{"id":44461,"date":"2015-10-18T03:30:09","date_gmt":"2015-10-18T10:30:09","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=44461"},"modified":"2021-09-22T01:10:00","modified_gmt":"2021-09-22T08:10:00","slug":"second-leg-traps-in-trading-range-usdjpy","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/ask-al\/second-leg-traps-in-trading-range-usdjpy\/","title":{"rendered":"Ask Al: Second leg traps in trading ranges (USDJPY)"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">BPA trading room Q&amp;A: September 28, 2015<\/h2>\n\n\n\n<p class=\"content-box-green\">I had a situation this morning at 09:00 EDT (06:00 PDT), on the 5 minute Dollar versus Yen Forex chart. It was late in the bear trend, price formed a trading range and a higher low&#8230; we had a bull breakout, but a lower high, and at the 60 minute moving average we had bad follow-through. Is this a low probability event, or am I not understanding price action?<\/p>\n\n\n\n<div style=\"position:relative;height:0;padding-bottom:56.25%\"><iframe class=\"sproutvideo-player\" src=\"https:\/\/videos.sproutvideo.com\/embed\/4c9adfbb1319eec9c4\/250029891e2785dc?playerTheme=dark&amp;playerColor=\" style=\"position:absolute;width:100%;height:100%;left:0;top:0\" frameborder=\"0\" allowfullscreen=\"\"><\/iframe><\/div>\n\n\n\n&nbsp;\n\n\n\n<p><em>Video duration: 3min 4sec<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Video transcript<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Bull breakout but poor follow-through<\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignleft\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/10\/150928-ask-al-29-second-leg-trap-in-trading-range.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"179\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/10\/150928-ask-al-29-second-leg-trap-in-trading-range-300x179.png\" alt=\"ES Chart - Second Leg Trap in Trading Range\" class=\"wp-image-44466\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/10\/150928-ask-al-29-second-leg-trap-in-trading-range-300x179.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/10\/150928-ask-al-29-second-leg-trap-in-trading-range-600x359.png 600w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2015\/10\/150928-ask-al-29-second-leg-trap-in-trading-range.png 796w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/figure><\/div>\n\n\n\n<p>Here\u2019s the 5 minute Dollar-Yen. And he said at 6 o\u2019clock \u2013 so here\u2019s the 6 o\u2019clock bar. We have a bull <a href=\"\/how-to-trade-manual\/trading-breakouts\/\" target=\"_blank\" rel=\"noopener\">breakout<\/a>, but a lower high. And at the 60 minute moving average we had bad follow-through. I have an idea what the rest of the question is going to be like. Let me go back to the question.<\/p>\n\n\n\n<p>\u201cIt was late in the bear trend, price formed a trading range and a higher low&#8230;&#8221; Okay. Trading range higher low, triangle\u2026 basically a triangle\u2026 and had a strong bull breakout right here. But just as the breakout was about to continue and make a higher high &#8212; above this high, it then turned around again and the bear trend resumed. &#8220;&#8230; Is this just a low probability event, or am I not understanding price action?\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Low, or high probability?<\/h3>\n\n\n\n<p>Yeah, I have a couple thoughts about that. I think this is a higher probability, but let me go to real-time. So we\u2019re in a broad bear channel or trading range. We have a double bottom pullback, so two pushes down, basically a triangle. But unless we get above this high, the best the bulls get is a trading range. We have one leg up, pull back, second leg up. And if you\u2019ve been in the room for any length of time, you\u2019ve heard me talk about second leg traps in trading ranges. A second leg trap means you have a first leg up, a pullback, and then a second leg up that looks fantastic &#8212; except it does not get above the top of the trading range. And until it gets above the top of the trading range, you have to be suspicious that it might be a trap, a second leg trap, a strong second leg up in a <a href=\"\/how-to-trade-manual\/trading-ranges\/\" target=\"_blank\" rel=\"noopener\">trading range<\/a>.<\/p>\n\n\n\n<p>And then you see this bar and you say, \u201cDarn, that\u2019s terrible.\u201d This might be a second leg trap. With that kind of bad follow-through and the market not getting above the prior lower high, I think, to me it\u2019s a problem. It\u2019s a big, big problem for the bulls. And to me, I would not have bought the close of that bar, and once I see this, I start thinking \u201cI\u2019m in trouble,\u201d and look what happened next. Okay? So the bulls have bought this close. What do they think when they see the next bar? They think, \u201cOh, this is\u2026 that\u2019s terrible. Al talks about this stuff all the time: that you need a good follow-through bar, and here I have a bad follow-through bar and a lower low. You know what, I\u2019m going to try to get out break-even. Maybe I\u2019ll try to buy more 10 pips below and try to get out with a profit on my second entry, break even on my first.\u201d Well, all the bulls have bought this close. Guess what? When they see that next bar, they say, \u201cOh, this is terrible. I\u2019m going to try to get out break-even.\u201d They place a limit order to get out here, so when the market gets there you have a lot of bulls selling.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Bulls can be bears too<\/h3>\n\n\n\n<p>What happens to a market when all the bulls are selling? The bears are always selling, right? The bulls are supposed to be buying. But now, you got bulls selling so what do you think\u2019s going to happen? &#8230; &#8230; Okay?<\/p>\n\n\n\n<p>So I think that answers your question. I hope it does. I hope I was clear.<\/p>\n\n\n\n<p><em>Al Brooks<\/em><\/p>\n\n\n\n<p><a title=\"Al Brooks' trading room\" href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\">Information on Al&#8217;s Online day trading room<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n","protected":false},"excerpt":{"rendered":"<p>BPA trading room Q&amp;A: September 28, 2015 I had a situation this morning at 09:00 EDT (06:00 PDT), on the 5 minute Dollar versus Yen Forex chart. It was late in the bear trend, price formed a trading range and a higher low&#8230; we had a bull breakout, but a lower high, and at the [&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-44461","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\/pt-br\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/44461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/comments?post=44461"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/44461\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=44461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=44461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=44461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}