blue candle - up candle (or green candle for your case). I learnt trading from books, internet, from coaches. Most of those info from coaches caused more harm than benefit as it contaminated my mind because those who taught were generally unsuccessful traders. so I have to learn unlearn relearn , delete those contaminated info from my mind, learn unlearn relearn again and again on my own. Deleting those contaminated info took me very long. I was fortunate to learn something (though it was very little) from a successful trader. And that gave me some starters.
a two leg pull back. the first leg down is the first attempt and then the second leg down is the second attempt. The problem in counting legs is that this pattern can extend into another two legs [this can happen with all patterns triangle can become a rectangle and THAT can become a diamond] and Brooks will say see i told you there will be two legs because the first two legs is actually ONE leg or the FIRST leg and the other two legs is the second leg. By that time you would have been stopped out or if no stop,you would have got a margin call. SO WHAT TO DO? It is better to take account of momentum rather than legs because sometimes momentum will die after two legs or after the 3 rd leg.And you do not want to jump in before the momentum is dieing so that is the most important factor rather than legs
Well said about unlearning and relearning. This is where I often find myself. What advice would you give to those who do not have access to a successful trader?
I have heard it said that follow the trend and that a market is either trending or in correction but i have personally observed-analyse for show, observe for dough:my motto- that there are varying degrees of trend, some like a channel, which may have direction,but are at the same time corrective. Again there are corrective two leg moves which have so much momentum, that they are mistaken for trends and are for all practical purposes , may be traded as such. So the market is indeed a strange place with moves, that are for all practical purposes corrective, being classified as trends and corrective moves which, for all practical purposes, are trends because they have all the characteristics of trend. It is important to realize this, if not you will always be surprised by what follows To those who want to define and classify everything as black and white,it may well be a mysterious place as well. For example in the chart above the sharp move up,labeled as C, was the 2 leg up, in a 2 leg move, though it had [reasonable] momentum. Also the leg labeled C , though it had considerable momentum, much more, than in a normal channel,WAS A CHANNEL, and recognising it as such, was instrumental in concluding that the move was corrective, not as strong , as it looks and so not to expect breakout and watch for a reversal. The market is master of disguise and deception. What is reversal? Reversal is not a point in time but a process. here it was a breakout failure, double top and a two leg move down with considerable bear participation and momentum. The dive which followed was not predictable in all its fury, but the reversal was on the cards.do not know if some news came out but such moves sometimes happen even without any news,
As u do the demo trade, always review yesterday performance / chart. eg your first chart. There was a signal but u failed to catch it; there was a decisive movement right after bull flag. ask yourself how can you catch such signal and enter early. remember don't miss first signal. eg your 2nd chart. there was no signal but you proceeded to trade. ask yourself how not to trade in such market. do these review everyday for many many years / decades. and since you are doing day trading, you have to focus on contuation signal AND reversal signal.
which bull flag? i counted 5 corrections i am golfer no golfer will count beyond 5 do me a favor and show me what first signal but mark it on the chart posted
good advice if there is no reversal, there must be continuation. many traders look for only one type of trade- nothing wrong with being specialists- but if you can trade both, you can become a master That has always been my goal
I wish I could give you more than one thanks for this post. You have masterfully divided all signals into continuation and reversal realms. A question. What lists of signals are you using? Flags and pennants are there, what else?