AIL after 3 bear bars

Looks like it's a similar setup to the prior one. A wedge bull flag with a HL in a bull channel.

Thanks Andrew!

So if I understand correctly because of the location, and as we had a lot of reversals previously, one bull bar is enough to make it AIL?

That is my best guess as to Al's thinking. Personally, I would want to see more buying pressure even though the selling decreased dramatically in the prior bear bars.

Wedge Bottom and Reversal bar - that's seem to be the BTC bread and butter setup, no? Could be wrong.

there are indeed 3 pushes down, however I don't think I have seen Al talking about wedge bottoms that are upward sloping?

Matthias it might look like this, no?

Hi Matthias,

Al's green text at top right talks about reversals from climactic selloffs on the open potentially lasting all day. So that could've been his overall bias for the day to at least reach HOD. 

Some other reasons I can think of to go long there in hindsight are:

1) Higher highs 1,2,3,4 all day

2) Fits well with bull trendline below

3) Tested BO and support level (purple)

4) If the day is a big ascending triangle (with yellow) then there's a higher probability of a BO attempt to be to the upside.

I don't think of every box that Al puts on the EOD review as an absolute you must've seen it and taken it if you want to be a good trader. They are more like exercises that challenge traders to think about why it's reasonable and how they would manage it if they took it.

In this case, I would first ask if it's a scalp or a swing to buy above that bar? Al doesn't label scalps on these charts so it's a swing. But also because it's not a high probability trade. There was no strong bull BO preceding it, in fact this is buying against 3 bears. But they're bears decreasing in size and into multiple levels of support with a bullish bias on the day. For a swing we need at least a 1:2 RR which seems to fit here before reaching prior swing highs (above which there are likely to be sellers).

In terms of management after entry, I would move my SL below the entry bar after it closes, or definitely after the next bar closes creating a micro gap. That gap was a good sign for the bulls and this is not an area of the chart where I'd want to see price meander. This setup needed to work immediately and for the bulls to strongly reject the 3 bear reversal attempt, so my stop would be tight.

Hope this helps,
CH
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Hi CH

That's a great answer, many thanks!

Thinking about it now, it makes sense to see it an an upward sloping channel (e.g. an upward sloping trading range) where it make sense to quickly reverse (that is go long) at support, or above a h1.

Cheers