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In video 32B (and I'm sure it's mentioned in other videos as well), Al mentions that a TR is a Limit Order Market and that therefore selling at the bottom or buying at the top (with a Stop Order) has a low probability (80% of BOs fail), bad risk (other side of TR) and reward is not mentioned (but it could be for instance a MM of the height of the TR).
Doesn't this mean that for example a Limit Order trade at the bottom of a TR has great Risk/Reward (Risk is a bit below the bottom of the TR, which is very close, Reward is near top of the range, which is often a few times risk if it's not a TTR) and great probability (80% of BOs fail). Isn't this almost a perfect trade then, or am I missing something?
Fading those failed BOs are great scalp trades but the risk and reward are not those you are saying that would create, as you very well saw, a perfect trade.
Risk: you need a wide stop because you never know in advance where the TR's bottom is. If you use a tight stop, bears still have only a 20% of having a sucesfull BO below the TR but you don't have an 80% because it can easily have another leg down before turning up.
Target: usually is the middle of the TR because many times just there it bounces down. Yet, if you get consecutive bull bars COH you can increase your profit target but when you are scalping is difficult to take those decisions in real-time so most of the time is better to take the profit and wait for the next trade.
