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Hi All,
When market has an opening reversal the size of the initial wrong move is significant.
It determines what will happen next.
I am having doubts with regards to this statement by Al on Opening Reversals.
How do I know that a particular move that happened is the initial wrong move?
For example, if the market gaps down and first bar is a bear trend bar, and then it is followed by bull bars, how do I determine which of the moves is an incorrect move?
Should I wait for one move to reverse completely or is there some other logic?
Thank you in advance.
Here's the answer that you don't want to hear: Trading is very gray.
The initial wrong move isn't determined until after the fact. Your job is to make calculated bets on what's happening in the moment...then adjust and manage after you're in the market. YOU have to determine what patterns/setups/price action will constitute holding or exiting early. The course won't do this for you. It's A LOT of work.
The best approach for me is to back test what Al says and how he has marked past charts. Then review and make my own determinations of what I interpret. You'll see "similarities" but never the exact trade twice.
Hi Omkar,
How do I know that a particular move that happened is the initial wrong move?
I think the key is to watch for moves on the open that "attempt to trend", like two or more strong cc bars, or one huge bar, or something that sets BTC or STC. Basically a breakout. And when that kind of move gets reversed off some S/R level then Al shows that there may be potential for a big move in the opposite direction.
So the market has to attempt to trend on the open, if the open is just a bunch of overlapping dojis then there's not much to reverse since the whole thing is reversing already on every bar.
Hope that helped!
CH
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