I would have been long at bar 9:45 by the close of that bar. I would not have waited for 5 bars to see if price is going back into the range. Why not? Several reasons: 1) BO bar is biggest bull bar in many many bars. 2) Gaps between the high of one bar and the high of the previous bar 3) Gaps between the low of one bar and the low of the bar 2 bars back. 4) Gaps between the low of one bar and the low of the previous bar. In short urgency. Price is going somewhere and fast. Institutions are probing hard for another level of fair value. They think it is higher up. So the larger context starts over again with a BO.
This is it! I simply gotta stop! But before I do LOL here is that channel phase materializing as I mentioned earlier. It is 11:52 now Chicago time and we can see by now that this second channel phase actually did indeed start with that actual PB on the 5 min chart. There are at least 20 bars in the channel phase since the actual PB. Time to start trading this with channel techniques. But I gotta go. What will come next after the channel? Likely some sort of range that may even have a reversal in it or it can channel on up until the close (unlikely).
That's an unusual way of defining a gap. Given price data is a constant stream and the time-limited bundles of data per bar (with time-based charts), current bar open compared to previous bar close is a standard method of determining gaps in many circles. But hey, whatever works!
Yes, I realize that different folks define gaps differently. This is just some of the ways I see gaps. I also see gaps between MA and bars. Open and close of a bar and the bars before it or two bars back. High and high of adjacent bars or two bars back. High and low of adjacent bars and or two bars back. Low and high of adjacent bars and 2 bars back. Opening gaps. ETC. This is bar by bar analysis within 3 contexts mentioned in posts above. Gaps are important as they show probing...the market seeking tradeable value. Like an auctioneer...(who will give me 500...can I have 600...650...700? Sold to the man in black for 800!) Markets are gonna move to where transactions will take place. That is the foundation and general purpose for even having markets. Money can only be made if transactions are taking place. That is the name of the game. Nobody wants to trade a dead market..well ...accept me.. and a few other radical traders..I will trade anything..I don't believe in noise. Noise on a 5 min chart is can be a trend on a 1 minute chart. Ad nauseam. My second trade this a.m. showed trading a gap between a low of a bar and my first entry point expecting the gap to close for at least a minimum scalpers profit. The idea is to gauge the pressures in the larger, intermediate, and immediate contexts and then use setups for entry and exits that make sense and will render me at least a min scalp. If you observe I often exit early and if I would have held I could get more profit. Thing is, the market is handing me a profit right NOW AND price is in a range, so I take the profit, gladly. If price moves on I can enter again. Most traders get chopped up trading chop because they are trying to hold on more profit. Sometimes, they will get it but much of the time they find themselves in a profit (which they don't take) then minutes or seconds later the profits vanishes into thin air and their tight SL (stop loss) get wacked. They finally give up trading ranges which they call "chop" because they got chopped up! But range trading is where the market IS at most of the session. BO's comprise at most 10% of a sessions PA. Channels (which are really just tilted ranges) and Ranges comprise the other 90% of a sessions PA. So, to me anyways, it makes more sense TO trade chop rather than MORE sense TO NOT trade chop. Anyway got to run do few more things. Remember, I said earlier that a channel was likely to evolve. Well here we are. I had to do some things in the yard (helping my dear wife) and now have to run to town, but here it is. What will likely come next? We should be looking for what phase of the market cycle is likely to be next. It will likely morph into some sort of a range in the last 2 hours of trading. But is has to start pretty quickly or price will likely stay in a channel until the close. It is now 1:23 Chicago time. But notice also that from 11:15 to 1:23 it is also a sort SPBL trend. But I prefer to call it a channel because the PB's ain't that tight and that small. But, it could be labeled a medium pull back pull trend. LOL Notice the flattening of the channel slope..(purple line) Hints of a developing range. We want to see 20 bars sideways action to begin range trade. Sometimes I will on 15 bars but then I am more used to it. Why? because 20 bars will usually be enough to prove out that the sideways action is NOT a PB in the form of a flag but is actually a range.
Now look at this price action from naked chart. See why it can also be a MPBL trend day? (Medium Pull Back Bull Trend). What could have been made trading it as such? That is, if one doesn't like all the nuances and details of channel and range trading. Well, review my posts on SPBL trends and how to trade them. A trader just have to have more $$ to trade MPBL or LPBL trends (Large PB bull trends) and averaging down over and over, but the risk is small that an averaged down position will hand me a loss in even a MPBL or a LPBL trend. But, as for myself I like the action and challenge of channel and range trading. I reserve trading SPBT (Small Pull Back Trend) trend days for when it appears the paint is drying real. Today had enough action in it to present a challenge to try and figure out what price is doing...where the pressures are...and where my entries and exits could take advantage of all the darn probing. My wife thinks I might be addicted to trading...she might have a point there ROFLMAO. My garden is looking great even if I planted it late from all my travels running here and there in the swamps of La, beaches of Florida, and the roller coasters of Ga. I still want to go to the pioneers museum in Alabama but the grandkids don't seem that interested. What a shame! Many young people today don't know how to garden, much less can stuff. If there were to come a civil breakdown or national catastrophe most people it seems, would be lost as to what to do. They have no skills to survive in a primitive setting.
Uh oh here we go RANGE 20 bars sideways action. Do we know what to do? What techniques to use? How to trade it? More importantly do we know what to do if we start range trading this and suddenly get hit with a successful BO up or down out of the range and we have a losing position on? I know what I would do? Do you? Bye I gotta to run to the post office and Auto parts store. Home home on the range......where the deer and the antelope play.......where seldom is heard a discouraging word and the skies are not cloudy all day.....
Bye. For real this time. But first: My wife is making a 1,2,3,4 egg cake. Yep, that is what she calls it. Sounds like trading waves in the market LOL. Big birthday party tomorrow for my daughter-in-law. My wife makes her own batter. Then yolks go in the batter. Then egg whites are fluffed up and added to the batter. Pineapple juice gets poured on the layers after they are cooked. Icing has cool whip, sour cream, powdered sugar and lots of chunks of pineapple. She got tired of dictating the recipe to me as I type this so she wanted to quit doing it. But I snagged this much out of her. She just wants to spout it all out at once and I have no reference point to work off from. No context. She gives up on me. It may cost me a trip to Dillards to get any more info from her. Gotta to run to town. Post office and auto parts store. I am out of here!
Ain't left for town yet. Typical range BO failure. Remember, most BO attempts fail within 5 bars and price reverses back towards the range, and often to the middle, and some times all the way to the top. Still a trader needs to know WHAT to do the event of a successful BO and he has a losing position on. Remember, there is a difference between a BO attempt and a successful BO. You can go back over some of my previous posts to study this. PS The wife got the first layer of the cake out of the oven and a little sample small pan just so we could test it out. The second layer will soon come out. Sounds like trading. Two legged runs. Backtesting...etc She let me taste a sample. I could say nothing less than marvelous! She is all smiles. Know she wants to show me more of the process.