{"id":64011,"date":"2017-02-05T04:16:08","date_gmt":"2017-02-05T12:16:08","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=64011"},"modified":"2018-03-25T07:18:07","modified_gmt":"2018-03-25T14:18:07","slug":"small-pullback-trend-bought-many-times","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/ask-al\/small-pullback-trend-bought-many-times\/","title":{"rendered":"Ask Al: Small pullback bear trend &#8211; bought many times"},"content":{"rendered":"<h2>Small pullback trend<br \/>\n BPA trading room Q&amp;A: February 8, 2016<\/h2>\n<p class=\"content-box-green\">Question: I bought many times between bar 44 and the low of the day. Could you talk about ways to have stayed out of trouble more effectively?<br \/>\n <em>Video duration: 4min 00sec<\/em><\/p>\n<div style='position:relative;height:0;padding-bottom:56.25%'><iframe class='sproutvideo-player' src='\/\/videos.sproutvideo.com\/embed\/1c9adfbb1318e5cf94\/6d363caf6d5e060f?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\/N-bNxL56I60\" target=\"_blank\" rel=\"noopener\">Al&#8217;s YouTube Channel<\/a> if needed.<\/p>\n<h3>Wide stop trading<\/h3>\n<p><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2017\/02\/Ask-Al-Brooks-Bought-Many-Times-in-Small-PB-Bear-Trend.jpg\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2017\/02\/Ask-Al-Brooks-Bought-Many-Times-in-Small-PB-Bear-Trend-300x219.jpg\" alt=\"\" width=\"300\" height=\"219\" class=\"alignleft size-medium wp-image-64013\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2017\/02\/Ask-Al-Brooks-Bought-Many-Times-in-Small-PB-Bear-Trend-300x219.jpg 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2017\/02\/Ask-Al-Brooks-Bought-Many-Times-in-Small-PB-Bear-Trend-768x559.jpg 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2017\/02\/Ask-Al-Brooks-Bought-Many-Times-in-Small-PB-Bear-Trend-600x437.jpg 600w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2017\/02\/Ask-Al-Brooks-Bought-Many-Times-in-Small-PB-Bear-Trend.jpg 810w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>I think this is an example of wide stop type trading. Starting bar 44, he started buying, buying, buying, and losing money. As you can see, it\u2019s a small pullback bear trend. The pullbacks are small. By pullbacks, I mean the bounces are small, and that means it\u2019s difficult to make money. <\/p>\n<p>For me, if I\u2019m buying early, taking a chance that we\u2019ll get a bar 30 and follow through with bar 13 and follow through \u2013 if I\u2019m doing that here, I\u2019ve got to use a wide stop. At this point I\u2019m very confident that there\u2019ll be buyers below 21, low of the day, below 28. I don\u2019t know if they\u2019ll come in at the 21 low. I don\u2019t know if they\u2019ll come in 5 points below the 21, but I am really confident that they\u2019ll come in. <\/p>\n<p>So that means that if you buy the 44 high or any time after 45 and you use a wide stop, maybe 5 or 10 points below 21, the odds are very, very high that you\u2019re going to make money. So if you\u2019re buying early, you need a wide stop, and it\u2019s probably better that you can scale in. <\/p>\n<h3>Low probability \u2013 wait for reversal<\/h3>\n<p>Otherwise, you hear me say all the time, it\u2019s a possible low of the day. But the probability is low. I\u2019d rather wait for the reversal up and buy after I see the reversal up. Traders who are buying around 44 or above 48. They\u2019re doing it because they\u2019re hoping, they\u2019re afraid of losing money. Their account is too small, they worked really hard to get the account, and they\u2019re really trying to buy at times when the signal bar is small so the risk is small if they put a stop below the signal bar. <\/p>\n<p>That\u2019s a mistake, because it\u2019s overlooking a very important variable. There are three variables: there\u2019s <a href=\"https:\/\/www.brookstradingcourse.com\/how-to-trade-manual\/traders-equation\/\" target=\"_blank\">risk, reward, and probability<\/a>. If all you see is risk \u2013 \u201cOkay, I\u2019m going to buy above 48 because the bar is small and I\u2019m not risking much\u201d \u2013 you\u2019re missing an equally costly variable, probability. You\u2019re buying above a small bull bar in a very tight bear channel, a small pullback bear trend. Chances are you\u2019re going to lose money. <\/p>\n<h3>Trade small<\/h3>\n<p>So you have to factor in probability and you have to trade small. You can say \u201cAl. I can\u2019t afford to risk 10 points.\u201d Well, don\u2019t take the trade. Wait until you get the strong reversal up and then buy. You see bar 30, then buy. You see bar 13, you buy. But then you see the bad follow-through, you get out breakeven, or with a point loss or something. Or you wait for bar 69 and you buy, or 70 and you buy. <\/p>\n<p>If your account prevents you from taking trades that you really would like to take, don\u2019t take those trades. It\u2019s better to not take the trades than it is to pretend probability does not matter. If all you see is risk \u2013 \u201cOh, 48, it\u2019s a buy, 9, it\u2019s a buy\u201d \u2013 if all you see is \u201csmall bull bar, therefore risk is not big,\u201d you\u2019re going to lose money. <\/p>\n<h3>Low risk, high probability<\/h3>\n<p>You have to say \u201cYeah, small bull bar, risk is not big. Hey, wait a minute. Al keeps saying that if the risk is small, the probability is low. So that means chances are I\u2019m going to lose money if I buy above 9 or if I buy above 48.\u201d So, if you\u2019re going to be taking <a href=\"http:\/\/www.investopedia.com\/articles\/trading\/11\/rules-for-picking-day-trade-entries.asp\" target=\"_blank\" rel=\"noopener\">low-risk trades<\/a>, you have to realize the probability is low unless you use a really wide stop. Especially if you can scale in lower; then all of a sudden the probability starts to get very high. <\/p>\n<p class=\u201dcaption\u201d>Follow up question: Will you ever add to a winning position? A pullback in a strong trend, for instance?<\/p>\n<h3>Buy, take profits, buy again\u2026<\/h3>\n<p>Yeah, I do that all the time. If I\u2019m swinging \u2013 let\u2019s say I\u2019m swinging a long and the market\u2019s going up and I take partial profits, and then I get another buy. A lot of times I\u2019ll try to put the scalp portion back on. I\u2019ll try to swing part and scalp part. Sometimes I\u2019ll do it with calls. Sometimes I\u2019ll be long calls, and I just hold the calls and then I scalp the futures. So buy, take profits, buy, take profits, buy, take profits. <\/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>Small pullback trend BPA trading room Q&amp;A: February 8, 2016 Question: I bought many times between bar 44 and the low of the day. Could you talk about ways to have stayed out of trouble more effectively? Video duration: 4min 00sec You can also view this video on Al&#8217;s YouTube Channel if needed. Wide stop [&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":"shadow","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[],"class_list":{"0":"post-64011","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\/64011","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=64011"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/64011\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=64011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=64011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=64011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}