al-brooks-course
02 - Trading Patterns on the Open
Raw transcript and slide notes for 02 - Trading Patterns on the Open.
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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 - 00:10
EN: This is a bonus video on trading patterns on the open.
Slide 001
Time: 00:13
Bilingual Transcript
00:14 - 00:17
EN: Everybody wants a trend from the open, but a trend from the open
00:17 - 00:21
EN: that lasts all day happens only about once a week, 20% of the days.
00:21 - 00:23
EN: 80% of the days have some kind of reversal
00:23 - 00:27
EN: on the open in the first 60 minutes to the first 90 minutes.
00:27 - 00:31
EN: I’m going to begin by talking about how I think traders should enter their trades,
00:31 - 00:34
EN: where they should put their protective stops, and how they should exit.
00:35 - 00:38
EN: I have a collection of about 100 patterns,
00:38 - 00:41
EN: and I have four variations of each pattern.
00:41 - 00:44
EN: I have a buy and sell version, and I have a successful
00:44 - 00:47
EN: and a failed version of each pattern.
00:48 - 00:52
EN: This set of 400 patterns, with many examples of each,
00:52 - 00:55
EN: is available to traders as an add-on
00:55 - 00:59
EN: if they have already purchased the Brooks Trading Course.
00:59 - 01:02
EN: Today I’m going to be talking about a gap down open
01:02 - 01:05
EN: - a gap from either yesterday’s close or below the Moving Average
01:05 - 01:09
EN: - and then a Buy Climax that reverses back down.
01:10 - 01:13
EN: Next I’ll talk about a gap down and a Buy Climax up to resistance,
01:13 - 01:16
EN: like the Moving Average, but instead of reversing down
01:16 - 01:20
EN: and forming an early high of the day, the reversal fails
01:20 - 01:22
EN: and becomes a bull flag and then the bull trend resumes.
01:23 - 01:28
EN: Next, the third pattern, I’ll be talking about a gap down and then a Sell Climax.
01:28 - 01:32
EN: The market gaps down, it sells off sharply and reverses up.
01:32 - 01:37
EN: Finally, I’ll talk about a Sell Climax that tries to reverse up;
01:37 - 01:40
EN: the reversal becomes a bear flag and the bear trend resumes.
01:43 - 01:47
EN: I want to begin by talking about a gap down and a trend from the first bar.
Slide 002
Time: 01:48
Bilingual Transcript
01:51 - 01:55
EN: For a gap down open, what I’m talking about is the open of today
01:55 - 01:59
EN: being either below yesterday’s close or below the Moving Average,
02:00 - 02:01
EN: and a gap up is opposite.
02:03 - 02:09
EN: When there’s a gap down and you get a trend from the open bull trend like this,
02:09 - 02:11
EN: you only see a gap down and a trend up
02:11 - 02:15
EN: or down on the open about once a week, 20% of days.
02:21 - 02:24
EN: If you see it and you have a couple bars,
02:24 - 02:26
EN: one of them being a big bull bar closing on its high,
02:26 - 02:30
EN: traders will buy with a stop 1 tick above the high of that bar.
02:33 - 02:36
EN: As long as the market keeps forming bull bars closing near their highs,
02:36 - 02:40
EN: traders will have plenty of opportunities to buy again.
02:40 - 02:42
EN: They can take the first entry.
02:42 - 02:44
EN: If they take a profit, they can look to enter again.
02:44 - 02:46
EN: If they don’t take the first entry,
02:46 - 02:50
EN: there are plenty of other opportunities to buy at any point during the day.
02:53 - 02:57
EN: You keep doing this until there’s a reason to suspect
02:57 - 02:59
EN: that the strong trend has ended.
02:59 - 03:01
EN: For example, there’s often profit-taking in the final hour,
03:01 - 03:05
EN: so if there’s some kind of a top – here, a Parabolic Wedge Top
03:05 - 03:07
EN: or a Micro Double Top, Buy Climax, pullback,
03:07 - 03:11
EN: second Buy Climax, and then a bear bar – traders will exit.
03:14 - 03:18
EN: Next I’m going to talk briefly about a gap down and a bear trend from the open.
Slide 003
Time: 03:20
Bilingual Transcript
03:28 - 03:33
EN: Again, only about 20% of the time will there be a trend from the open up or down.
03:35 - 03:37
EN: Here we have a series of bear bars.
03:37 - 03:42
EN: After the first 2 bear bars, with one or both having decent size bodies
03:42 - 03:47
EN: and closing near the low, traders will begin to sell closes
03:47 - 03:49
EN: or sell below the low of the prior bar.
03:51 - 03:55
EN: For example, you might sell with a stop 1 tick below the low of that bar.
04:01 - 04:04
EN: As long as there’s a strong bear trend in effect,
04:04 - 04:07
EN: traders will sell bear closes of any bear bar,
04:07 - 04:10
EN: or they’ll sell below the low of the prior bar
04:10 - 04:14
EN: if the bar closes below its midpoint, especially if it closes near its low.
04:14 - 04:18
EN: They’ll keep doing that as long as the trend is reasonably strong.
04:23 - 04:28
EN: Typically, if you have a strong series of bear bars on the open,
04:28 - 04:31
EN: it will result in a Measured Move, and one Measured Move
04:31 - 04:35
EN: that I like to find is one based upon the first series of bars,
04:35 - 04:37
EN: and then there’s a pause bar, a bull bar.
04:37 - 04:41
EN: I expect a Measured Move down from the open of the first bar of the series
04:41 - 04:44
EN: to the close or low of the final bar of the series.
04:44 - 04:47
EN: Here’s the close of the final bar, here’s a Measured Move,
04:47 - 04:49
EN: and that would be a target, a good profit-taking target.
04:49 - 04:53
EN: You can see when the market got down to that target, there was some profit-taking.
04:58 - 05:01
EN: 80% of opens have reversals.
Slide 004
Time: 05:02
Bilingual Transcript
05:03 - 05:08
EN: The reversal can be immediate – so for example, if you have a very strong selloff,
05:08 - 05:11
EN: 50% chance you’re going to get the reversal immediately.
05:14 - 05:19
EN: No matter how strong an open is, 50% chance it’s going to reverse.
05:22 - 05:25
EN: Typically, the reversal will take place at support or resistance.
05:27 - 05:31
EN: Here we have 2 big bear bars closing on their lows or near their lows,
05:31 - 05:35
EN: but we got a reversal up and those bear bars
05:35 - 05:37
EN: formed a Sell Climax and the low of the day.
05:38 - 05:39
EN: And here’s the opposite.
05:42 - 05:46
EN: On the open, we gapped above yesterday’s close, we gapped above the Moving Average.
05:46 - 05:51
EN: We have 3 decent size bull bars – yet as strong as the rally was
05:51 - 05:54
EN: and as strong as the trend from yesterday’s low was, it reversed down.
05:56 - 05:58
EN: So, if you see any strong opening,
05:58 - 06:01
EN: don’t become convinced that there’s a trend on the way.
06:01 - 06:04
EN: 50% chance you’re going to get a reversal.
06:07 - 06:10
EN: Here’s a collection of opens to illustrate some points.
Slide 005
Time: 06:10
Bilingual Transcript
06:15 - 06:19
EN: 80% of days, there’s a test of support or resistance in the first 90 minutes
06:19 - 06:23
EN: and you get a reversal, and that reversal often becomes the high
06:23 - 06:27
EN: or low of the day, and I call that reversal an opening reversal.
06:28 - 06:32
EN: Remember, only 20% of the days does the market open
06:32 - 06:34
EN: and trend for the rest of the day.
06:35 - 06:37
EN: I am not talking about these days today.
06:37 - 06:41
EN: I’m talking about the other 80% of the days when there’s some kind of reversal.
06:46 - 06:50
EN: Typically, when you get a reversal, if you’re getting a reversal down,
06:50 - 06:54
EN: it’ll come from a Wedge Top or a Double Top.
06:54 - 06:59
EN: If there’s a selloff on the open, you should be looking for a reversal up,
06:59 - 07:02
EN: typically from a Wedge Bottom or a Double Bottom.
07:02 - 07:04
EN: And sometimes you get both.
07:06 - 07:08
EN: For example, we have a Parabolic Wedge rally
07:08 - 07:11
EN: and then a Double Top, and we got a reversal down.
07:15 - 07:17
EN: Here, a Wedge Bottom and a reversal up.
07:17 - 07:19
EN: Bulls will buy above a bull bar closing near its high
07:19 - 07:21
EN: - that one, that one, that one.
07:21 - 07:22
EN: Any of them is fine.
07:24 - 07:29
EN: We have a gap down, a rally to the 20 bar exponential Moving Average,
07:29 - 07:31
EN: and a Wedge Top with a decent bear bar.
07:31 - 07:32
EN: Traders will sell that.
07:33 - 07:35
EN: The bulls tried to resume from a Higher Low.
07:35 - 07:37
EN: Instead we got a Double Top.
07:37 - 07:39
EN: Traders will wait for a bear bar closing near its low
07:39 - 07:42
EN: or for a series of bear bars, and then they’ll sell.
07:42 - 07:45
EN: So here we have two opening reversals down.
07:45 - 07:47
EN: We have a Wedge rally and then a Double Top.
07:47 - 07:50
EN: We tried to get an opening reversal up.
07:50 - 07:53
EN: There was a Wedge bull flag, a Double Bottom, and that failed.
07:57 - 08:02
EN: We have a gap up and a rally, a sharp selloff, but it formed a Double Bottom.
08:02 - 08:05
EN: A Double Bottom bull flag at the Moving Average.
08:05 - 08:09
EN: Traders will buy with a stop above a bull bar here or here.
08:09 - 08:14
EN: So, on the open, look for Double Tops, Double Bottoms, Wedge Tops, Wedge Bottoms.
08:14 - 08:19
EN: Sometimes the first reversal will fail and you’ll get an opposite reversal.
08:23 - 08:26
EN: I want to talk a little bit about trade management.
Slide 006
Time: 08:26
Bilingual Transcript
08:31 - 08:34
EN: Traders should be entering most of their trades using stops.
08:36 - 08:41
EN: To increase the probability of a profit, wait for a strong signal bar.
08:43 - 08:46
EN: For example, you could sell below this bar, but it has a big tail below.
08:47 - 08:48
EN: I would call that a doji bar.
08:48 - 08:51
EN: However, we have a bear bar closing on its low here,
08:51 - 08:56
EN: and it’s a higher probability of a profit selling on a stop below this bar.
08:56 - 08:58
EN: Here we have another bear bar closing near its low,
08:58 - 09:01
EN: and we’re in an early bear trend, a Tight Bear Channel.
09:01 - 09:03
EN: You sell on a stop below that bar.
09:03 - 09:08
EN: Another bar closing near its low – here on its low – sell on a stop below that bar.
09:14 - 09:17
EN: When looking to buy – we’re getting a reversal up here
09:17 - 09:20
EN: - it’s better to be buying above a bull bar closing near its high.
09:21 - 09:25
EN: Here we have a bull bar closing near its high, and the entry would be 2 bars later.
09:25 - 09:28
EN: Here we have a bull inside bar closing near its high.
09:28 - 09:29
EN: We have 3 bull bars.
09:29 - 09:32
EN: Traders will buy above that bull bar, get filled here.
09:32 - 09:33
EN: Bull bar closing near its high.
09:33 - 09:37
EN: They could buy with a stop above that bar and get filled here.
09:37 - 09:41
EN: They could buy closes or they could buy with a stop above the high of the prior bar.
Slide 007
Time: 09:45
Bilingual Transcript
09:46 - 09:51
EN: For a protective stop, you put your stop just below the bottom of the reversal
09:51 - 09:54
EN: if you’re buying and above the top of the reversal if you’re selling.
09:55 - 09:57
EN: It doesn’t matter which of these entries you take;
09:57 - 10:00
EN: the stop is the same, the bottom of the bull trend.
10:06 - 10:09
EN: Even if you take the second, third, or fourth entry,
10:09 - 10:13
EN: even if you’re entering several bars after the initial signal bar,
10:13 - 10:16
EN: your stop is below the bottom of the rally.
Slide 008
Time: 10:20
Bilingual Transcript
10:24 - 10:27
EN: If you’re selling, the opposite is true.
10:27 - 10:31
EN: Here we have a sell signal bar, but the stop goes above the top of the rally.
10:32 - 10:34
EN: Here, the sell signal bar, you enter here
10:34 - 10:36
EN: - it goes right above the sell signal bar.
10:37 - 10:39
EN: That’s true for any of these entries.
10:39 - 10:42
EN: If you sell here, you put your stop either above that bar
10:42 - 10:44
EN: or above here, the top of the swing.
10:44 - 10:45
EN: And the same with this.
10:45 - 10:48
EN: If you sell here, you could put your stop here,
10:48 - 10:51
EN: but it’s probably better to put it here or even here.
10:54 - 10:56
EN: When you buy, same thing.
10:58 - 11:00
EN: Any of these buys, stop here.
11:01 - 11:02
EN: Buy here, stop here.
11:02 - 11:04
EN: Buy here or here, stop here.
11:13 - 11:16
EN: When you’re starting out, you should be looking for swing trades,
11:17 - 11:19
EN: and you should take mostly swing trades,
11:19 - 11:23
EN: and that means you’ll be looking for one, two, or three trades a day.
11:28 - 11:30
EN: After you become consistently profitable,
11:30 - 11:34
EN: then you can start looking for other minor trades, scalps,
11:34 - 11:37
EN: and possibly take three to ten trades a day.
11:44 - 11:49
EN: As I said, I created a classification of patterns for swing traders,
11:49 - 11:50
EN: and there are four versions of each.
11:50 - 11:55
EN: There’s a buy pattern, a sell pattern, and then a failed buy and a failed sell.
11:55 - 11:57
EN: I have about 100 classic patterns,
Slide 009
Time: 11:57
Bilingual Transcript
11:57 - 12:03
EN: and that means I have about 400 total sections in my series of PowerPoints.
12:04 - 12:06
EN: This is not part of the Brooks Trading Course,
12:06 - 12:11
EN: but people who have the Brooks Trading Course can buy access to these slides.
12:11 - 12:15
EN: I keep adding to the collection every day,
12:15 - 12:20
EN: and right now I probably have well over 2,000 slides, maybe 2,500 slides.
12:21 - 12:23
EN: Multiple examples of each of the patterns.
12:26 - 12:30
EN: The importance of it is if you can recognize what the market is doing,
12:30 - 12:35
EN: you can look for examples of that pattern to get an idea of what might follow.
12:35 - 12:39
EN: So, if you see a Wedge Bottom and you want to know what kind of reversal to expect,
12:39 - 12:43
EN: you can look at the collection of patterns and find one similar to today,
12:43 - 12:46
EN: and that will give you an idea of what to expect.
12:48 - 12:51
EN: Now I’m going to move on to the patterns.
12:51 - 12:53
EN: First, I want to begin with a gap down
12:53 - 12:57
EN: and then a rally to a Buy Climax, and then a reversal back down.
Slide 010
Time: 12:57
Bilingual Transcript
12:59 - 13:02
EN: We have a gap down below yesterday’s close and below the Moving Average,
13:02 - 13:06
EN: and we have a strong rally – yet it was a Buy Climax
13:06 - 13:08
EN: that led to a reversal back down.
13:08 - 13:13
EN: You can buy as it’s going up, but you have to be prepared to sell on the way down.
13:13 - 13:18
EN: Remember, no matter how strong any trend is on the open,
13:18 - 13:21
EN: it’s going to reverse 50% of the time.
13:23 - 13:26
EN: No bear bar for the first 9 bars.
13:26 - 13:30
EN: Strong Buying Pressure, so strong bear trend is unlikely.
13:31 - 13:33
EN: If we get a reversal down after such a strong open,
13:33 - 13:37
EN: either it will lead to a bull flag and a bull trend or a selloff
13:37 - 13:41
EN: that will become a Trading Range – in other words, you’ll get a rally later.
13:44 - 13:45
EN: Two legs up.
13:45 - 13:48
EN: We had a weak rally with three pushes – one, two, three.
13:48 - 13:52
EN: So, the bears wanted a Parabolic Wedge bear flag at the Moving Average.
13:52 - 13:55
EN: Instead we got a breakout; however, the breakout failed.
13:55 - 13:58
EN: Therefore, I call this a two-legged trap.
13:58 - 14:03
EN: We have a first leg up, an attempt at a bear flag, and then we have a breakout.
14:03 - 14:05
EN: But instead of beginning a trend,
14:05 - 14:07
EN: it trapped bulls into hoping there would be a trend.
14:08 - 14:10
EN: And then in addition we have a Micro Double Top.
14:10 - 14:14
EN: We went up and then down, we went up again and then down.
14:14 - 14:17
EN: The bulls who bought this close or above this high were disappointed
14:17 - 14:20
EN: by this bear bar, and they used this bar to get out breakeven,
14:20 - 14:22
EN: and that began a bear trend.
14:23 - 14:28
EN: Traders can sell possibly below that low, because it’s already a Micro Double Top.
14:28 - 14:32
EN: We went up and down and then up, and we’re trying to go down again.
14:32 - 14:35
EN: Or you can wait for a second entry sell – for example, below that bar.
14:35 - 14:40
EN: Or you could wait for a sell below a bear bar closing near its low, like here.
14:41 - 14:45
EN: The selloff became a bear leg in what ended up as a Trading Range day.
14:45 - 14:47
EN: We have a bull leg, a bear leg, a bull leg.
Slide 011
Time: 14:50
Bilingual Transcript
14:56 - 14:58
EN: We have a gap down open below yesterday’s close
14:58 - 15:01
EN: and below the Moving Average and a pretty strong rally.
15:01 - 15:02
EN: Two legs up.
15:02 - 15:05
EN: We went above yesterday’s high and reversed down.
15:05 - 15:08
EN: You should always be paying attention to yesterday’s high
15:08 - 15:12
EN: and low because the market often tests it and reverses.
15:12 - 15:15
EN: Sometimes it’ll reverse down from just below yesterday’s high,
15:15 - 15:16
EN: sometimes from just above,
15:16 - 15:20
EN: and sometimes the market will test yesterday’s low and reverse up.
15:22 - 15:24
EN: We have a Buy Climax and a second Buy Climax,
15:24 - 15:28
EN: a failed breakout above yesterday’s high, and a Low 2.
15:28 - 15:29
EN: Two attempts to go down.
15:29 - 15:31
EN: Here’s the first, here’s the second.
15:31 - 15:35
EN: You could sell below that bar, but a prominent tail, a doji bar.
15:35 - 15:38
EN: Higher probability looking to sell below a bear bar
15:38 - 15:42
EN: that closes below its midpoint – for example, below that bar.
15:43 - 15:48
EN: As long as the market is going down, traders will sell below bear bars
15:48 - 15:49
EN: that close near their low.
15:51 - 15:52
EN: Here’s a big bear bar.
15:52 - 15:54
EN: Why would I not sell below that bar?
15:54 - 15:58
EN: After you’ve had 4 or 5 bars, if you suddenly get a very big bar,
15:58 - 16:00
EN: you’re probably going to get profit-taking.
16:00 - 16:03
EN: So, I typically do not sell below that bar.
16:08 - 16:09
EN: Good reversal up.
16:10 - 16:13
EN: Reasonable for the bears who took any of these shorts to exit above
16:13 - 16:17
EN: that bull bar or above a second entry reversal up, here or here.
16:22 - 16:26
EN: I said sometimes you get a gap down and a rally that is climactic,
16:26 - 16:29
EN: but instead of getting a reversal down, you get a bull flag
16:29 - 16:31
EN: and the bull trend continues up.
Slide 012
Time: 16:32
Bilingual Transcript
16:34 - 16:35
EN: Gap down, strong rally.
16:35 - 16:39
EN: The bears tried to get a second entry sell – first here, second here.
16:40 - 16:44
EN: The bears tried to fail in the reversal up from below yesterday’s low.
16:44 - 16:49
EN: Instead, we tested yesterday’s low again and we got a bull trend.
16:49 - 16:54
EN: So, gap down and a Buy Climax and attempt at a reversal down;
16:54 - 16:56
EN: instead it became a bull flag.
17:00 - 17:04
EN: Remember, no matter how strong any trend on the open is,
17:04 - 17:09
EN: it will reverse 50% of the time, and 50% of the time the reversal will fail
17:09 - 17:11
EN: and the bull trend will resume.
17:16 - 17:18
EN: Big gap down, bull bar closing on its high.
17:18 - 17:21
EN: It’s reasonable to buy there or above any of these bull bars
17:21 - 17:23
EN: closing near their highs.
17:29 - 17:32
EN: Here we have 8 consecutive bars on the open with bull bodies.
17:32 - 17:36
EN: There’s actually a small bull body here, and that is extremely rare,
17:36 - 17:38
EN: and it represents very persistent buying.
17:38 - 17:40
EN: Strong Buying Pressure.
17:44 - 17:48
EN: The bears tried to get the reversal down, and it’s reasonable to take that sell.
17:48 - 17:51
EN: We have a Buy Climax pulling back to the Moving Average,
17:51 - 17:52
EN: and it’s a second entry sell.
17:52 - 17:57
EN: However, you never can get married to a position.
17:57 - 17:59
EN: You have to realize on the open,
17:59 - 18:02
EN: everything that looks good only has a 50% chance of success.
18:07 - 18:09
EN: At some point you have to decide
18:09 - 18:12
EN: that instead of getting a reversal, it’s a bull flag.
18:12 - 18:16
EN: You don’t have to take this buy; it’s only a small bull doji after 3 bear bars.
18:16 - 18:19
EN: But now we’re getting a bull bar closing on its high.
18:19 - 18:22
EN: It’s reasonable to get out of shorts and buy here,
18:22 - 18:24
EN: and then we’re starting to get a series of bull bars.
18:24 - 18:26
EN: No pullbacks.
18:26 - 18:28
EN: Bull bars closing near their highs.
18:28 - 18:29
EN: Traders need to get long.
18:29 - 18:33
EN: If they did not take this buy and they see another bar closing near its high,
18:33 - 18:35
EN: you buy above that.
18:35 - 18:36
EN: You buy above that.
18:36 - 18:37
EN: You buy above this.
18:37 - 18:41
EN: Any of these is a reasonable entry, but you have to get long.
18:45 - 18:48
EN: I said sometimes you get a gap down and a selloff on the open.
18:49 - 18:52
EN: If it’s climactic, traders will look for a reversal up.
Slide 013
Time: 18:53
Bilingual Transcript
18:54 - 18:58
EN: Here, we were gapping down below the Moving Average.
18:59 - 19:01
EN: Not below yesterday’s close, but below the Moving Average,
19:02 - 19:04
EN: and then the bears got a Double Top below the Moving Average
19:04 - 19:06
EN: and a bear bar closing on its low.
19:06 - 19:08
EN: Reasonable to sell below the bear bars.
19:12 - 19:15
EN: When you see a bull bar, reasonable to get out,
19:15 - 19:19
EN: because 50% of strong bear trends on the open will reverse.
19:19 - 19:22
EN: Here we have an ii pattern.
19:22 - 19:26
EN: This bar is inside of this bar, and this bar is inside of that bar.
19:26 - 19:30
EN: Inside - this low is above that low, this high is above that high.
19:30 - 19:32
EN: We have consecutive inside bars.
19:32 - 19:34
EN: I call that ii, inside-inside.
19:34 - 19:37
EN: It’s a Triangle on a smaller timeframe chart.
19:37 - 19:41
EN: Reasonable to buy above the ii, even though it’s a bear bar.
19:41 - 19:44
EN: If you prefer, you can buy above this bull bar or you can wait for a bull bar
19:44 - 19:48
EN: closing on its high and buy above that bar, and you can buy above any bull bar
19:48 - 19:52
EN: closing on its high as long as the reversal up is strong.
19:54 - 19:57
EN: Two legs up to the Moving Average – one, pullback, two.
19:57 - 19:58
EN: A bear ii.
19:58 - 20:00
EN: Reasonable to get out of longs here.
20:01 - 20:03
EN: Very strong reversal up.
20:03 - 20:06
EN: Unlikely that we’ll get another strong reversal down.
20:06 - 20:09
EN: More likely if we sell off, it’ll be a bull flag.
20:10 - 20:15
EN: Whenever you have a reversal and then a bull flag, it’s a cup and handle pattern.
20:15 - 20:17
EN: So, a cup and a handle.
20:18 - 20:21
EN: Traders would buy going up here as well.
20:28 - 20:31
EN: You could also call it a Higher Low Major Trend Reversal.
20:31 - 20:37
EN: We have a bear trend, a strong minor reversal, and then a selloff testing this low.
20:37 - 20:39
EN: Did not get near it.
20:39 - 20:40
EN: It’s a Higher Low.
20:40 - 20:43
EN: You can call it a Higher Low Double Bottom.
20:43 - 20:45
EN: I call it a Higher Low Major Trend Reversal.
20:45 - 20:49
EN: Traders will buy above that bull bar and above any of these bull bars.
20:50 - 20:53
EN: When you have a big, big selloff on the open and you get a reversal,
20:53 - 20:56
EN: the day can reverse up for the remainder of the day.
20:56 - 20:59
EN: Typically, if the selloff on the open is big
20:59 - 21:01
EN: and you get a reversal to a new high,
21:01 - 21:04
EN: you’re not going to get much above the earlier high.
21:04 - 21:06
EN: I think of that as a Trading Range day
21:06 - 21:09
EN: - a leg down and a leg up, and closing around the open.
Slide 014
Time: 21:13
Bilingual Transcript
21:14 - 21:15
EN: Here’s the Moving Average.
21:15 - 21:18
EN: A big, big gap down below the Moving Average.
21:18 - 21:20
EN: Huge bear bars.
21:20 - 21:22
EN: But big bear bars, Sell Climax.
21:22 - 21:26
EN: You’ve got to be thinking 50% chance we’ll get reversal up.
21:28 - 21:31
EN: A doji, not a strong signal bar.
21:31 - 21:33
EN: But here we’re getting a second buy.
21:33 - 21:34
EN: First buy was above this.
21:34 - 21:37
EN: The bears were unable to resume down.
21:37 - 21:39
EN: Now we’re getting a second reversal up.
21:39 - 21:43
EN: Higher probability to take the second buy, especially since it’s an ii.
21:43 - 21:47
EN: Or if you want, you could wait for a bull bar closing near its high, here or here.
21:50 - 21:51
EN: Several legs up.
21:51 - 21:55
EN: Buy Climax, pullback, second Buy Climax, pullback, third Buy Climax,
21:55 - 21:58
EN: so Parabolic Wedge rally and a bear bar.
21:58 - 22:02
EN: Reasonable to get out below that bear bar or below consecutive bear bars,
22:02 - 22:04
EN: with the second one closing near its low.
22:07 - 22:11
EN: Tried to reverse up on the open and then we sold off sharply.
Slide 015
Time: 22:10
Bilingual Transcript
22:11 - 22:15
EN: A Sell Climax, and it was a test of last week’s low.
22:16 - 22:19
EN: Every day likes to test something on the open.
22:19 - 22:21
EN: For example, it might test yesterday’s low.
22:21 - 22:24
EN: Sometimes it tests last week’s low or last month’s low.
22:24 - 22:28
EN: Here it’s a test of last week’s low, and a very strong bull reversal bar.
22:28 - 22:30
EN: It’s the second reversal up.
22:30 - 22:33
EN: We tried to reverse up here, and we’re getting a second one here.
22:34 - 22:37
EN: The bears, if they sold here, they have to get out here,
22:37 - 22:40
EN: and bulls will start buying either above this bar or above that bar.
22:44 - 22:46
EN: It’s a 2nd Leg Trap.
22:46 - 22:50
EN: We gapped down and sold off, reversed up, and we sold off even stronger.
22:50 - 22:55
EN: The bears were hoping this was a breakout that was going to lead to a bear trend.
22:55 - 22:58
EN: Instead, it trapped bears into selling low.
22:58 - 23:02
EN: If they sold this close or below its low, they never got a chance to get out.
23:03 - 23:05
EN: The market just reversed up sharply.
23:05 - 23:08
EN: They’d have to get out above this bull bar and take the loss.
23:08 - 23:11
EN: However, had they bought here, they would have more than made up
23:11 - 23:16
EN: for the loss had they sold this bear close or below that bear bar.
23:19 - 23:21
EN: Three legs up.
23:21 - 23:27
EN: Buy Climax, pullback, Buy Climax, pause, third Buy Climax, and now a bear bar.
23:27 - 23:29
EN: Reasonable to get out below that bear bar.
23:29 - 23:30
EN: A Parabolic WedgeWedge rally.
23:30 - 23:33
EN: Three legs up in a Tight Bull Channel.
23:34 - 23:36
EN: The bears will take that short.
23:38 - 23:44
EN: And now we have a bear trend, a very strong rally, a strong minor reversal up,
23:44 - 23:47
EN: and we have a couple legs down and a Micro Double Bottom.
23:47 - 23:49
EN: Double Bottom with this low.
23:49 - 23:53
EN: It’s a Micro Double Bottom and a Higher Low Major Trend Reversal.
23:53 - 23:55
EN: Bulls will start buying.
Slide 016
Time: 23:58
Bilingual Transcript
23:58 - 24:02
EN: Gap down below yesterday’s close and below the Moving Average,
24:02 - 24:05
EN: and we sold off sharply below yesterday’s low.
24:05 - 24:08
EN: 2 consecutive bear bars, one closing on its low.
24:08 - 24:10
EN: Reasonable to sell below it’s low.
24:10 - 24:13
EN: But we’re getting a reversal up from below yesterday’s low.
24:13 - 24:17
EN: Remember, I said traders are always looking for the market
24:17 - 24:19
EN: to test yesterday’s high or low and then reverse,
24:20 - 24:23
EN: and here we have a pretty good bull bar, and the bear bars are shrinking.
24:23 - 24:27
EN: Bear bar, smaller body, smaller body, and now we’ve got a bull body.
24:27 - 24:33
EN: The bears who sold below there, below here, or below here have to get out,
24:33 - 24:35
EN: and bulls will buy, hoping for a swing up.
24:39 - 24:40
EN: Shrinking bodies.
24:40 - 24:42
EN: One, two, three.
24:42 - 24:43
EN: Loss of momentum.
24:47 - 24:49
EN: Pretty good reversal bar.
24:49 - 24:52
EN: Bulls buy above that bull bar closing on its high.
24:52 - 24:53
EN: Another bull bar closing on its high.
24:53 - 24:57
EN: Higher probability because now we have 2 consecutive bull bars
24:57 - 25:01
EN: closing on their highs, and this body is bigger than that body.
25:01 - 25:03
EN: So, the market’s accelerating up.
Slide 017
Time: 25:07
Bilingual Transcript
25:07 - 25:10
EN: Here we did not gap down, but we sold off strongly,
25:10 - 25:12
EN: so it’s a Sell Climax on the open.
25:12 - 25:14
EN: We have a little bit of a Parabolic Wedge rally.
25:14 - 25:18
EN: Three selloffs – one, two, three – and a bear bar closing on its low.
25:18 - 25:21
EN: Traders will sell below bear bars.
25:26 - 25:29
EN: We’ve had multiple attempts to bottom today.
25:29 - 25:34
EN: We have a bull bar here, a bull bar here, and a doji bar here.
25:34 - 25:37
EN: This is a better bottom, a second entry, and a bull bar here.
25:37 - 25:39
EN: So, bull bar, bull bar, bull bar.
25:40 - 25:45
EN: And inside of that, we have what I would think of as a Wedge Bottom.
25:45 - 25:48
EN: We have a spike down, 3 bar breakout, first leg.
25:48 - 25:53
EN: You typically get two more legs down and then an attempt at a reversal.
25:53 - 25:57
EN: So, first leg, pullback, second leg, pullback, third leg.
25:57 - 26:00
EN: Higher probability of some kind of reversal up.
26:06 - 26:07
EN: Reasonable to take that buy.
26:07 - 26:10
EN: It’s probably only going to be a minor reversal
26:10 - 26:14
EN: because the bear channel lasted a lot of bars and the channel is very tight.
26:14 - 26:17
EN: Usually the first reversal up is minor.
26:17 - 26:20
EN: Sometimes it’ll go up pretty far and you can make a pretty good profit.
26:20 - 26:22
EN: Other times you get immediate disappointment.
26:24 - 26:26
EN: As soon as you entered, your entry bar became a bear bar.
26:26 - 26:28
EN: Then you have another bear bar here.
26:28 - 26:31
EN: So, it looks like we’re not going very far up.
26:33 - 26:37
EN: Reasonable for the bulls to get out below a bear bar closing on its low,
26:37 - 26:39
EN: especially after three or four little pushes up
26:39 - 26:45
EN: - one, pullback, two, pullback, three, pullback, and then a second entry short.
26:45 - 26:48
EN: Tried to reverse here, tried to reverse here, tried to reverse there.
26:48 - 26:50
EN: So, get out of longs.
26:50 - 26:52
EN: Bears will sell that, looking for a test of the low.
26:53 - 26:56
EN: Lots of prominent tails, lots of reversals.
26:56 - 26:59
EN: This selloff is probably going to be a Trading Range,
26:59 - 27:04
EN: which means when it gets near the low, traders will look for another reversal up.
27:09 - 27:12
EN: Gap down below yesterday’s low and the Moving Average.
Slide 018
Time: 27:10
Bilingual Transcript
27:12 - 27:14
EN: The bulls tried to rally, but weak.
27:14 - 27:18
EN: A small doji bar and then a small bull bar with a prominent tail.
27:18 - 27:20
EN: No close above the Moving Average.
27:20 - 27:21
EN: We got a reversal down.
27:21 - 27:23
EN: Bears will start selling.
27:23 - 27:27
EN: We have a 2 bar breakout, so a spike down.
27:27 - 27:32
EN: First leg, a pause, second leg, small bar pause, third leg.
27:32 - 27:34
EN: So, it’s a Parabolic Wedge Sell Climax,
27:34 - 27:37
EN: and it turns out if you looked on the daily chart,
27:37 - 27:41
EN: this reversal is right above the bottom of a gap on the daily chart.
27:41 - 27:44
EN: So, you have a Parabolic Wedge Sell Climax
27:44 - 27:48
EN: reversing up strongly just above support on the daily chart.
27:48 - 27:49
EN: We have a Micro Double Bottom.
27:50 - 27:53
EN: The bears who sold this close, disappointed by this bull bar,
27:53 - 27:56
EN: decided to get out breakeven or with a small loss,
27:57 - 28:01
EN: and those bears placed limit orders to buy around their original entry price.
28:01 - 28:04
EN: So Micro Double Bottom, Parabolic Wedge.
28:04 - 28:05
EN: Reasonable buy.
28:05 - 28:08
EN: Tight Bear Channel, so first reversal is minor.
28:08 - 28:11
EN: Traders will look for a second reversal and a swing up.
28:17 - 28:19
EN: Strong selloff.
28:19 - 28:22
EN: It was just the price getting vacuumed down to test support.
28:22 - 28:26
EN: It got to within a tick of the bottom of the gap on the daily chart.
28:26 - 28:28
EN: Very strong selloff.
28:28 - 28:32
EN: Most traders will wait for a Micro Double Bottom and then buy.
28:32 - 28:36
EN: The Micro Double Bottom represents a test of the bottom of the bear trend,
28:36 - 28:41
EN: and the bears who sold this close will use that to buy back their shorts,
28:41 - 28:44
EN: and then this is a sign of bears giving up.
28:44 - 28:45
EN: This is a sign of bears giving up.
28:45 - 28:48
EN: Bulls are getting confident and will look to buy.
28:52 - 28:54
EN: Small Double Bottom, Micro Double Bottom.
28:55 - 28:57
EN: Good bull bar here, good bull bar here.
28:57 - 28:59
EN: Good context.
28:59 - 29:02
EN: A Parabolic Wedge Sell Climax testing important support,
29:02 - 29:05
EN: and now we have a Micro Double Bottom with 2 pretty good bull bars.
29:05 - 29:07
EN: Buy on a stop above the bull bar.
29:10 - 29:12
EN: We have a big gap down.
Slide 019
Time: 29:10
Bilingual Transcript
29:12 - 29:15
EN: The bulls tried to reverse up and the bears tried to reverse down.
29:15 - 29:17
EN: Possibly a trend from the open bear trend.
29:18 - 29:22
EN: Remember, only 20% of the time will it make it all the way to the end of the day.
29:22 - 29:26
EN: 80% of the time, it’s going to reverse and form some kind of a Trading Range.
29:30 - 29:32
EN: We have a trend from the open bear trend.
29:32 - 29:36
EN: We got a reversal, and it ended up as a Trading Range day, a Triangle.
29:36 - 29:38
EN: Lower Highs, Higher Lows.
29:43 - 29:44
EN: Parabolic Wedge.
29:43 - 29:48
EN: We have a reversal up, a second reversal up, a third reversal up.
29:48 - 29:49
EN: 3 bear bars.
29:49 - 29:52
EN: A lot of bulls will wait for a second entry buy, like a Micro Double Bottom.
29:52 - 29:55
EN: This is the neckline of this Double Bottom.
29:55 - 29:58
EN: Or they’ll buy above a bull bar closing on its high, here or here.
30:01 - 30:04
EN: Strong minor reversal up after a big bear trend.
30:04 - 30:06
EN: We’re far below the Moving Average,
30:06 - 30:09
EN: so it’s a big bear trend – but a strong minor reversal up.
30:09 - 30:13
EN: Therefore, traders will look for a test of the low and then a major reversal.
30:13 - 30:16
EN: This was a Higher Low Major Trend Reversal.
30:16 - 30:21
EN: It did not lead to a major reversal into a bull trend, but it’s a reasonable buy.
Slide 020
Time: 30:23
Bilingual Transcript
30:25 - 30:26
EN: Gap down.
30:26 - 30:27
EN: Failed rally.
30:27 - 30:28
EN: Double Top.
30:28 - 30:30
EN: Bears will start selling below bear bars.
30:34 - 30:37
EN: Lots of prominent tails below bars and bad follow-through.
30:37 - 30:39
EN: Bear bar, bull doji.
30:39 - 30:40
EN: Bear bar, small bear bar.
30:40 - 30:42
EN: Bear bar, small bear bar.
30:42 - 30:43
EN: A pair of bear bars, tails.
30:43 - 30:44
EN: Doji.
30:44 - 30:47
EN: It looks more like a bear leg in a Trading Range.
30:47 - 30:49
EN: Traders will look for a reversal.
30:49 - 30:50
EN: Here we have a Wedge Bottom.
30:50 - 30:52
EN: You could also call this a Micro Double Bottom.
30:52 - 30:55
EN: A bear bar, not a great buy.
30:55 - 30:56
EN: It’s a second entry buy.
30:56 - 30:58
EN: Here’s the first, here’s the second.
30:59 - 31:02
EN: Better to wait for a bull bar closing on its high.
31:02 - 31:05
EN: Here we have a second entry buy, but it’s a doji bar.
31:05 - 31:07
EN: 3 bear bars.
31:07 - 31:09
EN: A lot of bulls will not take this buy.
31:09 - 31:10
EN: They’ll wait for a second entry buy.
31:10 - 31:12
EN: Here the second entry buy is a doji bar.
31:12 - 31:13
EN: Not great.
31:13 - 31:17
EN: A lot of bulls instead will look to buy above bull bars closing near their highs.
31:23 - 31:24
EN: Gap down.
31:24 - 31:26
EN: Tried to reverse up and collapsed.
Slide 021
Time: 31:25
Bilingual Transcript
31:26 - 31:29
EN: Traders will sell below bear bars closing near their lows.
31:32 - 31:35
EN: 4 big bear bars closing near their lows.
31:36 - 31:39
EN: High probability of at least a small second leg down
31:39 - 31:41
EN: - but you might get a reversal at that point.
31:41 - 31:46
EN: Most bulls are not going to buy this reversal up after 4 strong bear bars.
31:46 - 31:49
EN: However, if we get a second reversal up like this,
31:49 - 31:53
EN: especially with a Micro Double Bottom, bulls will look to buy above bull bars,
31:53 - 31:55
EN: either here or here or here or here.
32:01 - 32:02
EN: We have a Micro Double Bottom.
32:02 - 32:04
EN: We have a bigger Double Bottom.
32:04 - 32:06
EN: Consecutive Sell Climaxes.
Slide 022
Time: 32:10
Bilingual Transcript
32:10 - 32:11
EN: Similar day.
32:12 - 32:14
EN: Bear bars closing on or near their lows.
32:14 - 32:16
EN: Bears will sell below those bars.
32:16 - 32:19
EN: Now we’re starting to get tails and dojis.
32:19 - 32:21
EN: The selloff is losing momentum.
32:21 - 32:25
EN: These are Trading Range type bars, so the bear trend probably will end soon,
32:25 - 32:30
EN: and we’ll probably enter a Trading Range or possibly even reverse into a bull trend.
32:34 - 32:40
EN: A series of Sell Climaxes – here and then here and then here and then here.
32:40 - 32:44
EN: Every bear bar or series of bear bars is a Sell Climax,
32:44 - 32:46
EN: and if you have a lot of them with bad follow-through
32:46 - 32:50
EN: and a lot of bars with tails below, you’re probably soon going to evolve
32:50 - 32:54
EN: into a Trading Range, and therefore traders will look for a reversal up.
32:59 - 33:03
EN: We have a small Wedge – one, two, and three, that little pink line
33:03 - 33:04
EN: - and it grew into a bigger Wedge.
33:04 - 33:09
EN: We have a breakout below the Wedge, reversed up, but it formed a bigger Wedge.
33:09 - 33:10
EN: One, two, and three.
33:10 - 33:12
EN: Traders will look to buy a reversal up,
33:12 - 33:15
EN: especially above a bull bar closing near its high.
Slide 023
Time: 33:18
Bilingual Transcript
33:19 - 33:23
EN: Big gap down and selloff, and then a Low 2 bear flag.
33:23 - 33:26
EN: Low 1 below these bars and then Low 2 here.
33:26 - 33:28
EN: Reasonable to sell.
33:28 - 33:30
EN: We tried to get a bull flag here.
33:30 - 33:32
EN: We tried to get a Higher Low bull flag.
33:32 - 33:35
EN: Instead we got a bear breakout, so two legs down.
33:35 - 33:39
EN: First leg here or here, and then a bear breakout for the second leg.
33:39 - 33:41
EN: The bears were hoping this was going to be a breakout
33:41 - 33:45
EN: leading to a trend; instead, it led to a reversal.
33:45 - 33:47
EN: So, it’s a second leg bear trap.
33:47 - 33:51
EN: First leg down tried to be a Higher Low, and we got one more breakout,
33:52 - 33:54
EN: and second leg a Sell Climax that reversed.
33:58 - 34:03
EN: You can look for either a reversal into a bull trend like we got here,
34:03 - 34:05
EN: or an end of the selling and the beginning of a Trading Range.
34:06 - 34:09
EN: In this particular case we got a bull trend reversal.
34:11 - 34:15
EN: In either case, you’re going to be looking to buy a reversal up,
34:15 - 34:16
EN: especially above bull bars.
34:16 - 34:19
EN: This is a pretty dramatic reversal after a pretty strong selloff,
34:20 - 34:22
EN: and whenever you get a big reversal like that,
34:22 - 34:24
EN: it’s the dominant feature of the day.
34:24 - 34:27
EN: The day is unlikely to come back down here.
34:27 - 34:29
EN: It’ll either stay sideways or go up.
34:29 - 34:31
EN: Cup and handle.
34:31 - 34:33
EN: A reversal and then a bull flag.
34:33 - 34:36
EN: Traders will look to buy the bull flag.
34:39 - 34:41
EN: They can also buy the reversal.
34:41 - 34:43
EN: Look for bull bars closing near their highs.
34:43 - 34:44
EN: Even that.
34:48 - 34:49
EN: Another gap down.
34:49 - 34:51
EN: Moving Average is up here somewhere.
Slide 024
Time: 34:50
Bilingual Transcript
34:51 - 34:53
EN: A series of bear bars.
34:53 - 34:56
EN: Bears will start to sell below bear bars, betting on a reversal.
34:56 - 34:59
EN: We’re trying to reverse up here, but 2 big bear bars
34:59 - 35:01
EN: - probably going to get at least one more leg down.
35:02 - 35:03
EN: 2 more bear bars.
35:03 - 35:05
EN: A weak buy signal bar.
35:05 - 35:07
EN: Probably not a high probability buy.
35:07 - 35:10
EN: Might get one more leg down after this big bear bar.
35:10 - 35:14
EN: This does not look strong enough to reverse that big bear bar.
35:19 - 35:21
EN: Parabolic WedgeWedge – one, two, three
35:21 - 35:25
EN: - and we broke below the Parabolic Wedge and got a big reversal up.
35:25 - 35:30
EN: Bulls will start buying above bull bars – here, here, here.
35:33 - 35:36
EN: First reversal up from a strong bear trend usually minor.
35:36 - 35:39
EN: It can often go up far enough to make a swing profit,
35:40 - 35:42
EN: but usually you need some kind of a test down
35:42 - 35:45
EN: before you can get a major reversal into a bull trend.
35:46 - 35:48
EN: We have a Higher Low Major Trend Reversal here.
35:48 - 35:50
EN: We got a swing up, but not a bull trend.
35:50 - 35:54
EN: Ultimately, we got a Double Top bear flag and a new low.
35:57 - 35:58
EN: Gap down.
35:58 - 36:02
EN: Immediately tried to reverse up, but we have a high here,
Slide 025
Time: 36:00
Bilingual Transcript
36:02 - 36:04
EN: sold off, sold off, sold off.
36:04 - 36:07
EN: So, this is a gap down and a Wedge rally to the Moving Average,
36:07 - 36:09
EN: and the bear trend resumed.
36:09 - 36:13
EN: It collapsed in a Sell Climax and we’re reversing up again.
36:13 - 36:18
EN: So, we have a Wedge bear flag, opening reversal down from the Moving Average,
36:18 - 36:20
EN: and now we have a Double Bottom.
36:20 - 36:22
EN: Possible low of the day after a Sell Climax.
36:23 - 36:26
EN: Traders will take the sell and they’ll take the buy.
36:34 - 36:37
EN: Either take the first bull bar or, after 3 bear bars,
36:37 - 36:40
EN: you might wait to buy above a second or third bull bar.
36:40 - 36:43
EN: Pretty good reversal up after a dramatic selloff.
36:43 - 36:44
EN: Cup and handle.
36:44 - 36:49
EN: Selloff, reversal, and then bull flag or Double Bottom bull flag.
36:50 - 36:55
EN: This is a dominant feature, and probably will result in a low of the day.
36:55 - 36:58
EN: So that means the day will either be sideways or up.
37:02 - 37:06
EN: I said that you can get a gap down and a Sell Climax that reverses up,
37:06 - 37:11
EN: but sometimes it reverses and becomes a bear flag and the bear trend resumes down.
Slide 026
Time: 37:12
Bilingual Transcript
37:14 - 37:15
EN: Strong selloff on the open.
37:15 - 37:17
EN: Bulls trying to get a reversal up.
37:17 - 37:20
EN: Instead of getting a trend reversal,
37:20 - 37:22
EN: we got a bear flag and resumption of the bear trend.
37:26 - 37:27
EN: Consecutive Sell Climaxes.
37:27 - 37:31
EN: Every bear bar or series of bear bars is a Sell Climax.
37:32 - 37:34
EN: First reversal up probably minor.
37:34 - 37:38
EN: The bulls hoped for a second reversal and some kind of a Double Bottom.
37:38 - 37:41
EN: Instead, here, we got a resumption of the bear trend.
37:44 - 37:46
EN: The bulls hoped for a Parabolic Wedge.
37:47 - 37:52
EN: Selloff, pause, selloff, small bar pause, and a third leg down,
37:53 - 37:56
EN: or nested, spike, small channel.
37:56 - 37:59
EN: Bulls buy the reversal up or they’ll maybe buy above here.
37:59 - 38:01
EN: But bad follow-through.
38:01 - 38:04
EN: The buy signal bar not big, the entry bar not big.
38:04 - 38:06
EN: Bad follow-through here.
38:06 - 38:08
EN: Bull breakout here, not big.
38:08 - 38:09
EN: Bad follow-through here.
38:09 - 38:14
EN: This looks like a leg in a Trading Range or possibly a bear flag.
38:17 - 38:21
EN: Bears will look to sell below bear bars closing near their lows.
38:21 - 38:24
EN: So instead of getting a reversal up from a Sell Climax,
38:24 - 38:27
EN: the reversal became a bear flag and the bear trend resumed.
38:31 - 38:35
EN: Now we have a Wedge Bottom, a bigger Wedge Bottom – one, two, three.
38:35 - 38:37
EN: It’s consecutive Wedge Bottoms.
38:37 - 38:39
EN: We have a Parabolic Wedge here and a bigger Wedge here,
38:39 - 38:41
EN: and a very good-looking buy signal bar.
38:41 - 38:44
EN: So, you have to be expecting a couple legs up.
38:44 - 38:46
EN: Reasonable to take that buy.
38:47 - 38:49
EN: Wedge Bottom – one, two, three.
38:50 - 38:54
EN: You expect two legs up, and the pullback from the first leg typically
38:54 - 38:57
EN: forms a Higher Low Major Trend Reversal and
38:57 - 39:00
EN: a Head and Shoulders Bottom with the second leg down in the Wedge.
39:00 - 39:04
EN: So left shoulder, head, right shoulder, and you expect a second leg up.
39:04 - 39:05
EN: Here, that’s all you got.
39:06 - 39:09
EN: Two legs up and not a reversal into a bull trend.
39:09 - 39:11
EN: We got a new low of the day.
39:16 - 39:20
EN: The way I look at it is most patterns work 40% to 60% of the time,
39:21 - 39:24
EN: and that means they fail 40% to 60% of the time.
39:24 - 39:27
EN: So, any time you see a pattern, no matter how good it is,
39:28 - 39:32
EN: always be prepared for it to fail and always think about the possibility
39:32 - 39:37
EN: of taking a trade in the opposite direction when the original pattern fails.
39:39 - 39:42
EN: I began by saying that strong trends
Slide 027
Time: 39:40
Bilingual Transcript
39:42 - 39:46
EN: from the open that last all day happen only about once a week.
39:46 - 39:49
EN: 80% of the time, days have some kind of reversal on the open,
39:49 - 39:52
EN: usually in the first 1 hour, first hour and a half.
39:52 - 39:57
EN: I began by talking about how to enter – you should be entering with a stop
39:57 - 40:00
EN: - where to place your protective stop, and how to exit.
40:01 - 40:05
EN: I have several hundred patterns, and among that group of patterns,
40:05 - 40:08
EN: I talked about two variations of two patterns.
40:08 - 40:14
EN: First of all, a gap down and a Buy Climax that led to a reversal back down.
40:14 - 40:18
EN: Second, a gap down and a Buy Climax, but instead of reversing down,
40:18 - 40:21
EN: we got a bull flag and the bull trend resumed.
40:21 - 40:24
EN: Next, a gap down and a selloff that reversed up.
40:25 - 40:28
EN: Finally, a gap down and a selloff that tried to reverse up,
40:28 - 40:32
EN: but the reversal became a bear flag and the bear trend resumed.
40:36 - 40:37
EN: This is Al Brooks.
40:37 - 40:42
EN: Thank you for watching this bonus video on trading patterns on the open.