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Am I missing something, or does this make sense?
The reason I put this chart up is below, I think if charts are educational, they need to show failed entries as well as successful ones. Otherwise, the charts are somewhat " curve fit"
Hey Jonathan,
I'll add my two cents to your question.
Your first picture, buying above the bull bar is not a good buy. This is because the market recently had a bear breakout and it's now forming a tight channel down. The bull bar is at the high of the channel, where bears will happily sell. The bears are not in any particular trouble or disappointment. This is why you see a one-bar reversal here.
However, the second picture has now formed a good buy for two reasons.
1. The bears that sold with a STOP below the bear bar or sold-the-close of the follow-through bar are now facing disappointment. The reversal bar closed against both of these bears and they are now facing a potential loss (small one). Better to exit quickly above the bull bar as bulls see the disappointed bears and will buy.
2. This particular day (Apr 24) was likely going to be a trading range day. The market was approaching yesterday's low and traders will likely cover and buy low because we are near a former low and you don't want to be holding for swing profits or entering low in a trading range.
Hope this helps.
Very much appreciated; thanks for the input
