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According to Al, a pullback lasting more than 20 bars is typically considered a trading range. In a bull trend, if the bears create a 2-leg down movement lasting about 10 bars and the bulls resume but fail to make a new high within the next 10 bars, can this situation be classified as a trading range instead of a pullback?
Would like to check if I had bought at the bottom (in the first highlighted box), should I consider it as a trading range trade whereby I BLSHS or a pullback trade whereby I should have maybe held for a swing?
Thank you in advance
Hi Joshua, check out my 2c as far as reasoning for taking that bull setup you ask about. Could be wrong.
Hi Joshua,
I think the more immediate price action takes precedence. This pullback, even though 2 legs and didn't break prior major HL, lasted too long to be a healthy PB in trend and devolved the trend into a trading range (imo).
In fact, when the move (A) - (B) went above 50% of the prior bear leg I would've already been thinking TR and drew the box. It was too much of a BDBU as well. When bars become climactic but don't have good FT it's a bad sign for trend traders.
Another thing to consider are trendlines. Without more information to the left it's hard to tell if we're in a spike phase or channel phase of the trend, but let's say we consider the red line to be the current TL of the bull trend -- it was broken at (A) so we can assume TR now just to be safe.
Hope this helps,
CH
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Thanks for sharing what you think happened on the chart, I've always wondered if others are seeing the same as me or if I have been labelling certain patterns wrongly and this is really helpful. Appreciate it 🙂
Hi Joshua,
I think the more immediate price action takes precedence. This pullback, even though 2 legs and didn't break prior major HL, lasted too long to be a healthy PB in trend and devolved the trend into a trading range (imo).
In fact, when the move (A) - (B) went above 50% of the prior bear leg I would've already been thinking TR and drew the box. It was too much of a BDBU as well. When bars become climactic but don't have good FT it's a bad sign for trend traders.
Another thing to consider are trendlines. Without more information to the left it's hard to tell if we're in a spike phase or channel phase of the trend, but let's say we consider the red line to be the current TL of the bull trend -- it was broken at (A) so we can assume TR now just to be safe.
Hope this helps,
CH
__________________
BPA Telegram Group
Thanks Carpet for pointing out the BDBU move, I actually did not notice it and I realise that I should have suspected a TR way earlier (if I remember correctly, I only suspected a TR when there was a TTR around the EMA). Appreciate you sharing 🙂
Hi Joshua,
I think the more immediate price action takes precedence. This pullback, even though 2 legs and didn't break prior major HL, lasted too long to be a healthy PB in trend and devolved the trend into a trading range (imo).
In fact, when the move (A) - (B) went above 50% of the prior bear leg I would've already been thinking TR and drew the box. It was too much of a BDBU as well. When bars become climactic but don't have good FT it's a bad sign for trend traders.
Another thing to consider are trendlines. Without more information to the left it's hard to tell if we're in a spike phase or channel phase of the trend, but let's say we consider the red line to be the current TL of the bull trend -- it was broken at (A) so we can assume TR now just to be safe.
Hope this helps,
CH
__________________
BPA Telegram Group
Hi Carpet,
Regarding your earlier reply, I would like to check if this could be interpreted as a BUBD move, hence suspect that the market could be in the early phases of transitioning into a TR?
Thank you
Hi Joshua,
I don't think this box works well for a BUBD. The bull move after the big bar is no more bigger or climactic than the bull pushes before it, and there wasn't much of a bear move to call big either. However, the single big bull bar itself (arrow) bigger than all the other bars in the trend (and the fact that it had bad FT) suggests possible climactic exhaustion and a high chance of leading to 2LSD (2 legs sideways to down) which is essentially a TR. So the moment you see such a bar and bad FT you can already start drawing a box.
Hope this helps,
CH
Hi Joshua,
I don't think this box works well for a BUBD. The bull move after the big bar is no more bigger or climactic than the bull pushes before it, and there wasn't much of a bear move to call big either. However, the single big bull bar itself (arrow) bigger than all the other bars in the trend (and the fact that it had bad FT) suggests possible climactic exhaustion and a high chance of leading to 2LSD (2 legs sideways to down) which is essentially a TR. So the moment you see such a bar and bad FT you can already start drawing a box.
Hope this helps,
CH
Thanks Carpet for your reply, it definitely helped clear some confusion I had. Appreciate it
