Trading Breakouts Flashcards
Bull BO - Strong Bull, SO BUY!
The probability Favors the Bulls (60% or more due to the context telling me so)
This 60% gives the Bulls a favorable traders equation
Bull BO - Strong Bull, SO BUY!
The probability Favors the Bulls (60% or more due to the context telling me so)
This 60% gives the Bulls a favorable traders equation
When there is a Bull BO always look for signs that we may have a strong Bull BO / Strong Trend
When there is a Bull BO always look for signs that we may have a strong Bull BO / Strong Trend
It is always important to decide early the always in direction
(as soon as you tell yourself OMG I want a pullback that means you should be going long/ BUY for any reason as the market is in AIL)
It is always important to decide early the always in direction
(as soon as you tell yourself OMG I want a pullback that means you should be going long/ BUY for any reason as the market is in AIL)
Many ways to Buy - All good so choose one
Many ways to Buy - All good so choose one
Setups never look good enough
Setups never look good enough
Stop - Decide where it belongs
Reasonable stop is below BO or below bull leg
Once you know where your stop is, trade a small enough size so risk is acceptable
Stop - Decide where it belongs
Reasonable stop is below BO or below bull leg
Once you know where your stop is, trade a small enough size so risk is acceptable
Stop, they’re always several good choices
Stop, they’re always several good choices
Any Reasonable Stop is good
Any Reasonable Stop is good
No matter where you buy the stop location is always the same
TRUE OR FALSE?
True
No matter where you enter the stop placement is always the same because it is to do with what took place to the left(the context) not the time you entered.
After each new BO while in a trade what should I do with my stop?
After each new strong BO, especially if a new high, trail stop to just below bottom of bull leg (major HL)
What is the simplest approach to buying the close of a strong bull trend?
The simplest approach is to buy at the market as soon as the bar closes
Some place a limit order to Buy the Close as soon as the next bar begins, but sometimes to not get filled
Beginning traders should mostly enter every trade with a stop order
As long as strong bull trend is in effect, buy 1 tick above the high of bulls bars that close near their highs
Beginning traders should mostly enter every trade with a stop order
As long as strong bull trend is in effect, buy 1 tick above the high of bulls bars that close near their highs
Buy The Close Bulls sometimes buy more as the Rally continues
Buy The Close Bulls sometimes buy more as the Rally continues
When the market is in a Strong Bull Trend there is a lot of profit potential
As a trader waits for a PB for smaller risk they most of the time you will miss the best part of the trend
When the market is in a Strong Bull Trend there is a lot of profit potential
As a trader waits for a PB for smaller risk they most of the time you will miss the best part of the trend
The market is always in a Cycle
Either in a BO , a Channel or TR.
a BO and Always in Long is a great time to Buy (at least a small position)
The market is always in a Cycle
Either in a BO , a Channel or TR.
a BO and Always in Long is a great time to Buy (at least a small position)
After a Bull BO when I am looking to go long in a Bull Flag choose either the High 1 or High 2 to enter the market long
As trends mature (add more bars) I will start to get more High 2 and High 3 (not just a High 1 because the trend was so strong initially)
After a Bull BO when I am looking to go long in a Bull Flag choose either the High 1 or High 2 to enter the market long
As trends mature (add more bars) I will start to get more High 2 and High 3 (not just a High 1 because the trend was so strong initially)
In a Strong strong should I bet on failed Reversals?
Yes, expect reversals to be minor and to create PBs, not bear swings
When the Bull Trend is Strong ALWAYS Swing at Least part of it
How long should I hold this swing for?
Hold it until there is at least a decent Sell Signal or at least until the end of the day
a Perfect Trade cannot Exist
a Perfect Trade cannot Exist
Never worry about perfection
Any trade that has a positive Trader’s Equation is as good as any other
Never worry about perfection
Any trade that has a positive Trader’s Equation is as good as any other
Let’s say you buy the reversal up from yesterday’s low, your risk is small and your reward is great.
This type of trade most of the your stop will get hit, but sometimes you will have a huge swing up for a huge profit.
Let’s say you buy the reversal up from yesterday’s low, your risk is small and your reward is great.
This type of trade most of the your stop will get hit, but sometimes you will have a huge swing up for a huge profit.
Gap Open Bars - Can Signal Weakness or Strength
Gap Open Bars - Can Signal Weakness or Strength
When the market has consecutive strong bear bars what should I do?
As long as the Context is good for the bears, Sell the Close of Bear Bars
Simplest approach is to sell at the market as soon as the bar closes
Some traders place a limit order to sell at the close (sometimes if the bear trend is strong I will not get filled short)
Sell The Close - Likely Bear Trend or TR
Most Traders sell once and then swing trade once they see the PB fails and the once potential TR is now a Bear Swing
Sell The Close - Likely Bear Trend or TR
Most Traders sell once and then swing trade once they see the PB fails and the once potential TR is now a Bear Swing
Scale into a Winning Trade - Most Traders however Sell inly Once or Twice
Use the appropriate stop and just hold for a swing
Scale into a Winning Trade - Most Traders however Sell inly Once or Twice
Use the appropriate stop and just hold for a swing
What does a Sell The Close BO eventually evolve into?
It eventually evolves into a a Channel (or Sometimes a TR)
When Scalping should I use a Tight Stop or a Swing Stop?
When Scalping use a Swing Stop this increases my probability
Positive Trader’s Equation is ALWAYS NEEDED
The problem with taking a profit that is to small is the trade has to be perfect and this is rarely true in the markets
Positive Trader’s Equation is ALWAYS NEEDED
The problem with taking a profit that is to small is the trade has to be perfect and this is rarely true in the markets
Minimum Profit = Rarely the Best Choice
Minimum Profit = Rarely the Best Choice
Scalpers can scale in and use swing stops
Scalpers can scale in and use swing stops
What can a PB signify other than traders taking profits?
a PB can signify a pause in Trend
In the Market Cycle what is the BO usually followed by?
In the market cycle the BO phase it usually followed by the Channel Phase
It is important to watch the BO because you want to see when it has ended and entered the channel phase because when it enters the channel phase you want to trade it differently
It is important to watch the BO because you want to see when it has ended and entered the channel phase because when it enters the channel phase you want to trade it differently
When market is in a Channel Phase what is an important sign that a channel is transitioning into a TR?
An Important sign that a TR is soon to emerge, is the Bear Scalpers begin to Make Money
As a Bull Trend matures it begins to weaken a sign of this is the Bears are able to make money selling with stops
A TR is soon likely
As a Bull Trend matures it begins to weaken a sign of this is the Bears are able to make money selling with stops
A TR is soon likely
a Trap often forms before a BO
a Trap often forms before a BO
If the Bulls can create a strong sell signal bar and prevent it from ever triggering in a probable BULL MTR
The Bulls Show their strength in the markets by doing this (It is a Bear Trap)
The Strong Bear Signal Bar with the weak Bear follow-through triggers signs of a Strong Bulls
If the Bulls can create a strong sell signal bar and prevent it from ever triggering in a probable BULL MTR
The Bulls Show their strength in the markets by doing this (It is a Bear Trap)
The Strong Bear Signal Bar with the weak Bear follow-through triggers signs of a Strong Bulls
Bear BO Below Bull Flag = Sign of Strong Bears
Bear BO Below Bull Flag = Sign of Strong Bears
Bear BO Below Bull Flag
Does a Later sell in this BO have a Lower or Higher Probability?
a Later sell has a Higher Probability
Strong Bull sometimes has a Weak High 1 Bull Flag
Strong Bull sometimes has a Weak High 1 Bull Flag
Strong BO, only Buy if I can use the correct STOP
Strong BO, only Buy if I can use the correct STOP
a Strong BO often has a FAR stop
When the correct stop placement is so far away (73 points on this chart) most should not trade this
Only take the trade if I can use the correct stop
a Strong BO often has a FAR stop
When the correct stop placement is so far away (73 points on this chart) most should not trade this
Only take the trade if I can use the correct stop
When Extremely Big Bars - DO NOT TRADE
Only experts should trade when this is occurring
An alternative is if my account cannot handle this type of risk is to trade weekly call options
When Extremely Big Bars - DO NOT TRADE
Only experts should trade when this is occurring
An alternative is if my account cannot handle this type of risk is to trade weekly call options
Bull - Stock Replacement Strategies
Bull - Stock Replacement Strategies
Buying Early = Less Risk
Buying Early = Less Risk
What probabilities exist with a deep pullback versus a small pullback?
a deep PB will probably lead to some kind of TR versus a smaller PB will probability lead to some kind of measured move (In this chart there was a deep pullback of more than 50% that lead to a TR)
Weak Bull BO - Deep PB
Weak Bull BO - Deep PB
When the market transitions from a BO to a TR how should I trade it?
Once the market evolves into a TR TRADE it like a TR not a Trend
BLSHS
Bulls and Bears - Buy Low and Sell High
Bulls and Bears - Buy Low and Sell High
Bears enter where the Bulls take PROFITS and vice versa
Bears enter where the Bulls take PROFITS and vice versa
Reversing a trade position is not for most traders
As it is pretty to emotionally exit long and go short simultaneously but if you are able to efficiently do it than do it
Reversing a trade position is not for most traders
As it is pretty to emotionally exit long and go short simultaneously but if you are able to efficiently do it than do it
Once the market evolves into a TR from a Bull Trend the Bears are much more eager to SELL
Once the market evolves into a TR from a Bull Trend the Bears are much more eager to SELL
At the close of this bar, if you had to take one of these 2 choices, which would you choose?
Bears Sell the Close or Bulls Buying the Close?
BEARS SELL THOSE as the math with this context is better for the BEARS
60% chance of the bears hitting their target versus a 40% chance of the bulls having their target hit
The probability clearly favors the bears, decide early that the market is now AIS
In a strong trend, even selling late is good
Only ONE thing matters - YOU MUST SELL!
Bear BO - Look for Signs of Strength
Bear BO - Look for Signs of Strength
Remember it is AWLAYS IMPORTANT to be thinking about the Market Cycle
Only 10% of the bars on any chart are in a BO Phase
Most BOs are 2-3 bars and part pf a TR or Broad Channel
Remember it is AWLAYS IMPORTANT to be thinking about the Market Cycle
Only 10% of the bars on any chart are in a BO Phase
Most BOs are 2-3 bars and part pf a TR or Broad Channel
It very important to always be ready to draw a conclusion the Always In direction
Decide Early; is the market in Always In Long or Always In Short
It very important to always be ready to draw a conclusion the Always In direction
Decide Early; is the market in Always In Long or Always In Short
There are many good ways to sell so CHOOSE ONE
There are many good ways to sell so CHOOSE ONE
Setups Never look Good Enough
Setups Never look Good Enough
Where does the stop belong in this trade?
Atop of the Sell Climax, as every agrees the market is AIS and the above goes above the BO or above bear leg
This is a BIG stop, if your account cannot handle this stop simply do not take the trade
If not sure if the reversal is minor or not, Exit Early for a profit
I can sell again after a PB(50% PB is GOLD👌🏾
If not sure if the reversal is minor or not, Exit Early for a profit
I can sell again after a PB(50% PB is GOLD👌🏾
They’re always several different good Stop Choices
They’re always several different good Stop Choices
Does my Stop vary depending on my entry into the market?
No, the stop is the same no matter where I sell
The stop placement has nothing to do with where I entered and everything to do with what occurred in the context
After each new BO - Lower the Stop
After each new BO - Lower the Stop
Sell the Close Bear Trend - a Reason to Sell on Every Bar
I have to be very careful off a Sell the Close Trend or Buy the Close Trend that emerges in the final hour of the trading day, I have to be quick to exit
Sell the Close Bear Trend - a Reason to Sell on Every Bar
I have to be very careful off a Sell the Close Trend or Buy the Close Trend that emerges in the final hour of the trading day, I have to be quick to exit
Sell the Close Bear Trend - Sell Strong Bear Closes
The reason why these big bear bars are closing on their lows is that institutions are selling just before the close so Traders must do the same
Sell the Close Bear Trend - Sell Strong Bear Closes
The reason why these big bear bars are closing on their lows is that institutions are selling just before the close so Traders must do the same
Once Clearly Always in Short Look to SELL NOW!
Especially if you see the market cycle has transitioned into a Strong BO
If the stop placement is to far do not worry about it, just do not take this trade
Once Clearly Always in Short Look to SELL NOW!
Especially if you see the market cycle has transitioned into a Strong BO
If the stop placement is to far do not worry about it, just do not take this trade
Bear Flags (Low 1 and 2 PBs) - Sell BO Below
Bear Flags (Low 1 and 2 PBs) - Sell BO Below
Bet Reversals will FAIL and become Bear Flags
Sell Bull Closes
Sell BO above Prior High
Sell above Bars
Sell @ 50% PB
Bet Reversals will FAIL and become Bear Flags
Sell Bull Closes
Sell BO above Prior High
Sell above Bars
Sell @ 50% PB
When you see the market is clearly AIS and the reversal down is strong, the odds are you’re going to get a Swing down
It is important to swing at least part of your position
If you keep scalping out that is ok but you need to get short again
The best approach is to just use the appropriate stop and hold short until there is a major reversal up or a major reversal setup, then look to exit my swing trade
When you see the market is clearly AIS and the reversal down is strong, the odds are you’re going to get a Swing down
It is important to swing at least part of your position
If you keep scalping out that is ok but you need to get short again
The best approach is to just use the appropriate stop and hold short until there is a major reversal up or a major reversal setup, then look to exit my swing trade
