Trading MTR Bottoms Flashcards
When a Reversal Setup is small what is more like a Major Reversal or a Minor Reversal?
a Minor Reversal is more likely due to the small Reversal Setup.
If anything it is better to look to Sell - it is a Higher Probability (There is a Low1 and a Low2 setup at the bottom for a short)
Final Bear Leg is usually WEAK but is can also be a Sell Climax
Final Bear Leg is usually WEAK but is can also be a Sell Climax
In the Bear Channel going down you want a relatively broad channel to increase the probability of a successful MTR.
As the shows Bulls and Bears are both able to make money and the market is than in BO making a wedge bottom more likely to be successful
Legs need at Least 5-10 Bars or else a Minor Reversal is Likely
In the Bear Channel going down you want a relatively broad channel to increase the probability of a successful MTR.
As the shows Bulls and Bears are both able to make money and the market is than in BO making a wedge bottom more likely to be successful
Legs need at Least 5-10 Bars or else a Minor Reversal is Likely
Possible Bottom (3 pushes down = Wedge Bottom) what should I be doing now?
Seeing this Wedge bottom forming I should begin to start anticipating a MTR and awaiting for the correct pattern to form inline with this context for a profitable trade
Whenever you are looking for any kind of Trade it is always good to Anticipate and see what the market is trying to do. And if you can see a PATTERN setting up then you’re ready to take the trade.
Whenever you are looking for any kind of Trade it is always good to Anticipate and see what the market is trying to do. And if you can see a PATTERN setting up then you’re ready to take the trade.
Whenever you see a Bear Channel how should you view and what percentage is the a Bull BO versus a Bear BO?
You should see a bear channel as a Bull Flag and there is a 75% chance of a Bull BO (Trend Reversal or Sideways) and 25% of a Bear BO (Trend Resumption)
Traders always need a Minimum Profit Target or else they will have a losing Strategy
Traders always need a Minimum Profit Target or else they will have a losing Strategy
When you Buy the Reversal at a MTR Bottom is the market still in AIS or has the AIS ended?
When you Buy a MTR Bottom the market is still AIS meaning the odds of a profit are only 40% of at least 2x Risk. It becomes 60% only after it clearly becomes AIL(Always In Long) or usually after a strong Bull BO OR 3 or more strong bull bars
At this potential MTR Bottom what would create a higher probability for the Bulls?
If the Bulls get a Strong Buy Signal Bar this increases probability.
What do the Bulls expect of this Bear Trend after the Bear Flag @ the bottom?
The Bulls expect this Bear Trend Resumption to Fail as we broke the Bear channel and chances are we are getting a final leg down(sell climax) before a MTR up
LL MTR formed a DB after Bull break of Bear Channel Trend. the DB failed a BO @ Support with bad follow-through, Bulls went long at support and long @ the 2nd Entry H1
LL MTR formed a DB after Bull break of Bear Channel Trend. the DB failed a BO @ Support with bad follow-through, Bulls went long at support and long @ the 2nd Entry H1
When Traders are looking for a Major LL MTR what kind of evidence do they need from the Bulls?
They need some evidence of strong Bull Bars from the Bulls
When a Channel is this tight what is it on a higher TF chart?
It is a BO on a higher TF Chart
*ONLY LOOK TO SELL
Beginners see these 4 Bull Bars at the Bottom of the trend and thinks a new Bull Trend.
They buy every “Major” reversal but these are not Major they’re minor.
More Evidence is required to solidify a MTR.
After a Tight Bear Channel it is more likely 4 Bull Bars are not enough buying pressure for the Bulls to take control and create a Trend
Beginners see these 4 Bull Bars at the Bottom of the trend and thinks a new Bull Trend.
They buy every “Major” reversal but these are not Major they’re minor.
More Evidence is required to solidify a MTR.
After a Tight Bear Channel it is more likely 4 Bull Bars are not enough buying pressure for the Bulls to take control and create a Trend
When an Expert looks at all of these reversals he sees Bears taking profits to reduce their risk and he sees bears selling every-time the price gets back to the MA.
Why? Because the strength is just not great enough to convert this Bear Trend into a Bull Trend
Until there is a CLEAR REVERSAL the Bears will continue to SELL
When an Expert looks at all of these reversals he sees Bears taking profits to reduce their risk and he sees bears selling every-time the price gets back to the MA.
Why? Because the strength is just not great enough to convert this Bear Trend into a Bull Trend
Until there is a CLEAR REVERSAL the Bears will continue to SELL
Can a Minor Reversal Setup lead to a Major Reversal?
Yes it can because after the Bear BO there was a VERY STRONG Reversal up and Bull Bars closing on their highs can generate enough Buying Pressure to create a Major Reversal up
Note - it is also important to perhaps look at the past several days to perhaps understand why this minor reversal converted into a Major Reversal
There is no BEST ENTRY SETUP - Anytime is a Good Time to Enter, Endless series of setups
There is no BEST ENTRY SETUP - Anytime is a Good Time to Enter, Endless series of setups
Can strong setups fail?
Yes Sometimes Strong Setups can Fail, look here, you got stopped out with a loss before the market took off to the upside. The MTR only has a 40% chance of a reversal up(down) so sometimes the perfect setup does fail and we get a LL MTR
After getting stopped out on this entry with a Strong setup should I look to buy again?
Yes, after getting stopped out look to Buy again, why? Look at the chart below
Let’s say you took this Buy looking for a Swing up, where should I take profit?
Minimum Target is 2x Actual Risk, it is ok to take partial profits off(or all off) @ 2x Actual or Initial Risk
However if the markets looks as though it will go further than 2x Actual/Initial Risk it is ok to hold on to part of my trade because the Bulls are making a strong case with a strong BO with strong follow-through. Odds we are going HIGHER.
Minimum Targets are Always Good but usually not the Best
Minimum Targets are Always Good but usually not the Best
There is no perfect way to take profits. Therefore you should never worry about being perfect instead only worry about be good.
Always be aware of what the minimum profit target is to have a winning strategy but remember the minimum is rarely ever the best. You can make more money by going for more than the minimum
There is no perfect way to take profits. Therefore you should never worry about being perfect instead only worry about be good.
Always be aware of what the minimum profit target is to have a winning strategy but remember the minimum is rarely ever the best. You can make more money by going for more than the minimum
Minimum Targets are Always Good but usually not the Best
Minimum Targets are Always Good but usually not the Best
When there is a Bear Leg that is starting to show signs of strong Buying Pressure what should Traders start doing?
Traders should start to look to go long at look at where some potential low spots could be.
Support (on this chart it is yesterday low or the bottom of this DT Bear Flag)
Both lows are reasonable Buys in conjunction with this Strong Buying Pressure. When the bottom is not yet clear using a Wide stop is much better
They’re no Perfect Trades - It is a Trade off Between Probability and RR
Usually one side gets higher probability
Other side gets better risk/reward(bigger reward and/or less risk)
Some Traders Prefer high probability and they wait for a Strong BO but at that point the reward is less and risk is greater
They’re no Perfect Trades - It is a Trade off Between Probability and RR
Usually one side gets higher probability
Other side gets better risk/reward(bigger reward and/or less risk)
Some Traders Prefer high probability and they wait for a Strong BO but at that point the reward is less and risk is greater
If the signal is not strong what should the trader do/
The Trader should wait for a 2nd Signal (2n Entry Buy) or a BO
What are the HL MTR Requirements?
Strong BO above Bear TL and Moving Average , MAG, Probably a Final Bear Leg down to a HL MTR Bottom
BUY ABOVE BULL bar after Failed BO @ Support (HL DB MTR)
Trend - Reversal Up or Resumption Down?
Trend - Reversal Up or Resumption Down?
Can a TR have deep PBs?
Yes when the market is mostly in a TR, the PBs from BOs can be deep
Making the Stop often far below
Trade small enough to avoid anxiety, BLSHS
TRs have many different ways to Scale In
TRs have many different ways to Scale In
This TR is still AIL (from the DB HL MTR) UNLESS there is a Good Reversal Down
As long as making HLs, then still bull trend After each new strong bull BO, trail stop to below HL (bottom of bull leg) If stop hit, then no longer bull trend
Probably evolved into TR No longer want to swing trade longs
This TR is still AIL (from the DB HL MTR) UNLESS there is a Good Reversal Down
As long as making HLs, then still bull trend After each new strong bull BO, trail stop to below HL (bottom of bull leg) If stop hit, then no longer bull trend
Probably evolved into TR No longer want to swing trade longs
Does the First selloff often fall below the entry price?
Yes the first selloff does often fall below the entry price, this is why it is import to have the correct initial risk stop, we do not want the market falling below the entry price for a second time
Bull Trend - Do not Raise Stop Until Strong Bull BO
Bull Trend - Do not Raise Stop Until Strong Bull BO
When should I Trail my stop?
After there is a Break to a new high and there is a clear resumption of a new bull trend, the bulls then raise stop too below most recent HL
If I have good buying pressure should I just scalp trade or swing trade part of my position?
If there is good buying pressure try to swing at least part of my position
If you are holding for a swing trade that is in profit and a strong sell signal appears should I exit or hold long still?
If a Bear will take the short due to the strength of the signal I should exit my long swing position
Do swing traders allow PBs?
Yes Swing Traders do allow PBs and they Rely on their Stops
When swing trading you must allow PBs. Selloffs often come from strong sell signal bars.
It is ok to exit and then buy again if continues up
In a Bull Trend do reversal attempts often fail?
Yes in a Bull Trend reversal attempts do fail often, about 80% of the time the Reversal attempts do fail
Swing Traders do not get fooled by minor reversals
What should I look for on the Open?
Often times on the Open there is a MTR, Looking for a MTR with the right context can yield great success in the markets as 50% of the there is a strong reversal on the Open after a Strong Selloff/Rally
Legs in a MTR on the Open can have only 1 to 5 Bars
Legs in a MTR on the Open can have only 1 to 5 Bars
When there is a Strong Reversal on the open should I take a minimum profit?
DO NOT EXIT at a Minimum Profit Target as Strong Buying Pressure on the Reversal might entirely reverses sell climax. Hold to see what happens (Trail position)
If it stalls maybe exit part of position and then continue to trail position
When there is a new BO should I be looking for the next target or should I exit my position with profits?
When there is a new BO look for at target
LL MTR but there was Big UP and Big DOWN Price Action in the Markets…
What is likely to occur?
This Price action is highly likely to evolve into a TR
What does a Failed HL MTR usually become?
a Failed HL MTR usually becomes a TR
a Bull BO of Bear Channel/Trend that fails to reverse into a MTR evolves into a TR instead of the start of a Strong Bull Trend Reversal of the Trend
When I have a LL MTR and then the market rallies, what is it usually followed by?
It is usually followed by a HL MTR (which is also a Head and Shoulders Pattern)
The Bull Trend needs a series of HLs and each is a chance to Buy
