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I understand the temptation to take the green arrow based on "pattern recognition". The difficulty is this, patterns fail all of the time.
Until profitable, the best piece of advice is really to wait for a good signal bar and if a good bull bar, buy on a stop 1 tick above, or if a good bear bar, sell 1 tick below. As simple as this sounds, and it is Al's "direct advice", it keeps you on the right side of the market.
That select bar comes after a doji bull bar and after 5 good bear bars. It may be a magnetic move at resistance. However, the strong downward strength has trapped many bulls and the "bulls want out". The strong bull bar. it came out of nowhere as a Trump tween allowed for many bulls to break even or get out without a loss. It really isn't a good strong bullish pattern to buy. After the bears were unsuccessfull in their attempt to retest the lows, bulls were able to resume control.
Hopefully helpful and good trades to you!
If i understand you right you mean that this trade have bad signal bar so becouse of that this is not a good trade but Al says when ever the context is good if we have bad signal bar it is ok to take the trade and in general i think richard have more conservative mindset in making daily reports that Al himself
For example in this slide the situation is basicly the same and Al marked it up with green box meaning that is good buy (yes it has better signal bar but it have overlap with prior bar and it did not close above prior bar also so it is weak signal but have good context i think if richard mark this chart he did not put the green box there )
Am i right ?
While still aggressive, that bar is 2/3 body and 1/3 tail. In this case he may be opting to classify as a trend bar vs a doji bar. Dojis do not make for great signal bars as they are 1 bar trading ranges. Stronger to wait for a better bar.
You see in this case that prices fell more before turning around. The question becomes what the individual therefore deems as a good signal bar. In comparison to the other surrounding bars, that bull bar isn't very strong is it? 50/50 chance really (as this is the channeling phase). However, when the nice bull bar shows up just a little later, things become much more clear.
The advantage of a trader is to "wait for their set" (surfing analogy). As much is in a fog, though we would love for things to be very clear, simply waiting for when the clarity appears would reduce a lot of traders learning time from years to weeks/months.
Good trades to you!
This is the case you are looking for. Consecutive wedges, poor follow through from bears, not series of 5 good bear bars in a row, 6 bar doji final flag formation. Bears had sufficient time to prove themselves and then . . . a doji reversal bar.
It is as much a factor that the bears had opportunity and didn't produce vs simply having a reversal bar (and doji reversal bars must be chosen carefull). Still stronger to use good trend bars. Compare this to the original question graphic and you may find some structural differences.
Hopefully clarifying and good trades to you!
I also wanted to include an Al historical markup slide. There is a phenominal amount of value in the markups that have been produced for years. Please note the similarity of the situation to the right side of the graphic. The boxes indicate signal bar markings (which was changed to arrow entry bar markings later for more simple book integration). Enjoy!
Eric, I’ve read many of your replies on this forum over the years and have always found them extremely helpful.
Yesterday’s price action was very difficult for me. Most of the stops I took were on valid setups — maybe only two or three were questionable — but my trade management was poor. I was jumping in and out of trades, and overall it turned into a very bad day.
It got me thinking more deeply about the blue box setups and how effective they seem to be. I remember you mentioning them in some of your previous posts on this forum. From what I’ve observed, using the blue boxes as swing-trade exits appears to be very profitable. Even treating them as simple 1:1 setups seems to produce an 80%+ win rate. I’ve gone back through the daily setups, and that’s the conclusion I kept arriving at. Even for scalping, they seem very effective.
My question is: is that level of consistency actually achievable in real trading? Are the blue rectangles intended to be precise areas, or more as guidelines to study and interpret?
For example, if you printed out a static chart and marked all the blue rectangles, then compared them afterward with als, how accurate would the matches realistically be? Could you identify them correctly 90% of the time — or at least with enough consistency for them to be genuinely useful — or is that not really the purpose of them?
Thank you for the compliment! I'm not always certain if people actually read the posts since I do not have a "moderator" label.
Here is the deal. When you can identify those specific bars 90%+ of the time, and either do 1:1 or scalp at 5 points (2026)(reasonable avg bar size and adjust based on volatility) - - - - YOU ARE PROFITABLE! It IS THAT GOOD. It is a foundational underlying concept of BPA & the BTC.
The open is a little more tricky and there are some additional "soft rules" some might use - - example if bar > 2 atr(4) then most of the move may have already occurred, don't trade for 2 bars . . . What you will notice though is there are trades every . . . single . . . day . . . For the cases where things do not work out, that is where appropriate money management and contract sizing counter balance not being 100%. . . But as you noted, you do not need to be.
Here is the other "secret". . . You get to wait for the bar to close!!!!! There isn't any guessing and you enter on a stop order. It is the easiest way to learn to trade and literally minimizes the stress. I'm willing to bet it is exactly what Al used to get him past the 10 year barrier. Taking the emotion out and able to use a simple template to "tame" a market that really can do anything.
It can do anything - - - -bar close cements the pattern.
It can do anything - - - Good signal bars have a much higher probability of continuation.
It can do anything - - - How are the bars forming and is the pattern a more reliable "blue box" situation has been seen before . . . because they just flat out work so well.
Yes?!!! - - - Use appropriate stop and size the trade (and this can mostly be pre-calculated before the bar closes).
Win/Lose - - - - > Next. Follow up end of day to see if trade selection in agreement with BPA published template.
As for yesterday - - noted - - - trading range open with very large bars - - - > Big Up / Big Down / Big Confusion - - - > Trading range behavior. The size of the bars would have kept stop market participants out for a bit. However, we are not always perfect. So if one has a loss, it should only be the size of an average loss (even if the signal bar is huge). In this way any trade, and every trade, simply becomes a single trade.
Hopefully helpful and good trades to you!
Final aspect, as I missed an important question: yes, the markings are very specific and follow the rules outlined and highlighted in the course, and by Al using stop orders. They are a template. What you will find as you work through them, time and again, is that the selections are consistent - very consistent.
You'll also note one other aspect - - - which is important: not all of them work, but most of them do. This is key as it shows that "the rules" are not over fitting or using a false "lookback" methodology. It isn't about "being right" or "correct" but consistent! Consistency in application, and strong position sizing - truly a secret - but it is "out in the open" isn't it :)?!!!
As you practice, someone may ask you - "Well, why did you take that"? And you'll say - "Well I had to, it was in the plan"!
The marked up charts, a free resource, is one of the most under utilized aspects within BPA and BTC because it is the direct application of the rules.
Good trades to you!
