Infinity, there is actually plenty of information in the first two bars, and bar two is very important to the set up. Also, I have said over and over that I don't recommend this entry. In addition to the information in the two bars and all the prevoius bars, there are other things you look for that offer information about a possible turn. You have to consider momentum, S/R, trend lines, fib areas, etc. Thats where things happen to help create the pivot turns. There are lots of traders that trade the 2 bar entry. Many people call them pinochio bars, because of the wick... in reference to a long nose and a lie about where prices are headed. You can probably google "pinochio bars" and get some good information on them if interested. Sometimes if you want to get in on a trade early with a small stop, you have to use something other than a 3 bar entry. There are many ways to enter other than a 3 bar entry. I know a great trader and he'll trade a strong S/R line with nothing more than a hesitation of prices at that level. Doesn't mean I'm going to do it, but it works for him. The only reason I even posted anything on a 2 bar entry was because people asked why I entered where I did. Simple as that! I've said all along to wait for the high probability set ups and don't get aggressive until you feel confident that you can get in and out quick if you are wrong. Hope that clarifies the discussion on a 2 bar entry.
Max, you had asked about this and today had a great example. Here's a perfect DB, followed by a HH. When that HL set up after the HH, that's when you go long. This was a text book DB play.
Hi Mccullek, I see it now, nice setup and great for getting in early on a new trend. Thanks for bringing it up and showing the example. Max
Mccullek, It looks like it may be setting up in the opposite direction. Sort of a double top at a res area and now a lower low. Is this what you are seeing also. Max
Now we need this attempt to form a lower high and that would be the entry. I guess we could use the 3br method or the 2 br method. Lets see how it plays out. Max
Stick to the 3 bar method. The only way I ever use an early entry is to scalp a few ticks and go to BE immediately on the rest. If you are wrong, or even suspect you might be wrong, cover quickly. If you lose a few ticks, you can easily make them back. If you take a full stop, well it takes longer to make them back.