{"id":50163,"date":"2016-03-06T04:43:35","date_gmt":"2016-03-06T12:43:35","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=50163"},"modified":"2018-03-25T03:07:59","modified_gmt":"2018-03-25T10:07:59","slug":"trading-range-days-price-action","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/ask-al\/trading-range-days-price-action\/","title":{"rendered":"Ask Al: Trading range days price action"},"content":{"rendered":"<h2>Trading range days special<br \/>\n BPA trading room Q&amp;A: February 18, 2016<\/h2>\n<p class=\"content-box-green\">An Ask Al special on trading range days price action with five questions at end of trading room webinar all being 100% relevant to topic.<br \/>\n See below video for all questions and transcript.<br \/>\n <em>Video duration: 11min 45sec<\/em><\/p>\n<div style='position:relative;height:0;padding-bottom:56.25%'><iframe class='sproutvideo-player' src='\/\/videos.sproutvideo.com\/embed\/709adfbb1319efcbf8\/604fcbf19bb02156?playerTheme=dark&amp;playerColor=' style='position:absolute;width:100%;height:100%;left:0;top:0' frameborder='0' allowfullscreen><\/iframe><\/div>\n<p><\/p>\n<p class=\"caption\">You can also view this video on <a href=\"https:\/\/youtu.be\/gPluSYMoRio\" target=\"_blank\" rel=\"noopener\">Al&#8217;s YouTube Channel<\/a> if needed.<\/p>\n<h2>Video transcript \u2014 Trading range days<\/h2>\n<h3>Making money on trading range days<\/h3>\n<p class=\"content-box-green\">Question: Why would you assume that Bar 49, that we would have to test back to the 47 low? [Okay, Bar 49, that we would have to test back to the 47 low.] Even though we already had a micro double bottom?<\/p>\n<p><a href=\"\/wp-content\/uploads\/2016\/03\/ask-al-49-making-money-on-trading-range-days.png\" rel=\"attachment wp-att-50177\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" src=\"\/wp-content\/uploads\/2016\/03\/ask-al-49-making-money-on-trading-range-days-300x219.png\" alt=\"Making money on trading range days\" width=\"300\" height=\"219\" class=\"alignleft size-medium wp-image-50177\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-making-money-on-trading-range-days-300x219.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-making-money-on-trading-range-days-768x561.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-making-money-on-trading-range-days-600x438.png 600w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-making-money-on-trading-range-days.png 800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Okay. Because it\u2019s a <a href=\"\/how-to-trade-manual\/trading-ranges\/\" target=\"_blank\">trading range<\/a> day, so I don\u2019t remember what I said, but in a trading range day I\u2019m assuming that every breakout is going to get reversed, right? And that you can pretty much buy with impunity below anything, use a wide stop to scale in and make money. And you can pretty much sell above anything all day long and make money. That\u2019s what I\u2019m saying: A day like this, you say, \u201cOh Al, it rallied 10 points. Al, it rallied 10 points in a small pullback bull trend.\u201d It doesn\u2019t matter &#8212; trading range day. As long as you understand that and you trade it well, you can make money.<\/p>\n<p>Sometimes in a trading range day, you can set up like this: A reasonable buy, high or low major trend reversal, Bar 48, right? And then you get a plunge &#8212; sometimes four or five bars &#8212; and you\u2019re thinking, \u201cOh, my gosh, I\u2019m getting killed. This is going to be a big bear trend day.\u201d It\u2019s not. As soon as you get a bull reversal, 53, you buy it because you\u2019re going to come back up here. Probably 70 percent chance.<\/p>\n<p>It takes a while to believe all this stuff that I\u2019m saying, but if you look at days like this, you start to see a lot of trading range price action. And then it\u2019s selling off and there\u2019s something wrong with the selloff &#8212; you\u2019re getting these big bounces all the way down &#8212; it looks like it\u2019s probably going to end up as a trading range day, in which case it\u2019s going to be a very forgiving day. And the key is staying patient, and confident, and comfortable, and not getting scared by the big moves. It\u2019s confident that it\u2019s a trading range day. It\u2019s going to keep reversing, and big legs, as strong as they are, they\u2019re not going to go all that far.<\/p>\n<h3>Fading measured move targets<\/h3>\n<p class=\"content-box-green\">Question: Do you think fading most logical, measured move targets is usually good enough for a one-point scalp, realizing that nothing\u2019s 100 percent and it depends on context?<\/p>\n<p>Context is everything, right? So you can see today I have several measured move targets drawn in. So It fell here, rallied, went up here, sold off, fell here, bounced, bounced over here, and there are other ones that I\u2019ve erased. I don\u2019t think measured move targets are any better or worse than any other kind of support or resistance, prior highs and lows, trend lines, channels. It doesn\u2019t really matter. In general, if the context is good, fading a test of support and resistance, that\u2019s usually a good thing. But if the context is good for a breakout &#8212; let\u2019s say you\u2019re in a strong bear trend and you see a measured move down, I think you\u2019re making a mistake buying with a limit order at that measured move down.<\/p>\n<p>Because if you look at a bear trend day and you start at the first bar and don\u2019t look at all the other bars to the right, hide them, and you start scrolling forward, you\u2019ll start to see all kinds of measured move targets, and wedge bottoms, and all kinds of reasons to buy. But as long as you understand that, \u201cHey, this is a bear trend; we\u2019re getting gaps to the downside, the pullbacks are small\u201d, do not buy. So you have to assume all that support that you\u2019re seeing as the market\u2019s going down, it\u2019s all going to fail.<\/p>\n<p>So when the market\u2019s in a trend day, you have to assume 80 percent of bottoms &#8212; 80 percent of reversals will fail, right? When it\u2019s in a trading range, you have to assume 80 percent of breakouts will fail. So we\u2019re trying to breakout &#8212; it\u2019s a trading range day. We\u2019re trying to breakout &#8212; it\u2019s a trading range day. Breakout, breakout, trading range day.<\/p>\n<p>So for me, I would not just routinely fade every <a href=\"http:\/\/www.investopedia.com\/articles\/technical\/061801.asp\" target=\"_blank\" rel=\"noopener\">support or resistance<\/a> level. I\u2019m much more eager to do it when there\u2019s a lot of trading range price action, or in climaxes. As you know, a lot of times I\u2019ll fade very strong moves in climaxes.<\/p>\n<h3>Think limit-order scalping &mdash; for me that is!<\/h3>\n<p class=\"content-box-green\">Question: You bought one point below Bar 27. For a scalp, you said you would not hold for a swing. Can you briefly explain when you <em>would<\/em> hold for a swing when taking this type of trade?<\/p>\n<p>Yeah. In general, when I think the day\u2019s a trading range day, I\u2019m just thinking scalp. My mind just goes to scalp limit orders. That\u2019s how I trade, right? If you look at this day, there probably were 40 or more one-point scalps, and I don\u2019t take all of them, but I take a lot of them. So is there a better way to trade it? There might be, depending on the personality, but I can make a lot of points on a day like today with a very high winning percentage. So there might be a better way that will suit somebody else\u2019s personality, but I\u2019m comfortable with what I\u2019m doing. I\u2019m happy, and I\u2019m relaxed as I trade, and what more can we expect out of a job, right? You\u2019re happy; you\u2019re making money; and you like what you\u2019re doing.<\/p>\n<p>So I understand that there are all kinds of ways to trade and some ways are better than others, especially in hindsight. All I care about is whether or not what I do makes sense. That\u2019s all I care about. There are always many logical ways to make money, and at the end of the day you can see which way was the best. I don\u2019t worry about that. I just worry about \u201cDid I do something that makes sense? Am I doing something that makes sense? Am I managing my trade correctly? Is what I\u2019m doing logical?\u201d That\u2019s all I care about. And I trust that if I do, I\u2019m going to make money.<\/p>\n<p>So in a trading range day, in a day where there\u2019s a lot of trading range price action and the breakouts just keep messing up, right &#8212; if there\u2019s something wrong with every breakout and every reversal, like all through here and then here, right, that big tail and then this reversal &#8212; to me, it\u2019s just reinforcing my belief that this is a trading range day and that it will probably continue all day long. So with that in mind, I\u2019m doing a lot of one-point scalps, some two-point scalps, and a lot of limit order trading that I\u2019m willing to scale in.<\/p>\n<h3>Breakeven instead of profit and holding onto losers<\/h3>\n<p class=\"content-box-green\">Question: I have a problem getting out at breakeven on most of my trades that are profitable and holding onto losers. Today, I broke even on selling 2 high and selling below 37. Can you comment on that?<\/p>\n<p><a href=\"\/wp-content\/uploads\/2016\/03\/ask-al-49-breaking-even-not-profit-hold-losers.png\" rel=\"attachment wp-att-50178\" target=\"_Blank\"><img loading=\"lazy\" decoding=\"async\" src=\"\/wp-content\/uploads\/2016\/03\/ask-al-49-breaking-even-not-profit-hold-losers-300x219.png\" alt=\"Breaking even not profit hold losers\" width=\"300\" height=\"219\" class=\"alignleft size-medium wp-image-50178\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-breaking-even-not-profit-hold-losers-300x219.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-breaking-even-not-profit-hold-losers-768x561.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-breaking-even-not-profit-hold-losers-600x438.png 600w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-breaking-even-not-profit-hold-losers.png 800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Yeah. I think in part it\u2019s what I said several times today, or at least I alluded to it several times. That in a trading range day the market is always trying to get you to believe it\u2019s becoming a trend day and it makes traders think, \u201cOkay, maybe if I hold, this will be it. This will be the one that is a 10-point winner or a 20-point winner,\u201d but the reality is it\u2019s not going to be. The reality is all day long, as I said, there were probably 40 trades today &#8212; 40 limit order trades betting that breakouts would fail, so the odds are just overwhelming that if you\u2019re holding onto a trade looking for a swing on a day like today, it\u2019s hard. Maybe you sell below 36 and hold for a swing. It\u2019s hard to hold short when you\u2019re forming a Higher Low Major Trend Reversal and a wedge bottom. It\u2019s just hard. So for me, I\u2019d rather just scalp, scalp, scalp, limit order, limit order, limit order. So once I decide that the day is getting a lot of trading range price action, I just scalp, scalp, scalp, and if suddenly &#8212; let\u2019s say we had Bar 30. Let\u2019s say 31 was another big bull bar closing on its high. I\u2019d say, \u201cOh, look at that. It\u2019s no longer a trading range day. It looks like it\u2019s becoming a trend day,\u201d then I might swing part. But until I\u2019m hit over the head with a board, I\u2019m going to just keep being stupid. It\u2019s a trading range day. It\u2019s a trading range day. I\u2019m going to scalp. I\u2019m going to scalp. Right?<\/p>\n<p>So until I\u2019m clearly wrong, then that\u2019s what I\u2019m going to keep doing. So if you sold the 2 high, you had two points, I\u2019d take the two points. The 2 high at that point, you possibly could swing, but then when you see the doji bar and then the bull bar here &#8212; 4 &#8212; I think you\u2019re going to be trying to get out. And selling over here on 36 low, to me, if I got one or two points I would bet on a trading range, which we had, I would just take the one or two points. For me, I\u2019m more selling above bars. You know, selling above 31 or maybe selling above 34, scaling in higher selling more at the 31 high.<\/p>\n<h3>Trading range versus trend day<\/h3>\n<p class=\"content-box-green\">Question: I sold the close of 33, the third consecutive bear bar, with a stop above the 12 high, [that makes sense.] betting on a test of the 23 close. [Okay, that might be a little bit aggressive, right? If this was straight down with no test, we already had a double bottom here, so I think there\u2019s less need for this to get tested, although it ultimately did. Okay?] I ended up reversing to long above 43, and took a loss on 47.<\/p>\n<p><a href=\"\/wp-content\/uploads\/2016\/03\/ask-al-49-trading-range-versus-trend-day.png\" rel=\"attachment wp-att-50179\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" src=\"\/wp-content\/uploads\/2016\/03\/ask-al-49-trading-range-versus-trend-day-300x219.png\" alt=\"Trading range versus trend day\" width=\"300\" height=\"219\" class=\"alignleft size-medium wp-image-50179\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-trading-range-versus-trend-day-300x219.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-trading-range-versus-trend-day-768x561.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-trading-range-versus-trend-day-600x438.png 600w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/03\/ask-al-49-trading-range-versus-trend-day.png 800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>Okay. So he sold the third bear bar here, okay, and he held through this, and that\u2019s okay, keeping a stop above 12. That\u2019s okay. So he sold that third close, and he ended up reversing to long above 43, and getting out down here. Again, that\u2019s the issue of what I\u2019m saying about trading range day versus trend day. So yes, we had several good swings today. We had a swing from the open down to here, and up, and then down, and up and down. And if you entered exactly right or if you entered early and used a very wide stop, you could make a lot of money.<\/p>\n<p>But to me, it\u2019s just too upsetting to do that because I\u2019m always getting torn up inside. \u201cHey, I sold the market, it\u2019s going up instead of down.\u201d Or, \u201cI bought \u2013 argh it\u2019s going down instead of up.\u201d So I\u2019d rather just take high probability limit order scalps and just do that all day long. So you\u2019re selling below &#8212; selling this third close. But at the time &#8212; I don\u2019t know if you were in the room at the time, I said the breakout 30 was strong enough so that we\u2019d probably get at least a little bit more up and there probably would be buyers below. And 34 might be a breakout test of the 27 high. So had I sold the 33 close, which I did not &#8212; I was buying there &#8212; I would have exited above 34. And then over here, this is a tight trading range, so I\u2019m not going to buy above 43 betting that we\u2019re going to get the bull breakout. I would wait to see a very strong bull breakout and then buy. So &#8212; also 30, I thought we\u2019d have one more leg up. Well, 36 might be that one more leg up. I understand that this could be a wedge, Higher Low Major Trend Reversal, but it\u2019s also a tight trading range in the middle of a trading range day, and I don\u2019t want to be entering with stops above anything. But that\u2019s my thought.<\/p>\n<p>So the message I\u2019m trying to communicate today is: When you see a lot of trading range price action, that\u2019s the old duck &#8212; it walks like a duck and sounds like a duck, it\u2019s probably a duck, right? When you see a lot of trading range price action, it\u2019s probably a trading range. And when there\u2019s a trading range, I automatically start thinking limit order, scalp, limit order, scalp, buy low, buy more lower, sell high, sell more higher, and scalp, scalp, scalp, scalp, scalp. Right? And instead, \u201cAarr\u2026 look at that strong bar, Bar 30. I bet that\u2019s the start of a bull trend. Or look at this strong rally up here &#8212; I bet it\u2019s the start of a bull trend. Look at that bear breakout; maybe it\u2019s a bear trend.\u201d<\/p>\n<p>Until I\u2019m clearly wrong, I\u2019m going to assume I\u2019m right on a trading range day. But this is, I think, a really good example of a trading range day. Lots of big swings and limit order scalpers, if they manage their trades correctly, collected a lot of points today.<\/p>\n<p>Okay, I hope everybody has a good night.<\/p>\n<p><em>Al Brooks<\/em><\/p>\n<p><a title=\"Al Brooks&#039; trading room\" href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\">Information on Al&#8217;s Online day trading room<\/a><\/p>\n<hr \/>\n","protected":false},"excerpt":{"rendered":"<p>Trading range days special BPA trading room Q&amp;A: February 18, 2016 An Ask Al special on trading range days price action with five questions at end of trading room webinar all being 100% relevant to topic. See below video for all questions and transcript. Video duration: 11min 45sec You can also view this video on [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[],"class_list":{"0":"post-50163","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-ask-al","7":"entry","8":"has-post-thumbnail","9":"override"},"featured_image_src":null,"author_info":{"display_name":"BTC Admin","author_link":"https:\/\/www.brookstradingcourse.com\/es\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/50163","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/comments?post=50163"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/50163\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=50163"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=50163"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=50163"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}