Daily Review Flashcards
1
Q
Where should stop go in Always In Long Market.
A
Below the strong BO with FT or major Higher Low.
A Major HL has a strong bear leg into it (5 out of 6 bars bear), and followed by 10 or more bars to new high and new high came with strong bull BO.
2
Q
What are some signs of buying pressure?
A
*More bull bars than bear bars
* No consecutive bear bars and number decreases
*Consecutive bull bars and number increases
*Bull Micro Channels (no PBs)
*Bull bodies are bigger than bear bodies
*Bull bodies getting bigger
*Bear bodies getting smaller
*Bars closing near high and at least above midpoint
*Tails below bars
*Bull BO bars with gaps, and follow-through
*Bad FT after big bear bars
3
Q
What are some signs of selling pressure?
A
*More bear bars than bull bars
*No consecutive bull bars and the number decreases
*Consecutive bear bars and number increases
*Bear micro channels (no PBs)
*Bear bodies are bigger than bull bodies
*Bear bodies getting bigger
*Bull bodies getting smaller
*Bars closing near low and at least below midpoint
*Tails above bars
*Bear BO bars with gaps, and follow through
*Bad FT after big bull bars
4
Q
What are the strong characteristics of a STRONG BULL BO?
A
*BO BAR has a Large trend body and small to no tails
*Larger the bar, the more likely the BO will succeed
*Vol 10-20x the avg vol of recent bars
*BO goes very far, lasts several BARS and breaks several Resistance levels like the MA, prior swing highs and TLs by many ticks
*You feel a sense of urgency to BUY but want a PB that never comes
*The 1st BO bar spends most of its time on the high of the bar and the PBs within the bar are small
5
Q
How do you mark your charts?
A
1st: Trend channel and Wedge channel lines with overshoots. Magenta.
2nd: Break Out Points. Gold.
3rd: Triangles Contracting/Expanding, MicroTriangles, Break Out Mode Ranges. Blue.
4th: Double Bottoms, Micro DB’s. Green. Double Tops, micro DT’s. Red.
6
Q
A, a, 1
A
DT DB Flag H2/L2 in Trend. TARGET: Previous High, 2X PB, Round #. STOP: Below signal bar or previous strong BO bar or previous major higher low/ major lower high leg.
7
Q
B, b, 2
A
Wedge Flag H3, L3 in Trend. TARGET: Previous High, 2X PB, Round #. STOP: Below signal bar or previous strong BO bar or leg. Or 5-10% ADR.
8
Q
C, c, 3
A
Test of Dynamic S/R. Target: Previous High, 2X PB, Round #. STOP: Below signal bar or previous strong BO bar or leg. Or 5-10% ADR.
Reaction by Rejection.
9
Q
D, d, 4
A
Above/Below Previous Bar in quiet flag at EMA
10
Q
E, e, 5
A
Above/Below Bar BO of Flag
11
Q
F, f, 6, V, v, W, w
A
DB DT Flag, hold for MM based on neckline.
12
Q
G, g, 7, Z, z
A
BOPB of flag
13
Q
H, h, 8
A
TCL overshoot and R bar (steeper the better)
14
Q
I, i, J, j, 10, Y, y
A
MTR, Double Bottom/Top after strong break of TL or 5-10 bars beyond EMA.
15
Q
K, k, 20
A
A. I. Flip Fade
16
Q
L, l, 30
A
FFR, BOM Reversal
17
Q
M, m, 40
A
PB = or < Previous PB
18
Q
N, n, 50
A
Failure of Anything, Especially 80% rule, failed BO of TR, failed Reversal of trend.
19
Q
O, 0, 70
A
Good Signal Bar/ Micro DT DB Flag
20
Q
P, p, 80
A
1st strong CT bar during micro channel/tight channel.
21
Q
Q, q, 100
A
Test of Horizontal S/R
Reaction by Rejection
Especially L2-L4 or H2-4
22
Q
R, r, 200
A
Fade the Close or Beyond of Exhaustive Climax.
TARGET: Once BO blw/abv start of climax 50% chance of MM based on size of Climactic BO (Bars/Bodies).
Minimum goal of climax is temporary end of trend. Most climactic reversals are followed by trading range not opposite trend.
STOP: Abv/Blw clmx, MM based on clmx, 10% ADR.
Most climaxes lead to a 3-10 bar TR then trend can reverse or resume.
Most climaxes lead to a trading range not opposite trend.
23
Q
S, s, 60
A
Enter BO, stop above/below start of leg or BO bar
24
Q
T, t, 400
A
H1/L1 during BO phase or start of channel
25
Th, th, 9
Wedge, Top/Bottom
26
Ch, ch, X, x 90
BOT
27
Sh, sh, 300
Fade H2/L2 Top/Bottom of TR
28
What is a Scalp?
What is a Swing?
A scalp is a minor Reversal or BO, prefers profit within 1-5 bars and no PB. Size of average bar or 5-10% ADR.
A swing is a major reversal or BO, want trend lasting at least half of bars on screen, 2 legs, 10 bars, but want 20 or more bars. Size is 40% ADR.
29
What is a realistic minimum profit target when scalping? When do you move stop to break even?
*Size of the average bar
*5-10% of ADR
*If close to target move stop to break even
30
In a bull flag what percentage of the time is there a bear BO?
25% of the time there will be a Bear BO of a bull flag, and spike and channel phase starts over.
31
When is a stop location placement clear?
After a BO and follow-through or after a strong BO to a new high the stop location is below bottom of rally (major HL)
32
How do you know if its a second leg trap?
Look to the left, did it close far above prior high, is it still in the trading range?
Is the follow through bar a bear bar forming and closing on its low?
33
What is the single most important concept in trading?
*Will the BO succeed or reverse or fail to reverse and be a BOPB.
34
How many major trends are usually on a chart?
*Only 1-2
35
What is the percent chance of a bull BO of a bear channel?
*75%
*Think of every bear channel as a bull flag
36
Name the different types of trends and their relevance?
*Broad channel trend including wedges and stairs
*Spike and Channel (almost every chart)
*Trending trading range day (a couple a week)
*Trend from the open (about once a week)
*Small pullback trend (about twice a month)
*Trend resumption day (about once a month)
37
Why is a TR hard to trade?
*Signal Bars and setups are weak,
Trends are weak,
Spends a lot of time in middle not moving,
Bad follow through after strong trend bars and breakouts,
Confusion at start of legs rarely certain reversal has begun.
38
What is Candle Behavior?
In a trend we expect a new candle to pullback in the first 1/2 before pushing onward.
Take sells above the open and buys below the open during 1st 1/2 HTF candles.
39
If you are risking very little, what will happen, what do you need to do?
What style of trading is this, should most traders, trade this style?
You will probably lose on any one trade.
Only take it if the occasional big reward is big enough to offset frequent small losses.
This is swing trading.
Most traders have a better chance of making money this way. 40% of time big win, 60% of time small losses, wins, and breakevens offset each other.
40
If position is large do what?
Be quick to take profits.
Must be fast to reduce position to normal if no longer a breakout.
Be quick to detect a loss of momentum or transition into channel or TR.
Exit completely if premise no longer valid.
41
What are the odds of a BO counter trend and with trend of a channel?
75% of time channel will BO countertrend.
25% of time channel will BO with trend and the spike and channel market cycle starts over.
42
How many times does the market have to try something, then what happens?
Anytime the market tries to do something 3 times and FAILS; Traders than expect the market to do the opposite
43
Bull BO of a Bear Flag is a Surprise, traders expected opposite, traders are Trapped In and Out, surprise bar from a bear trend bear flag is a low probability event. When would a long trade be a good trade?
The good trade will be after there is a Break above the major LH. Enter BOPB after break above LH.
A Major LH has a strong bull leg into it (5 out of 6 bars bull), and followed by 10 or more bars to new low and new low came with strong bear BO.
44
How should you scale into a buy/sell the close BO?
Most traders cannot think and act quickly enough, should only take one entry and hold for swing.
Some experts will swing first entry and scalp later entries.
Some keep adding to swing position until no longer strong BO.
Some buy/sell high/low 1 and high/low 2 flags.
45
When should I draw a line?
After 2nd reversal, draw a line, then draw a parallel on the other side which often has only 1 reversal, watch market closely to see how it reacts when it gets close to or to parallel.
46
What is the goal of every market?
The goal of every market is to find a fair price. It is constantly probing up and down until clearly it is too far, then it reverses and probes/ in the opposite direction.
47
Should you sell HH MTR or LH MTR?
When rally to DT HH MTR follows weak sell-off better to wait for LH MTR.
When rally to DT HH MTR follows strong sell-off you can sell HH MTR.
48
What is the chance of trend resumption if stop is hit?
After stop is hit, usually about 50% probability for both up and down, unless BO is very strong, then higher for BO party.
49
In general how much percentage does the first bar of the day have to be the high or low of the day?
It has about a 20% chance of being the high or low of the day.
50
What are the characteristics that a Break Out will fail?
*The breakout bar has a small or average-size bull trend body and a large tail on top.
*The smaller the bar the less likely it will succeed.
*The spike breaks above a resistance level like a swing high, a bear trend line, or a bull trend channel line by only a tick or so and then reverses down.
*There is a sense of confusion. You feel like you are not certain whether the breakout will succeed or fail.
*As the breakout bar is forming, it pulls back for at least a third of its height two or more times.
51
Selling Pressure, Doji's, and Bad Follow Through in a Bull Channel means what?
The Channel is soon to evolve into a TR.
52
What is the minimum size for a TR?
3 Legs 20 bars. Equally good buy & sell setups. BLSHS. Remember Buy Low Sell High Scalp.
53
If high Probability, what does that mean about reward?
It means bad reward, and big risk. Ok to take profit at 1x risk.
54
After a buy climax how long will the bulls wait to buy again?
TBTL or more.
55
When a 2 legged channel is tight, what is it on a higher time frame?
It is a BO on a higher timeframe otherwise known as a Leg 1. Usually followed by PB then a comparable 2nd leg up.
56
When selling reversal down from bear trend line where do you put stop?
57
When triangle flags on your chart what should you look out for?
The tests of apex of triangle flags.
58
How should you add to a loser?
You may only add 1 to 2 times. Only add 1-2x normal scalp size, 3x is best. Minimum is atleast a 1/3 of the way to stop, then add more 2/3. If position is big be quick to take profits.
59
Whenever I have a wedge what are the odds of a BO in the opposite direction?
75% chance of atleast a minor reversal.
60
Whenever there is a BO or Reversal what do traders agree upon in the markets?
That the price is wrong, markets have to move quickly to probe for a new fair price.
61
A v top, bottom usually creates what?
A trading range lasting 10 or more bars.
62
What kind of moves are TRs filled with?
2 legged moves (2nd leg trap) 2nd legs are usually stronger than the first and this tricks beginner traders all the time into thinking it is a successful BO ignoring the fact that 80% of TR BOs fail.
63
Is every reversal a type of DT or DB?
Yes, Deep PB becomes DB. Every bear BO is a DB that does not bottom.
64
For a Bear Trend in a Bear Channel to Reverse and become a Bull Trend what has to occur?
The market needs to BO above Bear channel and then have a series of HLs
65
Traders trade based on what happens when the market reaches a line. What happens when the market reaches a line?
66
What are ways to separate a major LH from a minor lower high?
*A major LH will have many bull bars in the rally, a minor will have a few.
*A major will lead to a strong new low
67
What is a Micro channel?
It can be 2 bars or 40 Bars, no high/low goes above/below the prior bar and once you get a PB it is no longer a microchannel, it is still a tight channel which is still a sign of strength but no longer a microchannel
68
Why is the MTR the best setup for Traders (beginners and Experts)?
69
Number 1 Rule for TRs?
TRs often have failed BOs do not enter BO until clear.
70
Anytime I see a Bear Channel I should assume what?
It is going to transition into a TR which it does more than 75% of the time
71
Do most Climaxes lead to Reversals?
72
Can a Reversal take 20 or more Bars before the Reversal is clear?
73
If the Premise in the market has CHANGED, DO NOT WAIT for Stop to Be Hit.
Be ready to get OUT if Always In reverses, How many consecutive CT bars closing on their low should you automatically get out?
4
74
When an “ii” pattern occurs late in a Trend what can it lead too?
A Reversal
75
A triangle 20 late in a trend often becomes what? The strongest 4 bars late in a trend often become what?
76
What should I be asking myself in a Bear Trend/Channel?
Can Bulls that buy new lows make money, and if they do it is the first sign bears are weakening and TR likely soon.
77
What are always the 2 options for a stop?
Out of Risk, Reward, Probability; which is the most important variable?
Above/Below the leg. Above/Below the BO bar/bars.
78
Why is the MTR the best setup for Traders (beginners and Experts)?
Usually about one a day. Reward is at least 2x, anticipate setups slowly, set it and forget it easy management. Take profit at end of session.
79
If MTRs 1st Reversal fails what should I do?
When trade is failing exit and try again, when in doubt get out and look to re-enter. There can always be 3 pushes or 3 pushes and a deep pullback so 4 pushes. Probability of swing reward is only 40%, 60% small losers and winners.
80
Traders are looking for BO Tests all the time, What kind of traders are exiting at role reversals/BOTs?
Scale in traders, or people with a losing position are exiting at Role Reversals/BOTs.
81
What is the probability BO of TR will fail? How do experts trade TRs?
80% of BOs will fail so Bulls buy near bottom and scale in lower confident bear BOs will fail, and Bears sell near top and scale in higher confident bull BOs will fail.
82
In a TR who bets against who?
If holding for a confirmed BO (20% odds) its Trend Reversal vs. Trend Resumption. If just scalping (if scale in 80% odds) its bulls vs. bears.
83
If ii reversal late in trend fails, what might it be is premise still valid?
It might be a triangle late in trend often becomes final flag, 50% chance trend resumption BO will fail and you can still trade the reversal.
84
The first time we get bars Below the MA usually leads to what?
1st MA gap bar(s) usually leads to trend resumption, the final leg of trend, then MTR.
85
What are the characteristics of a very strong breakout?
A very strong break out has 3 or more trendbars and even the strongest fail 30% of the time.
86
87
How should you classify the price action on every chart?
Classify as a tight trading range, trading range, micro channel breakout, tight channel trend, broad channel trend. Very weak, weak, strong, very strong.
88
89
What usually happens when a breakout is followed by a tight trading range? What are two forms of tight trading ranges?
A breakout followed by a tight trading range is usually followed by trend resumption. A triangle or pennant is a form of TTR.
90
If scaling in what type of entry should most use? What should be a good default size if stop is 3x normal away?
Stop Entry. TBTL 2nd Entry.
20% of normal size.
91
If a Trader is able to average 5000$/trading day trading 200+ Days a year = 1 Million Dollars made in a Year
There are about 250 business days in a year. Start by making 50$ a day, then 500$, Then 5000$. .1 Lot 1 Lot 10 Lot 5 points.
92
How to avoid Skunk Stops?
93
If a line is too divergent will most computers ignore them or use them?
Most computers will ignore them it is not useful support or resistance, more reliable if close to parallel or parallel. Once you have 2 reversals draw a parallel.
94
Monthly S/R, does the market like to pay attention to the S/R on the monthly near the end of a month?
Yes, High, Close, Open, Low.
95
When I have a strong BO to start the day for an hour or so, it usually followed by what?
It is usually followed by market going sideways for several hours, it then decides between a trend reversal or trend resumption.
96
Are the Final Flags big or small after and during a climax?
97
1 emini is how many dollars a point. 1 micro emini is how many dollars a point.
50$ a point, 5$ a point.
98
When the market has tried to BO in one direction 3 times and is failing what do the odds favor?
A BO in the opposite direction.
99
Are computers flexible in how they draw DT/DB Continuation/PB/Flags, Top/Bot Reversals?
Yes.
100
If my Premise is no longer Valid do not Let my Stop to be Hit before I exit my position.
101
Is it ever too late to enter a Reversal Entry?
102
If you want a PB to get in a BO is this the only time its ok to look at a smaller TF?
Yes.
103
What is the math for Stop and Limit order traders that take the opposite sides of each others trades?
90% of the time both have equally valid traders equation, 10% of the time there is a strong BO, and BO traders have better math.
104
Can a 2nd leg be as small as one bar?
105
If they’re a lot of bars near a reversal point, traders will view it as a single line point not multiple line points
TRUE or FALSE?
106
Whenever I have a strong BO where should I first look?
107
Are flags perfect?
108
What should you constantly ask yourself?
Are gaps closing, will this gap close?
109
Do DTs/DBs have to be perfect?
110
111
Is using the top of a Strong Leg down great to use?
112
In a bear trend who should you pay attention to, to determine strength of trend?
113
How does the probability change at the 50% mark during a PB?
114
a Bull BO above a bull channel fail what % of the time and within how many bars on average?
115
Basic Rules when to add?
3x size of scalp. At least 2/3 of the way to stop.
116
117
How to trade a TR?
Know approximate top and bottom of range, be confident enough to buy low and sell high, use wide stops, many scale in.
118
What is the difference between TR and BOM?
80% of TR BOs fail except when in BOM. BOM is a range so tight that BO likely within the next 5-10 bars, probability of BO is 50%, probability of failed BO and reversal is 50%.
119
What orders do you use in microchannel?
Tight channel?
Broad channel?
Microchannel: Market, sell the close when bar closes on extreme, try and buy 1/3 PB of previous bar.
Tight channel: Limit Order above/below previous bar or previous H/L, sell 1st strong CT close.
Broad Channel: Stop order after 2 leg PB /flag and signal bar.
120
How many Bars are Micro DTs and DBs?
121
As long as the market is making HHs and HLs
What should I do?
Buy reversals up from PBs that go down to middle 3rd of last leg up.
122
When scaling in what are the 3 ways to manage a trade.
Premise Remains Valid. Mildly Disappointed. Clearly Wrong.
Premise Remains Valid- Hold all for swing.
Mildly Disappointed- Exit all at first entry.
Clearly Wrong- Exit all at midpoint to avoid or reduce loss.
123
The first strong CT leg in MTR is usually 2 legged trading range phase. The MTR is the reversal phase. True False?
True.
124
When there is a Micro Channel early in a Trend what is it more likely to lead to?
Measuring Gap.
125
As soon as there are 2 reversals what should you do?
Draw a line to see how 3rd touch reacts.
Draw a parallel to see how PB reacts.
126
Can a long TTR replace the initial break of the MA/TL?
Yes.
127
What are the 12 types of s/r?
128
Where do bulls take partial or entire profits in a bull trend?
New highs.
129
Early in BO Bears scale into a short betting on the Failed BO attempt. When do the Bears Buyback their Shorts?
Once the Bears see strong follow-through, they buy back shorts and wait for many bars before looking to sell again.
130
What is more likely if the PB is deeper than expected
131
a Bear BO below a Bull TL needs what?
132
What is BOM? How do you make projections?
133
What is the 70% Rule
The 70% Rule
If I have a Bull Trend/Channel and I get a BO on-top of the Channel there is a 70% chance that I will get a Reversal down to test bottom of channel within 5 bars and the same if there is a BO below the bottom of the Channel there is 70% chance of a Reversal up to test top of channel.
And I have a 30% that the Bull BO is successful and start a new market cycle [BO - CHANNEL - Trading Range]
134
If your CT trading and buying new lows what's a reasonable profit target?
Middle of the last leg down.
135
Expand on what a Broad Channel is?
136
137
In a strong Bull “Buy the close Bulls” Trend why are the Bulls buying the close of bars?
138
If unclear if it is a trend or TR, what should you do?
Trade like a TR, BLSHS, 2-4 points minimum for gold and spx, 10-20 pips for forex. Find chart where atr matches.
139
How many bars does the bull BO have to fail before you can be confident that the Bull Trend will resume up?
140
What is a price pattern break?
If your system includes trading price patterns, you must know that for a pattern to be considered broken price must close outside of it. If you have a trading system using price pattern breaks to signal your entry, then you must wait for a candle or bar to close outside the pattern on the same timeframe where you spotted the pattern. Do not make the mistake to spot a pattern on the 4h chart and then go the 15 minutes chart and wait for a 15 minutes candle to close outside and call this a break of the pattern. If the pattern resides on the 4h chart, you must always wait for a 4h candle to close outside with momentum, meaning that the candle should have at least half of its body outside the pattern to consider it a break.
141
What is pivotal support and resistance?
where price bounces of them from either side. These pivotal support and resistance zones are by far the most important ones they attract the most attention from the traders out there.
142
How to use the moving average?
The moving average tells us what the main trend is on the 4h chart. This is very simple to do, just plot the 200 EMA on your 4h chart and observe where the current price is situated in respect to the moving average. If the pair at the current time trades above the moving average then the overall trend is up, if it trades below the moving average then the trend is down. The moving average itself must have a clear slope in one direction. This means that for you to consider that the trend on the 4h chart is up the moving average must be sloping upwards and the pair has to be trading above it at that time. For a downtrend, the moving average must have a clear slope down and the pair has to trade below it.
143
What are major HL's?
HL that leads to strong bull BO to new high.
144
In a strong Bear “Sell the Close” Trend why are the Bears selling the close of bars?
145
146
Define Inertia and 80% Rule
147
When should a Trader Scalp Shorts in a Bull Channel?
148
If your account can't handle the size of the stop where is a reasonable place to put stop?
149
Can a negative gap be used to make measured move measurements?
150
When I am in doubt what are 3 choices I have?
151
What is a skunk stop?
152
Is a TR a good reason to Buy or Sell?
153
Where can you enter limit orders against the trend?
154
Does a BO usually need a 2nd Bar to confirm?
155
What are the 3 limit orders you can use in a trading range?
156
What is the minimum profit target for a strong BO?
157
If there is a BO on a higher TF how would that look on a 5-minute TF?
158
What are 3 ways you can enter after a bear micro channel?
159
When trading a TR should you look left and be mindful of stretch targets?
Yes, TR's like to expand their range look left at how far the market can go while still remaining a TR?
