BTCUSDT 2022/09/17 Asian Open

I was waiting to get short and totally obvious to the fact that it was a DB 1 7 near MA, 2CCBLB1C, strong signal bar COH.

It was a micro-pattern, but sure, what you said is correct. More importantly, 6 was the only strong bear bar in the rally - meaning tight channel.

Additionally, FT to 6 was a bull doji.

I also missed the fact that 7 tail bottom tested the 2 C, meaning BR exited there. I marked the 2 C level beforehand, but still missed it in realtime at 7 😢

While it makes sense to think of both the sides, could you explain as to why bears would short on 2C?

Al said traders need to be mentally agile, keep thinking of both the bull and the bear side. I have yet to learn that.

After a lot of time spending doing just this, I have finally been able to classify this as among the "doing stupid things". I stay conscious in not jumping to conclusions and make mental statements like - "this is how the market will play out" and let the market show me what it is doing. It really helps in identifying what the stupid things, like Al says you're doing and stop doing those stupid things.

Also, just a note - 1,3,5 is a wedge sure but wedge in a tight channel usually leads to a small TR and then trend resumption, not reversal.

I have been practicing for a long time and I make a summary of how the market should have been traded, how I did trade it and what mistakes I made. It usually comes down to you, as to what you did and how you can get better. You know your problems best as compared to suggestion from others.

Hi,

More importantly, 6 was the only strong bear bar in the rally - meaning tight channel.

That’s an interesting way of detecting tight channel and make sense too. Thanks!

Additionally, FT to 6 was a bull doji.

Yeah, I noticed that but placed no emphasis on that at the time 😥 

While it makes sense to think of both the sides, could you explain as to why bears would short on 2C?

My thought was that it was the lowest close so there was bear shorted there. However, Al said he paid attention to the lowest strong close and 2C was not very strong. So maybe my thought was not very good?

Also, just a note - 1,3,5 is a wedge sure but wedge in a tight channel usually leads to a small TR and then trend resumption, not reversal.

That makes senses. But I saw the bigger context was that price was at a resistant level, 6 broke this blue TL, TR PA so far. So possible DT 2ES at the resistant level. Disregarding the DB near MA which I missed, is that a real possibility or am I mistaken?

Thanks for your sharing other thoughts and experience as well!

Yeah, I noticed that but placed no emphasis on that at the time 😥

I've noticed how important FT is, if you spend a lot of time looking at markets real-time - you'll see FT is just as important a piece of information the market is providing so ignoring it is not a good choice.

My thought was that it was the lowest close so there was bear shorted there. However, Al said he paid attention to the lowest strong close and 2C was not very strong. So maybe my thought was not very good?

This is something I am still not very good at - I still struggle a bit with bar-by-bar PA analysis, but to my knowledge (as Al shares) - selling above a bar which is a bad buy signal or buying below a bar which is a bad sell signal makes sense. I'm not sure what importance to attach to 2C - maybe some expert can weigh in on this.

Al said he paid attention to the lowest strong close

Yes, that is in a different context I think - during STC markets to see what bears are doing. I don't think this applies here. Also, like you said, 2C is not a strong bear close.

But I saw the bigger context was that price was at a resistant level

Resistance means brief pause (PB) or reversal, and not necessarily reversal. DT sure, but I think it is important to pay attention to the fact that market is not showing the same PA behavior as it was showing on the left (TR behavior). Also, if was, I think you would've been better equipped to expect a 2nd leg trap - not something you have here.

Disregarding the DB near MA which I missed, is that a real possibility or am I mistaken?

Again, the DB MA is there for sure, but it is a micro-pattern. It tilts the probability slightly more in favor of the bulls in my opinion. The more important thing is, the much more major context - market is breaking out in a tight channel after TR, changed PA behavior, the first break of a steep TL will not get you a reversal. Remember the market cycle. Also, when getting TR and confusion - look at the last time the market was clear - the market was clearly AIL, it still was here. Strong bulls would buy PBs especially when there was absence of strong bears.

But is selling below bar 6 (stop sell on bar 7) still a reasonable sell (scalp) even though it failed.  Since for bear augments:

- Wedge at 6

- failed BO previous top at 5 closing below

- DT

- big bear bar closing near low (trap)

But is selling below bar 6 (stop sell on bar 7) still a reasonable sell (scalp) even though it failed

Scalp needs high probability; selling below bar 6 is not 60% even by a long shot. You can argue for a swing short (which I won't as the market is trending up and it is much easier to make money buying rather than selling, but just for argument's sake).

When the market is racing up in a tight channel, even if the bear case is good, I would wait for at least a 2nd entry (not here). I would certainly not sell below a huge bear bar (high risk + low probability = perfect trap).

Market on the above chart is in a broad bull channel or you could argue in a TR (which I don't think is the case as it still didn't have a strong break of a major HL). So, some bears might sell above the previous buy climax high willing to scale in higher (at least 2-3 times the size of a minimum scalp) and hope that they will be able to get out breakeven on their first entry and on a profit on their second entry. However, this is for expert traders and not beginners. They won't be able to manage the trade if the premise becomes invalid (or purely due to lack of skill) at some point and will end up with a huge loss (perhaps due to mismanagement).

Once, these bears see the FT as a bull doji - I think many of them will exit their short with a small profit as they see the market is moving up in a tight channel (essentially BO on a HTF chart).

Beginners, on the other hand would be better placed swinging on the move up rather than looking for countertrend moves and a reversal (as they usually do to minimize their stop and entering on low probability trades) which will eventually lead to death from a thousand paper cuts.