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In this picture the blue arrow is the signal bar for a high 1. I am wondering if a high 1 makes a new high does the counting reset or does the red arrow count as a high 2. Im also wondering if the 3 bear bars are big enough to start a low 1 count at the green arrow.
I might be wrong, but I think the bear bar with the long wick at the top count as a high 2. Since you had a couple of bear bars after the high 2, the bull candle after that red arrow is a high one and the candle following is a high 2. But I think that Al Brooks still lable the first leg pullback at the top a high 1, and the second leg pullback over your red arrow a high 2. Don't take my word for it.
Hi Ethan,
I would initially mark like this for purely technical reasons. The decision of whether to do a reset so that H2 is actually a new H1 is a discretionary one that every trader will need to decide for themselves. The essence of a reset is to wait a little longer because you believe bears have shown sufficient strength so there's a higher probability of getting at least 1 more leg down.
I would argue that after a good signal bar and 3 cc bears, with 2 doing a BO+FT below prior swing low, does warrant waiting a little longer because chance of at least an attempt at 2nd leg down are higher. So I wouldn't buy a bull bar, especially after a bad H2 signal (bear bar).
So yes, I would personally reset and wait for 2nd entry long. But again, that's a discretionary decision and not everyone has to agree on this.
Hope this helps,
CH
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