Trading Climactic Reversals (Failed Breakouts): Video 42 A, B & C

Question 1

Whenever you see a Breakout that doesn’t look strong, that means the market will transition into a Trading Range soon.

Question 2

Look to see if Bulls can make money in Bear Trend. If they can, that means the trend is weakening and the market will soon transition into a trading range

Answer 2

This is a stairs pattern, the pullbacks are overlapping the breakout point (Green Line in photo). This means that the channel will evolve into a trading range.

Question 3

When a Breakout is more likely a bear leg in a Trading Range, than it is a the start of a bear trend.

Answer 3

Question 4

When a Breakout is more likely a bear leg in a Trading Range, than it is a the start of a bear trend.

Answer 4

Question 5

A Climax is an acceleration of a move up or down.
Extreme change in behavior.
Every breakout bar (with a big body) is a climax

Answer 5

Question 6

When you get three decent bull bars in a row, the market is most likely Always in Long and most likely will get a second leg up.

Answer 6

This photo highlights gaps

Question 7

Whenever there is a big bull Breakout, especially after a trend that last 20 or more bars, probability of reversal or end of bull is often __%
When the market give you something that is surprising, take it, because the market will usually take it away.

Answer 7

60%

Question 8

If you want to wait for a higher probability trade, wait for a strong breakout in the opposite direction.

Answer 8

At the top, climax are good to go in the opposite direction.
He talks about exhaustion gaps in here, but I still don’t know what that means.

Question 9

When a bull bar closing above midways is a buy, bear bar closing below it’s midpoint is a buy. (I’m slightly confused about long upper wicks though. Wouldn’t that be a sign of weakness?)

Question 10

V Tops: Almost always they are something else. Some other pattern. But a sign of a reversal before a reversal takes place.

Question 11

A micro Channel late in trend may be a climax

Question 12

Here a reversal down will probably be a trading range. Low probability of it being a massive reversal

Question 13

He’s saying once the market is doing something that it has never or not in a long time done, then it is unsustainable. Like 11 months without touching moving average. this is unsustainable. (But when will it correct? He doesn’t go over that)

Question 14

Remember the market cycle.
Strong trends rarely become opposite strong trends.
They go into an intermediate stage first, like a trading range.