Trading in Trading Ranges Flashcards
When a TR is Tight most traders will NOT trade
Expert Traders will trade with Limit Orders
When a TR is Tight most traders will NOT trade
Expert Traders will trade with Limit Orders
If TR is broad, buy and sell for scalps and some swings (BLSHS)
Enter with STOPS
Enter with Limit Orders
If TR is broad, buy and sell for scalps and some swings (BLSHS)
Enter with STOPS
Enter with Limit Orders
When a TR is Tight it is better to not trade. If a trader does decide to trade he should use limit orders
When a TR is Tight it is better to not trade. If a trader does decide to trade he should use limit orders
a TR is a Horizontal Channel
a TR is a Horizontal Channel
Markets are either in Trends or TRs and they transition one from the other.
They transition from a Trend to a TR
and
from a TR to a Trend
Markets are either in Trends or TRs and they transition one from the other.
They transition from a Trend to a TR
and
from a TR to a Trend
Context (Bars to the Left), influences the Bars to the Right
- When the BO is above the Bars to the left, there is a higher chance of it being a Trend
- When it is a Strong BO but not above the Bars to the left there is a higher probability it will be a bull leg in what will become a TR and not a Bull Trend
Context (Bars to the Left), influences the Bars to the Right
- When the BO is above the Bars to the left, there is a higher chance of it being a Trend
- When it is a Strong BO but not above the Bars to the left there is a higher probability it will be a bull leg in what will become a TR and not a Bull Trend
Confusion is not as Good or Bad as it appears
Confusion is not as Good or Bad as it appears
When the market is in a TR you never know where the bottom or Top is until there is a REVERSAL
Traders are still confident there is a Top and Bottom and that 80% of BOs will FAIL
They BLSHS
When the market is in a TR you never know where the bottom or Top is until there is a REVERSAL
Traders are still confident there is a Top and Bottom and that 80% of BOs will FAIL
They BLSHS
When there is BIG Confusion in the markets look for sign of sideways market Price Action
Beginners see consecutive bear bars closing near their low, possible Measuring Gap
When there is BIG Confusion in the markets look for sign of sideways market Price Action
Beginners see consecutive bear bars closing near their low, possible Measuring Gap
Until there is a clear BO = THERE IS NO BO!
Beginners see 5 consecutive bull bars closing near high, BO above DT and prior high and they enter LONG
Skilled traders see 2 legs up to LH after nested 2 legged wedge in a TR day and probable 2nd leg Trap and enter short with a limit order or a stop below a bear signal bar
Until there is a clear BO = THERE IS NO BO!
Beginners see 5 consecutive bull bars closing near high, BO above DT and prior high and they enter LONG
Skilled traders see 2 legs up to LH after nested 2 legged wedge in a TR day and probable 2nd leg Trap and enter short with a limit order or a stop below a bear signal bar
Disappointment = USEFUL INFORMATION
Disappointment = USEFUL INFORMATION
If high probability setups do not seem to work often, and low probability setups seem to work too often, the market is probably in a TR
If high probability setups do not seem to work often, and low probability setups seem to work too often, the market is probably in a TR
TR contained between S/R
When the market is in a TR the Bears and Bulls alternate control, they both take turns and make money
TR contained between S/R
When the market is in a TR the Bears and Bulls alternate control, they both take turns and make money
TRs usually need 2 Legs Up and 2 Legs Down as a range is created by repeated moves up and down
TRs usually need 2 Legs Up and 2 Legs Down as a range is created by repeated moves up and down
The markets are Fractal = Patterns in the markets usually subdivide into smaller patterns; a smaller pattern is contained in the bigger pattern
The markets are Fractal = Patterns in the markets usually subdivide into smaller patterns; a smaller pattern is contained in the bigger pattern
Traders are always looking for signs to see if the market is in a Trend or in a TR
Traders are always looking for signs to see if the market is in a Trend or in a TR
Early signs of a TR; If many of these signs are present this increases the chances that today is going to have a lot of TR Price Action
Early signs of a TR; If many of these signs are present this increases the chances that today is going to have a lot of TR Price Action
If traders see early signs of a TR, they will begin to trade like a TR rather than a trend
They know that a BO and trend will eventually come and they also know that they will probably make more than enough profit while in a TR betting on failed BOs in the TR to offset a possible eventual loss & successful BO
If traders see early signs of a TR, they will begin to trade like a TR rather than a trend
They know that a BO and trend will eventually come and they also know that they will probably make more than enough profit while in a TR betting on failed BOs in the TR to offset a possible eventual loss & successful BO
TRs can be Broad or Tight
When they are Broad Traders can BLSHS with Stop Orders and Limit Orders
When they are Tight most traders should not trade but skilled traders will trade them with limit orders
TRs can be Broad or Tight
When they are Broad Traders can BLSHS with Stop Orders and Limit Orders
When they are Tight most traders should not trade but skilled traders will trade them with limit orders
TR Price Action: Evidence that the market is in a TR
TR Price Action: Evidence that the market is in a TR
Always looking for early signs that the market might be in a TR
- Are there a lot of bars with prominent tails and small bodies
- Is there an absence of strong consecutive trend bars up/down
- Are there a lot of reversals?
- Are there a lot of 2 legged moves Up/Down
*ALL of this is evidence that the market is in a TR and start Trading it like a TR
Always looking for early signs that the market might be in a TR
- Are there a lot of bars with prominent tails and small bodies
- Is there an absence of strong consecutive trend bars up/down
- Are there a lot of reversals?
- Are there a lot of 2 legged moves Up/Down
*ALL of this is evidence that the market is in a TR and start Trading it like a TR
80% Rule - Failed BO and then Reversal is COMMON
80% Rule - Failed BO and then Reversal is COMMON
When the market is Rallying paying close attention to if the Bears can make money in a Bull is super important.
And if the Bears can make selling at a prior high or scaling in from a prior high, then the market is probably in a bull leg that is becoming a TR versus a bull leg line in a bull trend
Can a Bear sell at a prior high? If so, again these are signs of a probable bull leg in a potential TR
When the market is Rallying paying close attention to if the Bears can make money in a Bull is super important.
And if the Bears can make selling at a prior high or scaling in from a prior high, then the market is probably in a bull leg that is becoming a TR versus a bull leg line in a bull trend
Can a Bear sell at a prior high? If so, again these are signs of a probable bull leg in a potential TR
If the Bulls can easily make money in a Bear Selloff, using wide stops and Scaling In and Scalping.
Then there is a high probability of a bear leg in a TR instead of a Bear Trend
If the Bulls can easily make money in a Bear Selloff, using wide stops and Scaling In and Scalping.
Then there is a high probability of a bear leg in a TR instead of a Bear Trend
In TRs a lot of the setups gravitate towards 50%; Good Setups often Fail
In TRs a lot of the setups gravitate towards 50%; Good Setups often Fail
High Probability Setups in Trends have about 50% probability in TRs
Bad setups often work in TRs
High Probability Setups in Trends have about 50% probability in TRs
Bad setups often work in TRs
Expect Gaps to Close and not lead to a Trend
Most Gaps Close in TRs
Gaps closing is a characteristic of a TR
Expect Gaps to Close and not lead to a Trend
Most Gaps Close in TRs
Gaps closing is a characteristic of a TR
Bull Leg in TR instead of in Bull Trend
Bull Leg in TR instead of in Bull Trend
Bull Leg in Bull Trend versus it being in a TR
When ever a Rally looks weak but it is still forming Gaps that fail to close it is probably a small PB Bull Trend and is probably a Trend versus a TR
DO NOT SELL at Prior Highs and Scale in Higher
Bull Leg in Bull Trend versus it being in a TR
When ever a Rally looks weak but it is still forming Gaps that fail to close it is probably a small PB Bull Trend and is probably a Trend versus a TR
DO NOT SELL at Prior Highs and Scale in Higher
Bear Leg in TR instead of in a Bear Trend
Bear Leg in TR instead of in a Bear Trend
Bear Leg in Bear Trend instead of in a TR
Small PB Bear Trend can sometimes look weak and make traders think a TR is soon to come.
It is a Very Strong Type of Bear Trend
The Gaps remaining open make the Small PB Bear Trend more likely for a possible MM down
Bear Leg in Bear Trend instead of in a TR
Small PB Bear Trend can sometimes look weak and make traders think a TR is soon to come.
It is a Very Strong Type of Bear Trend
The Gaps remaining open make the Small PB Bear Trend more likely for a possible MM down
a BO = Bet that it WILL FAIL
a BO = Bet that it WILL FAIL
Bulls and Bears both Buy in the Bottom Half and Sell in the Top Half
As a Trader if you see evidence that there is in fact a TR in play do as the institutions are doing …. BLSHS
Bulls and Bears both Buy in the Bottom Half and Sell in the Top Half
As a Trader if you see evidence that there is in fact a TR in play do as the institutions are doing …. BLSHS
Bulls and Bears, some use upper and lower third
TRs have deep PBs, some look to buy in bottom third and sell in top third
Stop can be far (opposite end of the TR) so big risk = bad risk/reward
Bulls and Bears, some use upper and lower third
TRs have deep PBs, some look to buy in bottom third and sell in top third
Stop can be far (opposite end of the TR) so big risk = bad risk/reward
LOM = Limit Order Market; Betting against BOs
*When the TR is very Tight (TTR), most Traders should not Trade
TRs contain many TTRs
LOM = Limit Order Market; Betting against BOs
*When the TR is very Tight (TTR), most Traders should not Trade
TRs contain many TTRs
80% of BO attempts in TRs fail
Look for Reversal Attempts opposed to BO Trades
Very important to differentiate Legs in a TR versus Legs in a Trend
When the market is in a TR BLSH and take QUICK Profits!
80% of BO attempts in TRs fail
Look for Reversal Attempts opposed to BO Trades
Very important to differentiate Legs in a TR versus Legs in a Trend
When the market is in a TR BLSH and take QUICK Profits!
Entering with a Limit Orders make sure to use a Reasonable Stop
Entering with a Limit Orders make sure to use a Reasonable Stop
Scale In to increase chance of profitability
Some bulls will buy more lower and this increases the chances of profit, this increases risk so trade small enough so that risk is acceptable
Scale In to increase chance of profitability
Some bulls will buy more lower and this increases the chances of profit, this increases risk so trade small enough so that risk is acceptable
Taking Profits in a TR; many Traders will Scalp
It is ok to Scalp out at 1 - 2x Actual Risk as long as it is Bigger that the minimum Emini Scalp (1 Point)
*Remember that minimum needed for a profitable Trader’s Equation; the minimum is rarely the best choice
Taking Profits in a TR; many Traders will Scalp
It is ok to Scalp out at 1 - 2x Actual Risk as long as it is Bigger that the minimum Emini Scalp (1 Point)
*Remember that minimum needed for a profitable Trader’s Equation; the minimum is rarely the best choice
Taking Profits in a TR has many Logical Choices
Taking Profits in a TR has many Logical Choices
Swing Trades = 4+ Points / Scalp = 1 - 3 Points
Swing Trades = 4+ Points / Scalp = 1 - 3 Points
Take Profits at Big Swings Up and Down, so Many Traders will Swing
Take Profits at Big Swings Up and Down, so Many Traders will Swing
TR Day often gets a Late Test of the Open of the Day
TR Day often gets a Late Test of the Open of the Day
TRs are very Forgiving to Limit Order Traders who are able to use WIDE STOPS and Scale In
Good Management is NECESSARY
TRs are very Forgiving to Limit Order Traders who are able to use WIDE STOPS and Scale In
Good Management is NECESSARY
TRs can be a Tight Trading Range (TTR)
a Tight TR is a Limit Order Market
TRs can be a Tight Trading Range (TTR)
a Tight TR is a Limit Order Market
TTR most Traders should NOT TRADE
But to Trade in a TTR you want the Height of the TR to be at least either 3 times the size of the avg bar or 3 times the size of a minimum Scalp (1 point) so 3 points
TTR most Traders should NOT TRADE
But to Trade in a TTR you want the Height of the TR to be at least either 3 times the size of the avg bar or 3 times the size of a minimum Scalp (1 point) so 3 points
TR = LOM
TR = LOM
ALL TRs eventually BO into Trends
When the BO successfully occurs with the BO Bar closing near its low with strong follow-through; EXIT POSITION at the market DO NOT WAIT for a better Exit
YOU are WRONG, GET OUT it is ok to be wrong
ALL TRs eventually BO into Trends
When the BO successfully occurs with the BO Bar closing near its low with strong follow-through; EXIT POSITION at the market DO NOT WAIT for a better Exit
YOU are WRONG, GET OUT it is ok to be wrong
In a TR when the Bulls have a BO the Bears will SELL it betting on the reversal down
AND when the Bears have a BO the Bulls will BUY it betting on the reversal up
In a TR when the Bulls have a BO the Bears will SELL it betting on the reversal down
AND when the Bears have a BO the Bulls will BUY it betting on the reversal up
BOs can be made of a Channel and many Small BARS
BOs can be made of a Channel and many Small BARS
