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1. Are we not in a trading range before that? Example> Small green box or large green box
Are we in a trading range in the small green box?
The small green box is a small trading range. On the bigger context - the context of this chart, it's a bull flag (possibly final flag).
Are we in a trading range in the large green box?
'Not really', we're in a weaken bull trend, possibly a broad bull channel. Both of them have trading range characteristics so 'kinda yes'.
2. Does the break below the major higher lows seem more like a trading range or a bear breakout, always in short?
It's a bear breakout definitely, but remember what Mr. Brooks say about bear breakout in trading range, "80% breakout fail", right? So I think in this case it's more likely to stay as a trading range. We could be setting up a H2 buy signal bar on the next bar, also a wedge bottom (different ways to draw a wedge) for a reversal up, and we have a broader trading range. The H2 could also fail and one more push down so we have a nested wedge, spike (the 5 consecutive bear bars breakout) channel. And many such scenarios...
However, even though less likely, the possibility that it's a bear breakout is very real (for example, consecutive bear bars being printed next). We need to read and adjust our expectation as price unfold.
This explanation is after the fact and as we get closer to the right edge he gets less "descriptive" of what will happen.
W is right. You can explain it away in Brooks terms but it 1) Doesn't actually mean anything because it's already happened and 2) HOW ARE you to trade it profitably REAL TIME? Seems we are all hung up on predicting where the market will go.
I want to know how to trade profitably. Not how to enter. Anyone, literally anyone can enter a trade. Even if they took ONLY Brooks entries they could easily NEVER make money.
The small green box is a small trading range. On the bigger context - the context of this chart, it's a bull flag (possibly final flag).
Small trading range- agreed
Bigger picture- the first bear bar in the small box is a 20 bar pullback. Doesn't that indicate the preceding bull trend is over and it's 50/50 bull/bear?
Not really', we're in a weaken bull trend, possibly a broad bull channel. Both of them have trading range characteristics so 'kinda yes'.
The large box looks like Broad Bull Channel at minimum. Almost completely sideways.
My main point is when the bars unfold in real time, it looks like the trading range starts in the small box- 20 bar Pullback. That could be 50/50 bull/bear probability.
I'm just going through the course right now, so I don't know, how valid my interpretation is - but this is how I see it:
First, there was an uptrend. Then it shiftet to sideways, but the market never went below the last major higher low. The level of the major higher low was then tested several times. Finally the bulls at this level were weak enough for the market to go below that MHL. There weren't enough buyers left at this level. Before that break of the last major higher low, the probability of continuation of the trend might have been still slightly higher than a move down. On the other hand, the final bull flag was also a TR and since it went on for so long, chances of continuation vs. BO to the downside might have already been 50:50 at that point.
