Hi Eric (and team)!
Thanks to you all for putting together a great course. This helps clear up a number of misinterpretations I had.
While I seem to be adapting to the context nicely, some of the technical details are confusing me, which is impacting my ability to make contextual calls. I'm not sure how to reconcile the details with the context.
I was hoping you might be able to help!
Questions:
- If a second entry triggers on the signal/reversal bar as it is developing, do we wait for the bar to close or take the trade when it triggers? This could be 'engulfing,' but many times it does not seem to be.
- On that note, is engulfing just taking the trade as the signal bar passes the prior bar when the signal bar then becomes an outside bar? Is this still considered the signal bar even though it's now acting as the entry bar?
- Is a triple test three bars of the same kind testing a support or resistance area? Or can it be a mix/match?
- in a range for a triple test count can only bull bars test resistance and bear bars test support, or can they test either when in the range?
- Does a range boundary touch count as a bar toward a triple test, or does it need to pass through to count toward the triple test?
- Market moving in twos – how do triple tests fit this pattern? I understand second entries and higher lows or lower highs fit the concept, but triple tests seem to follow a different idea. I think I am wrong here though?
- Double tops and bottoms – is this two opposite pairs separated by a reasonable distance? Bull/Bear bars in succession, then another bull/bear bar pair in succession after a distance? Or is the double top/bottom just the one pair?
- If pairs in succession split by distance does it act as a higher low / lower high type construct where the placement does matter relative to context of the chart?
- Inconsistent vs. consistent ranges that are both loose. These have trend lines running through them, but it is not common for them to follow actual trend rules on their breaks? More often, they are spike-type trend lines that you look to fade on the breaks on a signal/reversal bar, particularly when at a range boundary - is that right?
- When inconsistent, how do you know the boundary to fade? Or do you just skip those?
- For ranges, are there any rules of thumb for always-in-trendline type move breaks that run through the ranges?
- When you have a tight range and there is a breakout of the range, when you get a failure of that breakout, can you take that trade outside the range to return back into the range even if there isnt a full scalp back to support/resistance? Or could there be like the 'failure' of the breakout twice: first by having a pullback from the recent breakout bar, and then the support/resistance line might still hold and turn up that failure to resume the breakout. Or is that more rare?
- When a trendline breaks with a microtrendline in the opposite direction, what is the expectation for the retest and the ema rules? Does the microtrendline now take local precedence and are we watching this to create a channel?
- For microtrendlines these are just Spikes and if they fail to channel then they are played out?
- For a trend - after a push to a new high or low post a break, are there any signals that it could indeed move for a measured move/leg 2 up? Should we look for like an always-in-type movement to a new high or low to indicate a possible measured move versus a reversal?
- For second entries rules - it seems like 1 bar can act as both the pullback and entry? How exactly does that work?
- For second entries we do something different with the count when it's a double top/bottom? Or is that just when that occurs on the triggering of the second entry? Does this need to have both matching tail levels and bodies?
- For a hidden second entry is that just like for example taking a bull bar in a pullback in developing 2el and if close enough calling that a entry 1 even if it didnt necessarily have a high that ticked higher than a previous bar (maybe instead it matched the previous bar high and had a low that was a higher low then prior bar)?
- General question - with context and the rules there are trades with a 95% probability of success. Is this a true statement? And these contextual setups happen everyday multiple times a day with the limiter being how the bars print to a specific individuals chart (so if ~1% of all trades on the board have the possibility a person may only get to see half or less of this 1% due to how ticks print differently) - is this a true statement or missing something?
Thank you very much...
Great course - few questions
Re: Great course - few questions
Thank you! A lot goes into making material accessible w/o becoming overly burdened. There is a lot to your questions, and there are some very good ones. Some of the answers are in line below, and I ask you to consider the following: remember, this isn't about the bars but what they represent. The size of the bars matter, as well as how they are created. In working through the course, and the examples, and also when simply watching the market, observe how the bars are created. Seriously! This in an important key because there is a difference between how they are created, and how they appear on a static page. Becoming familiar with this flow of bar creation will give you a stronger sense of what is happening - stronger than when looking at a static page. However, with that experience, you'll be able to look at the static page, and understand some of the underlying built nuances that created what is on the page. Understanding the past few sentences will significantly transform your trading.
Hi Eric (and team)!
Thanks to you all for putting together a great course. This helps clear up a number of misinterpretations I had.
While I seem to be adapting to the context nicely, some of the technical details are confusing me, which is impacting my ability to make contextual calls. I'm not sure how to reconcile the details with the context.
I was hoping you might be able to help!
Questions:
- If a second entry triggers on the signal/reversal bar as it is developing, do we wait for the bar to close or take the trade when it triggers? This could be 'engulfing,' but many times it does not seem to be.
In the beginning, always wait for the bar to close. It isn't about taking a trade but becoming familiar with how the market moves and the bars form. Over time, you'll gather a sense of when taking the bar as an engulphing makes sense. It relates to how support and resistance are formed, and when they break. Not just on a bar, but on the context of the situation
- On that note, is engulfing just taking the trade as the signal bar passes the prior bar when the signal bar then becomes an outside bar? Is this still considered the signal bar even though it's now acting as the entry bar?
Answer above
- Is a triple test three bars of the same kind testing a support or resistance area? Or can it be a mix/match?
This is more about support and resistance. Observing those boundaries where trading occurs as they transition to a trading range
- in a range for a triple test count can only bull bars test resistance and bear bars test support, or can they test either when in the range?
Answer above
- Does a range boundary touch count as a bar toward a triple test, or does it need to pass through to count toward the triple test?
Do not worry about these particulars as much as observing how prices move within trading ranges. There are strong boundaries and weak ones.
- Market moving in twos – how do triple tests fit this pattern? I understand second entries and higher lows or lower highs fit the concept, but triple tests seem to follow a different idea. I think I am wrong here though?
Answer above
- Double tops and bottoms – is this two opposite pairs separated by a reasonable distance? Bull/Bear bars in succession, then another bull/bear bar pair in succession after a distance? Or is the double top/bottom just the one pair?
Grab quite a few charts and work through them to note. You'll quickly build a feel for this better than a written answer can provide
- If pairs in succession split by distance does it act as a higher low / lower high type construct where the placement does matter relative to context of the chart?
Everything relates to context. The market can do anything, so becoming aware of the variations is important.
- Inconsistent vs. consistent ranges that are both loose. These have trend lines running through them, but it is not common for them to follow actual trend rules on their breaks? More often, they are spike-type trend lines that you look to fade on the breaks on a signal/reversal bar, particularly when at a range boundary - is that right?
This one is trickier. In a trend, there will be an impulse and then growing increasing strength of pullbacks.
Those pullbacks can create smaller ranges before continuation. This is different than a trading range, and please review the market cycle to note the key to this changeover.
- When inconsistent, how do you know the boundary to fade? Or do you just skip those?
Skip. You want consistency, so why trade lower probability patterns?
- For ranges, are there any rules of thumb for always-in-trendline type move breaks that run through the ranges?
Review the market cycle and variations to observe changes
- When you have a tight range and there is a breakout of the range, when you get a failure of that breakout, can you take that trade outside the range to return back into the range even if there isnt a full scalp back to support/resistance? Or could there be like the 'failure' of the breakout twice: first by having a pullback from the recent breakout bar, and then the support/resistance line might still hold and turn up that failure to resume the breakout. Or is that more rare?
The short answer to this is never take a trade unless you understand what is happening. Patterns fail, and a failure of a failure is a higher probability trade. So this is an aspect that must be learned.
- When a trendline breaks with a microtrendline in the opposite direction, what is the expectation for the retest and the ema rules? Does the microtrendline now take local precedence and are we watching this to create a channel?
Please review the market cycle and transitions. Then overview many charts to see the answer as to how you would like to manage.
- For microtrendlines these are just Spikes and if they fail to channel then they are played out?
No. Need to understand strong and weak trends and their variations.
- For a trend - after a push to a new high or low post a break, are there any signals that it could indeed move for a measured move/leg 2 up? Should we look for like an always-in-type movement to a new high or low to indicate a possible measured move versus a reversal?
Always-in allows for you to just a bias. A bias has a tendency to extend for a 2nd leg.
- For second entries rules - it seems like 1 bar can act as both the pullback and entry? How exactly does that work?
This is unclear, but probably falls under traps. Better to establish simple, consistent habits.
- For second entries we do something different with the count when it's a double top/bottom? Or is that just when that occurs on the triggering of the second entry? Does this need to have both matching tail levels and bodies?
The market offers too many variations. Instead recognize the purpose of counting, and the always in direction.
- For a hidden second entry is that just like for example taking a bull bar in a pullback in developing 2el and if close enough calling that a entry 1 even if it didnt necessarily have a high that ticked higher than a previous bar (maybe instead it matched the previous bar high and had a low that was a higher low then prior bar)?
Hidden are simply cases where the count doesn't update because a microtrendline isn't broken. These take a little bit more experience
- General question - with context and the rules there are trades with a 95% probability of success. Is this a true statement? And these contextual setups happen everyday multiple times a day with the limiter being how the bars print to a specific individuals chart (so if ~1% of all trades on the board have the possibility a person may only get to see half or less of this 1% due to how ticks print differently) - is this a true statement or missing something?
Yes, there are 95% probability trades. However, they do not last very long at all because it is a significant shift in balance. They do not happen everyday, multiple times a day. Perfect trades rarely exist. However, with the ability to recognize 75%+ probability, more opportunity occurs. It is all a tradeoff.
Thank you very much...
Hopefully helpful and good trades to you! Keep moving forward!!
Hi Eric (and team)!
Thanks to you all for putting together a great course. This helps clear up a number of misinterpretations I had.
While I seem to be adapting to the context nicely, some of the technical details are confusing me, which is impacting my ability to make contextual calls. I'm not sure how to reconcile the details with the context.
I was hoping you might be able to help!
Questions:
- If a second entry triggers on the signal/reversal bar as it is developing, do we wait for the bar to close or take the trade when it triggers? This could be 'engulfing,' but many times it does not seem to be.
In the beginning, always wait for the bar to close. It isn't about taking a trade but becoming familiar with how the market moves and the bars form. Over time, you'll gather a sense of when taking the bar as an engulphing makes sense. It relates to how support and resistance are formed, and when they break. Not just on a bar, but on the context of the situation
- On that note, is engulfing just taking the trade as the signal bar passes the prior bar when the signal bar then becomes an outside bar? Is this still considered the signal bar even though it's now acting as the entry bar?
Answer above
- Is a triple test three bars of the same kind testing a support or resistance area? Or can it be a mix/match?
This is more about support and resistance. Observing those boundaries where trading occurs as they transition to a trading range
- in a range for a triple test count can only bull bars test resistance and bear bars test support, or can they test either when in the range?
Answer above
- Does a range boundary touch count as a bar toward a triple test, or does it need to pass through to count toward the triple test?
Do not worry about these particulars as much as observing how prices move within trading ranges. There are strong boundaries and weak ones.
- Market moving in twos – how do triple tests fit this pattern? I understand second entries and higher lows or lower highs fit the concept, but triple tests seem to follow a different idea. I think I am wrong here though?
Answer above
- Double tops and bottoms – is this two opposite pairs separated by a reasonable distance? Bull/Bear bars in succession, then another bull/bear bar pair in succession after a distance? Or is the double top/bottom just the one pair?
Grab quite a few charts and work through them to note. You'll quickly build a feel for this better than a written answer can provide
- If pairs in succession split by distance does it act as a higher low / lower high type construct where the placement does matter relative to context of the chart?
Everything relates to context. The market can do anything, so becoming aware of the variations is important.
- Inconsistent vs. consistent ranges that are both loose. These have trend lines running through them, but it is not common for them to follow actual trend rules on their breaks? More often, they are spike-type trend lines that you look to fade on the breaks on a signal/reversal bar, particularly when at a range boundary - is that right?
This one is trickier. In a trend, there will be an impulse and then growing increasing strength of pullbacks.
Those pullbacks can create smaller ranges before continuation. This is different than a trading range, and please review the market cycle to note the key to this changeover.
- When inconsistent, how do you know the boundary to fade? Or do you just skip those?
Skip. You want consistency, so why trade lower probability patterns?
- For ranges, are there any rules of thumb for always-in-trendline type move breaks that run through the ranges?
Review the market cycle and variations to observe changes
- When you have a tight range and there is a breakout of the range, when you get a failure of that breakout, can you take that trade outside the range to return back into the range even if there isnt a full scalp back to support/resistance? Or could there be like the 'failure' of the breakout twice: first by having a pullback from the recent breakout bar, and then the support/resistance line might still hold and turn up that failure to resume the breakout. Or is that more rare?
The short answer to this is never take a trade unless you understand what is happening. Patterns fail, and a failure of a failure is a higher probability trade. So this is an aspect that must be learned.
- When a trendline breaks with a microtrendline in the opposite direction, what is the expectation for the retest and the ema rules? Does the microtrendline now take local precedence and are we watching this to create a channel?
Please review the market cycle and transitions. Then overview many charts to see the answer as to how you would like to manage.
- For microtrendlines these are just Spikes and if they fail to channel then they are played out?
No. Need to understand strong and weak trends and their variations.
- For a trend - after a push to a new high or low post a break, are there any signals that it could indeed move for a measured move/leg 2 up? Should we look for like an always-in-type movement to a new high or low to indicate a possible measured move versus a reversal?
Always-in allows for you to just a bias. A bias has a tendency to extend for a 2nd leg.
- For second entries rules - it seems like 1 bar can act as both the pullback and entry? How exactly does that work?
This is unclear, but probably falls under traps. Better to establish simple, consistent habits.
- For second entries we do something different with the count when it's a double top/bottom? Or is that just when that occurs on the triggering of the second entry? Does this need to have both matching tail levels and bodies?
The market offers too many variations. Instead recognize the purpose of counting, and the always in direction.
- For a hidden second entry is that just like for example taking a bull bar in a pullback in developing 2el and if close enough calling that a entry 1 even if it didnt necessarily have a high that ticked higher than a previous bar (maybe instead it matched the previous bar high and had a low that was a higher low then prior bar)?
Hidden are simply cases where the count doesn't update because a microtrendline isn't broken. These take a little bit more experience
- General question - with context and the rules there are trades with a 95% probability of success. Is this a true statement? And these contextual setups happen everyday multiple times a day with the limiter being how the bars print to a specific individuals chart (so if ~1% of all trades on the board have the possibility a person may only get to see half or less of this 1% due to how ticks print differently) - is this a true statement or missing something?
Yes, there are 95% probability trades. However, they do not last very long at all because it is a significant shift in balance. They do not happen everyday, multiple times a day. Perfect trades rarely exist. However, with the ability to recognize 75%+ probability, more opportunity occurs. It is all a tradeoff.
Thank you very much...
Hopefully helpful and good trades to you! Keep moving forward!!
Re: Great course - few questions
Eric, this is incredible feedback! I think you nailed my issue 100%, thank you. I went back through the course, watching and rewatching the materials to get a better sense of what was missing with this context. Here’s my assessment (please course-correct me if I'm off).
Details are important, but this isn't about checking technical boxes. We aren't really doing anything per se. We are impartial observers of the market's behavior, watching price movement as various participants buy and sell, which we interpret through various categorization and classification tools. These tools help us observe moments of imbalance in the market that present high-probability opportunities for market orders to overwhelm resting stop/limit orders or for the triggering of stop orders that move price in the intended direction. In the best cases, we will be part of early reallocation/repositioning movements of various traders positions.
This is all made possible because price movement, when viewed through a lens of momentum, creates patterns and structures (footprints) that can be organized and classified into types on tick charts. By using vertical and horizontal support structures and understanding the market cycle, we can accurately interpret these patterns and their place in time. The price action trading system accesses all of this - requiring the alignment of local with global context with an initiating signal to create a repeatable (profitable) process. This is the magic/blessing of what has been shared here.
Said another way a story is unfolding, written in its own language. By understanding the language, we can read the story. By reading the story, we can see what we need to see. This vision is progressive; what is able to be seen today may only be a fraction of what can be seen in the future with experience. But to be successful today, vision must only be open enough to see a few trades a day while intersecting with the discipline to take the trades and patience to not force trades.
Am I headed in the right direction?
Did have one lingering small technical detail that am getting a bit hung up on that was hoping you might be able to help on too. How can a price action trader reach 95%+ accuracy if it is more likely that trades being taken will regularly be 80%ish accuracy? Do the additional accuracy points come from trade management like being able to assess real-time feedback post executing a trade so that they can exit a trade at or near breakeven as more momentum data comes in?
And thank you again for this course. I don't think I accurately expressed just how thankful am you put this together - this shifted my perspective up several levels from where it had been.
Details are important, but this isn't about checking technical boxes. We aren't really doing anything per se. We are impartial observers of the market's behavior, watching price movement as various participants buy and sell, which we interpret through various categorization and classification tools. These tools help us observe moments of imbalance in the market that present high-probability opportunities for market orders to overwhelm resting stop/limit orders or for the triggering of stop orders that move price in the intended direction. In the best cases, we will be part of early reallocation/repositioning movements of various traders positions.
This is all made possible because price movement, when viewed through a lens of momentum, creates patterns and structures (footprints) that can be organized and classified into types on tick charts. By using vertical and horizontal support structures and understanding the market cycle, we can accurately interpret these patterns and their place in time. The price action trading system accesses all of this - requiring the alignment of local with global context with an initiating signal to create a repeatable (profitable) process. This is the magic/blessing of what has been shared here.
Said another way a story is unfolding, written in its own language. By understanding the language, we can read the story. By reading the story, we can see what we need to see. This vision is progressive; what is able to be seen today may only be a fraction of what can be seen in the future with experience. But to be successful today, vision must only be open enough to see a few trades a day while intersecting with the discipline to take the trades and patience to not force trades.
Am I headed in the right direction?
Did have one lingering small technical detail that am getting a bit hung up on that was hoping you might be able to help on too. How can a price action trader reach 95%+ accuracy if it is more likely that trades being taken will regularly be 80%ish accuracy? Do the additional accuracy points come from trade management like being able to assess real-time feedback post executing a trade so that they can exit a trade at or near breakeven as more momentum data comes in?
And thank you again for this course. I don't think I accurately expressed just how thankful am you put this together - this shifted my perspective up several levels from where it had been.
Re: Great course - few questions
Your description is EXCELLENT!
And this is why so many get lost, at least initially. They are looking to "check a box" vs understand what the participants are actually doing, and understanding the underlying directional strength, when present (trending or always in), or lack thereof (trading range).
The 95% may be throwing you off a little. Consider that there are different aspects which come together. Risk, reward, and probability. It is very rare for all 3 to come together. Low risk, high reward, and high probability. The participants are not colluding with one another, and for every buyer there is a seller (consider these smart participants each working from an edge). Therefore actual 95% probability can not exist for very long (the actual probability). Probability is also the "invisible" variable which takes experience to absorb. After watching the market for a bit (not under stress of having to perform), you will gain an understanding of context and will begin to recognize situations (I have seen this before).
One doesn't need 95% probability to succeed though. The red and blue markings from Mack are typically 75%+. As they have the most common characteristics in formation, they are usually the easier one's to begin to identify. The green opportunities often have runners too. Why, because green trades are lower probability, and by definition they are not necessarily expected to "run", but some do
.
With experience, and being able to read context, it is very possible for a trader to achieve 80%+ success, or very large streaks of wins. I've seen streaks of 20-30 trades in a row. This shouldn't be the focus though. If one is reading the market well, 1:1 risk/reward only requires slightly more than 50% accuracy to be a winning system. If one is able to capture runners. . . well, well, well. The signal bar often plays the part of risk, and one can measure one's reward with respect to the risk to gain an overall perspective of performance. Not $$$ but how much R factor (risk vs reward) one can achieve as well at the % of times one succeeds.
Finally the % win rate should probability be classified into market context types to better understand where and how individuals can perform under different market conditions.
Nice work! Hopefully helpful and good trades to you!
And this is why so many get lost, at least initially. They are looking to "check a box" vs understand what the participants are actually doing, and understanding the underlying directional strength, when present (trending or always in), or lack thereof (trading range).
The 95% may be throwing you off a little. Consider that there are different aspects which come together. Risk, reward, and probability. It is very rare for all 3 to come together. Low risk, high reward, and high probability. The participants are not colluding with one another, and for every buyer there is a seller (consider these smart participants each working from an edge). Therefore actual 95% probability can not exist for very long (the actual probability). Probability is also the "invisible" variable which takes experience to absorb. After watching the market for a bit (not under stress of having to perform), you will gain an understanding of context and will begin to recognize situations (I have seen this before).
One doesn't need 95% probability to succeed though. The red and blue markings from Mack are typically 75%+. As they have the most common characteristics in formation, they are usually the easier one's to begin to identify. The green opportunities often have runners too. Why, because green trades are lower probability, and by definition they are not necessarily expected to "run", but some do
.With experience, and being able to read context, it is very possible for a trader to achieve 80%+ success, or very large streaks of wins. I've seen streaks of 20-30 trades in a row. This shouldn't be the focus though. If one is reading the market well, 1:1 risk/reward only requires slightly more than 50% accuracy to be a winning system. If one is able to capture runners. . . well, well, well. The signal bar often plays the part of risk, and one can measure one's reward with respect to the risk to gain an overall perspective of performance. Not $$$ but how much R factor (risk vs reward) one can achieve as well at the % of times one succeeds.
Finally the % win rate should probability be classified into market context types to better understand where and how individuals can perform under different market conditions.
Nice work! Hopefully helpful and good trades to you!
Re: Great course - few questions
Ok this is really great to hear.
This is awesome feedback…
Based on this, here’s my plan: focus on the global and local conditions where I perform best, and dive deep into the R-factor around these using historical charts. The goal is to tighten my success percentage and improve trade management.
The feedback on ‘situation’ is much appreciated too. I’ll look to this as a milestone for progress on the above.
This is awesome feedback…
Based on this, here’s my plan: focus on the global and local conditions where I perform best, and dive deep into the R-factor around these using historical charts. The goal is to tighten my success percentage and improve trade management.
The feedback on ‘situation’ is much appreciated too. I’ll look to this as a milestone for progress on the above.
Re: Great course - few questions
great to hear! A good plan.
Keep moving forward and good trades to you!
Keep moving forward and good trades to you!