Monday, March 19, 2012

Simple 1PB

The simplest 1PB consists of a trend move from the first bar, i.e., at least two trend bars that break beyond the first bar (b2-b4) and then a pullback to a higher low. If the bar that began the pullback is a reversal bar (b5), then its best to take a 2 legged PB or a second entry. A mW such as b6,7,9 today can also act like a 2L pb.

Factors strengthening the 1PB signal are:

  • A two legged PB or a mW PB
  • strong close on signal bar
  • signal bar not too large
  • signal bar at ema or trendline

A 1PB that takes out the prior extreme of the day in one leg can often be held till the end of the day. A 2 legged move however often stalls or reverses at the extreme of the day and its best to exit and wait for the next signal.


  1. Hi cadaver,

    could you tell me why you take long at b22? Its obvious fL2 at EMA, HL, but what about b16 DT and ii (b17,b18)? I expected some kind of DP.

    Thank you very much for your reply.

    1. An fL2 had already occurred at the ema at b11 or so indicating possible trending behavior. A second fL2 at a HL is likely to continue the trend. Yes, at that point it looked a bit risky and I would have exited if there were two moves against me.

  2. Hi Cad,

    this is a great and very useful post - thanks so much!!:-)

  3. Cad-
    in real time, did you consider that b4-5 might be a 1Rev at HOY?

    1. b5 would be a good 1Rev if it had a larger tail. A 1t tail will often act like an inside bar, which often leads to 1PB. It would be acceptable on 2nd attempt. Inspite of all these caveats, b5 would probably be an OK short if it had triggered since bar quality can be relaxed for 1Rev and 1PB trades.