Trends: Video 14 A, B, C, D & E Flashcards
True or False
All trends are contained in channels?
True. May not be obvious to a beginner. Important to recognize it.
Major trend: Only 1-2 on the chart. Minor Trends are considered to be…
Swings
Legs and
Pullback
Can be many on chart
The bottom of a channel is…
Bull Trend Line
Top of Bull channel is a …
Trend Channel Line
Channel lines are rarely perfect, therefore…
Traders keep redrawing them.
How to find the bottom of a Trend Channel
Either use lows, or a parallel line. Drag it down to a bar creating a channel that contains ALL of the bars. Channels are rarely perfect.
All strong trends constantly create Wedges. Markets often reverse from Wedge Tops. What happens when you get a reversal in a tight bull channel like this?
The first reversal is minor, and the bulls will buy it. The beginner is selling just where the strong bulls are beginning to buy.
Describe Rising Wedge Channel and Falling Wedge Channel (Answer is a picture)
What is the strongest type of Trend?
Breakout (BO). Al also calls it a “Spike”. It is also a Buy Climax and Gap. (Trends are either in a breakout phase or a Channel phase)
True or False: All trends begin with some type of a BO (spike). Then has a pullback that leads to a channel.
True
A Tight Channel is _______ compared to a Breakout, but still a good set-up.
“Weak”. when it is a Tight Channel, trade it like a breakout. Only trade in the direction of the trend. It is a breakout on a higher time frame.
When I see a bear Channel, immediately think _____________
Bull Flag. 75% chance it’s going to be a bull breakout. 25% chance it will be a bear breakout and accelerate down.
A tight bear channel will not reverse into a bull trend. Usually, the first breakout of a channel results in…
A minor reversal in a trading range or a bear flag. Rather than a bull trend.
