Video 12 A, B & C: Market Cycle

Question 1

Market Cycle - Every Bull Chart is in 1 of 4 Pattern. What are they?

Answer 1

Breakout
Tight Bull Channel
Broad Bull Channel
Trading Range

Question 2

Breakout Characteristics

Answer 2

Stronger part of trend
No pullbacks, or just one pullback lasting 1-2 bars
Market quickly goes your way
probability of high prices is high
do not sell

Question 3

Tight Bull Channel Characteristics

Answer 3

most pullbacks only last 1 - 3 bars
probability of high prices is high
do not sell

Question 4

Broad Bull Channel Characteristics

Answer 4

bullish market sentiment, yet the traders take profits regularly
Higher highs, higher lows
Best to buy pullbacks
Sell on higher high
The broader and flatter the easier to make money
Okay to sell new high for scalp
On smaller time frame chart, contains Trading Ranges TR

Question 5

Trading Range Characteristics

Answer 5

When a pullback lasts 20+ or more bars
Market does not breakout and it will reverse.
Bull buy bottom third
Bears sell top third or breakout that may fail. 80% of breakouts fail.
Bulls and bears are confused.

Question 6

True or False

All trends begin with a breakout

Answer 6

True

Question 7

What happens as soon as Pullback?

Answer 7

Breakout phase of trend has ended

Question 8

Whenever you can look at a chart and come up with a reasonable buyer setup and a reasonable sell setup. You have to assume the market is in a….

Answer 8

Trading Range

Question 9

Define Inertia

Answer 9

The market continuing what it has been doing and resist change. What will the right do? What has the left done? 80% rule

Question 10

Binary Choices: It’s easier to decide when you I have just two choices.
Some examples are…

Answer 10

Binary Decision:
Trend or Trading Range?
Breakout or Channel?
Is Channel Tight r Broad?
Major or Minor Reversal?