A trend from the first bar is rare and treasurable event. When one of the first one or two bars are near a support such as the ema or low of prior day and form a strong reversal bar, there is a chance of a trend from the first bar. Once there is a trend breakout above the reversal bar (b2), there is usually an attempt to fail the breakout. Its usually a prudent approach to wait for at least one more bar (b3) before jumping on the trend. If the next bar has an upper tail, you can usually buy its close with a stop below the bar. This is not a high probability setup, but the risk to reward ratio is usually high enough to justify the trade (often 10x).
The conservative approach is to wait for any pullback such as an inside bar, a bear trend bar or any 2 attempts to fail the trend (b7-11). This is essentially a 1PB setup and should usually take you to a decent profit, often the best swing entry of the day.
On an obviously strong day, you can add-on or re-enter on any deep pullback for a swing such as b27 or b55. Counter-trend trading on a day like this is dangerous and you will miss many great with-trend moves.
What is the problem with the bar 8 long?
ReplyDeleteTo clarify my question - is there any reason to predict that the first attempt for a 1PB at bar 8 would fail and only the H2 at bar 12 would work? Thanks!!
ReplyDeleteA 1PB needs to be deep or 2 legged or near b1.
DeleteGreat Cad, thanks!!
ReplyDelete