Advanced Big Bar Techniques - Brooks Trading Course · 2018. 8. 10. · BrooksTradingCourse.com BrooksPriceAction.com Al Brooks Price Action Fundamentals Brooks Trading Course Advanced

BrooksTradingCourse.com BrooksPriceAction.com

Al Brooks

Price Action FundamentalsBrooks Trading Course

Advanced Big Bar Techniques

CME July 20, 2018


▪ Big Bars (Surprise Bars)Breakout, Reversal, Exhaustion, Give-up 2

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Slide 1

Main Points

BrooksTradingCourse.com BrooksPriceAction.com Slide 2

Surprise Bar: Price Needs to Change

Most trend bars do not give much informationSometimes get unexpected big bar (Surprise Bar)Unexpected means low probability eventSurprise Bar tells traders something has changedMarket needs to move to new price

BO BarHuge bear barMeasured Move down likely

Exhaustion BarsBig BO late in trendProbable exhaustion

Reversal BarsStrong reversal upMeasured Move up likely(open of 1st bar to close of last bar in BO)

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Give-up Bar (type of Surprise Bar)Bulls giving up, but no major top2nd leg sideways to down likely


6/26/17

Give-up Bar Up: Bears Giving Up

Slide 3

Bull bar too bigSurprise bar usually has at least 2nd Leg UpOften pulls back a little 1st

Context favors minor reversal since no major bottom formation

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2?


12/12/17

Bear Give-up Bar: Big Bear Bar Means Bulls Giving Up

Biggest BO late in trend so Exhaustion Gap 50% chance of 2nd Leg Upbefore 2 legs sideways to down1st target is bottom of BO(Also, bull BO above bull channel fails 75% of time)

Big bear bar so bulls giving up (Surprise Bar, Bear Give-up Bar)2 legs sideways to down likely

1 2?

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Context Affects Probabilities: Look at Bars to Left

Bull BO above Bull Channel Bull BO above Trading Range

Strong sell signal bar70% chance of swing down

60% chance of MM up

Sell reversal down Buy above bull bar or at close of bull follow-through bar

Huge bull bar late in bull trendBO above bull channel

Big bull bar late in bull trendbut also BO above TR

Began as bull leg in TRBecame bull trend as prior bear trend resumed

Gap is from close of final bull bar to low of 1st bull bar in BO

Slide 5


Context Affects Probabilities: Look at Bars to Left

Bear BO below Bear Channel Bear BO below Trading RangeHuge bear BO below bear channel

60% chance of MM down

Buy reversal up

Sell below bear bar or at close of bear follow-through bar

Strong buy signal bar70% chance of swing up75% chance trend has ended

Big bear bar late in bear trendbut also BO below TR

Began as bear leg in TRBecame resumption of prior bear trend

Gap is from close of final bear barto high of 1st bear bar

Slide 6


7/5/18

Gap Up Bars: Strong Buying

Open of bar is above close of prior bar so Gap Open BarSo many traders buying the closethat the next bar gapped upStrong buying pressure so higher prices likelyBulls eager to B, bears desperate to exit

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12/15/17

Surprise Bar: When Big, Often Get 3 or More Legs

When bull bar is unusually big, usually can buy 50% PBwith limit order or on reversal upBecame bull flag in Spike and Channel bull trend day

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60 - 70% chance of MM up based on body,and at least 2 more legs up, usually to Wedge Top

TR

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Extremely big bull bar so Surprise BarLow probability event

Bears tried for 2nd Leg Bull Trap (failed BO above TR)Good sell signal bar since close on low4 consecutive bear barsClosed far above bars to left so not test off top of TRMore likely successful bull BO than 2nd Leg Trap


5/3/18

Wedge Bear Flag: Bull BO

2 big bull bar BO above bear flagBuy the close of BO bar or above high of 2nd bar

Slide 9

Wedge bear flagMoving Average Gap BarsBears sell below bear bar


1/17/17

Gap on 5 Min Chart: Rarely Stays Open

Slide 10

On 5 min Emini chart,1 bar in 1,000 opens above prior bar’s H or below its L99% close before bar is complete

Opened below L of prior barRare for gap to stay openon 5 min Emini chart

Opened below close of prior bar,but not below low Not traditional gap down


8/15/14

Always In Short: From 1 Big Bear Bar

Slide 11

WedgeFailed BO above yesterday’s high1 unusually big bear bar so Always In ShortClose below lows of 14 barsExceptionally big bear bar so Surprise Bar

70% chance of MM down (minimum goal)based on size of body


6/24/14

Bull Flag: Bear BO

Slide 12

Endless PB in Tight Bear ChannelBecoming less bullish

Strong bear BO below Wedge bull flagBear bar for follow-throughLikely Measuring Gap

Failed BO aboveParabolic Wedge Possible high of day

MM down

Strength of bearssometimes easier to see on higher time frame chart

5 bar bear Micro ChannelSell below 1st strongbear close

15 min chart


Weekly Chart: Consecutive Exhaustion Gaps

Biggest pair of bull bars late (more than 20 bars) in bull trendProbably Exhaustion Gap BarsStrong BO so 60% chance of one more leg up after 1 – 3 bar pause (here, one small bull doji bar)Then, 60% chance of test to below bottom of Buy Climax

2nd consecutive Buy Climax late in trendBlow-off topShould test below bottom of Buy ClimaxOdds favor 2nd leg sideways to down

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Biggest Bear Bar Late in Trend: Exhaustion Gap Bar

Biggest bear bar in more than 20 bars into bear trendExhaustion Gap Bar and end of trendmore likely than Measuring Gap and new swing down

EURUSD 120 min

60% chance of one more Sell Climaxbefore reversal up


Huge Bear Surprise Bar: If in TR, Possible 2nd Leg Trap

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TR orbull channel

Emini example

Strong bear BO so early bear trendBut, look to leftStill Higher Low so bull channel or TR,as well as early bear trendStrong bull reversalBear BO was 2nd Leg Bear Trap (failed BO) in TR and bull channel


11/30/17

Bull MC in Extreme B Climax: Expect 2 Legs Down

Bulls disappointed by big bear barsThey exited at high close, creating Micro Double Top2nd entry sell for at least test of bottom of Buy Climax

14 bar bull MCVery strong, usually expect only minor reversalHere, got major reversal

But, bought more when returned to highest closeGot strong bull BO

Slide 16

Bulls who bought the highest closewere disappointed by bear bars

60 min chart2 bar buy climax


3/29/18

Buy The Close (BTC): Deep PB, So TR

Buy The Close (BTC), 8 consecutive bull barsStrong selloff but deep or prolonged PB and TR more likely than bearSometimes take 20 or more bars to get back to highest closeReasonable Buy The Close, but no micro DT to let bulls exit without lossOdds favored test of highest close so bulls could scale in and avoid loss

Bulls who bought high close bought more lowerCan exit break even on 1st buy and with profit from lower buyOther bulls bought lower, expecting test of highest close

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When taking reasonable entriesand managing well,80% chance of profit or no loss


7/6/17

STC Disappointed Bears: Minor Reversal Up and TR Likely

Slide 18

If disappointed bears get out,but still Always In Short,must sell again below bear barHere, Double Top bear flagnear MA

If bears disappointed by lack of follow-through after selling close, become afraid might have sold final Sell The Close bar

Now, know PB and TR more likely than more bear trendExpect at least one more selloff to test that close

Sell The Close Disappointed by big bull barExit breakeven or above bull bar


6/8/18

4 Small Bars: Can Also Lead to Big Moves

9 bars Tight Bull ChannelBuying PressureIncreases chance of bull BO

TR is about half height of average day’s rangeOdds favor BO and about MM up or down

Slide 19

Buy the Close or buy above bull bars,or buy close of BO Bar

4 – 5 consecutive small bull barsEvery close at or above prior close (Trending Closes)Highs and lows also trending up


7/16/18

Buying Pressure: 8 Consecutive Bull Bars

8 consecutive bull bars so bulls owning many barsVery few bear bars so eager bullsBuying pressure makes higher prices likely

Yesterday’s L

Only 2 bear bars in 1st 25 bars

7 bars without a pullbackMany bull gaps and micro gaps (not shown)Odds favor at least a little more upB below prior barB above prior bar

Slide 20


6/8/18

Bad Flags: Fade

BO pullback buy, but big bear bar,and consecutive bear bars at top of TRBad Bull FlagMore sellers than buyers aboveSell and scale in higher for scalp

BO pullback sell, but bull bar andPB from bull leg in TRBad Bear FlagMore buyers than sellers belowBuy at low for scalpBe willing to scale in lower

Buyers and sellers above and below every bar50% of time, stop order traders win and BO succeeds50% of time, limit order traders win and BO fails

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▪ Big Bars (Surprise Bars)Breakout, Reversal, Exhaustion, Give-up

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Slide 22

Review


Al Brooks

Price Action FundamentalsBrooks Trading Course

Advanced Big Bar Techniques

CME July 20, 2018

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Advanced Big Bar Techniques - Brooks Trading Course · 2018. 8. 10. · BrooksTradingCourse.com BrooksPriceAction.com Al Brooks Price Action Fundamentals Brooks Trading Course Advanced