Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Al Brooks Price Action Fundamentals SmithJones > Trends > Flashcards

Trends Flashcards

(94 cards)

Start Studying
1
Q

How can a trend channel be drawn on the chart?

A

With parallel lines or connecting tops

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

How many bars are in a Trend?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How many major Trends are usually on a chart?

A

Usually no more than 2 per chart

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

In this Bull Trend which line is the TREND line and which is the CHANNEL line?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How do I know when a channel is becoming exhausted?

A

The channel becomes flatter and broader

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

In a Bull Trend, what do the Bulls need?

A

The Bulls in the Trend need HLs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What needs to happen for a trend to be potentially over?

A

If the market (in Bull Trend) falls bellow prior HL

The trend might be over, and evolve into a TR or Bear Trend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

In a Broad Bull Channel sometimes the selloffs are strong enough to convert the market into AIS.

However what keeps the odds in favor of a continued Bull Trend?

A

If the Bears are unable to get the market below the Major HLs, odds are the Bull Trend will continue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why should a trader keep drawing new trend lines?

A

Because channels, trend lines are rarely perfect, so continuing to draw them gives the trader a better perspective on the market Price Action (PA)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What do the Bulls expect in a Bull Broad Channel?

A

The BULLS expect the BEAR Reversal ATTEMPTs to FAIL

There they’re buying above the strong BULL Reversal Bars at the Trend-line

They’re buying the PBs that go 50% or 1/3 of the middle of the last leg up

They’re Buying Bear closes at the Bull Trend line betting on the failed Bear BO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does a Bear Trend need to maintain its Bear Trend?

A

LHs and LLs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

In this Bear channel which is the Trend line and which is the bear channel line?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What Bear pattern is this?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Where do swing traders usually place their stops?

A

Above/Below Major Highs/Lows

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

When can a trader trail and move his stop?

A

If the Bear reaches a new low and has big bear bars closing on its low, lower stop to above this leg

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

If the market rallies above prior LH what does that mean for the traders?

A

Trend Might be over

Might have evolved into a TR or Bull Trend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

In a Bear Trend, what do the Bears do when the Bulls have rallies?

A

The Bears look to sell the rallies as they expect the Bear Trend to Resume as most Reversals a BOs fail

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

If the market is not clearly in a bull or bear trend what should I then assume?

A

That the market is in a TR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Every Trend contains TRs?

TRUE or FALSE

A

TRUE

Every PB and pause is a small TR (you can go to a lower TF to see it)

Once a TR goes 20+ Bars the probability for TREND RESUMPTION is equal to a TREND REVERSAL making it 50% to go in either direction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Trading in the direction of the Trend makes it easier to make money

TRUE or FALSE

A

TRUE

Only take trades in the direction of the trend

Try to swing part or all of your position, let your profits grow

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

When a CHANNEL is this TIGHT it is a good idea to take any SHORT

Hold until there is a clear ending to the Trend

A

When a CHANNEL is this TIGHT it is a good idea to take any SHORT

Hold until there is a clear ending to the Trend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Always use protective stops to protect you from yourself

A

Always use protective stops to protect you from yourself

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What kind of Bar has the strongest trend?

A

Big Bull/Bear BO Trend Bars

They have the highest probability for big profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

A beginner usually takes no trades

Why?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
A beginner constantly sees tops Doesn't realize that computers need to reduce position size when stop is far away Risk control creates a PB, but beginner sees trend reversal. After PB, computers buy again, but now have tighter stop Why?
A lot of times in a STRONG BULL(BEAR) Trend when the BULLS take some profit and REDUCE their position size/their risk this creates a BULL FLAG Quite often beginners may see this as a TOP/Reversal. Which is not as the case, I must keep in mind the context to the left and that markets have inertia Risk control creates a PB, but beginners see trend reversal
26
In a Tight Bull Channel, with small PBs what should I do?
PBs are small and do not look convincing. Therefore the tight channel is confirmed Buy for any reason. AIL
27
Once the beginner is finally ready to trade after taking no trades during the BO, or PBs what does the beginner bet on?
The beginner bets on regression, the reversal (thinking the trend can't last forever) The 1st Reversal down is usually minor and the experienced bulls are going to Buy it
28
Markets have inertia, The beginners that missed the strong bull trade that jumped at the first sign of a reversal Bear trade get stopped out why?
Trends have inertia 80% of reversals attempts fail Beginner doesn't realize, that small risk means low probability Most Wedge Topos become bull flags (here, Wedge Bull Flag)
29
The beginner still thinks the markets have to reverse, they must reverse so they try a 2nd entry Small Risk =?
= Low Probability
30
Strong Bull Trend and the Bears have attempted 3 reversals that have failed but the Bears still think the markets have to reverse And they get stopped out again, Why is that?
Markets have inertia and the beginner lost a fortune betting against it noo clear evidence of a reversal was presented Low Risk + Low Probability = Consistent losses in the markets
31
How are the markets trying to always make traders feel?
Markets always want to try and make traders uncomfortable
32
The markets are constantly in search for a fair price TRUE or FALSE?
TRUE
33
Should I trade each trade differently?
Yes you should Trends offer great profits Understanding how they operate is a must Great starting point is to classify them into types Based on behavior
34
All trends contain BO (Spike) & Channel TRUE or FALSE?
TRUE
35
What do trends begin with?
Trends begin with BOs, sometimes strong
36
37
Can a Trend BO be a series of small Trend Bars?
Yes, it can be a series of consecutive ordinary trend bars If bull BO, usually most of the small bull trend bars close near their highs, or at least above their midpoints
38
Can small BOs lead to Big Trends?
Yes they can, pay attention to the details
39
Small BO can it still get a Big Channel?
Yes
40
After this tight bear channel with this Bear BO, what is this telling me?
Bulls finally gave up No longer "bear channel is a flag" Now a bear trend and Measuring Gap
41
The market has different types of Trends Should they be traded differently?
42
Name the different types of trends day traders trade
43
Name and describe this trend
44
A Bear Channel has a 75% Chance of an eventual Bull BO Therefore when I see a Bear Channel what should I think?
BEAR CHANNEL = THINK BULL FLAG
45
What does a Channel usually evolve into?
It usually evolves into a TR
46
a Bull Channel has a 75% Chance of an eventual Bear BO ## Footnote Therefore when I see a Bull Channel what should I think?
BULL CHANNEL = THINK BEAR FLAG After the Bear BO it than usually converts into a TR
47
What does the Traders Equation = ?
Traders Equation = **Risk + Reward + Probability** ... All CLEAR? TAKE THE TRADE!
48
Once you think a Bull Trend is likely what must I the trader avoid at all costs?
Do not get **_Trapped Into Shorts_** Do not get Trapped out of Longs
49
Once you think a Bull Trend is likely what must I the trader avoid at all costs?
Do not get Trapped Into Shor**ts** Do not get **_Trapped out of Longs_**
50
Once you think a Bear Trend is likely what must I the trader avoid at all costs?
Do not get **_Trapped Into Longs_** Do not get Trapped out of Shorts
51
Once you think a Bear Trend is likely what must I the trader avoid at all costs?
Do not get Trapped Into Longs Do not get **_Trapped out of Shorts_**
52
Every Bear Trend usually contains what?
Spike. and Channel
53
Every Bull Trend usually contains what?
Spike and Channel
54
What is one of the strongest Bear Trends?
Small PB Bear Trend
55
In general how much percentage does the first bar of the day have to be the HIGH or LOW of the day?
It has about a 20% chance of being the HIGH or LOW of the day
56
In a TR when it is about 20 to 30 Bars that have been printed inside the TR, what must I the trader assume?
I must assume that the market is now in BO mode
57
The First two BULL bars of the day after the GAP Up Open is enough to make me as the TRADER think the market is in a BULL TREND - AIL (Always In Long) What does this mean for the potential high or low of the day?
This means that the bottom of this BO is probably the low of the day
58
What does a Bull Trend from the open tell me?
Sign of urgency, so usually strong trend Sometimes becomes TR Then, trend resumption (like here), or trend reversal
59
When I have a strong BO to start the day for an hour or so, it usually followed by what?
It is usually followed by the market going sideways for several hours It then decided between a trend reversal or trend resumption
60
Trending TRs the Range usually doubles So when the TR is broken what usually happens in a Trending TR market?
The market enters another TR \*Remember when I see a TR, think BO Mode \*20+ Bar TR = am equal 50/50% BO(Reversal or Resumption) in either direction
61
In a Trending TR what percentage is there for a Minor Reversal?
60% of a Minor Reversal \*Ranges often overlap, TRs usually goo beyond S/R, before reversing
62
Trending TRs can get 3 or More TRs Explain this signs given in this chart that told me the market will continue up
63
Are Trending TRs other patterns?
Yes, they are always other patterns
64
Where do the Bulls take partial or full profits?
The Bulls take partial or full profits at new high
65
New High what will the Bears do?
The Bears will Sell for Scalps
66
As long as the market is making HHs and HLs What should I do?
Buy reversals up from PBs that go down to middle 3rd of last leg up
67
Stairs are a Broad Channel but each BO is smaller What does this mean for these Bear stairs?
Bears are less confident and taking profits sooner Bulls a more confident and buying sooner Usually the start of the transition into a TR
68
Stairs are a Broad Channel but each BO is smaller What does this mean for these Bulls stairs?
Bulls are less confident and taking profits sooner Bears a more confident and buying sooner Usually the start of the transition into a TR
69
In a Broad Bear Channel as long as the market is making LHs and LLs What should I the trader look to do?
Look to sell PB to middle oof last bear leg
70
In the Bear Trend with market-creating LHs and LLS what are the Bulls doing?
Bulls buy new lows for scalps Some will scale in low (add to their long position)
71
Expand on what a Broad Channel is
Trend with Deep Pullbacks (PB) **Stairs** pattern, every PB goes above BO point Rallies often strong enough to reverse to AIL
72
Broad Bear Trend Channels many of the Bars are in a TR TRUE or FALSE?
TRUE Often unclear it is a TR or Broad Channel Trend \*When unclear, trade like TR, BLSHS
73
Broad Bear Channel as the trader what should I look to do?
Look to Sell After several trending highs and lows, trend becomes clear Consider swinging part of the position Only scalp counter-trend positions
74
Every Bar gives new information so keep drawing lines TRUE or FALSE
**TRUE** Channels rarely exact Have to keep redrawing Look to sell reversals down from near top Consider buying reversals up from near bottom
75
How should I trade Tight Channels?
Trade Tight Channels like a BO It is difficult to know if a BO or Tight Channel Therefore: Assume BO and trade like one a Tight Channel is a BO on a Higher TF
76
If there is a BO on a higher TF how would that look on a 5-minute TF?
a BO on a higher TF is a tight channel on a lower TF
77
In a Tight Bear Channel Only look to sell Why are these areas great Bear Entries? PBs to top of Channel
PBs to top of Channel 80% of Reversals Fail and the Bears bet on that Gaps are getting bigger so the Selling pressure is increasing and Bear Trend is strong
78
In a Tight Bull Channel Only look to buy Why are these areas great Bull Entries?
PBs to bottom of Channel 80% of Reversals Fail and the Bulls bet on that Gaps are getting bigger so the Buying pressure is increasing and Bull Trend is strong
79
Broad Bull Channel BLSHS In this channel should I trade in both directions?
Yes, however since it is a Bull Broad Channel selling is optional Look to Buy Low (BLSHS)
80
Is this a Tight or Broad Bull Channel?
Sometimes impossible to tell When in doubt, only look to trade with the trend If I cannot clearly distinguish if the channel is tight or broad than assume the channel is tight and trade with the trend
81
Is a Small PB Trend the strongest type of Trend?
Yes it is the strongest It is also often contained in the... Trend from Open, Spike and Channel, Trending TR
82
Small PB Trend has brief, small PBs TRUE or FALSE?
TRUE PBs less than half size of avg bar Usually begins in 1st hr
83
Small PB Trend On a higher TF it is a strong BO Trend TRUE OR FALSE?
TRUE
84
When Gaps stay open (No Stairs) and the Trend is strong (Bears) What is likely? Also, explain this chart...
Lower Prices are likely Sign of Strong Bear Need to see some bull strength, therefore, Bulls don't buy until gaps close \*You should not be looking to buy when there is still Body Gaps in this Bear Trend
85
In a strong Trend what usually happens to reversals?
Reversals will Fail and become Bull Flags Usually bigger PN in final 2 hrs, 1 1/2 - 2 biggest prior Trend Resumption into close
86
Small PB Trend can never have a Big PB TRUE or FALSE
FALSE Less often, bigger PB or Reversal into close
87
Can Strong Bull Trend still Reverse?
Yes it can, this chart shows that Close below MA, MAG, 20 Gap Bar Buy All Buy setups failed
88
Can a Strong Bear Trend still Reverse?
Yes, it can but it is Rare This chart shows just that
89
Small PB Trend day can also be a tight Channel Trend TRUE or FALSE
TRUE Trends as they mature they tend to become weaker Channels, as they mature, tend to become broader and flatter FLATTER = LOOK at the chart image above, the slope of the new bigger channel is flatter than the slope of the first tight channel
90
Weak Bears get Trapped into Losing Shorts How did the Weak Bears get Trapped here?
Traded against the Trend PBs too small to make profit Bears have tight stops so low risk Low Risk = Low Probability Small losses add up to big loss
91
Weak Bulls are too afraid and Get Trapped Out State reasons why they get Trapped out
Weak Bulls too afraid to buy Want a strong signal bar Want PB so can use tight and have smaller risk Don't realize probability is very high IF using correct stop
92
Strong Bulls make a lot of Money What are they doing in this strong Bull BO?
They know there is a high probability of profit Buy for any reason Put stop below bottom of Bull Leg After each new high, raise (trail) stop, to below bottom of last bull leg
93
When Price stays above MA for 20 or more bars What does the Bull do at the 1st PB to MA?
Bull buy 1st PB to MA (20 Gap Bar Buy Setup) & 1st Close below MA They also Buy Reversals up from MA
94
Support at MA - Market had a MA Gap Bar What are the Bulls looking for at the MA?
Bulls look for 1st Bull Bar completely below MA Moving Average Gap Bar (MAG) Bulls must be careful because bears were strong enough to put entire bar below MA Often final rally before TR

Al Brooks Price Action Fundamentals SmithJones (28 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions