Video 08A, B, C & D: Candles, Setups and Signal Bars

Question 1

Every bar is either…

Answer 1

Trend Bar = Big body, small tails. Trading Range bar = Small body, big tails.

Question 2

What do I do if I’m not sure if a bar is a tend bar or trading range bar?

Answer 2

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.

Question 3

Define a Trend bar

Answer 3

Small tails, body at least 50% of bar, Range at least as big as average

Question 4

Define Trading Range (TR) Bars

Answer 4

Small bodies, prominent tails.

Question 5

Describe a Trading Range (TR)

Answer 5

Big tails, small bodies, a lot of overlap of prior bars, most close in middle. Tend bars quickly reverse (meaning a failed breakout)

Question 6

True or False: Every tail was once a strong trend body?

Answer 6

True. Every tail is therefore a failed (BO) breakout attempt

Question 7

What are the strongest signal bars?

Answer 7

Reversal bars. When supported by the context. But are only 1% of all bars.

Question 8

True or False: Strong signal bars are rare?

Answer 8

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.

Question 9

Define “Buy Reversal Bar” Bull

Answer 9

Close above midpoint and open.

Question 10

Define 2-Bar reversal

Answer 10

Whenever a reversal takes place over 2 or more bars

Question 11

Define Multi Bar Reversal

Answer 11

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.

Question 12

True or False: Inside bars in good context are good signal bars?

Answer 12

True. Type of a 2-bar or multi-bar reversal

Question 13

Define Outside bar

Answer 13

Type of 2-bar reversal. In general do not need to buy as it goes outside

Question 14

Define “ib”

Answer 14

Bar that is inside prior bar

Question 15

Define “ii”

Answer 15

Inside-inside is two consecutive bars (So bar, inside bar, the ii)

Question 16

Define “iii”

Answer 16

inside-inside-inside is 3 consecutive bars

Question 17

Define “ioi”

Answer 17

inside-outside-inside is 3 consecutive bars

Question 18

Define “oio”

Answer 18

outside-inside-outside is 3 consecutive bars

Question 19

What are the inside bar set-ups?

Answer 19

Market is getting ready to break out.

Question 20

True or False: If context is bad, then more Tight Trading Range (TTR) likely

Answer 20

True: After 10-20 bars, especially when extremely tight, better to wait for breakout since TTR likely

Question 21

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.

Answer 21

Yes, if the context is good

Question 22

True or False: Inside bar patterns are breakout modes?

Answer 22

True, but the context has to be right.

Question 23

What do you look for when both “ii” candles are closing on their low?

Answer 23

A reversal

Question 24

True or False: Whenever a trading range is small and is occurring in a trend, chances are it is a pullback

Answer 24

True

Question 25

True of False: An outside bar is usually a trap

Answer 25

True. Needs good context.

Question 26

True or False: An outside bar can be part of a 2-bar reversal

Answer 26

True, if context is good. Good to BUY above bull OB in bull. Good to sell below OB in bear

Question 27

BOM means…

Answer 27

Break Out Mode

Question 28

A triangle is…

Answer 28

Three pushes up or three pushes down

Question 29

True or False: When you see a tight trading range late in bull trend you have to be thinking about a final bull flag

Answer 29

True

Question 30

True or False: With an “ii” I want the second bar to be a good bull bar

Answer 30

True

Question 31

True or false: A High 2 Bull Flag just above the moving average with bull signal bar is a high probability trade

Answer 31

True

Question 32

BLSHS means…

Answer 32

Buy low, Sell High, Scalp in a trading range. Most breakout attempts fail no matter how strong or convincing they look.

Question 33

True or False: In a strong trend the buy signal bars are not very good, but I should still buy them.

Answer 33

True

Question 34

True or false: When trading countertrend, I need a strong signal bar

Answer 34

True

Question 35

True or false: When in doubt, only sell below strong bear signal bars

Answer 35

True