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Hello everyone,
I'm going through the bonus videos (completed the fundamentals and how to trade PA).
And there is something that really caught my attention at 33:01. Why is bar n°4 H1 bar ?
In my comprehension, let's pretend we have a bull trend. The bar 3 is a PB bar (went below the low of the prior bar) and at the same time went above the prior's bar H. So became buy signal bar. Since it's a bull bar closing nearing its high = OK to buy above and therefore it'll potentially become H1.
Then we have bar n°4 that is a bear bar, closing near its low. because of its tail on the bottom, with bar 3 they are micro DB. But this is not a signal bull bar (because it's bear closing near its low). The only situation in which bar 4 can be a "bad" buy signal bar is if it closed above its mid point, and then we broke above, that would make it H1, which is not the case here.
Since I am definetly missing something here,If anyone can help me please I would really appreciate.
Thanks !
Every bar whose high is lower than the previous bar is a potential H[n] candidate, whether it is a bull bar or a bear bar. If the next bar goes above this bar, then the H[n] has triggered. So in this case bar 4 is a H[n] candidate because its high is lower than the previous bar 3 [Plus its an inside bar. All inside bars are H[n] and L[n] candidates]. Al has marked bar 4 as a H1 because its coming after a new high on bar 3. If a bear bar is a H[n] candidate and gets triggered, its considered a bad buy signal bar( you usually want bull signal bars) and vice-versa for the L[n] case.
Thank you Rajesh
