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Hi, perhaps I looked over this during the course, but does anyone know what Al means by TBTL correction, particularly in this case?
Hi Casper,
TBTL stands for "Ten Bars Two Legs". It's a general term for a deeper pullback/correction than the previous pullbacks seen up to that point. These types of deeper corrections often occur after a climax in a protracted trend. On your slide there was a bull trend, a pause, and then 4 big bull bars. It's reasonable to buy expecting higher prices after such strength but also have to be careful it's not a climax and you can see that Al is calling out a potential TBTL after seeing 4 bear bars. When strength is reversed by opposite strength (late in a trend) it may lead to a deep correction so it makes sense to exit early if already long and not wait for the stop to get hit since probably it will get hit.
P.S. It doesn't have to be exactly ten bars and two legs. It could last for 7 bars and 2 legs or 15 bars and 3 legs. The idea is to just expect a more protracted pullback than seen previously.
Hope that helped!
CH
______________________________________
Join BPA Telegram Group for more discussions about early exits.
Hi Casper,
TBTL stands for "Ten Bars Two Legs". It's a general term for a deeper pullback/correction than the previous pullbacks seen up to that point. These types of deeper corrections often occur after a climax in a protracted trend. On your slide there was a bull trend, a pause, and then 4 big bull bars. It's reasonable to buy expecting higher prices after such strength but also have to be careful it's not a climax and you can see that Al is calling out a potential TBTL after seeing 4 bear bars. When strength is reversed by opposite strength (late in a trend) it may lead to a deep correction so it makes sense to exit early if already long and not wait for the stop to get hit since probably it will get hit.
P.S. It doesn't have to be exactly ten bars and two legs. It could last for 7 bars and 2 legs or 15 bars and 3 legs. The idea is to just expect a more protracted pullback than seen previously.
Hope that helped!
CH______________________________________
Join BPA Telegram Group for more discussions about early exits.
Well explained, thank you!
