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Hi - In the glossary the definition for H1, 2, 3 is such: A high 1 is a bar with a high above the prior bar in a bull flag or near the bottom of a trading range. I'm getting confused because in this video and previous videos, Al labels a signal bar in a Bull Flag as H1, but it's DOES NOT have a high above the previous bar high. This is confusing me throughout.
The bar with a high above the prior bar makes the prior bar a H1. The bar with a high above the prior bar is actually the entry bar for the H1 signal bar. Does this explanation clarify it?
@ludopuig - I believe that confirms my understanding. Labeling the bar H1 that is not actually the high bar is what has been throwing me off.
Not sure but long ago I read, or maybe listened somewhere, that at first Al was pointing out the trades using the entry bar, not the signal bar, which would be the reason for the definition in the books that is giving you trouble… maybe @richardhkbtc-com can tell if this is true or just something I dreamt about.
Not sure but long ago I read, or maybe listened somewhere, that at first Al was pointing out the trades using the entry bar, not the signal bar, which would be the reason for the definition in the books that is giving you trouble… maybe @richardhkbtc-com can tell if this is true or just something I dreamt about.
Yes, Al has certainly said this several times in the past. Not dreamt up! But do have to say that Al is very creative with his bar counting which can cause confusion. So do not get too hung up on being exact with pullbacks. The strict definitions for H1/2 and L1/2 does not always have to apply to all pullbacks in my view, so be creative like Al himself. 🙂
Just to clarify my understanding.
H1 bar is a bar in a bull trend. It is the call to action bar. Or signal Bar. So if we have 2 bars down then a bar closing higher then this is H1 Signal Bar. This is also called a Bull Flag. But I prefer H1 as it is more specific.
When H1 connects to H2 and H3 in a series of signal bars - then this pattern forms something that can be called a wedge? is there any other name for this?
Thanks a lot.
H1 bar is a bar in a bull trend. It is the call to action bar. Or signal Bar
Yes!
So if we have 2 bars down then a bar closing higher then this is H1 Signal Bar
No, the bar trading higher (no need to close higher) is the Entry Bar, and the previous bar is the Signal Bar.
When H1 connects to H2 and H3 in a series of signal bars - then this pattern forms something that can be called a wedge? is there any other name for this?
Yes, a H3 is a wedge. If it is horizontal, you can call it triangle.
In the Brooks Ecncyclopedia of Chart Patterns Sampler (under "Learn to trade" tab) there are several slides about bar counting (slides 19-27). In there, Al is highlighting the signal bar, check them out!
Why is it that the H1 entry bar is not also considered the H1 signal bar? Isn't true that the H1 signal would only exist if the H1 entry bar exists? Without the entry bar, there would be no signal bar - how could a signal signal something if the signal requires a subsequent action to happen before the signal can signal something?
lol sorry I'm so confused! I know you guys also said to be creative with it and not super strict with labels, but I'm learning and just want to make sure I understand fully before I assume I understand and move on.
I've read through the forum a few times, watch bonus video 6 from 15mins and on, looked at slides 19-27 on the encyclopedia sampler page.
I think I'm following the point - buy above the high of the prior bar in the PB during a strong bull trend/channel. But the signal part is messing me up.
Why is it that the H1 entry bar is not also considered the H1 signal bar? ...
How can the entry bar also be a signal bar if it has not closed yet? Entering the trade happens after we get a confirmed signal, right? So that signal has to be firm, not something still in progress.
Lol duh! Thank you! I think I was also unclear with my definition of a signal bar.
Now I am thoroughly confused about the H1 / L1 (and 2, 3, 4) labeling. I see your comment above about not being strict with the placement and definition of these H1 and L1.
Is my thinking correct - in a Bull Trend, the H1 is the 1st PB leg, and the first bar that resumes the trend is either a signal bar or entry bar (depending on the preceding bar)?
If the trend resumes after the H1 leg with a bull bar, that bar is the signal bar and we could/should buy above that signal bar on the next bar? (it would make sense to me to wait for a 2nd signal, unless the original bull trend was strong)
I think of h1/and entry bar as one unit- h1 entry unit , h1 signal bar is the first bar where the low is below the prior bar and the following bar goes above this signal bar , when you see this unit- I consider it as h1 entry unit - the prior bars in the bull flag, up to the signal bar also have lower lows , but the signal bar is followed by a bar with a higher high. can use the same principle for h2 entry unit etc
This is essentially the rationale that I came to as well - thank you!!! This is SO exciting!!
