Just as a trend from the open can originate without a gap, so can a large gap fail to produce a trend. Within the first couple of up and down pushes (b5), its usually obvious its a trading range day. On a trading range day, the best trades are usually fades of breakouts and b8 was our first signal.
Failed breakouts are only expected to give two legs and there is no telling if the move will be shallow or deep. The highest probability fBO trades however are breakouts that occur on the third -- or if they are closely spaced -- the fourth push of the move, as in b33. These should be expected to fail and take out the other end of the range. Sometimes they may give a breakout pullback and a strong trend move on the other end but on other days such as today, they may fail on the other end as well (due to a second WfBO at b63 today).
While WfBOs are great entries, often they are scalp entries and can give a deep pullback as in b13 after the b8 fBO entry. If a trend line or a swing is point taken out (b4 low taken out by b10, also broke TL b1,b6), then a BP entry may give a trend move. This is usually stronger if the move was a clear 2 legged move as in b40-b49 after taking out the swing point at b30 and breaking the TL b19-b33.
When any fBO entry takes out the other end of the range, be prepared for failure and a move back into the range, especially in tight trading ranges since the magnetic effect of these is strong.
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