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Is this a reasonable MM to the upside?
Not sure whether I should go long or short. I am trying to analyze a MM based on Al's video. In the picture it shows that we are in a bear trend, and the market when touched the MA reversed down. The big picture chows me, that the market has been in a bear trend, where we had a 50% pullback and a double top around that 50% PB, so all those elements justify why the market reversed down. However at the point of the chart where you can see the two blue lines, I wonder if it makes to think of a MM up the way I drew it. Thank you
Sorry, but I can't see a MM target drawn by you. All I see is a Fib retracement.
Anyway, Measured Moves are made when the market creates a measuring gap or breaks out of a trading range(can be double tops and bottoms as well) or has a leg up or down strong enough to create a Leg 1 = Leg 2 type of MM up or down.
That alone however, is never enough to take a trade. It needs to be supported by good context and overall structure of the chart.
The chart you posted however, appears to be in a trading range that is part of a bigger trading range. Like Al says, big up, big down, big confusion. Here, you are confused whether you should buy or sell. A trading range has both good buy setups and good sell setups. That is why the market remains in a trading range as neither the bulls nor the bears have any distinct edge. That seems to be the case on your chart.
The strong leg up appears to be a 2nd leg bull trap here in a trading range. The 2nd leg up is also climactic and exhaustive(as the gap was filled in later through endless pullback).
Just a suggestion, although I can see that you have been around here longer than me - please get rid of anything Al does not consider necessary like Volume, Fib Retracements and Projections, VWAP and what not. Al successfully trades without these and he does his best in teaching us just that. Drop everything and follow the man. He has the capability to show us the light. With his videos, my approach to looking at charts changed drastically. There are countless successful members around here and they follow Al's teachings. I am pretty sure it will help you.
If you don't understand something, watch and watch it again. Ask questions on the forum. If not satisfactory, you can ask questions to Richard or Al himself(who takes time to answer those questions).
Just my 2 cents, as a beginner who might be around the same level as you are and might be facing similar problems as you.
Hope that helps and if I am wrong somewhere, some experienced member will come in and rectify that and tell you the right thing too.
Thank you Abir!
Well the stock ended going up. It pull back a little bit testing yesterday's high and then created a 2nd strong leg up. I got rid off the Volume bars, because like you said they are a distraction and Al mentioned it. The Fib retracement is what I have to measure MM and for me to see 50% PB. Now based on what I see in this chart from today, after I got a second leg up, I should expect either TR or Trend resumption down right? Thank you again for the help.. 😀
are you doing option trading? wait for the breakout. hope this help.
To me, that's what is expected as the stock fell in a tight bear channel and although it is a 2nd entry buy here, the chances of success are not that great. However, keep in mind that the 18th August high is a minor high and the stock can trade above it without meaning anything. Also, the trading range is on a higher time-frame as well as the lower time frame. So, any breakout above or below one trading range does not necessarily mean that the stock is not in a trading range on the higher time-frame anymore.
Like I said, I am a beginner. So, there probably is a lot of things I am missing out from the chart and it would be wise to use your own discretion regarding the same. I am just discussing to practice what I am learning. Hope you don't put your money to test on a beginner's hunches.
No, I am not doing options. I am studying the possibilities I have based on what I am learning in this course. Thank you Girl Trader!
It makes sense all what you are saying to me too... we'll see what happens. Thank you Abir!