Trading Breakouts Flashcards

1
Q

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

A

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

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2
Q

When there is a Bull BO always look for signs that we may have a strong Bull BO / Strong Trend

A

When there is a Bull BO always look for signs that we may have a strong Bull BO / Strong Trend

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3
Q

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)

A

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)

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4
Q

Many ways to Buy - All good so choose one

A

Many ways to Buy - All good so choose one

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5
Q

Setups never look good enough

A

Setups never look good enough

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6
Q

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

A

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

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7
Q

Stop, they’re always several good choices

A

Stop, they’re always several good choices

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8
Q

Any Reasonable Stop is good

A

Any Reasonable Stop is good

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9
Q

No matter where you buy the stop location is always the same

TRUE OR FALSE?

A

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.

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10
Q

After each new BO while in a trade what should I do with my stop?

A

After each new strong BO, especially if a new high, trail stop to just below bottom of bull leg (major HL)

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11
Q

What is the simplest approach to buying the close of a strong bull trend?

A

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

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12
Q

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

A

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

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13
Q

Buy The Close Bulls sometimes buy more as the Rally continues

A

Buy The Close Bulls sometimes buy more as the Rally continues

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14
Q

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

A

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

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15
Q

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)

A

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)

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16
Q

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)

A

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)

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17
Q

In a Strong strong should I bet on failed Reversals?

A

Yes, expect reversals to be minor and to create PBs, not bear swings

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18
Q

When the Bull Trend is Strong ALWAYS Swing at Least part of it

How long should I hold this swing for?

A

Hold it until there is at least a decent Sell Signal or at least until the end of the day

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19
Q

a Perfect Trade cannot Exist

A

a Perfect Trade cannot Exist

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20
Q

Never worry about perfection

Any trade that has a positive Trader’s Equation is as good as any other

A

Never worry about perfection

Any trade that has a positive Trader’s Equation is as good as any other

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21
Q

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.

A

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.

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22
Q

Gap Open Bars - Can Signal Weakness or Strength

A

Gap Open Bars - Can Signal Weakness or Strength

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23
Q

When the market has consecutive strong bear bars what should I do?

A

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)

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24
Q

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

A

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

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25
Q

Scale into a Winning Trade - Most Traders however Sell inly Once or Twice

Use the appropriate stop and just hold for a swing

A

Scale into a Winning Trade - Most Traders however Sell inly Once or Twice

Use the appropriate stop and just hold for a swing

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26
Q

What does a Sell The Close BO eventually evolve into?

A

It eventually evolves into a a Channel (or Sometimes a TR)

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27
Q

When Scalping should I use a Tight Stop or a Swing Stop?

A

When Scalping use a Swing Stop this increases my probability

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28
Q

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

A

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

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29
Q

Minimum Profit = Rarely the Best Choice

A

Minimum Profit = Rarely the Best Choice

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30
Q

Scalpers can scale in and use swing stops

A

Scalpers can scale in and use swing stops

31
Q

What can a PB signify other than traders taking profits?

A

a PB can signify a pause in Trend

32
Q

In the Market Cycle what is the BO usually followed by?

A

In the market cycle the BO phase it usually followed by the Channel Phase

33
Q

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

A

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

34
Q

When market is in a Channel Phase what is an important sign that a channel is transitioning into a TR?

A

An Important sign that a TR is soon to emerge, is the Bear Scalpers begin to Make Money

35
Q

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

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

36
Q

a Trap often forms before a BO

A

a Trap often forms before a BO

37
Q

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

A

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

38
Q

Bear BO Below Bull Flag = Sign of Strong Bears

A

Bear BO Below Bull Flag = Sign of Strong Bears

39
Q

Bear BO Below Bull Flag

Does a Later sell in this BO have a Lower or Higher Probability?

A

a Later sell has a Higher Probability

40
Q

Strong Bull sometimes has a Weak High 1 Bull Flag

A

Strong Bull sometimes has a Weak High 1 Bull Flag

41
Q

Strong BO, only Buy if I can use the correct STOP

A

Strong BO, only Buy if I can use the correct STOP

42
Q

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

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

43
Q

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

A

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

44
Q

Bull - Stock Replacement Strategies

A

Bull - Stock Replacement Strategies

45
Q

Buying Early = Less Risk

A

Buying Early = Less Risk

46
Q

What probabilities exist with a deep pullback versus a small pullback?

A

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)

47
Q

Weak Bull BO - Deep PB

A

Weak Bull BO - Deep PB

48
Q

When the market transitions from a BO to a TR how should I trade it?

A

Once the market evolves into a TR TRADE it like a TR not a Trend

BLSHS

49
Q

Bulls and Bears - Buy Low and Sell High

A

Bulls and Bears - Buy Low and Sell High

50
Q

Bears enter where the Bulls take PROFITS and vice versa

A

Bears enter where the Bulls take PROFITS and vice versa

51
Q

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

A

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

52
Q

Once the market evolves into a TR from a Bull Trend the Bears are much more eager to SELL

A

Once the market evolves into a TR from a Bull Trend the Bears are much more eager to SELL

53
Q

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?

A

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!

54
Q

Bear BO - Look for Signs of Strength

A

Bear BO - Look for Signs of Strength

55
Q

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

A

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

56
Q

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

A

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

57
Q

There are many good ways to sell so CHOOSE ONE

A

There are many good ways to sell so CHOOSE ONE

58
Q
A
59
Q

The STOP has to do with your Price Action NOOT your Entry Price

A

The STOP has to do with your Price Action NOOT your Entry Price

60
Q

Setups Never look Good Enough

A

Setups Never look Good Enough

61
Q

Where does the stop belong in this trade?

A

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

62
Q

After a BO sometimes the market goes straight down because of FOMO, traders Fear there will not be a PB so they SELL

A

After a BO sometimes the market goes straight down because of FOMO, traders Fear there will not be a PB so they SELL

63
Q

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👌🏾

A

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👌🏾

64
Q

They’re always several different good Stop Choices

A

They’re always several different good Stop Choices

65
Q

Does my Stop vary depending on my entry into the market?

A

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

66
Q

After each new BO what should I do with my stop?

A

After each new BO Lower the Stop, especially to a newer low (vice versa in a bull trade)

67
Q

After each new BO - Lower the Stop

A

After each new BO - Lower the Stop

68
Q

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

A

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

69
Q

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

A

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

70
Q

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

A

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

71
Q

Bear Flags (Low 1 and 2 PBs) - Sell BO Below

A

Bear Flags (Low 1 and 2 PBs) - Sell BO Below

72
Q

Bet Reversals will FAIL and become Bear Flags

Sell Bull Closes

Sell BO above Prior High

Sell above Bars

Sell @ 50% PB

A

Bet Reversals will FAIL and become Bear Flags

Sell Bull Closes

Sell BO above Prior High

Sell above Bars

Sell @ 50% PB

73
Q

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

A

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