Different types of breakouts

Hi Eric,

I have also encountered many times throughout the course with such "inconsistencies", in a slide you can see that it is showing you a good buy entry because there is a wedge, and 5 videos later, you see the same slide and in the same place it shows you a sale for a BO.

The only thing that I have learned from this to understand why these things happen, is that Al is probably trying to teach us something in particular, for example, if it is a BO chapter he is only going to talk about BO and omit the rest, and if it is about wedges, he is only going to talk about wedges. What I mean by this is that in a chart things are never black or white and may be both, just that one has been successful and the other has not.

In this case that you present, the fact that Al talks about a failed channel breakout does not mean that it can also be a successful triangle breakout as you indicate.

I don't know if this can help you to see things differently, but it is the only answer I have been able to find to these situations.

Best regards!

Thanks for the feedback on that Alejandro. I'm glad it's not just me. I guess it's all part of the mysteries of the markets and it's all open to interpretation. Very easy to do after the fact!!

Where are you located? Are you live trading?

You're welcome, I think we all went through that. Yes, I trade the MES, but sadly I am not profitable yet, I am more like a BE trader. I think that I am good finding good entries but I am really bad with the management, many times a sequence of bars makes me think I am wrong and then I end up in no man's land doing scalps of good swings or holding swings that should have been scalps and ending in BE or loss.

I wish I could help you more to understand things but I am having a really rough time trying to be profitable. Only in this particular case, I think I could have helped you with how to interpret the slides, as I don't think Al is not aware that many times he uses the same slides to show completely opposite things, and surely the idea of using the slides is not for us to compare one with the other, but to explain a setup or a certain price action at that moment. As you know, in the market there is always a case for bulls and bears, it is just that Al shows us only the case that is being explained in that part of the video, instead of the whole range of possibilities, as that could generate more doubts and make the course way more difficult to follow and understand.

Yes I know what you mean regarding the whole range of possibilities. I would think this would be less confusing also.

Hope you get profitable soon. Good luck and thanks again.

Hi Eric, 

I think first we should define what you mean by successful. For a scalp?Yes, there are successful scalps in there. For a swing hoping to catch the start of trend? No, because that's trading range price behavior: all gaps get closed, bulls and bears can't put many consecutive bars, big trend bars get immediately reversed, presence of tails and dojis.

Trading ranges act as magnets so BOs tend to be drawn back into the TR. If had sold that bear Bo bar right now I'd be very nervous because the market moved immediately against me and I'd start to think that the BO has failed. So it always depends on what the traders is doing.

I think Al's main point here is to highlight what trading range behavior looks like (I'm pretty sure he mentions TR , not channel in the video)  and the fact that the market struggles to move away from the "congestion" but that doesn't necessarily mean that there are no successful trades to do within , but that's depend on the trader's style. Hope it can help a bit and I agree with the fact that sometimes it's confusing and only with time things become clearer and clearer

Thanks Fred, you make some good points, and yes, I think you are correct when you say that he calls it a TR and not a channel.

I think Al means that these BOs are failing to end the larger TR market cycle from converting into a large trend (Major Trend).

These BOs were not the start of a big trend up or down.

Al is using the terms 'BO' or 'TR' in a lot of different contexts and variations.

This BR BO is indeed the ending of that the Triangle, and it has a 2nd leg large enough to make profit, so it is correct to mark that BO as successful BR BO.

But the same BO is failing in the sense to end the larger BR channel.

So I would say there is no 1 answer correct. But by asking yourself these kind of questions, trying to answer them but getting stuck, is a good thing. Because then after studying the course some more, suddenly these questions become better understandable. 

My 2c (could be wrong 😮 attached)

Yes you make some good points Sander, thanks. I can see where you're coming from now. It's never a black or white scenario. As Al says, we are always operating in the grey zone.

Could be correct Mike. I suppose a scalp trade wouldn't count in the context that Al is talking about.

Can all Breakouts be classified into the following 3 categories?

• Minor Surprise
• Major Surprise
• BTC/STC

Eric - may be these two opportunities as scalps (the first and last arrows)?

I'm unsure about that. where did you get that from?

I wouldn't have picked the first one Mike, but the second, yes quite possibly. I would have held that for a measured move, not so much a scalp. Fits in perfect for the triangle breakout MM.