al-brooks-course
15 - ii, ioi, OO Patterns- Definitions
Raw transcript and slide notes for 15 - ii, ioi, OO Patterns- Definitions.
Overview
- Slides: 29
- Transcript segments: 679
- 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 - 00:06
EN: I’m Al Brooks, and I am recording a bonus video.
00:06 - 00:11
EN: Today I’m going to be talking about three relatively common small chart patterns:
00:11 - 00:16
EN: ii, ioi, and OO patterns.
00:16 - 00:18
EN: In this video, the first of two videos,
00:18 - 00:21
EN: I’m going to define what I mean by those terms.
Slide 001
Time: 00:22
Bilingual Transcript
00:23 - 00:25
EN: All three are BreakOut Mode patterns.
00:25 - 00:27
EN: They’re all sideways bars.
00:27 - 00:31
EN: Traders are looking to enter on breakout, buy above or sell below,
00:31 - 00:34
EN: and if it goes one way and then the other way,
00:34 - 00:37
EN: theoretically a trader would take both trades.
00:37 - 00:40
EN: An ii is inside-inside.
00:40 - 00:42
EN: It’s consecutive Inside Bars.
00:42 - 00:47
EN: An Inside Bar is a bar whose high is at or below the high of the prior bar,
00:47 - 00:50
EN: and its low is at or above the low of the prior bar.
00:51 - 00:57
EN: Next I’ll talk about an ioi, which is an Outside Bar followed by an Inside Bar.
00:57 - 01:00
EN: By definition, if a bar is an Outside Bar,
01:00 - 01:02
EN: it has a high above the high of the prior bar
01:02 - 01:05
EN: and a low below the low of the prior bar,
01:05 - 01:08
EN: and therefore that prior bar is inside the Outside Bar.
01:08 - 01:13
EN: So it’s an Inside Bar, an Outside Bar, and then another Inside Bar.
01:13 - 01:18
EN: And finally, I’ll talk about OO, consecutive Outside Bars.
01:19 - 01:23
EN: An Outside Bar is the bar whose high is at or above the high of the prior bar
01:23 - 01:27
EN: and its low is at or above the low of the prior bar.
01:30 - 01:33
EN: I want to begin with an overview of the three patterns.
01:33 - 01:35
EN: Again, they’re BreakOut Mode.
01:35 - 01:37
EN: Traders are looking to enter on breakout,
01:37 - 01:40
EN: hoping that they are catching the start of a trend.
Slide 002
Time: 01:42
Bilingual Transcript
01:45 - 01:47
EN: On the left I have 3 bars.
01:47 - 01:51
EN: This bar is inside of that bar; that bar is inside of that bar.
01:51 - 01:55
EN: So it’s an Inside Bar, inside of another Inside Bar.
01:55 - 01:57
EN: Consecutive Inside Bars, or ii.
01:58 - 02:02
EN: Next I have an Outside Bar followed by an Inside Bar,
02:02 - 02:06
EN: so there’s an Inside Bar, an Outside Bar, and an Inside Bar.
02:06 - 02:10
EN: Any time you have an Outside Bar, the bar before is an Inside Bar.
02:11 - 02:15
EN: And finally, I have 3 bars and the bars are getting bigger.
02:15 - 02:18
EN: The high of this bar is at or above the high of that bar;
02:18 - 02:21
EN: the low of this bar is at or below the low of that bar.
02:21 - 02:25
EN: It’s an Outside Bar, and it’s followed by a second consecutive Outside Bar.
02:27 - 02:29
EN: These are BreakOut Mode patterns.
02:29 - 02:34
EN: Theoretically a trader buys above and sells below, expecting a trend.
02:38 - 02:41
EN: If the breakout fails and reverses,
02:41 - 02:43
EN: theoretically a trader would take the opposite breakout.
02:43 - 02:48
EN: So for example, if a person bought on a stop above the high of the ii
02:48 - 02:51
EN: and then the market turned down and broke below the bottom of the ii,
02:52 - 02:53
EN: a trader would short.
02:53 - 02:56
EN: So he’d buy above the ii and sell
02:56 - 02:58
EN: if it fell below the lower of the two bars of the ii.
03:00 - 03:05
EN: Whenever you look at a 3-bar pattern like this, a sideways pattern like that,
03:05 - 03:09
EN: always assume that there are at least two legs up
03:09 - 03:12
EN: and two legs down on a smaller timeframe.
03:12 - 03:17
EN: Typically, an ii pattern is a Triangle on a smaller timeframe,
03:17 - 03:22
EN: and an OO pattern is an Expanding Triangle on a smaller timeframe.
03:22 - 03:26
EN: A Triangle has three pushes one way and two the other way.
Slide 003
Time: 03:28
Bilingual Transcript
03:31 - 03:33
EN: Now, what’s so special about these patterns?
03:33 - 03:35
EN: Why am I talking about them?
03:37 - 03:41
EN: Well, the most important reason is they all have a good Trader’s Equation.
03:41 - 03:45
EN: If you think about it, if you buy above the high of this bar
03:45 - 03:48
EN: and your stop is below the low of the ii,
03:48 - 03:51
EN: the lower of the two ii bars, the risk is small.
03:51 - 03:56
EN: You’re buying here and your stop is here or below here.
03:56 - 04:00
EN: Not much risk if you’re looking for a move that could last 10 or 20 bars.
04:00 - 04:05
EN: So very good risk/reward, and the probability is pretty good.
04:05 - 04:07
EN: Any time you have a BreakOut Mode pattern,
04:07 - 04:13
EN: in general the probability that a breakout will succeed or fail is about 50%.
04:13 - 04:16
EN: So 50% chance if it goes above the ii,
04:16 - 04:19
EN: 50% chance it’ll keep going up enough for a swing,
04:19 - 04:22
EN: 50% chance it’ll reverse down and go below.
04:22 - 04:26
EN: And if it breaks below, 50% chance it’ll go down for a swing.
04:26 - 04:29
EN: And sometimes if the pattern is especially good
04:29 - 04:32
EN: – good context (the bars to the left),
04:32 - 04:36
EN: a good signal bar – the probability can be as high as 60%.
04:36 - 04:40
EN: So for example, if you have any of these patterns after a Sell Climax,
04:40 - 04:45
EN: it often is a very good buy if the third bar is a bull bar closing on its high.
04:45 - 04:50
EN: And if it’s coming at the end of a Buy Climax, especially if there’s resistance,
04:50 - 04:55
EN: like a Double Top, then if you have a third bar closing on its low,
04:55 - 04:56
EN: it’s a higher probability sell.
04:56 - 05:00
EN: In those instances, the probability could be 60% that you’ll get a swing trade.
Slide 004
Time: 05:04
Bilingual Transcript
05:05 - 05:07
EN: Some examples.
05:07 - 05:08
EN: This is a bear bar.
05:08 - 05:10
EN: Open here, close here.
05:10 - 05:10
EN: This is a bull bar.
05:10 - 05:12
EN: Open here, close there.
05:16 - 05:21
EN: A bull trend rarely abruptly reverses into a bear trend.
05:21 - 05:24
EN: Opposite is true for a bull trend reversal.
05:24 - 05:28
EN: A bear trend rarely immediately, instantly reverses into a bull trend.
05:28 - 05:31
EN: Normally a bull trend has to stop going up,
05:31 - 05:34
EN: at least for a few bars, before a bear trend can begin.
05:34 - 05:38
EN: And sometimes it stops going up and goes sideways for a few bars
05:38 - 05:40
EN: and creates one of these patterns.
05:44 - 05:49
EN: Sometimes you get more than 3 bars, but I’m talking today about 3-bar patterns.
05:50 - 05:54
EN: It’s higher probability if you’re looking to sell
05:54 - 05:57
EN: and you have a bear bar closing on or near its low.
05:57 - 05:59
EN: You’d sell below the low of that bar.
05:59 - 06:01
EN: Here, ioi.
06:01 - 06:03
EN: Inside-outside-inside.
06:03 - 06:06
EN: You sell on a stop 1 tick below the low of that bar.
06:06 - 06:11
EN: If it’s a Forex market, you sell 1 pip below the low of that bar.
06:11 - 06:13
EN: It doesn’t matter on the timeframe.
06:13 - 06:15
EN: This applies to all timeframes.
06:15 - 06:17
EN: Outside Bar, bigger Outside Bar.
06:17 - 06:20
EN: Theoretically, you sell below the low of that bar.
06:20 - 06:23
EN: But in general, selling below a big bull bar
06:23 - 06:26
EN: is not a particularly high probability thing to do.
06:26 - 06:29
EN: In this case, it’s probably better to wait
06:29 - 06:31
EN: until you have a bear bar closing near its low
06:31 - 06:33
EN: and then sell on a stop below that bear bar.
06:39 - 06:40
EN: Here are examples.
06:40 - 06:43
EN: You’d sell on a stop 1 tick below that bar
06:43 - 06:46
EN: and put a stop either above the top of the ii,
06:46 - 06:50
EN: the higher of the 2 bars, or the top of the move.
06:50 - 06:54
EN: So if this is a bull trend and you reverse down and get an ii,
06:54 - 06:57
EN: you could put a stop just above the top of the bull trend
06:57 - 06:59
EN: since it’s not much above that.
06:59 - 07:02
EN: So you’re risking a little bit more and you’re getting higher probability.
07:04 - 07:06
EN: Same thing here, ioi.
07:06 - 07:08
EN: You’d sell on a stop 1 tick below that bar
07:08 - 07:13
EN: – if it’s a Forex market, 1 pip below that bar – and put a stop above the high.
07:14 - 07:16
EN: And then here, an OO.
07:16 - 07:18
EN: Let’s say it’s coming in a bull trend.
07:19 - 07:22
EN: If you sell here, below that bear bar,
07:22 - 07:26
EN: you could put a stop above the bear bar, but this is not much higher.
07:26 - 07:31
EN: It’s probably better to put the stop above the top of the bull trend.
07:31 - 07:33
EN: We’re assuming this is a bull trend.
07:33 - 07:36
EN: We got the OO and then a reversal down.
Slide 005
Time: 07:39
Bilingual Transcript
07:41 - 07:44
EN: Now, I said BreakOut Mode patterns in general,
07:44 - 07:49
EN: 50% chance the breakout will succeed, 50% chance it’ll reverse.
07:49 - 07:54
EN: Here we have an ii, and we have a bear bar closing on its low,
07:54 - 07:57
EN: so it’s reasonable to look to sell below the low of the bar.
07:57 - 08:01
EN: That’s assuming that this is occurring either in a bull trend or a bear trend.
08:02 - 08:05
EN: It’s much less reliable to trade any of these patterns
08:05 - 08:07
EN: if the market is sideways in a tight range.
08:11 - 08:14
EN: A trader would place an order to sell 1 tick below the low
08:14 - 08:17
EN: of that bear bar closing on or near its low.
08:17 - 08:18
EN: Here it’s in the lower third.
08:18 - 08:24
EN: He’d get filled here, and he’d put a stop either 1 tick above the ii,
08:24 - 08:27
EN: the higher of the 2 bars, or 1 tick above the top of the move,
08:27 - 08:28
EN: which would be up here.
Slide 006
Time: 08:30
Bilingual Transcript
08:34 - 08:37
EN: If the market reverses abruptly like that,
08:37 - 08:42
EN: he would get stopped out of his short either above that or above this,
08:42 - 08:45
EN: and then he’d have to consider going long.
08:45 - 08:47
EN: It’s still a BreakOut Mode pattern.
08:47 - 08:50
EN: It’s a bear breakout that failed, and now we’re having a bull breakout.
08:50 - 08:53
EN: Theoretically, a trader could buy on a stop 1 tick above the bull bar
08:53 - 08:59
EN: or 1 tick above the high, assuming this is a rally and then we have a high.
08:59 - 09:03
EN: Or he could wait and buy above the high of the Outside Up bar.
09:03 - 09:08
EN: This is big bull Outside Up bar, a bull bar closing on or near its high.
09:08 - 09:10
EN: He could buy on a stop above that.
09:10 - 09:11
EN: Here’s the follow-through bar.
09:11 - 09:15
EN: He could buy on a stop above the high of the follow-through bar.
09:18 - 09:23
EN: If a bear shorted here, he could reverse to long above that or above the ii here.
09:25 - 09:28
EN: Higher probability if you get consecutive bull bars.
09:28 - 09:31
EN: We have a close above the top of the trend,
09:31 - 09:35
EN: assuming this was a bull trend, which is good for the bulls.
09:35 - 09:39
EN: You can buy on a stop above that bar or you can buy on a stop above the high
09:39 - 09:42
EN: of the follow-through bar,
09:42 - 09:44
EN: especially when you have a pretty good follow-through bar.
09:44 - 09:45
EN: This is an example of that.
09:46 - 09:48
EN: You have a good follow-through bar, you have consecutive,
09:48 - 09:53
EN: decent-size bull bars closing on their highs, both closing above the pattern.
09:53 - 09:57
EN: Higher probability to sell on a stop above the high of this follow-through bar.
09:57 - 09:58
EN: You’d get filled over here.
09:59 - 10:01
EN: High probability, stop further away.
10:01 - 10:03
EN: But that’s always the tradeoff.
10:03 - 10:08
EN: Whenever you get a higher probability trade, the risk/reward is going to be worse.
10:08 - 10:14
EN: There’s less room for profit because more of the move has already taken place
10:14 - 10:15
EN: and the stop is further away.
10:20 - 10:25
EN: ii, ioi, OO patterns are BreakOut Mode patterns.
Slide 007
Time: 10:20
Bilingual Transcript
10:26 - 10:28
EN: Traders look to trade them in trends.
10:28 - 10:30
EN: They want sustained moves.
10:30 - 10:33
EN: They want a market where there probably are traders
10:33 - 10:36
EN: entering with stops above or below.
10:36 - 10:41
EN: Therefore, they’re looking for reversal patterns or flags.
10:41 - 10:43
EN: For example, here we have a bull trend
10:43 - 10:48
EN: and then we have an OO pattern (Outside Bar, Outside Bar).
10:48 - 10:52
EN: Traders look for either a resumption of the bull trend above
10:52 - 10:57
EN: – in other words, a bull flag – or a top, a reversal below.
10:57 - 11:00
EN: In this case they’ll look to sell below the bear bar on a stop
11:00 - 11:04
EN: 1 tick below the bar, and they did get their reversal.
11:04 - 11:05
EN: So OO.
11:05 - 11:07
EN: It could’ve been a bull flag.
11:07 - 11:09
EN: In this case, it was a top.
11:10 - 11:14
EN: And here, we have an ioi pattern.
11:14 - 11:17
EN: There’s an Inside Bar after an Outside Bar.
11:17 - 11:19
EN: It’s coming in a trend.
11:19 - 11:22
EN: The market broke above and we got more trend.
11:22 - 11:33
EN: Here, we have an ioi, but also a second Inside Bar, so it’s both an ioi and an ii.
11:33 - 11:36
EN: You could call it an ioii.
11:36 - 11:37
EN: That’s what I would call it.
11:37 - 11:40
EN: Traders will enter with a stop above or below.
11:41 - 11:44
EN: In general, if you have bull bars closing near their highs
11:44 - 11:48
EN: at the end of the pattern, traders will be more interested in buying above.
11:48 - 11:51
EN: And if you have a bear bar as the third bar in the pattern,
11:51 - 11:56
EN: especially a strong bear bar, traders will be more interested in selling below,
11:56 - 11:58
EN: less interested in buying above.
11:59 - 12:04
EN: These are trend patterns, either for trend reversal or trend continuation.
12:05 - 12:07
EN: They are not limit order patterns.
12:07 - 12:09
EN: Here we have consecutive Inside Bars.
12:09 - 12:13
EN: We have 3 of them, but they’re coming in a Tight Trading Range.
12:13 - 12:16
EN: This is a Limit Order Market, not a stop order market.
12:16 - 12:19
EN: A stop order market, if you sell below a bar,
12:19 - 12:23
EN: you’re expecting a series of bars down below, like we have over here.
12:23 - 12:25
EN: You’re looking for a trend.
12:25 - 12:29
EN: In a Limit Order Market, you’re expecting more buyers
12:29 - 12:31
EN: below bars and more sellers above bars.
12:31 - 12:34
EN: It’s a Limit Order Market, and therefore,
12:34 - 12:37
EN: you should not be trading with stops in a Tight Trading Range.
12:37 - 12:40
EN: Any of these patterns – this is an ii, but any of these patterns,
12:40 - 12:43
EN: if they’re coming in a Tight Trading Range,
12:43 - 12:47
EN: especially where the bars are very small and the bodies are very small,
12:47 - 12:49
EN: it’s better not to trade them.
12:49 - 12:51
EN: So yes, we have an ii.
12:51 - 12:53
EN: In fact, we have an iii, 3 Inside Bars.
12:53 - 12:56
EN: We have a bear bar closing near its low.
12:56 - 12:57
EN: We have another bear bar here.
12:57 - 13:01
EN: But the bars are all small and they’re coming in a Tight Trading Range.
13:01 - 13:03
EN: This is a Limit Order Market.
13:03 - 13:07
EN: There probably will be more buyers below that bear bar than sellers.
13:08 - 13:12
EN: A Limit Order Market is a market where traders look to buy
13:12 - 13:16
EN: at the low of the prior bar and buy more lower, and then scalp out,
13:16 - 13:20
EN: and they sell above the high of the prior bar and sell more higher,
13:20 - 13:22
EN: and then scalp out.
13:22 - 13:27
EN: This is not the kind of pattern where traders should be entering with stops.
13:27 - 13:31
EN: So if you see any of these patterns in a Tight Trading Range,
13:31 - 13:35
EN: it’s better not to trade them with stops, and wait for some other pattern.
13:35 - 13:38
EN: It’s better to wait for a strong breakout up or down,
13:38 - 13:40
EN: or for a breakout that reverses,
13:40 - 13:44
EN: so an upside breakout that reverses, and then maybe sell that.
13:44 - 13:47
EN: Or a downside breakout that reverses, maybe buy that.
13:47 - 13:49
EN: Or a very strong downside breakout,
13:49 - 13:52
EN: and then start to sell because then it’s a bear trend.
13:52 - 13:58
EN: Or an upside breakout, then look to buy because then it’s a bull trend.
14:03 - 14:06
EN: Consecutive Inside Bars (ii).
Slide 008
Time: 14:08
Bilingual Transcript
14:09 - 14:11
EN: This bar is inside of that bar.
14:11 - 14:12
EN: This bar is inside of that bar.
14:12 - 14:15
EN: So ii, inside-inside.
14:18 - 14:21
EN: These are what I would call perfect Inside Bars.
14:21 - 14:25
EN: Remember I said that an Inside Bar has its low at
14:25 - 14:27
EN: or above the low of the prior bar.
14:27 - 14:29
EN: If it’s above, I call it perfect.
14:29 - 14:31
EN: So this is a perfect Inside Bar.
14:31 - 14:35
EN: Here’s the second one, low above that low, not at that low;
14:35 - 14:38
EN: high below that low, not at that high.
14:39 - 14:44
EN: Perfect Inside Bars have a higher probability of leading to a profitable trade.
14:46 - 14:49
EN: Here are some variations of an ii pattern.
14:49 - 14:51
EN: This bar is inside of that bar,
14:51 - 14:54
EN: and I would say this one is inside of that bar as well.
14:55 - 14:59
EN: High of the bar is at that high, and the low is above that low,
14:59 - 15:02
EN: so I would still call this an ii,
15:02 - 15:05
EN: but I think it’s a little bit less reliable than a perfect pattern
15:05 - 15:09
EN: where the highs are lower and the lows are higher.
15:13 - 15:14
EN: Another example.
15:14 - 15:18
EN: So instead of the two Inside Bars having identical highs,
15:18 - 15:20
EN: here the two Inside Bars have identical lows.
15:25 - 15:30
EN: And then here’s an example where all three bars have the same high,
15:30 - 15:32
EN: and the two ii bars have the same low.
15:32 - 15:37
EN: The two Inside Bars have identical highs and identical lows, but they’re still ii.
15:38 - 15:40
EN: The body can be bigger,
15:41 - 15:45
EN: but usually if you’re getting shrinking bars, you’ll get shrinking bodies.
15:45 - 15:52
EN: So more often than not, the body is the same size as the second bar or smaller.
15:52 - 15:55
EN: This would be unusual to have a bigger second body.
15:56 - 16:01
EN: In these examples, I’m not showing whether the bodies are bull or bear bodies.
16:01 - 16:02
EN: It doesn’t matter.
16:02 - 16:05
EN: In terms of what I’m explaining here, the bodies don’t matter.
16:05 - 16:09
EN: But as I said, if you’re looking to buy, it’s better if the third bar,
16:09 - 16:13
EN: the second bar of the ii, closes at or near its high.
16:13 - 16:14
EN: If you’re looking to sell,
16:14 - 16:18
EN: it’s better if it has a bear body and it closes at or near its low.
16:24 - 16:27
EN: In general, the more perfect a pattern is,
Slide 009
Time: 16:25
Bilingual Transcript
16:27 - 16:30
EN: the higher the probability that you’ll get a profitable trade.
16:31 - 16:37
EN: If you have a perfect ii, Lower Highs, Higher Lows, and you’re looking to sell,
16:37 - 16:41
EN: and this bar closes on or near its low, it would be a higher probability sell
16:41 - 16:44
EN: than if it had let’s say a bull body.
16:48 - 16:52
EN: The more obvious a pattern, the more perfect it is,
16:52 - 16:55
EN: the more computers will recognize it, the more computers will trade it,
16:55 - 16:59
EN: the more traders will trade it, and the more traders and computers
16:59 - 17:04
EN: will chase it as it goes up, if we’re talking about buys in these examples.
17:04 - 17:06
EN: For sells, it would be the opposite.
17:06 - 17:09
EN: If everybody sees it and it starts to go down
17:09 - 17:13
EN: and you start to get a series of bear bars closing on their lows, that’s perfect.
17:13 - 17:17
EN: You’ll get more and more traders willing to sell as it goes down.
17:17 - 17:21
EN: It increases the probability that you’ll make a good profit.
17:25 - 17:27
EN: A bull bar, bear bar, bull bar.
Slide 010
Time: 17:25
Bilingual Transcript
17:27 - 17:29
EN: Consecutive Inside Bars, and they’re perfect.
17:29 - 17:34
EN: This low is above that low, this low is above that low, and we have Lower Highs.
17:34 - 17:36
EN: We have a bull bar closing near its high.
17:37 - 17:40
EN: It doesn’t matter if this is a bull trend; this would be a bull flag.
17:40 - 17:44
EN: If it was a bear trend, it could be a reversal up,
17:44 - 17:47
EN: and you’d buy above the high of that bar.
17:51 - 17:55
EN: Place a stop to enter 1 tick above the high of the second bar.
17:55 - 18:01
EN: As I said before, if this second bar of the ii had a bear body
18:01 - 18:06
EN: and it breaks out above, it’s higher probability to wait to see if the entry bar
18:06 - 18:10
EN: is a bull bar closing on its high and then buy above the entry bar.
18:10 - 18:13
EN: It’s higher probability buying above bull bars,
18:13 - 18:16
EN: especially bull bars closing at or near their highs.
18:19 - 18:22
EN: The stop theoretically is below the ii.
18:22 - 18:26
EN: If this is coming in a bear trend and we get the ii,
18:26 - 18:29
EN: you could put the stop here or below the low of the bear trend.
18:29 - 18:32
EN: Remember, if it goes above the ii, it’s a buy.
18:32 - 18:35
EN: If it goes below the lower of the two bars, it’s a sell.
18:35 - 18:39
EN: So theoretically, you could exit below the bear bar
18:39 - 18:41
EN: or you could go short below the bear bar,
18:41 - 18:44
EN: or you could exit or go short below the bottom of the trend,
18:44 - 18:47
EN: assuming this ii is coming in a bear trend.
Slide 011
Time: 18:50
Bilingual Transcript
18:52 - 18:56
EN: I mentioned a few minutes ago, if you are breaking above an ii
18:56 - 19:01
EN: and the second Inside Bar is a bear bar, it’s still a buy above that bar.
19:01 - 19:03
EN: Some traders will buy above a bull bar.
19:03 - 19:04
EN: This is a bull bar.
19:04 - 19:05
EN: They’d buy above that.
19:05 - 19:07
EN: Others would wait for the breakout bar,
19:07 - 19:11
EN: and if it’s a bull bar closing near its high, they’ll buy above that.
19:11 - 19:12
EN: That’s higher probability.
19:12 - 19:18
EN: The stop is further away, but the increased risk – that’s the price you pay
19:18 - 19:21
EN: to get higher probability, and that’s an okay thing to do.
19:23 - 19:26
EN: You could buy above the second Inside Bar,
19:29 - 19:33
EN: and you could put a stop either below the ii or, if this is a bear trend,
19:33 - 19:36
EN: you’d put the stop below the bottom of the bear trend.
19:38 - 19:43
EN: Higher probability, buy 1 tick or 1 pip above the high of a bull bar.
19:43 - 19:47
EN: In this case, the entry bar, the breakout bar, is a bull bar.
Slide 012
Time: 19:50
Bilingual Transcript
19:52 - 19:58
EN: Here we have an Inside Bar following an Inside Bar, and we’re breaking below it.
19:58 - 20:02
EN: But the close of the bar is above the midpoint of the bar,
20:02 - 20:05
EN: so that’s not a particularly strong sell signal bar
20:05 - 20:09
EN: because when we were down here, traders bought and it went up.
20:09 - 20:13
EN: It reduces the chances that a lot of traders will sell if it goes below that bar.
20:13 - 20:16
EN: And here’s another bar with a big tail below.
20:17 - 20:20
EN: Theoretically, you could sell on a stop below this bar,
20:20 - 20:22
EN: but a lot of traders prefer to sell below bear bars
20:22 - 20:27
EN: that close on or near their lows, so it’s higher probability to sell below this bar,
20:27 - 20:31
EN: 1 tick or 1 pip below that bar, and put the stop
20:31 - 20:34
EN: either above the ii or above the top of the pattern.
20:34 - 20:36
EN: So if this is a bull trend, you’d put the stop up here.
20:36 - 20:42
EN: If it’s a bear trend, then this is a bear flag and you’d put the stop above here.
20:46 - 20:51
EN: You could sell below the ii or, if you want higher probability
20:51 - 20:55
EN: – and many traders do – they’ll wait for a bear bar closing on or near its low,
20:55 - 20:59
EN: and they’ll sell below that bar and get filled over here.
Slide 013
Time: 21:03
Bilingual Transcript
21:04 - 21:07
EN: Here we have an ii, and what do you notice?
21:07 - 21:12
EN: Traded below the ii, triggering a sell, and in the same bar,
21:12 - 21:19
EN: it immediately went above the high of the ii, the first of the two Inside Bars.
21:19 - 21:20
EN: So what do you do?
21:20 - 21:23
EN: First of all, I don’t like to sell below a bull bar,
21:23 - 21:26
EN: but technically it’s okay to do that.
21:26 - 21:31
EN: If you did sell below the bull bar, you’d get filled here on your short.
21:31 - 21:35
EN: In the same bar, your stop would get hit, and that’s okay.
21:35 - 21:38
EN: You could reverse to long above that or you could wait
21:38 - 21:41
EN: for a bull bar closing near its high and get long above this.
21:42 - 21:45
EN: Here, in this case, we have the opposite.
21:45 - 21:49
EN: We have an ii where the second bar has a bull body.
21:49 - 21:52
EN: Only a small bull body, but a bull body.
21:52 - 21:55
EN: You could sell below the low of that bull bar.
21:55 - 21:58
EN: You could sell below this bar because it’s below the ii
21:58 - 22:02
EN: and it’s a bear bar closing near its low, or you could sell
22:02 - 22:05
EN: below the low of that bar, a bear bar closing on its low.
22:09 - 22:17
EN: We have 4 bars, and the second and third bar are consecutive Inside Bars – ii, ii.
22:19 - 22:21
EN: Now, I want you to look at this.
22:21 - 22:24
EN: Remember I said every ii, every ioi,
22:24 - 22:29
EN: every OO has at least some kind of a Double Top of a Double Bottom.
22:29 - 22:33
EN: Here we went down, we went up to the high of that bar,
22:33 - 22:36
EN: we came down to the close of that bar – at some point we were up
22:36 - 22:39
EN: at the high of this bar and then we closed down here.
22:39 - 22:43
EN: So in this particular case, we have a low and a Higher Low,
22:43 - 22:46
EN: so it doesn’t look like a Double Bottom, but it’s a type of Double Bottom,
22:46 - 22:47
EN: and we have two highs.
22:47 - 22:50
EN: So there’s a Double Top and a Double Bottom.
22:51 - 22:52
EN: In this case, same thing.
22:52 - 22:57
EN: We have a low, we have a second low, and we have a high and a second high.
22:57 - 23:02
EN: Remember I said that ii’s on smaller timeframes are usually Triangles.
23:02 - 23:06
EN: At a minimum, they’re going to be at least a Micro Double Top
23:06 - 23:10
EN: and a Micro Double Bottom, and that’s why I call it a BreakOut Mode pattern.
23:10 - 23:12
EN: It’s a small Trading Range.
23:15 - 23:19
EN: Micro Double Bottom, this low and that pullback
23:19 - 23:22
EN: to the close of the bar from the high of the bar.
23:24 - 23:25
EN: Micro Double Top.
23:25 - 23:29
EN: We went up here, down to the close, up here, down to the close.
23:33 - 23:37
EN: As I said, it’s probably a Triangle on a smaller timeframe.
23:37 - 23:40
EN: On this timeframe, there’s a Micro Double Top
23:40 - 23:42
EN: and a Micro Double Bottom.
23:45 - 23:46
EN: Same thing over here.
23:46 - 23:52
EN: A Micro Double Top on this timeframe and a Micro Double Bottom on this timeframe
23:52 - 23:56
EN: – that low and then the pullback from that high to that close.
23:56 - 24:00
EN: And if you looked at a smaller timeframe chart, you’d probably see a Triangle.
Slide 014
Time: 24:04
Bilingual Transcript
24:05 - 24:08
EN: Here’s an ii, 5-minute chart, and we’re breaking above it.
24:08 - 24:10
EN: Consecutive Inside Bars.
24:16 - 24:19
EN: Usually a Triangle on a smaller timeframe chart.
24:19 - 24:22
EN: If you looked at a 1-minute chart, you’d see we have three lows
24:22 - 24:26
EN: – one, two, three – and two highs, and a Trading Range
24:26 - 24:30
EN: where you have a Lower High and two Higher Lows, that’s a Triangle.
24:30 - 24:32
EN: This looks like this.
24:32 - 24:34
EN: This is the 1-minute version of that.
24:34 - 24:37
EN: You can see it’s a Triangle and we’re breaking above the top.
24:39 - 24:42
EN: Not every Triangle is an ii on a higher timeframe,
24:42 - 24:46
EN: so you could probably find some timeframe
24:46 - 24:50
EN: where the Triangle is an ii, but it’s not worth looking.
24:50 - 24:54
EN: Also, if you see an ii on the timeframe that you’re trading,
24:55 - 24:57
EN: it’s not worth looking at a smaller timeframe to see a Triangle.
24:57 - 24:59
EN: You know it’s there.
25:02 - 25:04
EN: This is a monthly chart of Bitcoin.
25:04 - 25:06
EN: Consecutive Inside Bars.
Slide 015
Time: 25:05
Bilingual Transcript
25:07 - 25:10
EN: Here’s a weekly chart of Bitcoin.
25:10 - 25:13
EN: We have three highs – one, two, and three – and two lows.
25:13 - 25:14
EN: A Triangle.
25:14 - 25:18
EN: And we have a bear breakout here, and this is the bear breakout on the weekly chart.
25:23 - 25:25
EN: Look at this: 4 consecutive Inside Bars.
Slide 016
Time: 25:25
Bilingual Transcript
25:25 - 25:29
EN: This bar is inside that, and then we have 3 more Inside Bars.
25:29 - 25:31
EN: So we have 4 consecutive Inside Bars.
25:31 - 25:33
EN: No different from an ii.
25:33 - 25:37
EN: It doesn’t matter if the pattern has 3 Inside Bars
25:37 - 25:41
EN: or 4 Inside Bars or 100 Inside Bars; it’s still a BreakOut Mode pattern,
25:41 - 25:44
EN: and it’s going to be a Triangle on a smaller timeframe chart.
25:47 - 25:50
EN: 60-minute, 4 consecutive Inside Bars.
25:50 - 25:53
EN: 5-minute chart, you can see it’s a Triangle.
25:55 - 26:03
EN: Always assume that every ii or iii or iiii is a Triangle on a smaller timeframe.
26:03 - 26:05
EN: And that really doesn’t help you.
26:05 - 26:09
EN: It might help you feel more comfortable that it’s a BreakOut Mode pattern
26:09 - 26:11
EN: because a Triangle is a more common
26:11 - 26:15
EN: or more classic BreakOut Mode pattern, but it doesn’t matter.
26:15 - 26:19
EN: The market’s sideways and we’re contracting; we’re in BreakOut Mode.
26:19 - 26:23
EN: Whether or not you know it’s a Triangle on a smaller timeframe chart,
26:23 - 26:26
EN: you’re going to trade it like a BreakOut Mode pattern on the chart in front of you.
26:27 - 26:32
EN: With a BreakOut Mode pattern, as I said, 50% chance the first breakout up
26:32 - 26:37
EN: or down will fail, and 50% chance you’ll get an upside breakout,
26:37 - 26:40
EN: 50% chance you’ll get a downside breakout.
26:40 - 26:41
EN: And sometimes you get both.
26:41 - 26:43
EN: Here we went down and up.
Slide 017
Time: 26:46
Bilingual Transcript
26:47 - 26:54
EN: Here is a Triangle late in a bear trend, so a bear trend and a Triangle.
26:54 - 26:58
EN: A Triangle late in a bear trend is typically the Final Flag, final bear flag.
26:58 - 27:00
EN: It’s an area of agreement.
27:00 - 27:02
EN: Traders think this price is fair.
27:02 - 27:06
EN: If we break out to the downside or to the upside,
27:06 - 27:09
EN: the market will tend to gravitate back to this fair price.
27:09 - 27:13
EN: So it’s often the Final Flag in a bear trend; if you get a downside breakout,
27:13 - 27:16
EN: you’re probably soon going to come back to the apex of the Triangle.
27:20 - 27:23
EN: This is a 5-minute chart, and on the 60-minute chart,
27:23 - 27:28
EN: if you looked at it, you’d discover that this Triangle was in fact an ii.
27:28 - 27:33
EN: If you were trading the 60-minute chart, you would assume this ii is a Triangle
27:33 - 27:36
EN: on a smaller timeframe chart, like a 5-minute chart.
27:40 - 27:44
EN: ioi, an Inside Bar after an Outside Bar.
Slide 018
Time: 27:45
Bilingual Transcript
27:46 - 27:48
EN: We have an Inside Bar.
27:48 - 27:53
EN: The bar before it is an Outside Bar, and therefore the bar before the Outside Bar
27:53 - 27:57
EN: is an Inside Bar, and therefore we have an inside-outside-Inside Bar.
27:57 - 27:59
EN: Again, a BreakOut Mode pattern.
28:03 - 28:06
EN: This is an example of a perfect ioi.
28:06 - 28:11
EN: The low of the Outside Bar is below, not at, the low of the prior bar.
28:11 - 28:16
EN: The high of the Outside Bar is above, not at, the high of the prior bar.
28:16 - 28:22
EN: And then the Inside Bar that follows has a high below the high of the Outside Bar
28:22 - 28:25
EN: and a low above the low of the Outside Bar.
28:29 - 28:31
EN: Here are some variations.
28:31 - 28:35
EN: This bar is inside because its low is above the low of that bar
28:35 - 28:38
EN: and its high is at the high of that bar.
28:39 - 28:41
EN: Again, the more perfect a pattern is,
28:41 - 28:44
EN: the higher the probability that you make money.
28:44 - 28:47
EN: But here are some variations where the Inside Bar
28:47 - 28:50
EN: has a high at the high of the Outside Bar, not below.
28:54 - 28:59
EN: Here’s another example where all 3 bars have identical lows,
28:59 - 29:03
EN: but the Outside Bar is above both Inside Bars.
29:06 - 29:10
EN: Another example where the Outside Bar is perfect,
29:11 - 29:15
EN: but the bar after it has a high at the high of that bar
29:15 - 29:17
EN: and a low at the low of this bar.
29:18 - 29:22
EN: Therefore, this bar is an Inside Bar, but its high is at that bar,
29:22 - 29:24
EN: so it’s also an Outside Bar.
29:24 - 29:28
EN: Its low is at that low, so it’s also an Outside Bar.
29:28 - 29:33
EN: So this is an ioi, and it’s also an OO.
29:33 - 29:38
EN: This bar is an Outside Bar; this bar is both an Inside Bar and an Outside Bar,
29:38 - 29:42
EN: so you can call it either an ioi or an OO.
29:42 - 29:43
EN: It doesn’t matter.
29:43 - 29:45
EN: Both are BreakOut Mode patterns.
Slide 019
Time: 29:48
Bilingual Transcript
29:48 - 29:51
EN: We have an Outside Bar and the second bar is a bear bar.
29:51 - 29:55
EN: This could be in a bear trend; it could be a bull trend,
29:55 - 29:57
EN: so it could be the top of a bull trend.
29:57 - 29:59
EN: It could be a bear flag in a bear trend.
29:59 - 30:01
EN: We have a bear bar closing on or near its low.
30:01 - 30:06
EN: Traders will sell on a stop 1 tick or 1 pip below the low of that bear bar.
30:12 - 30:17
EN: It’s a higher probability ioi because it’s perfect.
30:17 - 30:18
EN: It looks very good.
30:18 - 30:22
EN: We have a big bull bar and then we have a bear bar closing on or near its low.
30:22 - 30:25
EN: That’s a pretty reliable pattern.
30:25 - 30:30
EN: You’d put a stop above the top of the pattern, the ioi.
30:33 - 30:36
EN: Here’s an example of an ioi.
Slide 020
Time: 30:35
Bilingual Transcript
30:36 - 30:39
EN: Instead of getting a bear breakout, we have a bull breakout.
30:39 - 30:41
EN: But remember what I said.
30:41 - 30:46
EN: It’s in general a higher probability trade to buy above a bull bar closing on
30:46 - 30:48
EN: or near its high, and not above a bear bar.
30:49 - 30:52
EN: Theoretically, you could buy on a stop above this bar.
30:52 - 30:53
EN: Here’s a bull bar.
30:53 - 30:55
EN: You could buy on a stop above that bar.
30:55 - 31:00
EN: I usually wait to see the entry bar and then buy on a stop above the entry bar.
31:00 - 31:03
EN: When you have a bad signal bar like this – this is a bear bar
31:03 - 31:07
EN: – it would be better if it went below and triggered a sell.
31:07 - 31:09
EN: Instead, we’re going above, triggering a buy.
31:09 - 31:12
EN: That’s lower probability.
31:12 - 31:16
EN: So instead of buying above this bar, I would buy above that bar.
31:16 - 31:21
EN: If instead this bar went below that bar, I would sell below the Inside Bar.
31:27 - 31:31
EN: You could buy above the ioi, but if you want higher probability,
31:31 - 31:34
EN: it’s better to buy above a bull bar closing on its high.
31:36 - 31:39
EN: So you’d buy on a stop 1 tick or 1 pip
31:39 - 31:42
EN: above the high of this bar and get filled over here.
Slide 021
Time: 31:45
Bilingual Transcript
31:46 - 31:48
EN: Here we have 5 bars.
31:48 - 31:49
EN: We have an ioi.
31:49 - 31:51
EN: Bars 2, 3, 4.
31:51 - 31:53
EN: BreakOut Mode, and we broke out above,
31:53 - 31:57
EN: and here we have the same pattern but we broke out below.
31:58 - 32:04
EN: Reasonable to sell below Bar 4, a bear bar closing on its low and an ioi.
32:04 - 32:08
EN: Here, less reasonable to buy above that bar because it’s a bear bar.
32:11 - 32:15
EN: Bars 2, 3, and 4 form ioi patterns.
32:18 - 32:21
EN: We went up and then we went down to that low, right?
32:21 - 32:24
EN: We went up here and here’s the close, so we’re going down.
32:24 - 32:26
EN: And then on this bar we went above that bar,
32:26 - 32:29
EN: and then we have a bear bar here, so we went down here.
32:29 - 32:34
EN: So in this pattern, we have at least a Micro Double Top and a Micro Double Bottom.
32:34 - 32:38
EN: That is what you often see in BreakOut Mode patterns
32:40 - 32:44
EN: – the market making several attempts to go up or down
32:45 - 32:47
EN: and then traders are looking for a breakout.
32:47 - 32:52
EN: Here, there’s a Micro Double Bottom and we also have a Micro Double Top,
32:52 - 32:54
EN: this high and that high.
32:58 - 33:01
EN: Here, it’s in a bull trend.
33:01 - 33:03
EN: This is a High 1 bull flag.
33:03 - 33:04
EN: That’s the high of the bull trend.
33:04 - 33:05
EN: We have a pullback.
33:05 - 33:08
EN: It’s a High 1 bull flag above that bar.
33:08 - 33:11
EN: You could buy above the bear bar, you could buy above the bull bar,
33:11 - 33:12
EN: or you could wait for the breakout bar and,
33:12 - 33:15
EN: if it closes near its high, buy above the high of that bar.
33:19 - 33:24
EN: In this chart the market went from that low up to that close and up to that high,
33:24 - 33:26
EN: and then it went down to this low,
33:26 - 33:29
EN: and then it went up to that high, and then down here.
33:29 - 33:31
EN: Bear bar, so it’s going down.
33:31 - 33:32
EN: This is a Micro Double Top.
33:35 - 33:37
EN: Bar 2 and 3 form the Micro Double Top.
33:40 - 33:44
EN: And 2 and 4 are a Low 2 top.
33:44 - 33:48
EN: We went up here, we went down; we went up here, we went down.
33:48 - 33:51
EN: This bar went below that, so it’s a first reversal,
33:51 - 33:54
EN: and now we have a second reversal, so that’s a Low 2 top.
33:59 - 34:04
EN: Bar 4 is a High 1 bull flag, but it’s a bear body, so it’s a lower probability buy.
34:04 - 34:06
EN: I talked about that here.
34:07 - 34:10
EN: The High 1 buy did not trigger in this example.
34:10 - 34:13
EN: In this example it did trigger, but the example on the right,
34:13 - 34:16
EN: the buy did not trigger but the Low 2 top did.
34:20 - 34:22
EN: Outside-outside (OO).
Slide 022
Time: 34:25
Bilingual Transcript
34:25 - 34:28
EN: An Outside Bar followed by another Outside Bar.
34:28 - 34:31
EN: The high of the bar is above the high of that bar;
34:31 - 34:33
EN: the low of the bar is below the low of that bar.
34:33 - 34:36
EN: It’s outside, and then there’s a second Outside Bar.
34:39 - 34:44
EN: A perfect OO because the lows are lower and the highs are higher.
34:45 - 34:48
EN: It doesn’t matter; the bars could have bull bodies or bear bodies.
34:49 - 34:54
EN: What does matter is if the bodies are big and the tails are small.
34:54 - 34:58
EN: If the 3 bars are little doji bars in a Tight Trading Range,
34:58 - 34:59
EN: it’s a Limit Order Market.
34:59 - 35:02
EN: You should not be buying above or selling below.
35:02 - 35:06
EN: But if the bodies are pretty big – for example, if you have a big bull bar,
35:06 - 35:10
EN: a big bear bar, a big bull bar – you’ll get traders more interested
35:10 - 35:12
EN: in buying above the high of that bull bar.
35:16 - 35:17
EN: Variations.
35:17 - 35:21
EN: Here, the low is below that bar, this low is below that bar,
35:22 - 35:24
EN: and the high is at that high instead of above.
35:25 - 35:29
EN: Though it’s still an OO pattern, but it’s not perfect like this,
35:29 - 35:31
EN: where the high is above the high.
35:34 - 35:40
EN: And then here’s an example where the third bar, the second Outside Bar,
35:40 - 35:44
EN: has a low at the low of the first Outside Bar, not below.
35:48 - 35:54
EN: And then here’s an example where the second Outside Bar is identical in height
35:54 - 35:57
EN: and has identical highs and identical lows.
36:02 - 36:04
EN: A perfect OO.
36:04 - 36:08
EN: We have a bull bar, a bigger bear bar closing on or near its low,
Slide 023
Time: 36:05
Bilingual Transcript
36:08 - 36:11
EN: followed by a bigger bull bar closing on or near its high.
36:15 - 36:17
EN: Let’s say this is a bull trend.
36:17 - 36:19
EN: You have a bull bar closing near its high.
36:19 - 36:22
EN: Some traders will buy above the high of that bull bar
36:22 - 36:25
EN: and they’ll get out either below the low of that bull bar
36:25 - 36:28
EN: or they’ll wait for a bear bar and get out below the low of that bar.
36:28 - 36:31
EN: Other traders will reverse to short.
36:31 - 36:34
EN: If you have a failed buy and then an Outside Down bar,
36:34 - 36:35
EN: they’ll sell below the low of that bar.
36:36 - 36:40
EN: And then here, it goes back above the high of that bar,
36:40 - 36:42
EN: so you have bulls buying above this bar,
36:42 - 36:47
EN: and you’ll have some bears selling below that bar, and these bulls lost money
36:47 - 36:51
EN: when it went below that bar or this bar; these bears lost money
36:51 - 36:54
EN: when it went above the high of the signal bar or above that bar.
36:54 - 36:59
EN: So you have trapped bulls into a bad long, trapped bears into a bad short.
37:00 - 37:05
EN: That increases the chance that if we get a third breakout, it’ll be profitable.
37:09 - 37:11
EN: For the bears, they see a 2-bar reversal.
37:11 - 37:12
EN: We went up, we went down.
37:12 - 37:15
EN: They sell on a stop below that bar,
37:15 - 37:19
EN: just after the bulls had a failed buy above that good-looking bull bar.
37:20 - 37:24
EN: And then the bears got stopped out and the bulls have a second buy signal bar.
37:25 - 37:29
EN: I’m not saying you should take that buy and that sell.
37:29 - 37:30
EN: It depends on context.
37:30 - 37:33
EN: You might take it, you might not take those two signals.
37:33 - 37:37
EN: However, once you see the two signals and then you see the market
37:37 - 37:41
EN: go above this bull bar, this is usually a pretty good buy.
37:41 - 37:43
EN: You’ll have trapped bulls, trapped bears,
37:43 - 37:46
EN: and now a bull bar closing on or near its high.
37:46 - 37:48
EN: That’s a reasonable buy.
37:48 - 37:52
EN: It could be in a bull trend, in which case it’s an OO bull flag.
37:52 - 37:57
EN: It could be in a bear trend, in which case it’s an OO bottom.
37:57 - 37:58
EN: If you’re looking to buy,
37:58 - 38:02
EN: you want to be buying above a bull bar closing on or near its high.
Slide 024
Time: 38:05
Bilingual Transcript
38:09 - 38:15
EN: Now, one difference between an OO and the other two patterns, ii and ioi,
38:15 - 38:19
EN: is the third bar in the other two patterns is small.
38:19 - 38:25
EN: It’s an Inside Bar, so the stop is not as far and the risk is relatively less.
38:25 - 38:29
EN: When you’re trading an OO pattern, the third bar is big.
38:29 - 38:33
EN: It’s the second consecutive Outside Bar, and the stop is further away.
38:34 - 38:35
EN: Your risk is greater.
38:35 - 38:39
EN: You should always trade small enough so that you’re not risking
38:39 - 38:43
EN: any more on any trade than you are on any other trade.
38:43 - 38:46
EN: So very often, with an OO pattern,
38:46 - 38:49
EN: you have to trade a little bit smaller position size.
38:52 - 38:57
EN: A perfect OO and a not-so-perfect OO.
Slide 025
Time: 38:55
Bilingual Transcript
38:57 - 38:59
EN: This low did not go below that bar,
38:59 - 39:03
EN: and therefore, yes, you might’ve triggered a buy above this bar,
39:03 - 39:06
EN: but we did not trigger a sell below that bar.
39:06 - 39:08
EN: We did not go below the low of that bar.
39:08 - 39:10
EN: Some bulls would still be long.
39:10 - 39:13
EN: They’d have a stop below the bear bar, and they would not have been stopped out.
39:17 - 39:22
EN: Over here, theoretically bulls would buy above the bull bar, sell below the bear bar.
39:22 - 39:27
EN: So you have bulls losing money, bears losing money, and if you have a third breakout,
39:27 - 39:30
EN: which you have here, it’s a higher probability trade.
39:30 - 39:33
EN: Higher probability that you’ll make money.
39:33 - 39:38
EN: Again, you don’t necessarily take the first buy or the first sell.
39:38 - 39:40
EN: You do depending on context.
39:40 - 39:45
EN: But if you see the OO and a perfect OO like that, you know we had trapped bulls,
39:45 - 39:49
EN: you know we had trapped bears, this becomes a higher probability buy.
39:56 - 40:00
EN: Here, depending on the context, you might buy above that bull bar,
40:00 - 40:01
EN: but you never got the short.
40:01 - 40:03
EN: It never went below the low of the bear bar.
40:07 - 40:12
EN: A lot of the bulls who bought here might hold and get out below a bear bar,
40:12 - 40:15
EN: so a lot of these bulls are still long, even though we went below that bar.
40:23 - 40:28
EN: If you did buy here and did not get stopped out, you could buy more here.
40:29 - 40:33
EN: If you did buy here and got stopped out, you could buy there.
40:33 - 40:34
EN: It’s a second buy signal.
40:39 - 40:40
EN: What do you think about this?
Slide 026
Time: 40:40
Bilingual Transcript
40:40 - 40:44
EN: We have 3 bars with identical highs and identical lows.
40:44 - 40:48
EN: It’s a variation of an inside-inside pattern (ii).
40:48 - 40:50
EN: This is an Inside Bar.
40:50 - 40:51
EN: Did not go below that.
40:51 - 40:54
EN: It’s an Inside Bar, did not go above that, and then you have a second Inside Bar.
40:58 - 41:01
EN: But it’s also a variation of an ioi.
41:02 - 41:06
EN: This bar, it’s an Inside Bar, but it’s also an Outside Bar.
41:07 - 41:11
EN: An Inside Bar has a high at or below the high of the prior bar;
41:11 - 41:15
EN: an Outside Bar has a high at or above the high of the prior bar.
41:15 - 41:18
EN: So this bar is both an Inside Bar and an Outside Bar.
41:18 - 41:19
EN: And the same with this bar.
41:19 - 41:22
EN: It’s both an Inside Bar and an Outside Bar.
41:22 - 41:26
EN: So in addition to being an ii, it’s also an ioi.
41:26 - 41:29
EN: You could view this as an Outside Bar and this as an Inside Bar.
41:29 - 41:33
EN: So this is an ii and an ioi.
41:37 - 41:40
EN: It doesn’t take much to realize that it’s also an OO
41:40 - 41:43
EN: because this qualifies as an Outside Bar, and so does this one.
41:43 - 41:47
EN: So it’s consecutive Outside Bars as well as consecutive Inside Bars.
41:52 - 41:56
EN: Is it an ii, is it an ioi, or is it an OO?
41:56 - 41:59
EN: As I said, it’s all three, and it doesn’t matter what you call it.
41:59 - 42:03
EN: You’re looking for a BreakOut Mode pattern, and no matter how you look at it,
42:03 - 42:05
EN: it’s a BreakOut Mode pattern.
42:05 - 42:07
EN: Traders are going to buy above, they’ll sell below.
Slide 027
Time: 42:10
Bilingual Transcript
42:12 - 42:13
EN: 5-minute chart.
42:13 - 42:15
EN: We have consecutive Outside Bars.
42:19 - 42:22
EN: On a smaller timeframe chart – here, a 1-minute chart
42:23 - 42:26
EN: – you should assume that it’s going to be an Expanding Triangle.
42:26 - 42:31
EN: Just like the mirror image of this, consecutive Inside Bars,
42:31 - 42:34
EN: is a contracting Triangle, consecutive Outside Bars
42:34 - 42:37
EN: on a smaller timeframe chart is an Expanding Triangle.
42:38 - 42:40
EN: It doesn’t matter if you have a contracting Triangle
42:40 - 42:44
EN: or an Expanding Triangle; both are BreakOut Mode patterns.
42:51 - 42:56
EN: Here’s a 60-minute chart, and we have an Outside Bar and then a bigger Outside Bar.
Slide 028
Time: 42:55
Bilingual Transcript
42:56 - 43:00
EN: You have to assume it’s going to be an Expanding Triangle
43:00 - 43:02
EN: on a smaller timeframe chart.
43:06 - 43:08
EN: Here’s a 5-minute chart of that.
43:08 - 43:13
EN: The brown box here is the same as here.
43:13 - 43:15
EN: 2 hours of trading here, 2 hours of trading here,
43:15 - 43:19
EN: and the OO here is an Expanding Triangle here.
43:24 - 43:27
EN: I talked about three small sideways patterns.
Slide 029
Time: 43:25
Bilingual Transcript
43:27 - 43:31
EN: They’re all BreakOut Mode patterns, and they could be bull flags,
43:31 - 43:34
EN: they can be bear flags, they could be reversal patterns.
43:34 - 43:37
EN: So if you have one of these patterns at the top of a bull trend,
43:37 - 43:40
EN: it’s a bull flag and it’s a possible top.
43:40 - 43:42
EN: You buy above, you sell below.
43:42 - 43:44
EN: If you have one of the patterns at the bottom of a bear trend,
43:44 - 43:47
EN: it’s both a bear flag and a reversal pattern.
43:47 - 43:49
EN: You sell below, you buy above.
43:49 - 43:57
EN: ii, consecutive Inside Bars; ioi, Inside Bars before and after an Outside Bar;
43:57 - 43:59
EN: and then OO, consecutive Outside Bars.
44:04 - 44:06
EN: I’m Al Brooks. Thank you so much for your attention.
44:06 - 44:08
EN: I hope that you found the video helpful.