Pullbacks and Bar Counting: Video 09 A, B & C Flashcards
Define Pullback
Smallest reversal: In bull, low of bar below low of prior bar. In Bear, high of bar, above high of prior bar.
True or False: in a bull trend, a doji bar or bear bar even if not below low of prior bar, is an implied pullback.
True. These are actual pullbacks on lower time frames.
Define: Implied Pullback
A “Pause” bar that would be a pullback on the smaller time frame chart.
In bear trend, a doji or bull bar, even if not above high of prior bar, is an implied pullback (PB)
True or False: PB’s in trend usually provide high probability, low risk entries
True
Talk about 50% pullback: Most important
50% Pullback in bear means distance to stop (risk) is same distance as to the bottom of bear trend (minimum reward). Probability favors trend resumption, so traders like to sell on 50% PB in bear trend. Traders buy 50% pullback in bull trend. 50% is the basis for much of the math for traders. (Slide 9, 09 A)
True or False: Bears look to sell 50% PB from a selloff.
Bulls look to buy 50% PB from a rally
True
Define ABC Correction
Two legs: First leg down is A, Pullback up from 1st leg down is the B, the next leg down is C. Buy above the high of the C bar which is a High 2 Bull Flag
Define Triangle
PB Pullback with 3 Legs in one direction(5 or more total). Three pushes down.
Purpose of the course
To show all of the different types of entries throughout the day and how to manage the trades.
When does a pullback end?
When the current bar’s high goes above high of prior bar.
Bar Counting: Count trend resumption attemps
Count number of attempts to resume trend. Each resumption attempt in bear trend usually has bear bar. Why? i don’t understand this.
True or False: Each leg in a bear trend has 1 or more bars. Each leg in a bear flag has 1 or more bull bars.
True
True or false: In a bull trend, if the high of the next bar goes above the high of the current bar, then the curent bar becomes the buy signal bar.
True
High 1. If the high of the next bar goes above current bar:
Current bar becomes High 1 Buy Signal (High 1 buy setup, High 1 reversal, High 1 Bull Flag). High 1 ends the first leg of sideways or down move. High 1 ends the first leg down. First pullback from a new high.
What is the purpose of looking for pullbacks in trends?
They give traders a high probability trade.
Once a pullback grows to 20 or more bars, it becomes a…
Trading Range (TR). The more bars added to the pullback, the less probability of a continued trend.
True or False: Some lower highs are minor in a bear trend, It is common for a pullback to go beyond a higher lower high, the continue down.
True
A triangle is…
A pullback PB with 3 legs in one direction (5 or more total)
Video 09A at 31:00 describes High 1, but I don’t understand it.
Video 09B as well.
What is the purpose of bar counting?
To look for logical reasons to enter a trade.
Big up, plus Big down = ________________________
A lot of confusion and you will probably get sideways trading range action
Why would I buy above “High” candles?
I’m betting on trend resumption, that’s why to buy on pullbacks.
True of False: All major trend reversals are type of double tops (DT)
True
True or False: All Double Tops (DT) are Low 2 sell setups?
Treu. But don’t enter unless context is good.
True or False: In a broad (bear) channel, always be suspicious if the rally doesn’t go above the pullback
True
True or false: When you have a tight bear channel and it is trying to reverse repeatedly, those reversals are going to be bear flags.
True. You don’t want to be looking to buy when the market looks like this
True or False: A High 2 is the second attempt to resume the bull trend
True: It has a higher probability of success especially if the signal bar of High 2 has a bull body. It’s reliable because both bulls and bears are buying. No one willing to sell. Market goes up to find sellers. High 2 is a reliable buy signal in a bull trend.
Pullbacks tell you that the trend is probably going to resume soon and it give you an opportunity to enter.
These are actually pullbacks on the lower time frame charts
Implied Pullback in Bear Trend: When you see a strong trend, and a tail like shown, look on the smaller time frame chart and if it is a pullback, bet that the trend will resume.
I always though that this long lower tail and bear bear closing on it’s high would be a sign that the trend is about to reverse.
High 1: The first time the bar goes beyond the previous bar in a bear pullback.
(The Green is on a higher time frame chart)
If you get 5 or 6 Legs down (A leg is after a high 1,2…)
A Pullback ends when the current bar’s high goes above the high of a prior bar
Bar Counting: The number of attempts a trend tries to resume after a pullback.
Each resumption attempt in a bear trend usually has a bear bar.
So the bear bars are an attempt at trend resumption down.
He very poorly explains this very important concept!
Buy Signal Bar:
In a Bull Trend, if the high of the next bar goes above the high of the current bar, then the current bar becomes the buy signal bar. It signals traders to go long.
He calls the bottom/signal bar in the photo a High 1 signal bar or a High 1 reversal. Or High 1 bull flag. A buy set-up.
A High 1 end the first leg of sideways or down move.
You’re betting on Bull Trend resumption, that’s why you’re buying above these pullbacks.
In this photo, because of the three bear bars, he’d rather wait for a “second entry.”
A triangle is just 3 pushes down and a pullback that is mostly sideway.
I don’t understand this. He just wants us to buy after every new high in a pullback?
Doesn’t make sense, just keep buying lower and lower?
He doesn’t seem to show that a High has a grater probability than any other.
So we’re looking for 3 pushes down, aka: Wedge? For Bar Counting
So here is saying that this is the second leg trying to reverse the bull trend. An
And he says second attempts are higher probability.
He says if you get High 5s and High 6s, you’re probably in a bear trend.
He doesn’t use High 5. After High 4 he stops looking to buy PB , and starts looking for rallys in bear trend.
This makes no sense. Why aren’t these highs?
Makes no sense at all.
Damnit, I wish he explained this better.
All Double Tops are Low 2 sell set-ups, but don’t sell unless the context makes sense.
All Wedge tops and Wedge bear Flags are Low 3 sell set-ups.
Why aren’t these High 3s? They’re going up!!!!!!!!!!!!!!!!!
I understand the Wedge Bear Flag, but why are they Lows?
I really wish he would create his own chart with a simple explanation. At least for learning purposes. I know nothing’s perfect, but show us a clear perfect set-ups so students can understand the information, then go into a sample chart. It’s unreal that his context can defeat the purpose of learning. Why doesn’t he get that?
All Double Bottoms are High 2 Bull Flags.
All Wedge Bottoms and Wedge Bull Flags are High 3 Buy Set-ups.
Here he says a Wedge Bottom is always a High 3. That may help in understanding.
I guess my Highs and Lows are mixed up. How can a wedge is a falling market be a High that I should buy on a pullback? Again Al, makes no sense.
Whenever Al sees a Double Top Bear Flag, he’s always thinking measured Move Down.
In this case a tight bear channel, so first move up is a minor reversal.
Use the lower high to create the measured move. If it fall below that, then he’ll look at a measured move using the measured move down using hw higher one. (Again, makes no sense. What he must mean is use the first lower high. )
When a rally doesn’t go above the previous lower high, you can look to sell it.
A Double Bottom reversal on the first Higher Low ina bear trend is usually a major Trend Reversal
Is a Double top a Flag or Reversal?
Every double top is a Low 2 sell set-ups.
This is ridiculous. Why is he counting High bars in a bear trend?
Al, please, please, please find a way to explain this important concept better.
On ALL chatrooms, no one understands this concept the way he explains it. Ridiculous!
He says whenever there is a strong breakout, traders will restart the counting.
Why not listen to your students and find a way to provide more value by explaining this better?
So now he says that with strong bear trends, never look for bottoms. So why are you confusing us? Yes, we’re looking at lows. Why confuse us?
I’m like, “what?” How are those L2’s??????
Now I’m really confused
If you get a Bull Breakout above a Wedge, 50% chance it will either succeed or fail.
Okay, so you can flip a coin then. 50/50 come on. Why bother even saying anything?
Sorry, I’ve been through all of the videos. Now reviewing. And the content is exhausting.
I want to learn this, but the content is like anti-helpful.
So here’s Low 2’s, and i don’t know why they are not High 2’s. Ugghhhh!!!!!!!!
Never look for Tops in Strong Bull Trends.
Do not look for Low 1, Low 2 and Low 3’s.
(This slide should sum it up, but exhausted by this course.)
