there was a L2 trade, could have been taken since the previous swing, marked by the yellow trend line, was down: see chart.
well the trendline is down,so the L2 entry was in the direction of the trend line, so it was a trend trade
PaduTrader I want to super thank you for your efforts. it is wonderful to find someone who expresses his inner self and shares it with others. this is an act of perfect love. giving expecting nothing in return. you are a wonderful person. now i want to make some suggestions. mostly because i want to understand this stuff. as a newbie dummy I will tell you want will help you teach better to the dummy like me. here are some suggestions. i will have more suggestions in the future as we work through all of this over time. I think you need to include more than one chart. the first chart is good. but at least for awhile until we learn some basics. i suggest you include a 2nd blow up chart of the area you are talking about. i dont know what you are talking about because i dont know what bar you reference or when you make your trades. Al Brooks numbers all the bars. but focus in on the area of interest with large bars you can put up arrows pointing to where you make entry where is the trend. why they are labeled L2. I dont find the L1 count to make it an L2 in some cases. my understanding is that if the move goes to a new lower low then one has to start the count over. in an early chart you have 2 yellow lines of L2 but there was a new low made between them and the 2nd L2 looks to me like a L1. you dont have to go back just keep moving forward. try it on at least one discussion of a trade. I NEED CHARTS TO UNDERSTAND THINGS. AND I NEED TO KNOW WHAT EXACTLY ON THE CHART AT WHAT POINT ON WHAT BAR CAUSES THINGS TO HAPPEN ETC ETC. I NEED THE DETAIL SPELLED OUT WITH NO ROOM FOR ERRORS IN EXACTNESS. PRECISION IN EXPLANATION. AS IF WE WERE SITTING TOGETHER AT A BIG COMPUTER SCREEN AND YOU ARE TEACHING ME AND I CAN ASK QUESTIONS LIVE. REAL DETAILS OF A TRADE. this seems to require a blow up chart of what is happening. along with the longer term chart to show the context setup coming and how it worked out. this is where Brooks loses me. the comment on the previous yellow down trendline was real good. I knew what line that was because there was only the one line on the chart. and I could see what you said. your comment was good. I need to see the idea of the price bar entry at the ema. I need discussion of how the price is at the ema. its meaning what we are talking about how it works. when to do it and when to skip over it. I don't know what it means that it is ok to take the trade at the ema but skip other times. I need to see that idea in action both when it is very good or best case and when to avoid. I need to experience what this is all about. EXPERIENCE is the key word. verbal discussion does not do it. I need to experience the limits of what works and does not work. and the only way to experience it is to see it deeply on a chart. to live through the trade. God Bless you PaduTrader do not get too deep into my comments we will work it out over time. we have the rest of our lives to get to the goal line. life is about the fun of learning how to trade well. so just pick one idea at a time. lets work on one thing. tomorrow we work on one thing. before we know it I will be trading up in heaven. the great trading room in the sky. where everyone is a winner. hahaha.
i may have to write a book to answer all this:and i think that is why Brooks has written so much and made so many videos. the idea behind this H1 H2 L1 ETC.....is to enter when the pullback is likely to have ended.. always remember this...so it does not matter if it is H1 or H2...... but before this you have to know that it is a pullback: so what is a pullback and how do we recognise it? it should not go beyond the extreme or start of the trend move.....so that tells you where your stop should be.
everything is trading trading is relative and this is good a example of it. i will try to explain it: you are right it is L1 in relation to the swing in which it is located:you had the first down bar- a one bar trend-then a one bar pullback;because it did not break the start of the trend and then you had a down move so it was a L1. BUT if you consider swing marked ab on the chart you have pull back bc......and then you have a entry so i called it L2. where was L1 then? if you see after the first bar of swing ab there were 3 bars which could be labelled a pullback so you have L1 there. and after that you have one bar pull back:bar 6 from the swing ab high- and you have L2 . so what i have called L2 may be called L3! CONFUSED? me too.....but once you remember the rational or principle behind it you will realise that it does not matter what it is called....it is signalling the end of a pullback and that is a trading /entry opportunity
yes for bar counting it does not matter.the pull back has finished so enter.you have tight stop. but there is one more point as far context is considered to be noted: swing ab was a down move and then you have bc as a pullback. note this pull back was deep and was all bull bars. it broke the bear trend line formed by swing ab. this means the counter trend traders are strong and so the next buy signal that occurs should be taken. so if you have shorted L1 [or if you want to call it L2 or L3] then the trade has to be reversed. WHY ? because now you have a signal that ends the pull back abcd.....why was abcd a pull back? because it stayed above THE LOW of swing AB YOU NEED NOT THINK OF H1 H2 L1 ETC.......DOES IT SIGNAL THE END OF A PULL BACK. THAT IS WHAT MATTERS
he does that very well......but that is because he wants to you tell you everything: but no one can digest that huge quantity. but such generosity is rare in this trading education business it took me 12 years to figure it out. i would not wish that experience on my worst enemy. so i have started this thread to help others and also to vindicate Brooks because,IMO, there is no one who is so well intentioned as he is. trading can be hell if you are not clear exactly what you are /have to do. it can be simple too