Trading in Trading Ranges

Question 1

When a TR is Tight most traders will NOT trade

Expert Traders will trade with Limit Orders

Answer 1

When a TR is Tight most traders will NOT trade

Expert Traders will trade with Limit Orders

Question 2

If TR is broad, buy and sell for scalps and some swings (BLSHS)

Enter with STOPS

Enter with Limit Orders

Answer 2

If TR is broad, buy and sell for scalps and some swings (BLSHS)

Enter with STOPS

Enter with Limit Orders

Question 3

When a TR is Tight it is better to not trade. If a trader does decide to trade he should use limit orders

Answer 3

When a TR is Tight it is better to not trade. If a trader does decide to trade he should use limit orders

Question 4

a TR is a Horizontal Channel

Answer 4

a TR is a Horizontal Channel

Question 5

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

Answer 5

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

Question 6

Context (Bars to the Left), influences the Bars to the Right

1. When the BO is above the Bars to the left, there is a higher chance of it being a Trend
2. 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

Answer 6

Context (Bars to the Left), influences the Bars to the Right

1. When the BO is above the Bars to the left, there is a higher chance of it being a Trend
2. 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

Question 7

Confusion is not as Good or Bad as it appears

Answer 7

Confusion is not as Good or Bad as it appears

Question 8

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

Answer 8

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

Question 9

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

Answer 9

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

Question 10

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

Answer 10

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

Question 11

Disappointment = USEFUL INFORMATION

Answer 11

Disappointment = USEFUL INFORMATION

Question 12

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

Answer 12

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

Question 13

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

Answer 13

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

Question 14

TRs usually need 2 Legs Up and 2 Legs Down as a range is created by repeated moves up and down

Answer 14

TRs usually need 2 Legs Up and 2 Legs Down as a range is created by repeated moves up and down

Question 15

The markets are Fractal = Patterns in the markets usually subdivide into smaller patterns; a smaller pattern is contained in the bigger pattern

Answer 15

The markets are Fractal = Patterns in the markets usually subdivide into smaller patterns; a smaller pattern is contained in the bigger pattern

Question 16

Traders are always looking for signs to see if the market is in a Trend or in a TR

Answer 16

Traders are always looking for signs to see if the market is in a Trend or in a TR

Question 17

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

Answer 17

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

Question 18

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

Answer 18

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

Question 19

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

Answer 19

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

Question 20

TR Price Action: Evidence that the market is in a TR

Answer 20

TR Price Action: Evidence that the market is in a TR

Question 21

Always looking for early signs that the market might be in a TR

1. Are there a lot of bars with prominent tails and small bodies
2. Is there an absence of strong consecutive trend bars up/down
3. Are there a lot of reversals?
4. 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

Answer 21

Always looking for early signs that the market might be in a TR

1. Are there a lot of bars with prominent tails and small bodies
2. Is there an absence of strong consecutive trend bars up/down
3. Are there a lot of reversals?
4. 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

Question 22

80% Rule - Failed BO and then Reversal is COMMON

Answer 22

80% Rule - Failed BO and then Reversal is COMMON

Question 23

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

Answer 23

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

Question 24

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

Answer 24

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

Question 25

In TRs a lot of the setups gravitate towards 50%; Good Setups often Fail

Answer 25

In TRs a lot of the setups gravitate towards 50%; Good Setups often Fail

Question 26

High Probability Setups in Trends have about 50% probability in TRs Bad setups often work in TRs

Answer 26

High Probability Setups in Trends have about 50% probability in TRs Bad setups often work in TRs

Question 27

Expect Gaps to Close and not lead to a Trend Most Gaps Close in TRs Gaps closing is a characteristic of a TR

Answer 27

Expect Gaps to Close and not lead to a Trend Most Gaps Close in TRs Gaps closing is a characteristic of a TR

Question 28

Bull Leg in TR instead of in Bull Trend

Answer 28

Bull Leg in TR instead of in Bull Trend

Question 29

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

Answer 29

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

Question 30

Bear Leg in TR instead of in a Bear Trend

Answer 30

Bear Leg in TR instead of in a Bear Trend

Question 31

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

Answer 31

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

Question 32

a BO = Bet that it WILL FAIL

Answer 32

a BO = Bet that it WILL FAIL

Question 33

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

Answer 33

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

Question 34

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

Answer 34

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

Question 35

LOM = Limit Order Market; Betting against BOs \*When the TR is very Tight (TTR), most Traders should not Trade TRs contain many TTRs

Answer 35

LOM = Limit Order Market; Betting against BOs \*When the TR is very Tight (TTR), most Traders should not Trade TRs contain many TTRs

Question 36

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!

Answer 36

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!

Question 37

Entering with a Limit Orders make sure to use a Reasonable Stop

Answer 37

Entering with a Limit Orders make sure to use a Reasonable Stop

Question 38

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

Answer 38

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

Question 39

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

Answer 39

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

Question 40

Taking Profits in a TR has many Logical Choices

Answer 40

Taking Profits in a TR has many Logical Choices

Question 41

Swing Trades = 4+ Points / Scalp = 1 - 3 Points

Answer 41

Swing Trades = 4+ Points / Scalp = 1 - 3 Points

Question 42

Take Profits at Big Swings Up and Down, so Many Traders will Swing

Answer 42

Take Profits at Big Swings Up and Down, so Many Traders will Swing

Question 43

TR Day often gets a Late Test of the Open of the Day

Answer 43

TR Day often gets a Late Test of the Open of the Day

Question 44

TRs are very Forgiving to Limit Order Traders who are able to use WIDE STOPS and Scale In Good Management is NECESSARY

Answer 44

TRs are very Forgiving to Limit Order Traders who are able to use WIDE STOPS and Scale In Good Management is NECESSARY

Question 45

TRs can be a Tight Trading Range (TTR) a Tight TR is a Limit Order Market

Answer 45

TRs can be a Tight Trading Range (TTR) a Tight TR is a Limit Order Market

Question 46

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

Answer 46

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

Question 47

TR = LOM

Answer 47

TR = LOM

Question 48

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

Answer 48

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

Question 49

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

Answer 49

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

Question 50

BOs can be made of a Channel and many Small BARS

Answer 50

BOs can be made of a Channel and many Small BARS