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Dear Price Action Traders,
I have one query. Al mentions that any range lasting more than 20 bars is considered as TR rather than PB in original trend. He also gives insight that TR in lower TF can be PB or even BO in larger TF charts. In that context thus, does it mean 20 bar range definitions applies only to 5 min TF charts.
Thanks in advance!
Amol
Al mentions that any range lasting more than 20 bars is considered as TR rather than PB in original trend.
This is valid for every time frame.
He also gives insight that TR in lower TF can be PB or even BO in larger TF charts.
Yes!
In that context thus, does it mean 20 bar range definitions applies only to 5 min TF charts.
Nop. You need to trade the chart in front of you, if you have a sideways move bigger than 20 bars in your time frame, this is probably a TR so you have to trade it accordingly. It doesn't matter if it is another thing in another time frame, you trade the TR in your chart, whatever time frame you are using, not only the 5 min.
If you have a sideways trading range of 20+ bars think of it as BO mode, however as each bar gets added, the chance of a bull/bear breakout becomes closer to 50/50. With that said the trend prior to the Trading Range takes slight precedence but be prepared for a break out either direction.
Timeframes are fractural, 5 min chart has the same readability any higher timeframe, everything you generally need to see can be seen on a 5 min timeframe though.
Nop. You need to trade the chart in front of you, if you have a sideways move bigger than 20 bars in your time frame, this is probably a TR so you have to trade it accordingly. It doesn't matter if it is another thing in another time frame, you trade the TR in your chart, whatever time frame you are using, not only the 5 min.
This is difficult to understand. If higher TF has a strong breakout where current TR is only a pullback, and on that TF the resumption of the trend is more likely, then how can it be that on lower TF where TR is >20 it is 50/50?
The breakout is 50/50 on the STF, but that doesn't mean the breakout will go far against the HTF direction. My understanding is that even though the BO could go against the HTF direction on the STF, it could still end up reversing after a brief move and still look like a regular PB on the HTF.
Actually there was an elaboration couple of videos later, where Al talks about how continuation to the higher TF direction is still more likely (i.e. not 50/50 but 53/47 as he says it).
