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Hi, everyone!
I have a question about the day 01/13/23 and maybe someone can help me. Since now thank you for your time.
I trade the market since bar 1 until bar 22 because after i have another appointment, anyway..
I would like to know if what I seen is wrong: bar 1 - 4 was a sell clx and 6 - 10 another clx, but in this case was buy clx. after moves big up - big down like that on the open I look for reversals and fail breakout because i assume 'big up big down - big confusion'. I don't expect the market formed a bull trend, like formed today and was expecting a test at the high of bar 5 and a fail breakout to the bottom of 6.
I would like to know if we have any signals that show us that a trend is more likely than:
- open bullish microgap from bar 5 high and bar 6 negative gap;
- failure on the sellers' second entry (bar 16) to take the market down;
And one last thing, I understand the reason to buy above bar 13, it's a H1 after a strong breakout from bar 9-10, but wouldn't that be a short limited entry at the high of the range? By the time we formed the buy mark above bar 13, the market had not shown the sellers' failures and for me it was still likely that a TR would follow. Also a stop would be below bar 6, a bad trader's equation for me, hoping the breakout would work into a range.
I couldn't understand what I missed. Every trend bar is momentum, breakout, climax and gap, but in context to me this bar 9-10 high looked more like a second leg trap.
Perhaps my thinking is correct for an assumption that is more likely to happen, but since nothing is 100% in trading, the market can do the exact opposite of what we are expecting.
Att,
Hi Felipe
The two clearest events in my thoughts during the opening 20 bars was the climactic low confirmed at the bar 6 strong bull bar, and the failure of the bulls to penetrate the double top (at bars 11-18) at the big round number.
after moves big up - big down like that on the open I look for reversals and fail breakout because i assume 'big up big down - big confusion'
I think you're correct in expecting Trading Range after big up - big down. Here is what Al said in the book Trading Range:
Whenever the market has a spike up and then a spike down, or vice versa, it tends to enter a trading range as the bulls and bears both fight to create follow-through in their direction
But let looks at the example provided for that statement:
A sharp move up and then down, like the move up to bar 2 and then down, is a climactic reversal and a two-bar reversal on some higher time frame chart. It is a single reversal bar on an even higher time frame chart. Bar 8 was a sell climax and a two-bar reversal, and the move would be a single reversal bar on some higher time frame chart. It was followed by a trading range, which grew into a bull channel.
To me, that looks just like the day in question just inverse.
This is another example with spike down (7 Bar Bear MC) spike up, bull channel:
