 point scalp on his second entry.
06:24 - 06:30
EN: Or he could exit at the low, thinking that the odds were high the low in ticks
06:30 - 06:32
EN: will not be the low in price.
06:32 - 06:34
EN: Price will go down a little bit more.
06:38 - 06:42
EN: Here, ticks fell almost to the blue line, -700,
06:42 - 06:44
EN: but we’re getting near the end of the day.
06:44 - 06:45
EN: Remember, this is a 1-minute chart.
06:45 - 06:48
EN: You can see it’s already 12:50 Pacific Time,
06:48 - 06:50
EN: so there’s not much trading left to the day,
06:51 - 06:56
EN: and therefore selling with limit orders on a rally is a risky thing to do.
Slide 004
Time: 07:00
Bilingual Transcript
07:05 - 07:07
EN: When the bears see this very strong reading in ticks
07:07 - 07:11
EN: during an initial bear breakout, the start of a possible bear trend,
07:11 - 07:12
EN: they’ll sell for any reason.
07:12 - 07:16
EN: They’ll sell the close of the bar that hit -1,000.
07:16 - 07:18
EN: They’ll sell a reversal up.
07:18 - 07:23
EN: Here we got a small Double Top bear flag – this high and then that high.
07:23 - 07:24
EN: So Low 1, Low 2.
07:24 - 07:25
EN: Sell that for a scalp.
07:25 - 07:29
EN: We have a strong rally up, but again, it’s a 1-minute chart.
07:29 - 07:31
EN: First pullback to the Moving Average.
07:31 - 07:32
EN: Traders will look to sell.
07:33 - 07:36
EN: After 6 bull bars, they might take the second entry down,
07:36 - 07:39
EN: which would be to sell below this bear bar closing on its low.
07:40 - 07:42
EN: Again, this is a 1-minute chart,
07:42 - 07:44
EN: and most traders should not be trading the 1-minute chart.
07:44 - 07:48
EN: However, these are the kinds of things that scalpers will do
07:48 - 07:52
EN: when they see a dramatic drop in ticks or a dramatic rally in ticks.
07:52 - 07:56
EN: They’ll do the opposite up here, expecting the high in ticks
07:56 - 07:58
EN: will not be the final high in price.
08:03 - 08:07
EN: Remember, these are scalps, so traders are looking to exit with a 1 point profit.
08:07 - 08:11
EN: The range here, while it looks big, is really not all that big.
08:11 - 08:14
EN: This is a 1-minute chart, and this is about a 6 point range,
08:14 - 08:17
EN: and therefore scalping for 1 point is reasonable.
Slide 005
Time: 08:20
Bilingual Transcript
08:25 - 08:29
EN: If the market is sideways to down but then has a bull breakout,
08:29 - 08:31
EN: traders look for the first tick reading
08:31 - 08:35
EN: above 700 (the blue line) or above 1,000.
08:35 - 08:39
EN: Once they see it, they expect the market to go a little bit higher.
08:42 - 08:44
EN: Here, you can see we touched the blue line,
08:44 - 08:47
EN: 700 in ticks, and we’re in a bear trend.
08:47 - 08:49
EN: We’re getting a pretty good reversal.
08:49 - 08:50
EN: Again, 1-minute chart.
08:50 - 08:51
EN: It’s a scalp.
08:51 - 08:56
EN: A lot of traders will buy at the market or they’ll buy a 1 point pullback
08:56 - 09:02
EN: on the first touch of +700 on a reversal up, expecting that the market
09:02 - 09:04
EN: will go at least high enough up for a scalp.
09:08 - 09:13
EN: Let’s say you buy the close of that bar when it first hit a tick reading of 700.
09:13 - 09:16
EN: You can buy more lower, betting that the odds
09:16 - 09:18
EN: are high you’ll be able to make a profit.
09:23 - 09:26
EN: So, for example, you buy a 1 point pullback from the first entry,
09:26 - 09:29
EN: and then you get out breakeven on your first entry
09:29 - 09:32
EN: and then with a 1 point scalp on your second entry.
Slide 006
Time: 09:35
Bilingual Transcript
09:39 - 09:41
EN: You can buy for any reason.
09:41 - 09:45
EN: You can buy at the close of the bar that hit 1,000.
09:45 - 09:48
EN: You can buy below its low, a bull bar, a bad sell.
09:48 - 09:49
EN: You can buy 1 point down.
09:49 - 09:52
EN: You can buy at a pullback to the 1-minute Moving Average.
09:52 - 09:55
EN: Your risk is at least below here,
09:55 - 09:57
EN: so you’re risking 3 or 4 points to make a 1 point scalp.
09:58 - 10:02
EN: If you manage the trade properly and are willing to scale in
10:02 - 10:07
EN: and are quick to decide that the trade is bad, it’s a profitable strategy.
10:07 - 10:09
EN: There are many “ifs” in that sentence.
10:14 - 10:16
EN: Some traders will exit with a 1 point scalp,
10:17 - 10:19
EN: wherever they bought – below bars, above bars.
10:24 - 10:26
EN: Very strong bull breakout.
Slide 007
Time: 10:25
Bilingual Transcript
10:26 - 10:27
EN: Ticks hit 1,000.
10:27 - 10:31
EN: They went above 1,000, and therefore a new high in ticks
10:31 - 10:33
EN: and a new extreme in ticks.
10:33 - 10:34
EN: Very bullish.
10:34 - 10:35
EN: Most stocks are going up.
10:35 - 10:37
EN: Traders will buy at the market.
10:37 - 10:39
EN: They’ll buy a reversal down, they’ll buy a resumption up,
10:39 - 10:45
EN: betting that the final price will be above the price when ticks hit 1,000.
10:45 - 10:51
EN: Usually the high in ticks does not correspond to the final high in price.
10:51 - 10:54
EN: Usually price goes higher after you get an extreme reading
10:54 - 10:56
EN: of ticks early in a trend.
11:03 - 11:06
EN: Traders will therefore bet the first reversal down will fail.
11:06 - 11:07
EN: They’ll buy below the bull bar.
11:07 - 11:09
EN: They’ll buy above the High 1.
11:09 - 11:11
EN: We have a little pullback.
11:11 - 11:13
EN: They’ll look to buy at the Moving Average.
11:16 - 11:18
EN: They’ll buy the breakout of this small bull flag
11:18 - 11:21
EN: - bull breakout, small pullback, it’s a bull flag
11:26 - 11:29
EN: - and then look to take profits about a point higher.
11:29 - 11:33
EN: If they buy up here, their stop is probably going to be below the bottom
11:33 - 11:35
EN: of this very strong bull breakout.
11:35 - 11:40
EN: It should not fall below here, if in fact the trade is good.
11:42 - 11:46
EN: First pullback to the Moving Average, a Double Bottom bull flag.
11:46 - 11:47
EN: A breakout.
11:47 - 11:51
EN: Again, this is a 1-minute chart, and most traders should not be doing this.
11:51 - 11:56
EN: However, scalpers – experienced scalpers – do trade like this.
11:56 - 11:59
EN: They look for all kinds of little tricks on the tick chart
11:59 - 12:02
EN: to help them find trades on the Emini chart.
Slide 008
Time: 12:05
Bilingual Transcript
12:11 - 12:15
EN: Now here, again, we’re hitting 1,000 in ticks.
12:15 - 12:20
EN: The first time during a rally that has gone on for 30, 40, 50 bars.
12:22 - 12:23
EN: Look at the rally.
12:23 - 12:25
EN: It’s a stair-step pattern.
12:25 - 12:27
EN: We have a breakout, a pullback below the breakout.
12:27 - 12:30
EN: A new high and a pullback below the breakout.
12:30 - 12:31
EN: A new high.
12:31 - 12:33
EN: We’re probably going to pull back below the breakout,
12:33 - 12:37
EN: and we’re also probably near the potential top of a Trading Range.
12:37 - 12:40
EN: This looks like a bull leg in a Trading Range.
12:41 - 12:43
EN: When that’s the case, when you get an extreme reading
12:43 - 12:47
EN: in ticks occurring late in a trend, you have to be careful
12:47 - 12:50
EN: that it might be an exhaustive end of the trend
12:50 - 12:53
EN: and not the start of an even stronger part of the trend.
12:54 - 12:59
EN: Again, subjective, but in general if you’re looking to buy ticks,
12:59 - 13:02
EN: you want to buy them early in a trend, not late in a trend.
13:02 - 13:06
EN: Late in a trend, it’s more likely to be a climactic end of the trend
13:06 - 13:08
EN: than the start of an even stronger leg up.
13:11 - 13:12
EN: We’re stair-stepping up.
13:12 - 13:14
EN: We go above this high, we pull back.
13:14 - 13:15
EN: Above this high, we pull back.
13:15 - 13:18
EN: Above this Double Top, we pull back.
13:18 - 13:20
EN: Well, what do you think is going to happen
13:20 - 13:22
EN: when we get above this high and this high?
13:22 - 13:23
EN: We’re probably going to pull back.
13:24 - 13:28
EN: With this many stairs, chances are the market’s going to enter
13:28 - 13:32
EN: a Trading Range fairly soon, or possibly even a bear trend,
13:32 - 13:37
EN: and therefore buying a new high reading in ticks is a low probability bet.
13:44 - 13:48
EN: A possible blow-off in ticks, possible blow-off in the stock market.
13:48 - 13:52
EN: Traders will wait to see if the bears get stronger.
13:52 - 13:55
EN: For example, like a very Tight Bear Channel,
13:55 - 13:57
EN: in which case they’ll stop looking to buy.
13:58 - 14:02
EN: You want high tick readings early in a reversal or early in a trend.
14:02 - 14:06
EN: Those have a high probability of follow-through trading.
14:09 - 14:12
EN: Again, we have a 1-minute Emini chart, a 1-minute tick chart.
Slide 009
Time: 14:10
Bilingual Transcript
14:17 - 14:18
EN: Look at this.
14:18 - 14:21
EN: The ticks hit about -1,000.
14:21 - 14:23
EN: I don’t know if it’s quite there, but very close to it on this bar.
14:26 - 14:28
EN: It’s also a fourth new low in ticks.
14:28 - 14:33
EN: Ticks made a new low here, a new low here, new low here, new low here.
14:39 - 14:42
EN: This is a possible climactic end of a trend.
14:42 - 14:47
EN: Usually the low value in ticks is not the final low value in price.
14:47 - 14:51
EN: Here we have ticks almost to 1,000, -1,000, and here’s the price.
14:51 - 14:54
EN: Usually that will not be the end of the trend.
14:54 - 14:57
EN: Usually you’ll get at least a little bit lower price
14:57 - 14:59
EN: and a higher value in ticks.
14:59 - 15:02
EN: You get some kind of divergence, a tick divergence,
15:02 - 15:04
EN: and it leads to at least a bounce.
15:06 - 15:10
EN: Again, a low tick reading, -1,000, late in a trend
15:10 - 15:14
EN: - especially a trend that’s stair-stepping down either in price or in ticks
15:14 - 15:18
EN: - there’s a higher chance that it is a climactic end of the trend
15:18 - 15:21
EN: rather than an acceleration into an even stronger trend.
Slide 010
Time: 15:25
Bilingual Transcript
15:26 - 15:29
EN: I want to talk now about tick divergences.
15:29 - 15:34
EN: Sometimes when you have a Buy Climax, the highs of the ticks will get less,
15:34 - 15:36
EN: and sometimes the buying will get less as well,
15:36 - 15:40
EN: and it often leads to a scalp in the opposite direction.
15:40 - 15:42
EN: The opposite’s true at a low.
15:42 - 15:47
EN: If you have a series of Sell Climaxes, the tick value can get less negative
15:47 - 15:50
EN: and it can result in a buy setup.
Slide 011
Time: 15:51
Bilingual Transcript
15:54 - 15:55
EN: Stock market is rallying.
15:55 - 15:56
EN: Emini 1-minute chart.
15:56 - 15:59
EN: We have a new high in price, but look at this.
15:59 - 16:05
EN: Ticks hit 1,000 over here, and we have a new high in price
16:05 - 16:06
EN: and a Lower High in ticks.
16:07 - 16:11
EN: Therefore, fewer stocks are going up compared to the number of stocks
16:11 - 16:14
EN: that went up over here, yet the prices are going higher.
16:14 - 16:19
EN: Then here, we have a strong breakout to a new high, and look at ticks.
16:19 - 16:24
EN: We have fewer stocks trading above their last trade at this Higher High
16:24 - 16:26
EN: in price than what we had over here.
16:26 - 16:29
EN: This is a tick divergence, and it increases the chances
16:29 - 16:33
EN: that the bull trend will either turn into a bear trend
16:33 - 16:34
EN: or a Trading Range very soon.
16:38 - 16:43
EN: The high in ticks, the first time you hit 1,000, usually not the end of the move.
16:43 - 16:47
EN: We went up a little bit more, and then we went up more again 30 bars later.
16:53 - 16:58
EN: Bulls will buy the first high in ticks, which would be over here,
16:58 - 17:02
EN: or they’ll buy the reversal down, betting that the first reversal down will fail.
17:07 - 17:12
EN: The traders who did buy this breakout, some of them will buy more lower.
17:12 - 17:15
EN: If they bought this, they might buy more lower as well.
17:15 - 17:18
EN: They always want the second entry to be at least as big
17:18 - 17:20
EN: as a scalp below their first entry,
17:20 - 17:23
EN: and then they look to get out at their first entry.
17:23 - 17:27
EN: For example, if you bought that high close and you bought more down here,
17:27 - 17:29
EN: this entry, you want it to be at least a point below that
17:29 - 17:32
EN: so that when it gets back to that high close,
17:32 - 17:36
EN: you get out with a 1 point scalp here and you can get out breakeven here.
Slide 012
Time: 17:40
Bilingual Transcript
17:46 - 17:48
EN: The Emini sold off at this price.
17:48 - 17:51
EN: It pulled back at around that price again,
17:51 - 17:54
EN: and it might pull back when it’s up at that price a third time.
17:55 - 17:56
EN: We’re getting a tick divergence.
17:57 - 18:00
EN: You can see at this price, we have ticks here,
18:00 - 18:03
EN: and the ticks here, later, are lower.
18:03 - 18:07
EN: So, we have a tick divergence from this high to that high, ticks getting lower,
18:08 - 18:11
EN: and we have a tick divergence from this high to that high.
18:13 - 18:15
EN: So, ticks getting lower.
18:15 - 18:19
EN: That increases the chances that this is near the end of the move
18:19 - 18:20
EN: and that the rally might soon be converting
18:20 - 18:23
EN: into either a Trading Range or a bear trend.
18:24 - 18:29
EN: I had a friend years ago – I traded with him for a year or two in a chatroom,
18:29 - 18:31
EN: and this is what he did all day long.
18:31 - 18:36
EN: He would simply look at a 1-minute chart of the Emini versus ticks
18:36 - 18:39
EN: and look for one or two tick divergences a day.
18:39 - 18:43
EN: He was trading 25 contracts, looking for a 1 point scalp.
18:44 - 18:47
EN: I have no idea whether or not he was profitable.
18:47 - 18:51
EN: However, the way he talked made me believe that he was profitable,
18:51 - 18:54
EN: that he was picking the right trades to fade.
18:58 - 19:02
EN: We have a bull trend on the 1-minute chart, and it’s pretty strong right here.
19:03 - 19:07
EN: Therefore, only experts should ever consider selling a tick divergence
19:07 - 19:09
EN: in a reasonably strong bull trend.
19:09 - 19:13
EN: It’s just too easy to make mistakes – and remember, this is a 1-minute chart,
19:13 - 19:16
EN: and most traders should not be trading the 1-minute chart.
19:16 - 19:20
EN: However, as I said, experienced traders are looking for scalps,
19:20 - 19:25
EN: and some of them do trade 1-minute tick divergences and 1-minute tick extremes.
19:30 - 19:35
EN: Ticks are going down over here.
19:36 - 19:41
EN: Traders will expect that this bear reversal, 20 bars or so,
19:41 - 19:44
EN: is probably enough so that we’re converting into a Trading Range.
19:45 - 19:46
EN: This looks like Trading Range price action.
19:46 - 19:48
EN: This looks like Trading Range price action.
19:48 - 19:52
EN: Traders therefore will look to sell at a prior high,
19:52 - 19:55
EN: especially when the ticks are at a Lower High.
19:59 - 20:03
EN: They’ll sell either with a limit order at that prior high or on a reversal down.
20:03 - 20:07
EN: Here we have an ioi and a bear bar closing on its low.
20:07 - 20:10
EN: Some traders will sell on a stop below that bear bar
20:11 - 20:14
EN: and then try to exit 1 or 2 points down.
Slide 013
Time: 20:20
Bilingual Transcript
20:21 - 20:22
EN: Tick divergence.
20:22 - 20:28
EN: Here we got a very strong Sell Climax, and the low in ticks is about -1,000.
20:28 - 20:30
EN: That’s probably not going to be the low in price.
20:30 - 20:34
EN: However, if we make a low in price and ticks do not make a new low,
20:34 - 20:37
EN: that increases the chances that we’ll get a reversal
20:37 - 20:39
EN: at least into a Trading Range.
20:44 - 20:50
EN: The first time down – ticks to -1,000 in a new bear breakout
20:50 - 20:52
EN: - traders will sell for any reason.
20:52 - 20:57
EN: They’ll sell bear closes, they’ll sell above bars, they’ll sell reversals down,
20:57 - 20:59
EN: looking for at least a scalp,
20:59 - 21:02
EN: expecting the Emini to make at least one more new low.
21:05 - 21:09
EN: Then they try to exit at the prior low or with a 1 point scalp.
Slide 014
Time: 21:15
Bilingual Transcript
21:19 - 21:22
EN: If the Emini is at a confluence of support
21:22 - 21:24
EN: - for example, you don’t see the bars to the left here,
21:24 - 21:28
EN: but if this is the 5-minute Moving Average and a Wedge Bottom
21:28 - 21:31
EN: on the 5-minute chart, a 50% pullback of a rally
21:31 - 21:35
EN: - if there are many things going on here that increase the probability
21:35 - 21:39
EN: that bulls will come in, if you then also see a tick divergence,
21:39 - 21:43
EN: this could be the end of the pullback and it could lead to a resumption
21:43 - 21:46
EN: of the rally that you see on the higher timeframe chart.
21:47 - 21:51
EN: When that happens, bulls will start buying at prior lows in price,
21:52 - 21:55
EN: expecting that the tick divergence will lead to at least a bounce
21:55 - 21:58
EN: and possibly a resumption of the bull trend on the higher timeframe chart.
22:03 - 22:06
EN: Again, you have a very strong bear breakout.
22:07 - 22:11
EN: Buying in a very strong bear trend based upon anything, a tick divergence,
22:11 - 22:14
EN: is a very difficult way to make a living.
22:15 - 22:17
EN: Only expert traders should consider doing this.
22:22 - 22:25
EN: There are many decisions that a trader has to make
22:25 - 22:29
EN: when trading a 1-minute chart in a tick divergence.
22:29 - 22:35
EN: Most beginners cannot make the decisions accurately fast enough in the time
22:35 - 22:38
EN: that they have on a 1-minute chart, and therefore it’s a dangerous strategy.
22:42 - 22:46
EN: If an expert trader did buy the reversal up, he could scalp,
22:46 - 22:50
EN: get out with a 1 point scalp, or he could hold for a swing trade,
22:50 - 22:54
EN: especially if this is at a support area on a higher timeframe chart,
22:54 - 22:55
EN: like the 5-minute chart.
Slide 015
Time: 23:00
Bilingual Transcript
23:05 - 23:07
EN: Here the market’s in a bear trend.
23:07 - 23:12
EN: Some traders will watch tick rallies when the Emini is in a bear trend,
23:12 - 23:16
EN: expecting the tick rallies to correspond to a bear flag on the 1-minute chart,
23:16 - 23:18
EN: and therefore they’ll look to sell.
23:18 - 23:24
EN: For example, strong bull close above zero in ticks probably is not going to lead
23:24 - 23:27
EN: to a tick reversal if the ticks have been mostly negative.
23:29 - 23:32
EN: Sometimes they’ll sell with limit orders at prior highs and ticks.
23:33 - 23:37
EN: We have ticks going above this high, and as soon as that happens,
23:37 - 23:40
EN: an Emini trader might sell at the market,
23:40 - 23:42
EN: looking for at least a little bit lower in price.
23:42 - 23:45
EN: Again, a new high in ticks, but in a bear trend,
23:45 - 23:49
EN: so as soon as it happens some traders might sell at the market,
23:49 - 23:52
EN: expecting that they’ll be able to make at least a scalp.
23:55 - 23:57
EN: Ticks going above the prior high in ticks.
23:58 - 24:00
EN: Traders sell at the market, looking for a scalp down.
24:05 - 24:08
EN: This high in ticks is above that high in ticks,
24:08 - 24:11
EN: and traders will therefore look to sell at the market
24:11 - 24:14
EN: when this bar goes above the high of that tick bar,
24:14 - 24:16
EN: looking for at least a 1 point scalp.
Slide 016
Time: 24:20
Bilingual Transcript
24:23 - 24:25
EN: We have a Wedge in price – one, two, three
24:26 - 24:30
EN: - a Wedge Bottom, and ticks are making a Higher Low.
24:30 - 24:35
EN: We’re getting a tick divergence, a new low in price, a Higher Low in ticks.
24:35 - 24:38
EN: Often leads to a transition into a Trading Range.
24:43 - 24:46
EN: Then look what’s taking place over here.
24:46 - 24:48
EN: The market’s sideways in a bear trend.
24:48 - 24:52
EN: After about 20 or 30 bars, the probability of trend reversal up
24:52 - 24:56
EN: is about the same as trend resumption down.
24:56 - 24:58
EN: But take a look at what took place here.
24:58 - 25:01
EN: Most of the ticks are above zero.
25:01 - 25:04
EN: That increases the chances that we’ll get a bull breakout.
25:04 - 25:07
EN: In any case, because the market’s in a Trading Range,
25:08 - 25:11
EN: bulls will look to buy whenever the ticks get near prior lows
25:11 - 25:13
EN: or slightly below prior lows.
25:16 - 25:19
EN: Here you can see we were right at that low and we got a little bounce.
25:19 - 25:24
EN: Bulls might buy here, risk 2 or 3 points, and try to get a 1 point scalp.
25:27 - 25:29
EN: Again, ticks are at this prior low.
25:30 - 25:31
EN: Bulls will look to buy.
25:34 - 25:39
EN: Now we’re starting to get a bull breakout, and we’re getting a big bear bar.
25:40 - 25:43
EN: Again, ticks are at the prior low in ticks.
25:43 - 25:47
EN: Every time the market has been here, the selling has stopped.
25:47 - 25:49
EN: We’re getting a little bit of a bounce.
25:49 - 25:53
EN: Bulls will buy this little tail at the prior low in ticks
25:53 - 25:56
EN: because every time the market gets to this tick level,
25:57 - 25:59
EN: we’ve been getting a bounce in ticks,
25:59 - 26:01
EN: and it usually corresponds to a bounce in price.
26:06 - 26:08
EN: It can be the start of a swing, but I’m talking about scalps,
26:08 - 26:11
EN: and most traders taking that kind of a trade will scalp.
Slide 017
Time: 26:10
Bilingual Transcript
26:17 - 26:19
EN: I mentioned that we had a bear trend
26:19 - 26:22
EN: and we were sideways for about 30 bars, maybe 40 bars.
26:22 - 26:24
EN: But look at ticks during that time.
26:29 - 26:33
EN: Ticks are mostly above zero, yet price is below the Moving Average
26:33 - 26:35
EN: and we’re in a bear trend.
26:35 - 26:38
EN: That increases the chances that we’re going to get a bull breakout.
26:38 - 26:42
EN: Also, we have several tick readings around 700.
26:42 - 26:45
EN: We have no tick readings around -700.
26:45 - 26:49
EN: So ticks are getting bullish and price is neutral.
26:49 - 26:51
EN: That increases the chances that we’ll get a bull breakout.
Slide 018
Time: 26:55
Bilingual Transcript
26:56 - 27:00
EN: If the current bar opens above or below the close of the prior bar,
27:00 - 27:03
EN: that is a gap open bar, and sometimes
27:03 - 27:07
EN: that can be useful in making decisions on your trades.
Slide 019
Time: 27:08
Bilingual Transcript
27:12 - 27:16
EN: If you have a gap open, it can increase the probability of a trend continuing
27:16 - 27:20
EN: or it can increase the probability of a trend reversing, depending on the context.
27:25 - 27:28
EN: It’s good to help traders find scalps.
27:28 - 27:32
EN: Also, if you’re in a strong trend, it’s a good sign that a trend is strong
27:32 - 27:36
EN: and you can enter in the direction of the trend, expecting a swing.
27:40 - 27:43
EN: We’re in a bull trend, and then we have a bull flag
27:43 - 27:45
EN: - a High 1, High 2, both with bull bodies.
27:46 - 27:49
EN: Then we have this very big outside down bar.
27:49 - 27:53
EN: This looks like it’s reversing this strong bull bar,
27:53 - 27:58
EN: and therefore instead of a bull flag leading to a resumption of the bull trend,
27:58 - 28:01
EN: we’re getting a bear breakout below the bull flag.
28:01 - 28:02
EN: That’s bearish.
28:02 - 28:04
EN: Then look at the next bar.
28:04 - 28:07
EN: Its open is below the close of the prior bar.
28:07 - 28:09
EN: What does that tell you?
28:09 - 28:13
EN: It tells you that a lot of traders concluded by the close of this bar
28:13 - 28:17
EN: that the market’s probably going lower, and as soon as this bar closed,
28:17 - 28:20
EN: a lot of traders just hit the button to sell the market,
28:21 - 28:24
EN: and there were so many traders eager to sell at the close of this bar,
28:24 - 28:27
EN: the next bar opened below that close.
28:27 - 28:33
EN: That is a sign of eager bears or bulls eagerly giving up, desperate to give up.
28:34 - 28:36
EN: Then we have another bear bar here,
28:36 - 28:39
EN: and look what happened when the next bar opened.
28:39 - 28:40
EN: Another gap.
28:40 - 28:43
EN: The open of this bar is below the close of that bar
28:43 - 28:46
EN: - a sign of strong selling early in a bear trend.
28:46 - 28:50
EN: The market is probably going lower and probably will have a couple legs down.
28:50 - 28:53
EN: Therefore, traders are selling the close.
28:53 - 28:57
EN: As soon as they see that close, they’re hitting sell the close.
28:57 - 29:00
EN: That tells you that it’s probably a good thing to do as well.
29:01 - 29:06
EN: You either start to sell closes or you sell at the market,
29:06 - 29:08
EN: and you sell closes because you’re confident
29:08 - 29:10
EN: that one of two things is going to happen.
29:10 - 29:15
EN: One is the market will go straight down and you’ll be able to make a profit.
29:15 - 29:19
EN: Or if the market reverses, the reversal will be minor
29:19 - 29:24
EN: and either become a bear flag, in which case prices go lower,
29:24 - 29:28
EN: or become a Trading Range, in which case it’ll come down to your original sell
29:28 - 29:30
EN: and you’ll be able to get out without a loss.
29:36 - 29:37
EN: Look at this.
29:37 - 29:40
EN: We have a close here, and look at the open of the next bar,
29:40 - 29:43
EN: its open above the close of this bar.
29:43 - 29:44
EN: There’s a gap up.
29:44 - 29:49
EN: However, it’s a very strong bear trend, and the reversal up is minor.
29:50 - 29:53
EN: Also, the entry bar for the bulls above this bar is a doji,
29:53 - 29:54
EN: and the follow-through is a doji.
29:55 - 29:59
EN: This looks like a weak trend, and therefore this gap up
29:59 - 30:02
EN: is probably not going to lead to a reversal.
30:02 - 30:06
EN: It’s probably going to lead to a bear flag and lower prices.
30:06 - 30:11
EN: Traders will then either sell the open as soon as they see a gap above this close,
30:11 - 30:17
EN: or they’ll sell a bull bar, or they’ll look to sell after a reversal down.
30:17 - 30:21
EN: They expect that this gap up is not a sign of strong bulls;
30:21 - 30:23
EN: it’s a sign of a bear flag.
30:27 - 30:29
EN: Now look at this open.
30:29 - 30:34
EN: This bar, a big bear bar, and then the next bar opens below that close.
30:35 - 30:38
EN: It’s similar to this and this, and pretty much this.
30:38 - 30:42
EN: This opened at the close, but a strong bear bar followed
30:42 - 30:44
EN: by a strong open for the bears.
30:45 - 30:46
EN: What’s different this time?
30:47 - 30:48
EN: Consecutive Sell Climaxes.
30:49 - 30:54
EN: We have a Sell Climax, a Sell Climax, and then a second leg down
30:54 - 30:55
EN: and a very big bear bar.
30:55 - 30:58
EN: Just about the biggest bear bar in the entire bear trend.
30:58 - 31:02
EN: It’s therefore more likely to be an exhaustive end of the trend
31:02 - 31:04
EN: than the start of a new leg down.
31:05 - 31:10
EN: Experienced traders who see the biggest bear bar in about 20 bars in a bear trend,
31:10 - 31:14
EN: especially after a Low 2 late in the trend, a potential Final Flag,
31:14 - 31:18
EN: and then sideways bars, bull bars, tail – they will be thinking
31:18 - 31:22
EN: that this big bear bar is more likely an exhaustive end of the trend.
31:22 - 31:27
EN: They’ll either buy the close of that bar, or if they see it reverse up quickly,
31:27 - 31:31
EN: even if it’s a gap down, they’ll assume that the gap down is a trap
31:32 - 31:34
EN: and that the market’s going higher.
31:35 - 31:36
EN: Sell Climax.
31:36 - 31:38
EN: Low 2 bear flag.
31:38 - 31:40
EN: The biggest bear bar late in a trend.
31:41 - 31:43
EN: A lot of two-sided trading here, big tail here.
31:43 - 31:46
EN: Probably an exhaustive Sell Climax.
31:46 - 31:49
EN: The bulls will probably get at least a scalp
31:49 - 31:52
EN: and possibly a strong minor reversal up.
31:53 - 31:57
EN: A lot of bulls will just buy the close, and then when they see the gap down
31:57 - 32:01
EN: and the market start to reverse up, they’ll think that the bears are trapped
32:01 - 32:03
EN: and buying back their shorts.
Slide 020
Time: 32:10
Bilingual Transcript
32:11 - 32:12
EN: Here we have a gap up.
32:13 - 32:16
EN: The open of this bear bar is above the close of this bull bar.
32:16 - 32:18
EN: There’s a gap up here as well.
32:18 - 32:21
EN: The open of this bar is above the close of that bar.
32:21 - 32:23
EN: We have a strong reversal.
32:23 - 32:26
EN: However, it’s a very Tight Bear Channel,
32:26 - 32:28
EN: and the first reversal up is probably minor.
32:28 - 32:33
EN: It could go up a long way, but it’s still probably a minor reversal.
32:35 - 32:38
EN: Strong enough reversal up, a second leg up is likely.
32:38 - 32:42
EN: Some bulls will buy at the low of this bar and scale in lower,
32:42 - 32:48
EN: betting that we’ll get a Higher Low and either sideways or a second leg up.
32:52 - 32:57
EN: We have a gap down on this bar, following 3 dojis, and a second leg up is likely.
32:57 - 32:59
EN: It’s a small cup and handle pattern.
32:59 - 33:02
EN: We have a reversal and then a bull flag.
33:02 - 33:03
EN: The market’s probably going higher.
33:03 - 33:06
EN: Traders are looking for reasons to buy.
33:06 - 33:09
EN: They’ll either buy at the low of the prior bar
33:09 - 33:13
EN: or they’ll buy at the close of this bar, and if they see a gap down,
33:13 - 33:16
EN: a lot of traders, as soon as they see the gap down, will hit Buy the Market,
33:16 - 33:18
EN: looking for at least a scalp up.
33:20 - 33:21
EN: Tight Trading Range.
33:21 - 33:23
EN: If the market’s trying to break to the downside,
33:23 - 33:25
EN: the odds are it’s not going to get very far.
33:25 - 33:27
EN: If it tries to break to the upside,
33:27 - 33:30
EN: it’s probably not going to get very far as well.
33:30 - 33:36
EN: Also, the first reversal up in a very strong bear trend is still a minor reversal
33:36 - 33:39
EN: and the bear trend will probably resume.
33:39 - 33:43
EN: Once it resumes, then you might get a Major Trend Reversal.
33:43 - 33:46
EN: Here we have an attempt at a Higher Low Major Trend Reversal,
33:46 - 33:47
EN: and another one here.
33:47 - 33:49
EN: So now it’s a Double Bottom Higher Low.
33:50 - 33:52
EN: A lot of bear bars here.
33:52 - 33:53
EN: Probably a minor reversal.
33:53 - 33:55
EN: A lot of bear bars here.
33:55 - 33:58
EN: This is also probably a minor reversal.
34:02 - 34:03
EN: Bull bar.
34:03 - 34:06
EN: We have a bull bar, a doji – in other words, not a bear bar
34:06 - 34:08
EN: - another bull bar, and now we have a gap up,
34:08 - 34:11
EN: the open of this bar above the close of that bar.
34:11 - 34:15
EN: A lot of bulls will buy the close looking for at least a scalp up.
Slide 021
Time: 34:20
Bilingual Transcript
34:22 - 34:23
EN: Look at this rally.
34:23 - 34:24
EN: Spike, pullback, channel.
34:24 - 34:27
EN: On a smaller timeframe chart, it’s probably a Parabolic Wedge.
34:27 - 34:31
EN: We have a bull bar and then a pause, 2 bull bars and then a doji,
34:31 - 34:34
EN: a pause, and then a small rally.
34:34 - 34:35
EN: So, it’s a Spike and Channel.
34:35 - 34:42
EN: A Parabolic Wedge – first push or first push, second push, third push.
34:42 - 34:47
EN: It’s a breakout test of the low of the day and it’s about a 50% pullback.
34:48 - 34:51
EN: There’s a gap below the low of this bar and the Moving Average,
34:51 - 34:53
EN: and the same with all 4 of these bars.
34:53 - 34:56
EN: These are Moving Average Gap bars in a bear trend.
34:56 - 34:59
EN: It usually leads to a resumption of the bear trend.
35:00 - 35:04
EN: But when that bear trend resumes, there’s usually an attempt
35:04 - 35:07
EN: at a Major Trend Reversal after this minor reversal.
35:07 - 35:12
EN: The bulls got two Major Trend Reversal attempts, and both failed.
35:12 - 35:13
EN: That’s likely.
35:13 - 35:18
EN: All Major Trend Reversals only have about a 40% chance of leading to a swing up.
35:18 - 35:24
EN: 60% chance of a small profit, like here and here, or a small loss.
35:29 - 35:33
EN: Look at the open of this small bull doji and the close of that bear bar.
35:34 - 35:35
EN: There’s a gap up.
35:36 - 35:38
EN: Do you think this is a resumption of the trend?
35:38 - 35:40
EN: Well, we thought we were going to get two legs up
35:40 - 35:43
EN: after this Sell Climax – one, pullback, two.
35:43 - 35:48
EN: We have a series of gap bars to resistance and a minor reversal.
35:48 - 35:51
EN: The market’s probably going down for at least a couple legs.
35:51 - 35:54
EN: One and then maybe sideways and then two.
35:54 - 35:59
EN: Therefore, a lot of bears, when they see this gap up, think that it’s a bull trap.
35:59 - 36:03
EN: It’s trapping bulls into buying high, and aggressive bears
36:03 - 36:06
EN: will sell the close of that bull bar or sell at the market
36:06 - 36:10
EN: when they see that gap up, looking for at least a second leg down to support.
36:10 - 36:12
EN: Spike, pullback, channel.
36:12 - 36:14
EN: This is the beginning of the channel.
36:14 - 36:17
EN: This is probably two legs down to the area of the beginning of the channel.
36:18 - 36:20
EN: These are advanced trades.
36:20 - 36:24
EN: Beginners are not going to be taking these trades, but experts will take them.
Slide 022
Time: 36:28
Bilingual Transcript
36:31 - 36:34
EN: This open is above this close.
36:34 - 36:37
EN: The bulls tried to get a reversal; they failed.
36:37 - 36:39
EN: A lot of bulls bought that close.
36:39 - 36:43
EN: A lot of bulls, when they saw this bear close, thought it was a bear trap
36:43 - 36:48
EN: and were hoping that the market would immediately reverse up, as it did here.
36:49 - 36:51
EN: The close of this bar, the market never went below it.
36:51 - 36:54
EN: The bulls were so eager to buy that they bought the close
36:54 - 36:56
EN: and the market rallied strongly.
36:56 - 36:59
EN: The bulls were hoping that this was going to be the same case here,
36:59 - 37:02
EN: that it was going to be a bear trap.
37:02 - 37:06
EN: A big bear breakout below a bull flag, a bear breakout below a bull flag.
37:06 - 37:08
EN: The bears were hoping for this.
37:08 - 37:11
EN: However, this was a strong enough minor reversal
37:11 - 37:15
EN: that more traders thought we were going to try to resume up.
37:16 - 37:18
EN: Tight Bear Channel, a lot of bear bars.
37:18 - 37:20
EN: This is probably also going to be a minor reversal,
37:20 - 37:25
EN: even though when you look at it, it is a Higher Low Major Trend Reversal.
37:26 - 37:30
EN: Some bears might sell on the close of this bar,
37:30 - 37:31
EN: looking for a little bit more down.
37:31 - 37:36
EN: I suspect that more bulls bought it, and that’s why this close is above this bar.
37:36 - 37:39
EN: The bears got a small second leg down.
37:43 - 37:44
EN: Gap down.
37:45 - 37:48
EN: We have a gap up here and we have a gap down here,
37:49 - 37:50
EN: but look at the bars before the gap.
37:50 - 37:54
EN: A big bear bar – good – but then a couple dojis,
37:54 - 37:57
EN: testing the bottom of the channel, and a possible
37:57 - 38:01
EN: Higher Low Major Trend Reversal after gap bars in a bear trend
38:01 - 38:03
EN: and a very strong minor reversal up.
38:04 - 38:08
EN: A lot of traders, when they see the bear trend weakening, getting small body
38:08 - 38:14
EN: and smaller body, as soon as it opens below that close, a lot of bulls will buy,
38:14 - 38:16
EN: thinking that it’s not going lower
38:16 - 38:18
EN: and maybe it’ll be a Higher Low Major Trend Reversal.
38:18 - 38:21
EN: Experienced traders know the selloff is so tight,
38:21 - 38:24
EN: the reversal is probably going to be minor,
38:24 - 38:25
EN: and therefore they’re looking for a scalp.
38:25 - 38:27
EN: But it is a reasonable scalp.
38:27 - 38:33
EN: It’s also testing the high of this buy signal bar, and it’s around this price.
38:33 - 38:36
EN: The market reversed up, the market reversed up,
38:36 - 38:38
EN: the market reversed up at this price level,
38:38 - 38:40
EN: and now we’re testing that level again.
38:40 - 38:42
EN: We reversed up, we reversed up.
38:42 - 38:47
EN: A lot of bulls, as soon as they saw the market open below the close of that bar,
38:47 - 38:51
EN: they bought, betting that it would reverse up again.
38:54 - 38:57
EN: Low of this bar below the close of that bar.
38:58 - 38:59
EN: Tight Trading Range.
38:59 - 39:00
EN: Possible bull flag.
39:01 - 39:02
EN: Rally, pullback.
39:03 - 39:06
EN: A lot of bulls in a Tight Trading Range are looking for reasons to buy.
39:06 - 39:09
EN: They’ll buy below bars, like below this bar,
39:09 - 39:12
EN: and if the market gaps down below a close,
39:12 - 39:15
EN: they’ll buy looking for at least a small second leg up.
39:15 - 39:17
EN: Testing the top of the range.
39:17 - 39:22
EN: It sold off, sold off, sold off, sold off at this general price area.
39:22 - 39:25
EN: Therefore, it’s probably not going a lot higher.
39:26 - 39:29
EN: Even though Major Trend Reversal, very Tight Bear Channel,
39:29 - 39:32
EN: this is more likely going to be a bull leg in a Trading Range.
39:32 - 39:36
EN: Strong enough for a second leg up – one and then a two-legged pullback down.
39:36 - 39:39
EN: Reasonable to buy looking for at least a scalp up.
39:44 - 39:50
EN: Close of this bar is above the open of that bar – a sign of buying.
Slide 023
Time: 39:45
Bilingual Transcript
39:50 - 39:52
EN: But a tail on the top of the bull bar.
39:52 - 39:56
EN: 3 bear bars closing below their midpoints, having decent size bodies.
39:56 - 40:01
EN: Probably a strong enough reversal down for at least a small second leg down.
40:01 - 40:06
EN: Some bears, as soon as they saw this bar open above that close,
40:06 - 40:10
EN: thought it would be a bull trap, trapping traders into buying
40:10 - 40:13
EN: a possible Major Trend Reversal when we’re probably going
40:13 - 40:15
EN: to get at least a small second leg down.
40:20 - 40:24
EN: Now we have another attempt at a Higher Low Major Trend Reversal.
40:24 - 40:26
EN: It’s a big High 2.
40:26 - 40:31
EN: First leg down, so High 1, not a good-looking High 1, and then a second leg down.
40:31 - 40:32
EN: So, it’s a High 2.
40:32 - 40:34
EN: But a very Tight Bear Channel.
40:34 - 40:39
EN: Probably, again, a minor reversal like this, and it reversed up strongly
40:39 - 40:42
EN: but stalled at the top of the Trading Range.
40:42 - 40:44
EN: Reasonable to buy.
40:44 - 40:47
EN: We have a gap up above the close of this bull bar.
40:47 - 40:51
EN: That tells you that a lot of bulls think this is a Major Trend Reversal
40:51 - 40:54
EN: or a Double Bottom at the bottom of a Trading Range,
40:54 - 40:56
EN: and that the market should come up and test here.
40:56 - 40:59
EN: It might continue a lot higher, but it should come up
40:59 - 41:04
EN: and test near the top of the range – here, here, here, somewhere up here.
41:04 - 41:06
EN: Enough room for a scalp.
41:10 - 41:11
EN: Big gap up.
41:11 - 41:14
EN: The open of this bar above the close of this bar.
41:14 - 41:15
EN: But look to the left.
41:16 - 41:18
EN: What happened at this price prior?
41:19 - 41:22
EN: It sold off, it sold off, it sold off, it sold off.
41:22 - 41:25
EN: This is two legs up – one, pullback, two.
41:25 - 41:29
EN: Not a good location for a buy, especially late in the session.
41:30 - 41:32
EN: If you have a Buy The Close finish,
41:32 - 41:36
EN: normally it’ll last 4 or 5, 6 bars, and then you get a reversal.
41:36 - 41:41
EN: One, two, three, four, five, and you’re buying the close of the fifth bar.
41:41 - 41:42
EN: I would not do that.
41:42 - 41:45
EN: I think it’s more likely going to stall at the top of the range.
41:46 - 41:50
EN: At the end of the day, a Buy The Close rally and you get 4 or 5 bull bars,
41:50 - 41:54
EN: it’s usually better not to buy, especially at resistance.
41:54 - 41:59
EN: If traders do buy – if they buy the close of this bar or this bar –
41:59 - 42:02
EN: if they buy the close of this bar, they get filled here.
42:02 - 42:05
EN: If they buy the close of this bar, immediately reverses down.
42:05 - 42:07
EN: A Buy The Close finish, end of the day.
42:07 - 42:13
EN: Traders get out either 1 tick below a bear bar or 3 or 4 ticks below a bull bar.
42:13 - 42:17
EN: Once it gets 3 or 4 ticks below that bar, the bulls sell.
42:17 - 42:19
EN: The bears know the bulls sell.
42:19 - 42:21
EN: The bears sell as well for a scalp down.
Slide 024
Time: 42:25
Bilingual Transcript
42:25 - 42:29
EN: Ticks can be useful to help traders find scalps,
42:29 - 42:31
EN: either with the trend or against the trend.
42:32 - 42:35
EN: If the ticks are positive, traders tend to look to buy.
42:35 - 42:37
EN: If they’re negative, they tend to look to sell.
42:38 - 42:41
EN: If there’s a tick divergence after a climax,
42:41 - 42:45
EN: traders will often look for a scalp in the opposite direction (a minor reversal).
42:45 - 42:47
EN: Then gap bars.
42:47 - 42:52
EN: If the open of the current bar is above or below the close of the past bar,
42:52 - 42:55
EN: that’s a gap bar, and that can either be a sign of strength
42:55 - 43:00
EN: and lead to continuation or it can be a reversal.
43:05 - 43:06
EN: This is Al Brooks.
43:06 - 43:09
EN: This is the third of five videos on scalping.
43:09 - 43:12
EN: Thank you for watching the Brooks Trading Course.