PullBacks (PBs) Flashcards
What is a PB?
In Bull, low of bar below low of the prior bar (green)
In Bear, high of bar above high of the prior bar (red)
Implied PB in Bull Trend means what?
In a Bull Trend, a Doji bar or bear bar, even if not below low of the prior bar, is an implied PB
*These are actual PBs on lower TFs
Implied PB in Bear Trend means what?
In a Bear Trend, a Doji bar or bull bar, even if not below high of the prior bar, is an implied PB
*These are actual PBs on lower TFs
a PB can grow into a TR how many bars does it take to grow it into a TR?
Once a PB grows to 20 or more bars, it is now in a TR
Strong Trend why does it PB?
Once bulls confident that bears will fail
to reverse bull trend, bulls buy again and tighten their stop
Deep PB, if the premise is still good the trend will continue
What makes this DEEP PB premise still good for the Bull Trend MTR?
Deep PB to DB HL MTR
HELD SLIGHTLY ABOVE PRIOR LOW = Premise still good for Bull MTR with this deep PB
A 50% pullback of the previous Leg is the most common pullback.
TRUE or FALSE?
True
Who does the 50% PB Favor?
The Reversals or the Trend Resumptions?
Probability favors trend resumption with a 50% PB in a trend
The PB sometimes falls below Bull BO in TR what would the Bulls do in this scenario?
80% of BOs in TRs Fail
This PB fell below the previous BO but with weak follow-through and weak BARS
the BULLS will buy Reversal up into the TR
Bar Counting is a method to Help traders to find PB Entries
How many legs in the PB do traders often wait?
2 or 3 legs
Rarely, 4 to 6 legs
(2-3 leg PB can fail; 2nd PB of 2-3 legs)
Identify the 3 legs in this PB
When does the PB end?
The PB ends when the bar goes above high of the prior bar
Define this High 1 Bull Flag
What is Bar Counting?
In a Bull trend with a BO from a PB
What should I now begin to do?
New BO so start looking for new PBs
The 1st PB from a BO is High 1 or High 2?
It is High 1
*Might be 1st of 2-3 Legs Down
If you continue counting after a H1 (1st leg in pullback) what is the 2nd leg down considered?
High 2 Reversal
*Ending the 2nd leg
*Also a Bull Flag
Here is an example of Strong Bull Trend - Many High 1 & High 2 Buy Setups
NOTE: High 3 is usually also a Triangle when sideways
Here, it is just a Tight TR (TTR),
or a Wedge sloped down
In a strong Bull Trend when should I raise my STOP?
After each new High
After each new high, trail stop below most recent HL
Do not lose sight of goal, The market is AIL
Therefore I am looking for a reason to buy
Identify the High 2 Bull Flag
(It is a two-legged, sideways to down PB)
Don’t lose sight of the goal, Trying to get long in a Bull trend
One good way to buy is a PB (same in a Bear trend)
After PB, if low of next bar goes below PB bar than what does this mean?
Which is the signal bar and which is the entry bar?
What is Low 1?
and
What is Low 2, Low 3, Low 4?
All Double Tops (DT) are ______ sell setups
AND
All Wedge Tops and Wedge Bear Flags are ______ sell setups
Fill in the blank
Wedge Bottoms and Wedge Bull Flags are always a High 3 buy setups
TRUE OR FALSE?
TRUE
*DO NOT ENTER UNLESS CONTEXT is GOOD
All Double Bottoms are High 2 Buy Setups
TRUE OR FALSE?
TRUE
*DO NOT ENTER UNLESS CONTEXT is GOOD
Describe this pattern
DB High 2 Bull Flag BO PB Buy Signal
Name this pattern
DT Bear Flag: Look for MM
Is this a DB Flag or DB Reversal?
DB Reversal
Is this a DB Flag or DB Reversal?
DB Bull Flag
Double Top Flag or Reversal?
DT Reversal
Is this a DT Flag or Reversal?
DT Flag
Flag and Reversal, do you trade them the same way?
Yes, trade them the same it does not matter if call it a DT or DB. a flag or reversal. Trade them the same.
DT but not yet clear BEAR Trend what should I then do?
Call it a DT LH Reversal until more evidence in context is presented and the bear trend is clear
In a Strong Bear Trend never look for Bottoms
TRUE or FALSE?
TRUE
80% of reversals fail in strong trends, Channels too tight for MTR only get minor reversals, which is bear flag on higher TF
a L1, L2, L3 is what kind of setup?
Sell Setups
a H1,H2,H3 is what kind of setup?
Buy Setups
After each BO should I start the count again?
Yes, after every new BO, start the count over again with H1
Look to buy PB after every new leg
a Low 4 on a 5 min TF can be a Low 2 on a Higher TF such as a 10 min
TRUE or FALSE
TRUE
If a PB keeps growing what may occur?
It may become an opposite Trend
*If the PB grows too 20 or more bars, it is an Endless PB
This Wedge Bull Flag PB has low probability of a BULL BO and has become an endless PB
Why?
Tight Bear Channel
20+ Bars in the Bear Channel
Bears Managed to get price below MA
The Bull flag still has 40% of Bear BO
Bull Channel in a Bear Trend is a PB Bear Flag
More likely to get a Bear BO
If it grows to 20 or more bars, it is now what?
It is now an Endless PB odds of a Bear BO fall to about the same for a Bull BO (50/50)
Here is a 24 Bar PB after a Bull BO
It is now an Endless PB
What are the odds of a bear BO?
they are a 50% chance of a Bear BO
If there is a PB on a 5-minute TF that seems too last forever; 50 or even 100 bars and it is hard too read the count what is the simple best solution?
Simply look at a higher TF such as the 60 minute and things could be much more clear.
TR on 5 minute TF
Is a H2 buy setup on a 60 minute
Does it matter if you call the PB a H1 or H2?
No, it does not matter
Buy a PB in a Bull Trend - AIL
Low 2 Strong Sell
When should the shorts exit?
If High 2 Triggers in Bull Trend
