Always in Confusion

Hi w,

That's yesterday's chart from Brook's Encyclopedia ... Overall day is trading range day, that had moves within.

P.S - today we had a strong bull move, which might end up being a bull leg in wider trading range

Great markup!

So in that example, is the market always in a trend or TR?

Also, can the market be always in Long/Short within a TR?

🍹 🍕 

W, always in, I am going to revisit that section in BTC course once/few more times more for sure.

"Always in" might suggest few things:

1. Entering a trade based on technical analysis such as:

a. failed breakout from range boundaries

b. other form of failure and measured moves

c. swinning for 2 pullbacks 10 bars (if not mistaken)

d. scalping knowing it's a trading range

2. Technical analysis might change during the course of action, that might mean the "Always In" in one direction might suggest switching the directions.

All in all - we could be "Always In" all day long but not necessarily in one direction  

Could be wrong.

Experts, please verify:

Always in is a concept for strong trends only, and is useless in a TR.  (Broad channel is sloped TR)

Always in always begins with a Breakout (Trend Bars: 1 Big, 2 Medium, 3+ Small).

It is recommended to enter ASAP after Always In BO is identified.

After BO stage, "always in" (Trend) is identified and recommended to enter on PBs.

Channel eventually evolves into TR, and always in becomes useless again until TR BO + FT.

Hey w,

You are correct in general, but not for TRs.

Always In has 2 broad uses:

1. If you want to enter a trade right at this moment, which direction is easier to make money? This generally means which direction has more probability for a profitable trade (swing or scalp). For this, you look for the most recent BO like you said.
2. If you (almost) always want to keep an open position in a market all day long, which direction should you enter as #1, but also when to exit (to possibly reverse or to enter again for a resumption).

In a trend, AI is obviously in the direction of the trend most of the time, until:

1. you see a major HL/LH getting broken with follow-through, in which case you are either in a TR or in the opposite trend. You may need to see a few bars to determine the new AI direction.
2. you see 3-5+ consecutive strong trend bars against you. This will make the AI direction reverse at least temporarily, especially in weak trends (broad channels). As in #1, unless a major HL/LH is broken, the overall AI direction is still valid. In such a case, you can hold and rely on your stop because the trend is still valid, or you can exit right now and look for a PB to re-enter.

In a TR, AI can be useful if the range is broad i.e. the legs inside are big enough. You trade them as trends too, so see above. If you cannot make an easy decision for the direction of the AI in a TR, then look a bit far left to find the last clear AI direction and look to enter in that direction for a possible resumption. You stay in the trade until there is a clear reversal against you, which is the TR getting a successful BO against you.

If you have a successful BO from a TR in either direction, then AI is in the direction of it.

Much appreciated. It looks pretty straight forward, I think I may be hung up on some of the wording.

Is this accurate?:

• Market is either always in long or always in short (never both)
• Market is either always in a trend or always in a TR (never both)

How do we account for the trends within a TR? (we would say "it's always in long, but it's a leg in a TR, not a leg in a Trend)

Also, are those 2 decisions the only 2 decisions in the entire strategy ? (Trend/TR) (Long/Short)

Reversals book, chapter 15:

"Always in is a swing concept that applies to trends, and is dangerous within trading ranges, where it is better to scalp and buy low and sell high."

"What constitutes a strong always-in market? Since always in can occur only when there is trend or at least a potential trend, look for the signs of strength in trends and reversals. The more that are present, the more likely you will make a profit. An obvious one is a strong spike, especially if it lasts for several bars."

"At any moment during the day you might decide that there is clearly a trend or that there has been a clear reversal. You need one or both for any always-in trade"

Al's explanations on Always In aren't as clear as they could have been I think, so the confusion is normal. I had it too in the beginning.

It is correct that Always In is generally for swings. You look at the market and just enter in the "correct" direction and that's it.

Yes, a market is either AIL or AIS, and yes a market is either in a trend or a TR. The thing is though, everything, including the AI direction, trends and TRs, depends on the TF.

So, back to my previous example. If you are in a broad bull channel, by definition it means that the channel lines are far enough apart for scalps in both directions. Your AI direction is obviously long because the market is making higher highs and higher lows. All good... but all of a sudden you get a big bear bar closing near its low and it gets strong follow-through, let's say a couple of bear trend bars.

Now you can say that AI direction has changed and it now AIS because bears have the control of the market, at least for the time being. Yet, you are still in a broad bull channel and a major higher low hasn't been broken yet, so what do you do?

There are some reasonable choices:

1. You can say "Meh, this is a strong move against me but it is still just a PB because the trend is weak, therefore the market is AIS only temporarily. I don't care and I'll rely on my stop". If the market doesn't break a major HL against you and hits your stop, you are golden. The downside is, if you lose, you lose more than any other alternative below.
2. "This bear BO is strong, so I'll exit (with profit/loss) for now and will watch the market for a resumption of the bull trend to enter again". You do this to pocket at least a small profit or avoid a bigger loss, but the downside is the bull trend can resume soon and you might have trouble getting back in (long). You've lost profit and maybe you took an unnecessary loss too.
3. "Meh, life is too short to rely on stop, I'll exit and join the bears for a scalp". Why scalp? Because you are in a bull trend and any short has to be scalp because you won't have enough room and opportunity for a swing. This choice is only valid if you think market will go down at least for a minimum scalp. It may or may not and you might find it difficult to get back into the market (long).

Why are all these choices reasonable? They consider different TFs actually. Anyone who exits longs in this case prioritizes a possibly short move (a temporary bear BO in a bull trend) i.e. a LTF over the longer move HTF (the weak bull trend).

Hope this helps.

Respondido por: Khan

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So, back to my previous example. If you are in a broad bull channel, by definition it means that the channel lines are far enough apart for scalps in both directions. Your AI direction is obviously long because the market is making higher highs and higher lows. All good... but all of a sudden you get a big bear bar closing near its low and it gets strong follow-through, let's say a couple of bear trend bars.

Now you can say that AI direction has changed and it now AIS because bears have the control of the market, at least for the time being. Yet, you are still in a broad bull channel and a major higher low hasn't been broken yet, so what do you do?

I think he designed this to be a binary decision tree. The gray area is broad channels which can be traded either way. As far as I can tell, Always in Direction is irrelevant in TR.  Once in TR, then BLSHS.