Video 08A, B, C & D: Candles, Setups and Signal Bars Flashcards
Every bar is either…
Trend Bar = Big body, small tails. Trading Range bar = Small body, big tails.
What do I do if I’m not sure if a bar is a tend bar or trading range bar?
Look to the left. look at the context. For example: A small body in a strong trend is more of a trend bar. A bigger body in a sideways market, is a trading range (TR) bar.
Define a Trend bar
Small tails, body at least 50% of bar, Range at least as big as average
Define Trading Range (TR) Bars
Small bodies, prominent tails.
Describe a Trading Range (TR)
Big tails, small bodies, a lot of overlap of prior bars, most close in middle. Tend bars quickly reverse (meaning a failed breakout)
True or False: Every tail was once a strong trend body?
True. Every tail is therefore a failed (BO) breakout attempt
What are the strongest signal bars?
Reversal bars. When supported by the context. But are only 1% of all bars.
True or False: Strong signal bars are rare?
True. Waiting for the perfect buy or sell signal bar is a waste of time. There are reasons to enter after every bar on the chart.
Define “Buy Reversal Bar” Bull
Close above midpoint and open.
Define 2-Bar reversal
Whenever a reversal takes place over 2 or more bars
Define Multi Bar Reversal
BO Reverses 2 or More Bars later. On higher time frame chart, they form single bar. They form a reversal on a higher time frame chart.
True or False: Inside bars in good context are good signal bars?
True. Type of a 2-bar or multi-bar reversal
Define Outside bar
Type of 2-bar reversal. In general do not need to buy as it goes outside
Define “ib”
Bar that is inside prior bar
Define “ii”
Inside-inside is two consecutive bars (So bar, inside bar, the ii)
Define “iii”
inside-inside-inside is 3 consecutive bars
Define “ioi”
inside-outside-inside is 3 consecutive bars
Define “oio”
outside-inside-outside is 3 consecutive bars
What are the inside bar set-ups?
Market is getting ready to break out.
True or False: If context is bad, then more Tight Trading Range (TTR) likely
True: After 10-20 bars, especially when extremely tight, better to wait for breakout since TTR likely
Is it worth taking if the context is good? A sell signal bar in top third of trading range. Buy signal bar in bottom third of trading range.
Yes, if the context is good
True or False: Inside bar patterns are breakout modes?
True, but the context has to be right.
What do you look for when both “ii” candles are closing on their low?
A reversal
True or False: Whenever a trading range is small and is occurring in a trend, chances are it is a pullback
True
True of False: An outside bar is usually a trap
True. Needs good context.
True or False: An outside bar can be part of a 2-bar reversal
True, if context is good. Good to BUY above bull OB in bull. Good to sell below OB in bear
BOM means…
Break Out Mode
A triangle is…
Three pushes up or three pushes down
True or False: When you see a tight trading range late in bull trend you have to be thinking about a final bull flag
True
True or False: With an “ii” I want the second bar to be a good bull bar
True
True or false: A High 2 Bull Flag just above the moving average with bull signal bar is a high probability trade
True
BLSHS means…
Buy low, Sell High, Scalp in a trading range. Most breakout attempts fail no matter how strong or convincing they look.
True or False: In a strong trend the buy signal bars are not very good, but I should still buy them.
True
True or false: When trading countertrend, I need a strong signal bar
True
True or false: When in doubt, only sell below strong bear signal bars
True
