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Hi there, I have some questions that I can't seem to find the answer for.
1- Until what numbers of bars are the information irrelevant ?
I am going to start trading the forex market in high time frames (1-4 hours) and I don't know the number of bars that are still relevant for the price action that it is taking place in the present, I imagine that there isn't a magical number but I would love to have a window to be more comfortable.
2- Do all the futures contracts behave the same ?
I took the online course. However, I am from Europe and I would like to trade European futures (Dax, etc), so my question is if the Dax will have the same behaviours that the course teaches (patterns, division of the day 1st third- 2nd third- 3th third, open probabilities (80% minor PB and 50% major reversal), etc).
3-Probability in the daily review ?
This last topic is about the reviewed chart that is posted daily, I don't know if this is the place to ask this. However, in the mast 2-3 months I have been reviewing E-mini charts on my own and then I compare it to the one that it is posted in the blog, I am really happy with the progress because I normally have almost exactly the same entries but I do not see much progress in the probability aspect, meaning that I do not know based on the chart what probability the trade has. Because of this I wonder if the daily reviews could also have a number near the entry signals that determine the probability of a swing and of a scalp with the objective of traders to associate a probability as soon as they see the pattern.
Hey Rodrigo,
Many of these answers are in the BPA video trading course. And, like trading in general, students like you and I have to put the answers together from a lot of different information.
1 - This question is vague, but in general, if prices are forming a spike and channel bull trend, traders would expect pullbacks to continue back in the direction of the bull trend with 60% probability. However, if the channel has a pullback in a tight channel and/or tight trading range that lasts twenty or more bars, traders would no longer see a continuation of the bull trend as 60% probable. The would now believe the prices have a 50% chance of either moving up or down.
2 - Dr. Brooks says that the price action that we learn in his course is applicable to all financial instruments and all time-frames, so futures contracts like the ES would trade similarly to the DAX.
3 - My sense of probability as Dr. Brooks teaches in the course is that traders develop a sense of probability based on price action. So, after patterns that form a DB LH MTR, a trader might feel confident that prices will probably move one way rather than the other. And, traders would put a 60% number on that confidence they developed based on the price action.
Or, for another example, today, Monday, Oct. 23, after the bull spike and channel that formed after bar 3, traders would be confident that prices would move for a measured move up. Then, for the traders' equation, they might put a 60% probability in there.
So, I hope you can see that the traders' reading of price action determines the probability of the trade, and as we get better at reading price action, our guesses about probability get better as well.
Dr. Brooks discusses patterns throughout his course and always includes information about probability. I hope this helps. For what it is worth, I am working hard to make sense of these skills, myself.
Good luck!
With regards to whether the course applies to all (liquid) markets, the answer is yes, but there will be matket-specific practical nuances that you need to factor in.
For example, DAX is fine until the US open. After US open you shouldn't trade DAX any more because the US market then dominates and drives all other markets.
Another example: all US indices, bonds and currencies are heavily impacted by FOMC announcements, but gold and oil are not.
Thanks PB, very helpful.
