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Can anyone help me understand this better, what does al mean with 2 or 3 legs? Does he mean 2 bear bars are one leg? does a bottom attempt mean a long wick below the bar? Its not clicking in my head for some reason, and when do you reset a bottom attempt and count it again? Thank you?
The text in red is indicating that bears just broke out of the attempt to bottom at H3. The bear breakout closed and had follow through. Those 2 bars were strong enough that another leg down is expected.
The question becomes whether those 2 bars are a spike and 2 more legs down in a channel or simply 1 more leg down. The reason this isn't determinable yet is because the 2 bear bars are now testing the low to the left. If prices continue past that support, it may be the beginning of a spike and channel trend down. Howevever, this is not known yet. What is known is that bears will get another leg down because the breakout was strong enough. The 2nd leg down consististed of the 3 consecutive bear bars 6-7 bars later testing the low again.
As the support held, bears had their second attempt and prices rallied.
Hopefully helpful and good trades to you!
You can start by giving yourself some simple rules, for example: in a move down a leg ends as soon as a bar breaks above the high of the previous one.
You can also call the end of a bear leg a bottom attempt because if the market then generates a strong move up that breaks to a new high, it will be the bottom of the new bull leg.
It's a rule that Al also used in the example
Also why is he looking to sell if the trend is bull in the beginning?
The key is in this sentence: Consecutive top attempts have a higher probability of a reversal. The market has moved from spike -> channel and bears have begun to make money from the L1/L4. This means that each successive high will be shorted by aggresive bears. While this doesn't mean that you have to do it, there are "players" on both sides.
So while the trend is still bullish and moving into more trading range behavior, the participants have changed what they do. At L5/L2 bulls are waiting for retracement and not buying new highs while bears are shorting. This is reviewed more in the market cycle videos.
Good trades to you!
Thank you again Eric, hopefully I'll start to understand it better later on in the course.
