Trading When a Market Is in a Bear Channel | Al Brooks

Summary

El transcripto describe diferentes tipos de canales de tendencia alcista y bajista en el mercado de valores, destacando las estrategias de trading en cada escenario. Se discuten las señales de entrada y salida, y cómo utilizar las tendencias y la media móvil para tomar decisiones de trading. Además, se aborda la importancia de la disciplina y la gestión de riesgos en la toma de decisiones de inversión.

Takeaways

• 📉 Una tendencia bajista (bear channel) se caracteriza por una serie de puntos máximos más bajos y puntos mínimos más bajos.
• 🔍 Para identificar un canal bajista, es importante observar si los puntos máximos y mínimos están formando una tendencia descendente desde la parte superior izquierda hacia la parte inferior derecha del gráfico.
• 📊 Los breakouts en una tendencia bajista pueden ser grandes y conspicuous o pequeños y sutiles, pero ambos representan un momento en el que los compradores (bulls) se retiran y los vendedores (bears) toman el control.
• 🛑 Una vez que se rompe un breakout, se considera el final de la fase de breakout y comienza la fase de canal.
• 📉 En un canal bajista, se esperan pullbacks (retratos) donde el precio se eleva temporalmente, pero no se espera que dure demasiado tiempo.
• 📈 Las entradas al mercado en una tendencia bajista suelen ser más rentables cuando se venden en lugar de comprar, especialmente si la mayoría de las barras están por debajo de la media móvil.
• 🔄 Los traders pueden expectativas de una continuación de la tendencia bajista, buscando oportunidades de venta después de barras bajistas cerradas cerca de sus mínimos.
• 🤔 En un mercado en tendencia bajista, es común ver intentos de rally (alza) que fallan alrededor de la media móvil, ofreciendo oportunidades de venta.
• 📊 En un canal bajista estrecho, los traders deberían estar al tanto de las oportunidades de venta, ya que es una señal de una tendencia bajista fuerte.
• 📉 La venta en un canal bajista se enfoca en colocar órdenes de venta (stop orders) por debajo de las barras bajistas, buscando beneficios de la continuación de la tendencia bajista.

Q & A

¿Qué es un canal de tendencia bajista y cómo se define?

Un canal de tendencia bajista es una serie de puntos máximos y mínimos crecientes hacia abajo. No es necesario que cada punto máximo sea menor que el anterior, ni cada punto mínimo sea menor, pero en general, los puntos máximos y mínimos se desplazan hacia la parte inferior derecha y la mayoría de los puntos máximos son más bajos.

¿Cuáles son los tipos de canales de tendencia bajista mencionados en el script?

Los tipos de canales de tendencia bajista mencionados son: el canal de tendencia bajista muy estrecho (micro canal), el canal de tendencia bajista con pequeñas correcciones, el canal de tendencia bajista ordinario y el canal de tendencia bajista amplio.

¿Qué sucede cuando el mercado se encuentra en un canal de tendencia bajista muy estrecho?

En un canal de tendencia bajista muy estrecho, también conocido como micro canal, los pullbacks son nulos o inexistentes y se produce una serie de puntos máximos y mínimos cada vez más bajos. Se espera que la tendencia continúe bajista y es más fácil ganar dinero vendiendo en lugar de comprando.

¿Cómo se identifica un buen punto de entrada para vender en un canal de tendencia bajista?

Un buen punto de entrada para vender en un canal de tendencia bajista es en una barra bajista que se cierra en o cerca de su mínimo. Es razonable vender en una parada de una tick por debajo de esa barra bajista.

¿Qué es un breakout y cómo se relaciona con el inicio de un canal de tendencia bajista?

Un breakout es un movimiento del precio que rompe por encima de un nivel de resistencia o por debajo de un nivel de soporte. El inicio de un canal de tendencia bajista generalmente comienza con un breakout bajista, que representa a los toros dándose por vencidos y decidiendo que el precio es demasiado alto para seguir comprando.

¿Qué se puede esperar al final de un canal de tendencia bajista?

Al final de un canal de tendencia bajista, es común esperar una inversión de tendencia o un cambio a un rango de trading. El 75% de las veces, se espera un rompimiento por encima de la línea de tendencia bajista y una transición a un rango de trading.

¿Qué es un canal de tendencia bajista amplio y cómo se diferencia de un rango de trading?

Un canal de tendencia bajista amplio es uno donde las correcciones se extienden casi hasta el punto máximo anterior o cerca de él, lo que hace que parezca un rango de trading inclinado hacia abajo. La principal diferencia con un rango de trading es que en un canal de tendencia bajista amplio, las rallys tienden a fallar alrededor del promedio móvil y el mercado vuelve a su tendencia bajista.

¿Cómo se pueden obtener ganancias en un canal de tendencia bajista ordinario?

En un canal de tendencia bajista ordinario, se puede obtener ganancias vendiendo durante las rallys que se acercan al promedio móvil y también comprando en反转 de rallys desde nuevos mínimos, esperando que el mercado falle cerca del promedio móvil.

¿Qué sucede cuando un canal de tendencia bajista rompe por debajo de su fondo?

Cuando un canal de tendencia bajista rompe por debajo de su fondo, hay un 75% de probabilidad de que la breakout falle y el mercado se reversa hacia arriba. Esto significa que en un 75% de los casos, se puede esperar una inversión de la tendencia bajista y un retorno a un patrón de trading.

¿Qué es un patrón de escalinata en un canal de tendencia bajista y cómo se identifica?

Un patrón de escalinata en un canal de tendencia bajista es cuando hay una serie de rallys que no superan el punto de breakout previo y luego se revierten hacia abajo. Esto indica que los compradores con órdenes de límite pueden estar ganando dinero, lo que hace que el patrón sea más fuerte y probablemente continúe la tendencia bajista.

¿Cómo se pueden manejar las entradas y salidas en un canal de tendencia bajista?

En un canal de tendencia bajista, se pueden manejar las entradas y salidas vendiendo en paradas o limitando las órdenes de venta en el nivel de la barra bajista o en el promedio móvil. Para salir, se puede salir por encima de una barra de compra o en un cierto número de tics por encima de una barra bajista, asegurándose de no arriesgarse demasiado si la barra de compra se convierte en una gran barra de compra.

Outlines

00:00

📉 Introducción a los canales de trading y definiciones

Se introduce el tema de los canales de trading, específicamente el canal bear (tendencia bajista). Se definen términos como 'mejor canal', 'trading ranges' y diferentes variaciones de canales. Se discute cómo identificar una tendencia bajista y las características de un 'breakout bear' (ruptura bajista). Además, se menciona la importancia de los 'pullbacks' (retratos) y cómo se pueden interpretar para predecir el comportamiento futuro del mercado.

05:00

📉 Estrategias de trading en un canal bear

Se profundiza en las estrategias de trading dentro de un canal bear, destacando la facilidad para ganar dinero vendiendo en lugar de comprando. Se abordan situaciones especiales como 'inside bars' (barras interiores) y cómo se pueden utilizar para tomar decisiones de trading. También se discuten patrones como 'spike and channel' (pico y canal) y cómo los traders pueden esperar ciertos comportamientos del mercado para maximizar sus ganancias.

10:02

📉 Análisis de la probabilidad en los canales bear

Se analiza la probabilidad en diferentes tipos de canales bear, como 'breakouts' (rupturas) y 'pullbacks' (retratos). Se discute cómo interpretar los movimientos del mercado para prever posibles inversiones de tendencia. Se enfatiza la importancia de las acciones de los traders limit order y cómo estas pueden influir en la continuidad o interrupción de una tendencia bajista.

15:04

📉 Diferentes tipos de canales bear y estrategias

Se describen cuatro tipos de canales bear: micro canales, canales bear de pequeña retroceso, canales bear ordinarios y canales bear amplios. Cada uno tiene características únicas que se deben considerar al establecer estrategias de trading. Se discute cómo adaptar la estrategia en función de las condiciones del mercado y cómo los traders pueden beneficiarse de la venta y la compra dentro de estos canales.

20:06

📉 Ventajas y desafíos en diferentes canales bear

Se exploran las ventajas y desafíos de operar en diferentes tipos de canales bear. Se mencionan situaciones en las que es más fácil ganar dinero vendiendo, y otras en las que comprar puede ser igual de rentable. Se habla sobre cómo identificar señales de inversión y cómo manejar el riesgo en función del comportamiento del mercado.

25:07

📉 Consideraciones finales y preguntas sobre los canales bear

Se presentan reflexiones finales sobre la naturaleza de los canales bear y cómo los traders pueden aprovecharlos para su beneficio. Se hace hincapié en la importancia de la disciplina y la paciencia en el trading. Además, se aborda la idea de que los traders suelen ser más exitosos cuando siguen las tendencias del mercado en lugar de intentar predecir sus movimientos.

Keywords

💡Canal de tendencia bajista

Un canal de tendencia bajista es una forma de tendencia de precios en el mercado en el que se producen una serie de máximos más bajos y mínimos más bajos. Se define como una tendencia general de precios que comienza en la parte superior izquierda y avanza hacia la parte inferior derecha, con la mayoría de los máximos y mínimos en declive. En el video, este concepto es central para entender cómo operar en un mercado en caída y cuándo es más probable la continuación de la tendencia bajista.

💡Salto y canal de tendencia bajista

Un salto y canal de tendencia bajista es un patrón en el que un mercado en caída experimenta un salto significativo seguida de una serie de fluctuaciones dentro de un canal definido. Este patrón es indicativo de una fuerte tendencia bajista y se espera que continue con una serie de nuevos mínimos. En el video, se discute cómo este patrón es una señal para operadores de mercado para continuar vendiendo en la mayoría de las situaciones.

💡Pullback

Un pullback se refiere a una subida temporal del precio de un activo en una tendencia bajista general. Es una oportunidad para los operadores de mercado que están esperando vender, ya que se espera que el pullback no durará mucho tiempo y que el precio eventualmente continuará su tendencia a la baja. En el video, se discute cómo los pullbacks pueden variar en duración y extensión, pero en general, se consideran señales para vender en un canal de tendencia bajista.

💡Zona de profit taking

La zona de profit taking es un nivel de precios en el que los traders toman ganancias de sus posiciones abiertas. Este concepto es importante en el video ya que se relaciona con cómo los traders pueden manejar sus operaciones en un canal de tendencia bajista. Se espera que la presión de venta en la zona de profit taking lleve a una reversión del precio, ofreciendo oportunidades de venta adicionales.

💡Stop loss

El stop loss es un nivel de precios preestablecido en el que un trader cierra una posición de venta o compra para limitar las pérdidas. Es una herramienta de gestión de riesgo importante en trading y es especialmente útil en un canal de tendencia bajista para proteger las ganancias y minimizar las pérdidas. En el video, se discute cómo colocar un stop loss en un nivel razonable por encima o por debajo de los precios de un bar de tendencia bajista para asegurar una salida temprana de una posición.

💡Máquina de trading

Una máquina de trading es un sistema o conjunto de reglas y estrategias diseñadas para operar en el mercado de manera automática o semiautomática. En el video, aunque no se utiliza el término explícitamente, se describen patrones y comportamientos del mercado que podrían ser parte de un sistema de trading para identificar y aprovechar las oportunidades de venta en un canal de tendencia bajista.

💡Tendencia del mercado

La tendencia del mercado se refiere a la dirección general de los precios de un activo o índice a lo largo del tiempo. Es fundamental para el éxito en el trading ya que permite a los traders tomar decisiones informadas sobre cuándo comprar, vender o permanecer al margen. En el video, la identificación y el análisis de la tendencia bajista son cruciales para determinar las mejores oportunidades de venta y gestión de riesgos.

💡Cerrado en los niveles más bajos

Cerrar en los niveles más bajos se refiere a la acción de vender un activo cuando el precio se cierra en o cerca de su nivel más bajo para la duración del período de tiempo analizado. Es una estrategia común en un mercado en caída para maximizar las ganancias, ya que indica una posible continuación de la tendencia bajista. En el video, este concepto es crucial para entender cuándo es adecuado vender en un canal de tendencia bajista.

💡Movimiento promedio móvil

El movimiento promedio móvil (Moving Average, MA) es una herramienta de análisis técnico utilizada para suavizar los precios y mostrar la tendencia a largo plazo de un activo. En el video, la MA se utiliza como una referencia para determinar cuándo es adecuado vender o comprar en función de la relación entre los precios y la línea de la media móvil.

💡Revisión al alza

Una revisión al alza es un patrón de precios en el que el mercado se sube temporalmente después de una caída prolongada. Es una oportunidad para los traders de vender, ya que se espera que la tendencia bajista se reanudará después de la revisión. En el video, se discute cómo las revisiones al alza pueden ofrecer oportunidades de venta en un canal de tendencia bajista.

💡Riesgo de gestión

La gestión de riesgo es el proceso de proteger el capital de un trader mediante la mitigación de las pérdidas potenciales. Es una parte esencial del trading y se destaca en el video como una práctica recomendada al operar en un canal de tendencia bajista. La gestión de riesgo incluye el uso de stop loss, la toma de ganancias y la evaluación cuidadosa de cada operación.

Highlights

Definition of a bear channel as a series of lower highs and lower lows.

Explanation of how a bear breakout represents bulls giving up and bears taking control.

Discussion on the importance of pullbacks and how they signify the end of the breakout phase and the beginning of the channel phase.

Identification of different types of bear channels: tight channels, small pullback bear trends, and broad bear channels.

Explanation of trading strategies within a bear channel, focusing on selling as the market moves down.

Use of moving averages in determining entry points for selling in a bear channel.

Description of how to manage stop losses and take profits in a bear channel.

Discussion on the characteristics of a micro channel, which is the strongest type of bear trend.

Analysis of small pullback bear trends and their trading implications.

Explanation of trading in a broad bear channel, which is essentially a trading range tilted down.

Importance of recognizing when a bear channel may transition into a trading range.

Discussion on the psychology of trading in a bear channel and the tendency of the market to look strongest before reversing down.

Explanation of how to identify and trade in a stair-stepping down pattern within a bear channel.

Discussion on the potential for profit-taking and trend reversal in a bear channel with lots of two-sided trading.

Identification of key reversal patterns such as double tops and wedges within a bear channel.

Advice on managing trades and emotions when the market presents confusing signals in a trading range.

Transcripts

I'm going to be talking about trading

when the market is in a beer channel it

was just which happens a lot I'll first

define what I mean by a better channel

and then I'll talk about ordinary common

types of beer channels and then there

are different variations of their

channels one where the channel is

especially tight basically a small

pullback bear trend where the pull backs

are very small very brief and the market

keeps trending down and then broad bear

channels which are basically trading

ranges that are tilted somewhat done

alright so I'll start with what is a

bear Channel and it's a series of lower

highs and lower lows and not every high

is necessarily going to be lower and not

every low is going to necessarily be

lower at either but as long as overall

it's starting in the upper left and

going down to the lower right and it's

mostly lower highs and lower lows it's a

bear channel and every bear trend begins

with some kind of a bear breakout

sometimes the breakout bar is relatively

big conspicuous like this and sometimes

it's very small and that bear breakout

represents bulls giving up Bulls

deciding that the price is too high they

better get out and look to buy back

lower and it's also bears selling

aggressively every trend bar I see on

the screen I think of as a breakout but

I typically reserve the term breakout

for trend bars that have a reasonable

chance of leading to a trend and a

breakout it can be a single bar it could

be two bars there could be many bars I

just want to see some bars that are big

relative to the prior bars and I want to

see bars closing near their lows here we

have two bare bars and it's right on the

open it's a bear trend from the open and

the second part is surprisingly big and

whenever you see something that is

surprisingly big you have to expect at

least some follow-through

some second-leg sometimes it's just a

single bar like this sometimes you get

more of a pullback and sometimes you get

a second like a third leg and it just

keeps trending down all day but when I

see a bear surprise I expect at least a

small second leg down and trends usually

begin with surprises this is the

breakout here it's - bear - bear bars it

could be one bar and as soon as I see a

bar go above the high of the prior bar

the breakout phase has ended and that is

a pullback so the pullback simply means

a bar goes above the high of the fire

bar sometimes it can last two or three

bars

sometimes the pullback can be four or

five bars but once you get a pullback

the breakout phase has ended and the

trend has become weaker and now it's in

a channel face and the channel can last

a few bars they can have a big pullback

breaking about the bear trend line and

form a bigger channel that can last all

days every bear channel is some type of

spike and channel pattern here we have a

spike and a wedge bottom yet it

continued down into a much bigger

channel and a channel typically has at

least three pushes down one to three so

a channel wedge usually I use the term

synonymously when you

some kind of a wedge three pushes down

in a channel it typically begins to

attract some profit taking and that's

when that was this is an example and

sometimes the profit taking is enough to

reverse the trend

sometimes the profit taking has a couple

legs and then the trend resumes I don't

have the bear trend line drawing in but

we broke above the bear trendline yet we

could not get a both prior lower highs

and the reversal was minor and it became

a airflight alright so when the markets

in a bear channel there it's a bear

trend and it's a lot easier to make

money selling than it is flying

especially if most of the bars have

below the moving average and you see it

keep trying to get above the average

price and when people start to think

that the average price is expensive and

they keep selling at the moving average

doesn't matter if you get strong rallies

for the moving average if you see it

constantly failing at the average price

you have to assume it's gonna be a lot

easier making money selling these red

boxes are reasonable entry places for

example if you get a reversal up area of

a bull bar and then you get a bear bar

closing on or near its low it's

reasonable to sell on a stop below that

bear bar here we have another reversal

up and another bear bar closing on or

near its low you sell on a stop one tick

below that bar here we have three bull

bars the bodies are increasing in size

so the momentum is picking up yet what

happened as soon as it got to the

average price the body started to shrink

and then you get a bear bar closing near

its low another sell if you place a stop

to go short right below that bear bar

and you just keep doing that all day

long as long as you keep seeing bear

bars closing on or near their lows this

is a special circumstance an inside bar

another small bar at the moving average

I would sell that but you could sell blo

that bear bar with this bear mark and

you can just do keep doing it all day

long you can take profits at the prior

load or you can take profits after it

makes it in low and then reverses up you

exited on the bull bar if you

take this cell you could put a stop here

or you could put a stop up there if you

take this cell you could put a stop here

you take these stops

if you enter on these stops you have a

double top here flag I'd put a stop that

or above that and then you just take

profits on a reversal back up where you

simply hold all day and after each new

pull back and each new low you just

tighten your stop I typically get out

above a bull bar so if we make a new low

and I think the day is in a better

channel this green box is a buy in that

particular circumstance you could buy

for a scalp but at a minimum if I were

short I would get out we have a bull

inside bar it's a actually an outside

bar inside bar so it's an IO eye pattern

you're probably going to get a couple

small legs up here one pullback and then

two if you're buying in a beer channel

in a channel it's tight like this the

reversal is probably going to be minor

and lead to either a trading range or a

bear flag and not a bull trend so if

you're buying in a bear channel you're

buying for a scalp you're just looking

for a quick profit maybe a point or two

maybe a test of the moving average

our things to look at on a chart they

tell you that it's mostly better only to

look to sell you know for example here

where do you see all the bars are below

the moving average that means you have

to expect the market is going to keep

working lower and therefore it's going

to be easier to make money selling and

then you get pullbacks that are racing

up to the moving average but they're

stopping at or around the moving average

and the markets starting to resume down

again and then pull backs do not last

very long here we weren't up for a

couple bars here for a couple bars here

for three or four bars and then you look

at the bull bars how big are the bull

bars how many consecutive bull bars are

you getting are you getting bull bars

closing any of their highs are you

getting bull bars breaking about the

moving average are you getting two or

more bull bars breaking above the moving

average here we have a pair of pretty

good bull bars one bar closing above the

moving average but that's it you don't

get consecutive bull bars closing above

the moving average and then you look at

it and say okay if I take a stop entry

by most of the time I'm losing money if

I buy above this bull bar I lose money I

buy above this it's hard to make money

if I buy here possible bull flag

possible bull friend possible higher low

major trend reversal overall bull flag

very hard to make money so if most of

the stop entry buy signals are losers

that tells you that it's a lot it's

going to be a lot easier to make money

looking to sell and then in a very

strong trend I'm looking at whether or

not pull backs go above breakout points

and if the pull backs do not go above

the breakout points then traders buying

with limit orders cannot make money and

that means it's a very strong bear trend

okay if

pullbacks a big so here we have a

breakout we have a big trend bar we have

a new low so it's a breakout here's the

breakout point it broke below something

it broke all of this and at some point

you're going to get a pullback does the

pullback go above the breakout point

that's a really important point if it

does that tells you that some bull who

had a limit order to buy it this low

he gets filled here he uses a wide stop

and he buys more lower he made money so

he bought at this low he bought more

lower and then it got back to the

breakout point his original buy he could

get out break-even on his first buy and

with a profit on his lower body so that

tells you that limit order Bulls Bulls

off making bills Bulls buying with limit

orders at prior lows and blows are

making money I call that a stairs type

of pattern and when you're in a stairs

type of bear channel Bulls can make

money in addition to bears making money

but it's still easier to make money as a

bear plus the profit that you make as a

bear is bigger than the profit that you

make is a bull

another example we have a breakout here

to a new low so this is the breakout

point the market pulled back and it went

above the breakout point and therefore

limit order Bulls once Bulls start to

see pull backs going about breakout

points a pullback going above breakout

points you'll get limit order Bulls

buying below lows confident that even if

the breakout is strong it'll come back

above that breakout point and they can

make money if they take the bite and

scale and lower all right so some

by at the prior load they buying more

lower maybe a point lower maybe two

points lower buy more again confident

that if went about breakout points here

and here it'll probably do the same here

and then they can get our breakeven on

their first buy and with a profit on

their lower buys a series of bear bars

so it's a breakout is this a pullback

all in this timeframe it's not and then

on this time frame it's a pause remember

a pullback means the next bar goes the

above the high of that bar so to me this

is a pause and this is a breakout and

the breakout face ended when this bar

went above the high of that bar so this

is the end of the breakout right here

and when the breakout phase ends the

channel phase begins so we have a spike

down a bear breakout and a pullback and

now we're probably in a channel channels

typically break to the upside bear

channels typically break to the upside

every time I see a bear channel I think

of it as a bull flag because 75% of the

time you're going to get a break above

the channel and then a transition into a

trading range so typically you get a

strong friend a breakout a channel and

then a break above the channel and then

a transition into a trading range okay

so I said this is a pause and not a

pullback on a smaller time frame chart

that might be pulled back but on this

chart it's just a pause in the breakout

and the breakout is continuing and then

once a bar it goes above the high of the

part of our you have a pullback couple

legs up one pull back to and now we have

a Big Bear bar so we're probably

beginning a channel down traders will

start to look to sell as I said 75% of

the time you'll eventually get a break

above the bull of the bear trend line

and a conversion into a trading range

and then you start trading it like a

trading range

sometimes you have a beer channel and

instead of breaking above the channel

you break below the channel so you break

below the bottom of the channel and when

that happens 75% chance within five bars

it's going to reverse back up so only

rarely to have a barre channel that

breaks below and you continue down into

a stronger bear trend 75% chance it's

going to reverse off you still keep

selling below bear bars closing on or

near their lows and put you exit above

the bull bar another way to exit is a

certain number of ticks above a bear bar

four or five ticks above a bear bar just

in case this bull bar becomes a huge

bull bar you don't want to be risking

too much so America crashed down

reversed up and odds are you're going to

get at least a small second leg up after

a bull breakout a bull breakout bull

reversals you'll probably get at least a

small second leg up here's a beer

channel it's a small pullback bear trend

and we're breaking below the bottom of

the channel 75% chance the breakout is

going to fail and the market is going to

reverse up that means 25% chance the

breakouts not going to fail and it's not

going to reverse up so 25% of the time

you'll get a break up a lower Bear

Channel and it begins the process over

again so instead of a bear channel and

then a transition into a trading range

you get a bear channel and then another

breakout phase and then you're back into

a breakout and Bear channel on a

situation bear bar we've got a breakout

bar you can sell below the low of the

bar sell below the low of the bar you're

getting bear bars closing on or near

their lows it's reasonable to sell on a

stop one tick below the low of the bars

here we're going to pull back and then a

vert bar closing near its low every time

you see a bear bar closing on or near

its low it's a reasonable short one tick

below the bar and you don't have to take

every one of these shorts alright a lot

of times it happens quickly and you

don't expect it when you see this

breakout you're thinking well al says

75% chances

going to reverse up maybe I shouldn't

sell you know it's reasonable to take

the sell and then if you get the

reversal get out because sometimes

you'll get a big trend down and after

three or four bear bars if you're still

flat you're thinking oh my gosh I'm you

know I'm missing something what do i do

how do I get in what you do is you

simply place in order to go a short one

tick below any bear bar you could wait

for a pullback and then start but when

you're in a strong bear trend like that

you have to get short and the easiest

way to do it is wait for a bear bar

closing near its low and then enter on a

stop one tick below the bear bar their

channel three legs down one two three

and a pretty good-looking bull bar late

and a bear trend you're probably going

to get some profit taking late in the

day so I would get out of shorts above

that bull bar and in fact I personally

would buy looking for at least a couple

legs up some profit taking at least to

the moving average now four types of

channels and that there's there are some

subtle differences here between this

channel and this channel I don't know if

you can see the difference in this

channel we have bull bars but no bar

goes above the high of the prior bar so

I call that a micro channel and it looks

similar to this but it's not it's

different this is a micro channel there

are no pull backs and on the next higher

time frame chart let's say this is a

5-minute chart if you look at a

15-minute chart or a 30-minute chart you

don't have any bull bars it's just a

series of bear bars so a micro channel

is the strongest type of bear trend and

you only want to sell and the next

strongest type of bear trend is this

it's a small pullback bear trend the

pull backs are small one or two bars and

you keep making new lows and the pull

backs do not go up very far so they're

small and they're brief and whenever you

see the market looking like this don't

buy you only want to sell so a micro

channel you only sell a small pullback

bear

friend you only want to sell and on a

higher time frame this is going to be a

breakout as well it'll just be a series

of beer bars if this is a five-minute

start and you were to look at a

15-minute chart or a 30-minute chart or

a 60-minute chart you wouldn't see any

bull bars you just see a series of beer

bars closing on or near their lows and

you know if the next higher time frame

is a strong breakout on this time frame

you don't want to be buying and this is

a common type of bear channel where you

have pretty good bull bars pull backs

lasting more bars five bars sometimes

more you have the market going sideways

for extended periods of time it's good

to sell reversals down from the moving

average every time it rallies to near

the moving average you sell on a stop

below a bear bar however Bulls entering

with stops can make money as well

buying above this bull bar buying above

that bull bar they can make scalps so in

an ordinary type of bear channel yes you

keep selling but if you want you can

also buy above reasonable bull bars

reversing up from a new low but you're

buying for a scalp expecting the market

to fail at or around the moving average

limit order bulls they'll make money so

Bulls buying with a limit order at or

below the prior bar

they will make money here buying at this

low or below you'll make money because

you'd expect the pullback to come above

the breakout point so stop order Bulls

Bulls buying with stops limit order

Bulls Bulls buying with limit orders are

making money and that is common in a

bear channel the common type of bear

channel easier to make money selling but

you can start to make money buying as

well buying for scalps and then a broad

bear channel when you look at it at this

point is it a bear Channel well it has

lower highs is it a trading range

yes it's clearly sideways is it a bull

friend it might be we have a higher low

and this highs above that high so it

might also be a bull trend and whenever

you see a channel that is very broad

where the rallies

go almost all the way up to the prior

high it's basically a trade training

range that is tilted down and when the

markets on a trading range I'm looking

to scalp I want to buy blow I want to

sell high and I scalp you can say wow

it's a bear trend don't you don't only

want to sell well when you look at it at

this point in the day right here at this

point in the day you wouldn't be calling

it a bear Channel you'd be calling it a

trading range and if the market is in

the trading range I want to buy and sell

and I'm going to be scalping most of the

bars below the moving average through

here easier to make money selling but

now we're starting to get a lot of bars

above the moving average you will get

bulls flying

alright beer channel you go to spike

down and then a channel you have a

pullback in a channel you sell rallies

any time it gets near the moving average

you look to sell below a beer bar

closing there it's low especially if you

have a second sell signal here's a first

sell and we have a bear inside bar and

then the second sell another a small

double top this would be a second sell

another double top I know you can look

at this and say Alice on a double top

it's a double top this was an attempt to

get above that and it reversed down a

second time a lot of times double tops

are not perfect and the second high can

be pretty far below the first time it

can be above the first time but it's

still a double top and we're mostly

below the moving average you want to be

selling below beer bars closing there

lows another double top this hike went a

little above that high but it was simply

a test of this high and traders who look

to sell you could sell below the outside

down bar or you could wait for a second

sell here here we have a bear inside bar

closing there it's low we're still near

the moving average we're still in a bear

trend cell below bear bars here you

could sell blow this beer bar and take a

chance that we go further down and

sometimes it doesn't

you simply get out one tick above a bull

bar or if you want you could get get out

four or five ticks above the bear bar

and then look for the next cell

all right so we went to a new low here

but we went above the breakout point new

low here what about the breakout point

so we're stair stepping down pull backs

are going about breakout points and when

that's the case Bulls will buy reversals

up looking for a scalp so maybe you buy

above this and try to get a one-point

scalp to the moving average here we got

a second reversal here's the first and

then another pullback and then a second

a reasonable buy even though the bull

bars are not big we're stair stepping

down every time it goes to a new low at

rallies new low and rallies so you'd

expect a rally you might not want to buy

the first reversal appear after four

bear bars so you might not buy above

this but this is a second attempt to

reverse up so it's a reasonable buy

sometimes way

just grow and become bigger and this

became a bigger wedge so we had a wedge

here we had a wedge here and now we have

one two three a bigger wedge so nested

wedges that's a higher probability that

we'll get some kind of reversal up

another wedge here one to pause three so

we're probably going to get a couple

legs up reasonable to buy so even though

it's a bear channel traders can buy as

well as sell now I said bears will sell

when it gets up to the moving average

and reverses down lower highs lower lows

bear trend the mayor's they do not have

to buy back their shorts at a new low

they can continue to hold and just keep

tightening lowering their stops so if

you sell here you could put a stop up

there a new low here you could hold

short and put a stop above the prior

high that's a major high and as long as

it keeps holding below the prior major

heist the highs that led to new lows

it's a bear channel so you know trader

might sell for any reason here and just

hold short and put a stop up here once

it gets a new low you know lower the

stop so you can swing trade when I see

lots of reversals like this I tend to

scalp I tend to sell it gets a new low

I'm take my profits and if you get a

reversal up from a new low I tend to buy

so I tend to you know sell and buy and

sell and sell and then buy it again

alright so here we have a breakout we

have a series of beer Morris we have

four bear bars here we have seven bear

bars in the past nine bars beer bodies

it's a breakout but it's not a very

strong one we have one beer bar and then

a bull bar we have two bare bars they're

not big and then we have a bull bar we

have two bull bars here but tails below

we have a bear bar here but

follow-through is a bull bar so it's a

breakout but it's a weak beer break on

it still could be the sort of a bear

trend compare that beer break out to

this beer break

and what do you see you see no bull bars

you see boulevards closing very close to

their logos you see beer bars getting

bigger in size body bigger body bigger

you see beer bars closing on their lows

or near their lows this is a much

stronger beer breakout and it's more

likely to be leading to a bear trend for

the rest of the day sell below a beer

bar or you can wait until we're getting

it clearly a series of lower highs and

lower lows and once you see that you

have to bet it's going to go lower and I

might go lower all day any time you get

a reversal up you have to get you got to

bet the reversal is going to fail and

we're going to get a new low so you get

a reversal up you see a bear bar closing

on or near its low you sell you sell you

just keep selling blue bear bars

reversing down now you have a very

strong bear breakout and you're getting

lower highs lower lows or in the beer

trend what happens when you see a bull

bar trying to break to the upside do you

think do you think that bull bar is the

start of a bull trend what do you think

that's probably going to fail right

every time you buy somebody else's

selling right so that means when you see

a bull bar like this closing on its high

somebody's buying and somebody's selling

which one do you think is going to make

money the Bears are going to make money

and therefore if I see a bear trend like

this and I see a bull bar with a good

sized body closing on or near its high

at the moving average what am I going to

do I'm gonna sell alright so here we

have a very good bull bar another very

good bull bar another very good bull bar

am I'm gonna be selling them so as soon

as those bars close I'm gonna either

sell at the market I'm going to place a

limit order to sell at the close of the

bars it's counterintuitive you see a

bull bar and if you know hoping that the

Bulls are going to win but they're not

they're gonna lose so you know here you

get bull bars they're good selling

opportunities you know you're not

getting consecutive big bull bars

closing above the moving average you're

getting weak attempts to get above the

moving average so another way to enter

is in addition to selling with stops

below bear bars you can sell the

of bull bars at or just below the moving

average another thing to do is traders

are going to see the average price as

expensive the Bulls have bought don't

they're not expecting a bold friend and

they're going to be trying to exit

around the average price because they're

expecting the average is going to keep

getting lower and the Bears think that

the average price is expensive so the

Bears will sell around the average price

as well so another way to get short is

you simply place a limit order to sell

at the moving average or maybe a tick

below the moving average in case it it

doesn't quite get to the moving average

or doesn't quite get above the moving

average so it's a third way to sell in a

bear Channel gaps are closing we have a

breakout and that means it broke out of

something look to the left eye it broke

a little this and then we have a

pullback and the pullback went above the

breakout point even though it's a very

strong breakout the pullback went above

the breakout point all right what does

that tell you it tells you that a bull

who placed a limit order to buy at this

low

he got filled here if he was willing to

buy more a point or to lower and use a

wide stop was he was able to make money

so he takes the buy there he buys more

down here it gets back to his entry

price yes it immediately sold off

because all the Bulls were happy to get

out break even the Bulls have bought

over here but if he bought more lower he

made money here we have a breakout

series of beer bars it broke out of

something it broke below this looked to

the left and then look at the pullback

it went above the breakout point and

that happened all day long and therefore

the gaps are closing the gap between

this closed and the breakout point it

closed so Bulls see that and bulls are

buying at prior lows and lower and

making money so the Bulls will scalp for

example the buy and then the scale in

and buy more or lower by one point lower

two points lower by at the prior low and

buy more one point lower by the prior

low buy more one point lower by more one

point lower

two points lower confident that there

will be a pullback that will go above

the breakout point and that will allow

them to get out break even on their

first buy and with a profit on your

lower vice so in the exit on these blue

rectangles once it bounces back to the

breakout point so when you're in a beer

channel that is stair stepping down pull

backs going about breakout points you

can buy and make money even when the

sell offs look very strong so that's

another way to make money in a better

Channel

the pull backs are relatively small and

if the pullback is going to be small one

bar the Bulls cannot make much money but

they can make money so if you want you

can buy prior lows and scale and lower

and scout for money a lot of times if

you have a lot of two-sided trading a

lot of bull bars bull bars bull bars a

lot of reversal attempts and it's Ann

Arbor channel it will get some profit

taking late in the day the final our

file on and a half bulls making money

betting that break house will pull back

above the break on point and plus you're

getting bad follow-through barabar doji

bear bar doji whenever you see that a

Big Bear bar doji bear bar bull bar

whenever you see that I mean see bad

follow-through and the way down and a

lot of prominent tails then indicates

that the self has a lot of buying going

on and therefore it's more likely to be

a bear leg and what will end up as a

trading range sometimes you do not get a

bull leg in the trading range until late

in the day but whenever I see this kind

of a sell-off with bad follow through

after the bear bars and a lot of bull

bars and then a lot of bars with

prominent tails that's a very two-sided

market and the odds are you're going to

get some profit taking and some

conversion to a trading range later in

the day you do not typically get that

but you do get some kind of a rally some

you know may be the opposite of this so

a weak sell-off and then a weak rally

sometimes you'll get very sharp profit

taking like that

we have a weak sell-off bear bars having

bad follow-through lots of bars with

prominent conspicuous tails you're

probably going to get profit-taking

so you have to be looking for a reversal

late in the day here we try to get a

wedge bull flag here we try to get a

wedge bottom here another wedge bottom

three consecutive attempts at a wedge

bottom usually you're going to get some

kind of a reversal so you're looking to

buy a reversal up by above a bull bar

closing on or near it's high breakout

far above the beta Channel it's now and

always in long market it's probably

going higher and a bear bar late in the

day like that I would get out of my

lungs below any beer bar so I'd get out

of lungs their type air channel okay

very tight not much overlap between the

bars pull backs are small this is what I

mentioned earlier that sometimes you get

a perfect double top sometimes you'll

get a double top where the second highs

a little bit higher a little bit lower

but we have a bear friend here a

reversal attempt a second reversal

attempt both failing around the same

price double top bear flag and you could

also call it a double top major trend

reversal lower high major trend reversal

we had a bull trend

who knows what took place yesterday but

we're above the moving average and we

have a reversal down and we have a

double top and it's a lower high so it's

a double top lower high major trend

reversal and if you have a situation

like this where you think you're in a

beer trend and you have a double top and

then you get a bear bar around that

double top as soon as you see a bear bar

something something math mathematically

interesting takes place there's a 40%

chance that if you sell below a bear bar

at a double top in a possible bear trend

that you're going to break below the

neckline of the double top we have a

double top neckline 40% chance you'll

fall below the neckline for about a

measure move down here and ended up

falling much lower

okay now our limit order Bulls making

much money here

by and below that low no it's it's a

very tight bear channel it's a small

pullback bear trend and ten bars here

we've had one pullback and it's only one

tick this is an extremely strong bear

trend and very it's impossible for both

me to make money if the Bulls cannot

make money you have to be short you have

to be you have to be you have to be

selling for any reason it's not a strong

bear trend in here but now we're

starting to get here we got four

consecutive bear more so we have a one

tick pullback we have six beer bars no

pull backs it's a small pullback beer

friend a very strong bear trend and

therefore you got to be selling again it

continued down for the rest of the day

the pull backs are all small they're all

brief here it went up for two bars not

very far one bar couldn't even go up

here right small pullback bear friend

it's a very tight beer channel you only

want to be selling anytime and how do

you get short you know you see it you

see it happening and say oh my gosh you

know I can't make money buying um I got

to get short how do I get short easiest

thing to do is look for a bear bar

especially a bear bar closing on or near

its low and then place a stop order to

go short one tick below the low of the

bear bar

you want to bet on trend resumption down

when the trend is really strong and

let's say you've just watched all of

this happen and you said it's a smooth

this is what alcohols a small pullback

bears friend it's going to go lower I

have to get short what do I do you know

you can just simply sell it the market

you know if you sell at the market here

you can put a stop above this couple

ticks above that stop above that just

sell at the market and if you're really

nervous you know go to Walmart and place

your order place you stop you know go

out for a walking and come back in a

half hour yeah I talk about that in my

chat room all the time that if you find

yourself unable to stay in a position

but your mind tells you that it's a it's

a good trade you know just go out and

come back in 30 minutes go out and do an

errand

you know go to Walmart do something I'm

sorry what

Costco anything you know just you just

get you just get away from your computer

because you know it's a small pullback

bear trend it's a breakout on a higher

time frame that it's going to trade

lower or at least an hour to more maybe

all day and you don't want to be scared

out here's a bear reversal we got a tail

on the bottom of the bar it's reversing

I gotta get out no you don't get out you

stay short okay

a small pullback bear trend now and you

may not get remember I talked about an

irregular bear channel how you sometimes

get big bull bars at the moving average

you know I can't hear ya this is true

for every time frame if you notice I

don't have prices on the right and I

don't have times on the bottom and it's

for that very reason that it doesn't

matter what chart you know what market

doesn't matter what time frame doesn't

matter it doesn't matter you know daily

chart weekly chart you know this is a 20

bar exponential moving average but you

don't have to use that you know I had a

friend I traded with online for years he

used a34 a34 bar weighted moving average

and and I said why using that he said

I've done all this testing and this is

perfect its current matter you use any

kind of moving average just you know

just get comfortable you just learn how

the market tends to behave around

whatever moving average you use alright

so I was saying that when you're in a

small pullback bears friend you're

probably not going to get a lot of big

bull bars closing near the moving

average you may not even get bull bars

touching the moving average for a long

time so those other ways of shorting

that I talked about in a regular bear

channel you don't get those

opportunities when you're in a small

pullback bear trend like this all right

so you have to have other things to do

one thing to do you sell below bear bars

like you do with any bear trend also you

buy above bars there seems to be a sell

above any bar right so anytime

bar closes you place a limit order to

sell at the height of the bar all right

it's a small pullback bear trend so the

pullback will be small it might last a

bar or two sometimes three but it's

going to be small and it probably is

only going to last one bar so as soon as

you think you're in a small pullback

bear trend you place a limit order to

sell at the high of the pirate bar

another bar place a limit order to sell

it the high of that bar betting that

it's only going to go up a bar or two

and the very trend is going to resume so

you can sell below Bear bars you can

sell at the market you can sell at the

high of the prior bar and if you see a

bull bar sell the close of the bull bar

I mean the next bar might not go above

the height of the bar here we have a

bull bar next bar did not go above the

high of that bull bar so you just sell

every bull clothes these are all ways to

get short broad bear channel when the

bear channel has pullbacks that go

pretty much all the way up to the prior

high or near the prior high and you're

looking at it and you're not sure is

that a trading range is it a bear

channel at the end of the day you look

at it and say huh

we have a bunch of lower highs this high

went above that high but not above these

highs and this low is a little bit below

that this is a little bit below that

this is a little bit below that at the

end of the day you look at it and it's a

bear Channel but during the day for most

of the day it's also a trading range and

when you have a trading range that is

kind of tilted down I trade it like a

trading range so I want to buy low I

want to sell high and I want to scalp

here we got a bull break a pair of

consecutive bull bars but look what

happened a lower high and at the moving

average and the next bar reversed okay

at that point am i thinking this is the

start of a bull trend or am I thinking

it's not a bull trend and if it's not a

bull trend you have two things left one

is a bear trend and the other is a

trading range but with this much of a

rally if it is a bear trend it's

probably not going to be a strong bear

trend so that leaves you with a broad

bear channel okay

so once it's probably going to be either

a bear trend abroad better channel or a

trading range you start trading it like

a trading range and when you get beard

channels broad bear channels or trading

ranges there's one thing that happens

all the time and it's really hard if

you're starting out and that is the

market often looks strongest right

before it reverses down and it looks

most bearish right before it reverses up

so here look at the bull bars here and

then you get this bull bar so you get

the best-looking bull bar right near at

the top here too strong bull bars but

they weren't able to get above the high

here a huge bull bar unable to get above

the high it looks the most bullish at

this point but that's not you're not you

don't want to be buying we're still in

the trading range or still in the beer

channel and here we have a huge beer bar

and you're thinking wow it's really

bearish now but is it what will the

follow-through look like we're at the

bottom of a trading range and you have

to realize that trading ranges are

constantly trying to convert into trends

so near the bottom you tend to get a big

bear breakout but you have to bet the

breakout will fail when you get near the

top you're probably going to be getting

a strong bull breakout and you're going

to look at anything oh it's going to be

breaking into a bull trend until it has

clearly broken into a bull trend you

have to assume every breakout attempt up

and down is going to fail so channels

tend to look most bullish right before

they reverse down and most bearish right

before they reverse up Laura

lower lows so it's a beer channel but I

would still look to sell when the market

is high and by when it's low and

sometimes the self is really strong when

that's the case we have three beer bars

here instead of buying the first

reversal up wait for a second reversal

up and buy their same here you might you

might buy that if not you could wait for

a second reversal up or wait for two or

three full bars and buy above the second

bull bar way down like this you're not

sure is this beer bar a pullback from a

new bull trend here or is it a failed

breakout and the start of a bear trend

well you could sell below it or you

could wait for a second sell a double

top a lower high double top a little bit

of a wedge okay so a double top that

means it's the second sell you could

wait for that high to high one first

reversal up a second reversal here you

get a wedge even though it's a first

reversal down it's a parabolic wedge

first reversal up second reversal up

above that bull bar another wedge one of

the point about these channels is it's

really frustrating because you're

looking for textbook signals you're

looking for really good signal bars

you're not going to get them one of the

hallmarks of a trading range is

confusion and that means nothing ever

looks right

you see bull breakouts they reverse down

you see signal bars that they don't look

quite good enough all right that's just

the nature of trading ranges and if you

know if you're not comfortable taking

the entries don't worry about it and

just don't trade it but every now and

then you'll get one that looks pretty

good here our second reversal up that's

pretty good it's probably not going to

lead to a trend it's probably going to

be a leg in a trading range so you take

the Buy and then you take reasonably

quick profits so I talked about four

types of bear trends bear channels very

tight no pull backs a micro channel you

only want to sell it's a bear breakout

on a higher time frame chart the next

strongest type of beer channel is this

the pull backs are small and brief only

one to three bars

they do not go up very far and on a

higher time frame chart this is also a

breakout so if you looked at a 60-minute

chart of this it would be a series of

bear bars closing on or near their lows

and if it's a strong bear trend on a

higher time frame chart on this chart

you only want to sell so a microchannel

no pullbacks only sell a tight bear

channel a small pullback bear trend only

sell and then your typical type of bear

channel where pullback school book

breakout points it's easier to make

money selling but you can also buy you

can buy with limit orders or you can buy

with stops on reversals up and finally a

broad bear channel where it looks like a

trading range and it's in a trading

range for a lot of the time you can buy

or sell I began by talking about what a

better channel is lower highs and lower

lows I then talked about the ordinary

type of bear channels where pullbacks go

above the breakout points and you can

make money buying and selling next I

talked about very tight beer channels

either micro channels or small pullback

bear trance you only want to sell and

then broad bear channels which are

basically trading ranges that are tilted

down you can buy and sell okay does

anybody have any questions about

anything yeah no they're they're not

enough retail guys out there okay you

know you and I are totally unimportant

we cannot do anything we cannot do

anything that will do anything on that

chart all of us together could probably

not make the market move right you know

you know we're just too small and

insignificant so what you're saying is

well how the heck do you get who's

buying up there all right everything

who's you know you get that bull bar

closing on its high right at the moving

average somebody had to take that buy

right in my opinion is it's

high-frequency trading firms looking for

one tick profit

right so it gets if if you look at that

bull bar closing on or near its high if

you looked at maybe a one-second chart

or even a tick chart you know I see two

three four ticks up up up up up right a

high-frequency trading firm is going to

see it went up with no pull back up

without pulling up with no pull back

it's gonna keep buying it's gonna do

exactly what I'm talking about but

they're doing it on a chart there's one

tick instead of a chart that's five

minutes so you know it goes up up up up

they're gonna buy the market buy at the

market buy at the market until there's

finally a tick down and then they sell

well every institution is using

something different you know you have no

idea what they're doing right and you

just don't to me I'm just looking for

some measure of what is average and on

the 5-minute chart for me I think the

twenty bar exponential moving average

works pretty well but if you put up any

other you know some people use a ten a

bar exponential moving average some

people use fifteen some people use

simple moving averages waiting moving

averages and they all are kind of about

the same some you know sometimes you on

the 5-minute on the 28 bar exponential

moving average you'll see the market

reverse down from below the average

other times to see it go above the

average or guess what if you were using

a 30 bar simple moving average those

might be perfect tests on some other

moving average right so on with my

moving average you know something

sometimes it goes a little bit above

sometimes a little bit below if you look

at some other moving average my

imperfect touches could be perfect

touches so it doesn't matter which one

you take you know

right for example if you're selling at

the moving average you all right and you

know the movie and you depends expensive

which moving average you use I don't

think it matters because no matter which

one you take if you're selling in a bear

trend you're going to put your stop

above the most recent low or high and

you know so it okay I'm getting kicked

out right but it doesn't matter we

should thank

[Applause]

you

[Music]