Trading Tight Bear Channels Flashcards
Bear Channels can be TIGHT or BROAD
In a Tight Bear Channel I should be looking for ANY reason to SELL
In a Broad Bear Channel it is a 2 sided Channel, I can Buy and Sell however it is still a Bear Channel so it is Better to SELL and trade in the direction of the Trend (Perhaps for a Swing)
Bear Channels can be TIGHT or BROAD
In a Tight Bear Channel I should be looking for ANY reason to SELL
In a Broad Bear Channel it is a 2 sided Channel, I can Buy and Sell however it is still a Bear Channel so it is Better to SELL and trade in the direction of the Trend (Perhaps for a Swing)
If I am unsure if the Channel is Tight or Broad I must assume the Channel is Tight and only Trade in the Direction of the Trend
If I am unsure if the Channel is Tight or Broad I must assume the Channel is Tight and only Trade in the Direction of the Trend
Only Reason to distinguish a Tight Channel from a Broad Channel is because traders TRADE THEM DIFFERENTLY
Only Reason to distinguish a Tight Channel from a Broad Channel is because traders TRADE THEM DIFFERENTLY
How do you know if the channel is tight?
PBs last mostly 1 - 3 Bars
Size of PB is less than 2 -3 times as big as smallest scalp
Size of PB is less than 2x the size of avg bar (2-2.5 points)
If it is a Tight Bear Channel trade with it do NOT fight it
Do not look to Buy a wedge bottom in a tight Bear Trend unless the Swings are big
If it is a Tight Bear Channel trade with it do NOT fight it
Do not look to Buy a wedge bottom in a tight Bear Trend unless the Swings are big
a Buy Signal Bar in a Tight Bear Channel with a wedge bottom
Is this a Good buy?
No it is not a good buy as it is a Tight Bear Channel with no buying pressure to help support a Long Trade
Sellers waiting above this Buy Signal Bar in a Tight Bear Channel
Sellers waiting above this Buy Signal Bar in a Tight Bear Channel
Tight Bear Channel is always a BO on a Higher TF
Tight Bear Channel is always a BO on a Higher TF
If it is difficult to source a trade consider trading on a Higher TF
If it is difficult to source a trade consider trading on a Higher TF
Tight Bear Channel
a Bear Flag
an Endless PB & Reversal
Once it grows to 10 bars traders being to wonder if it is an Endless PB & start of bull trend
Tight Bear Channel
a Bear Flag
an Endless PB & Reversal
Once it grows to 10 bars traders being to wonder if it is an Endless PB & start of bull trend
What is a Tight Bear Channel in a Bull Trend?
In a Bull Trend a Tight Bear Channel is a Bull Flag
The BEST the Bears can get from this is a TR until either a bear BO or MTR
Tight Bear Channel in a Bear Trend = Sell in Bear Trend
Tight Bear Channel in a Bear Trend = Sell in Bear Trend
If a Channel is not clearly Broad what should I then assume it is?
If not clearly Broad assume the Channel is Tight
Only trade it in the direction of the trend, trade it like a BO
When I feel anxious to sell, what does this usually mean?
It means it is time to SELL
IS it time to enter?… If waiting for a PB, don’t wait
IS it time to enter?… If waiting for a PB, don’t wait
Small Risk for Bears
Small Risk for Bears
First Reversal up probably will be SOLD
First Reversal up probably will be SOLD
Near the End of the day A LOT of Traders look to take profits
Near the End of the day A LOT of Traders look to take profits
If I sell at the bottom of a BO, the probability of making money is high but so is the risk
If I sell at the bottom of a channel, the probability of profit is usually not as hig
If I sell at the bottom of a BO, the probability of making money is high but so is the risk
If I sell at the bottom of a channel, the probability of profit is usually not as hig
Is the first reversal up usually Major or Minor?
The First Reversal up is usually Minor
Tight Channel usually becomes a TR before the Bulls have a chance of Reversing the market, therefore the bears have time to exit with a low probability of stop being hit
No Clear MTR Pattern or no Wedge Bottom there the reversal up has a 70% chance of being minor and being followed by a test of the bottom of the Bear Trend
Probability favors a trend Resumption Down
Tight Channel usually becomes a TR before the Bulls have a chance of Reversing the market, therefore the bears have time to exit with a low probability of stop being hit
No Clear MTR Pattern or no Wedge Bottom there the reversal up has a 70% chance of being minor and being followed by a test of the bottom of the Bear Trend
Probability favors a trend Resumption Down
Stop placement location often has TWO Good Choices
Stop placement location often has TWO Good Choices
After a Minor Reversal up if there is a Trend Resumption where should I look to take Profits?
Look to take Profits at the Test of the low and perhaps look to sell again below the test of the low if the market breaks it
Tight Bear Channel = BO on Higher TF
Trade just like a BO, the market is AIS; SELL FOR ANY REASON
Tight Bear Channel = BO on Higher TF
Trade just like a BO, the market is AIS; SELL FOR ANY REASON
After a BO in the market phase (1st Phase of the market cycle)
When does the 2nd Phase start in the cycle?
After there is a PB it is the start of the Channel Phase, the 2nd Phase in the Market Cycle
If the Bull Scalpers can make a Profit then we are in a Channel not a BO
It is 2-sided trading as the Bulls and Bears can make money
In a BO only the Bears or Bulls can make money in that moment
If the Bull Scalpers can make a Profit then we are in a Channel not a BO
It is 2-sided trading as the Bulls and Bears can make money
In a BO only the Bears or Bulls can make money in that moment
Lower Probability than a BO but still Strong Bear
Lower Probability than a BO but still Strong Bear