Tight Channels & Micro Channels Flashcards
What kind of trend/channel is this?
Small PB. Bull Trend - Tight Bull Channel
A deeper dive on a Micro Channel
A deeper dive on a Micro Channel
Is a Tight TR, horizontal channel a type of tight channel?
Yes, it is tight and horizontal
Is a parabolic wedge a type of tight channel?
Yes it is, it is usually climatic at the 3rd push and usually a failed BO above then a reversal
Is a small PB Trend a type of tight channel?
Yes, it has tiny PBs that last only 1-3 bars usually a BO or micro channel on a higher TF
What is a Micro Channel?
Micro means no PBs.
In any tight channel only trade in the direction of the trend, why?
A tight channel on a lower TF is what on a higher TF?
A BO, treat the 5min like a BO only look to buy
Can I make money shorting in a Tight Bull Channel?
No, if I cannot make money shorting with stops, then the bull channel is tight
What is a tight channel?
A tight channel is a channel with not much space between the lines. It is usually a BO on a higher TF. It is important to only trade in the direction of the tight channel. The swings are small, they only fall a bar or two.
If the smallest is 1 point should I enter the market with limit orders?
No do not even trade the Tight TR is not big enough. The minimum needed to trade is the height of the range is at least 2-3x size of the smallest scalp AND 2-3x the height of avg bar
What is the smallest scalp I should take in the ES markets?
10 ticks (2.5 Points)
How many Bars can a Micro Channel be?
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
When I have strong Bull Micro Channels like this traders will look to buy the 1st reversal(PB) down why?
They are expecting at least one more small leg up, I can buy with limit orders’ same thing for the bears
Channels need 2 lines, an extreme form of Tight Channel with no PBs, like with any channel, Micro Channel Line is opposite from Micro Trend Line.
HOWEVER, the Micro Channel line adds nothing, so do not draw it only need to see a micro trend line
Channels need 2 lines, an extreme form of Tight Channel with no PBs, like with any channel, Micro Channel Line is opposite from Micro Trend Line.
HOWEVER, the Micro Channel line adds nothing, so do not draw it only need to see a micro trend line
No PBs in a Bull BO means what?
It means the bulls are buying above low of the prior bar, and they’re so eager to buy at or below the bar, it is a sign of Buying Pressure. Do not SELL
No PBs in a Bear BO means what?
It means the bears are selling below high of the prior bar, and they’re so eager to sell at or above the bar, it is a sign of Selling Pressure. Do not BUY
When there is a Micro Channel early in a Trend what is it more likely to lead to?
a Strong BO(Micro Channel) early in a trend is more likely to lead to a Measuring Gap for a MM down
When I see a Micro Channel late in a Trend is it more likely to be a Measuring Gap or an Exhaustion Gap?
When I have a Bear BO 20 or more bars into the Trend and that BO is the strongest that the Bear Trend has been the odds are it will be an Exhaustion Gap, it can be a Measuring Gap but the odds of it being that with this Micro Channel being late in the Trend are very low. More likely to a TR to follow instead of MM down
Is a Micro Channel a BO or a Climax or both?
Micro Channel is a BO and a Climax. If many bars and big bars, the climax is more extreme. More likely to be exhaustive; a PB that lasts more bars
A Bull Micro Channel with a BEAR BO leg in it is usually a Bull Flag
TRUE or FALSE?
TRUE, the Bull Micro Channel is a BO, the Bear Micro Channel is a PB, bull flag (bear leg in a Bull trend) & reversal attempt. Most reversal attempts fail. Expect Bull to resume.
Bear Micro Channel
Are the Bull Reversal attempts usually Bear Flags?
Yes they’re, The Bear Micro Channel is a BO, the Bull MC is a PB, Bear Flag and a reversal attempt, most reversals fail (even though in on this chart they are bull MCs) so expect the bear trend to resume
Is a Micro Channel early in a Trend a Probable BO?
Yes it is
18 Bar MC over 2 days, MC is a BO & a BO can be a Buy Climax and an Exhaustive end of the Trend
18 Bar MC over 2 days, MC is a BO & a BO can be a Buy Climax and an Exhaustive end of the Trend
A Bear Micro Channel occurring 20 bars into a trend means what?
Bear MC late in a bear trend (after 20+ bars), can be a Sell Climax, and exhaustive end of the bear trend. Do not sell BO above bear MC wait for 5-10 bars before considering selling again, to see if still bear trend
