Showing posts with label Al Brooks. Show all posts
Showing posts with label Al Brooks. Show all posts

Sunday, August 20, 2023

Three-Push Reversal Patterns | Cameron Benson

There are a lot of varying opinions about how the market moves, such as the Wyckoff method, Elliott Waves, Stacey Burke Trading, Steve Mauro’s BTMM, etc. However, one thing that all of these methods and models have in common is that the market moves in three pushes.
 

In all timeframes price is always in some three-push pattern. Price develops in fractals, and everything happening on a higher time frame happens far more frequently on lower time frames. Be aware of Other Time Frame (OTF) traders, of previous monthly, weekly, and daily highs or lows. It helps us to identify liquidity areas. Where are the entry and the stop loss orders? Where is the money, at the upper or at the lower end of a range?
 

After the third push into one direction, price is going into consolidation.
During the second push retail-traders believe that price is going to continue in the same direction, and everybody jumps in. This is the market maker’s trap to harvest entry and stop loss orders during consolidation. The third push is already part of a larger peak formation reversal pattern. 
 
There are four different variations of the three-push pattern that can be observed on all timeframes:             
 
          1.             3 Levels, also referred to as ‘stair stepping’.
            2.             3 Pushes:
                                a.   Stair Step.
                                b.   1, 2, Pause, 3.
                                c.   1, 2, 3.
                                d.   1, Pause, 2, Pause, 3.
                                e.   3 Burst Impulse Candles.
            3.            3 Pushes out of consolidation in any of the above listed variations.
            4.            Working Levels (3 Pushes)
                               a.   Triple Tops.
                               b.   Triple Bottoms.  
 

Sunday, May 28, 2023

Trading the Pump & Dump Pattern | Cameron Benson

I'm going to show you that pattern that I use every single day on every single trade, whether I'm going long or short. The pattern that I'm referring to is the pump & dump and the dump & pump pattern. Every single market movement is either a pump & dump or a dump & pump pattern, and all trade setups are based on these two patterns.
 
 
Markets are fractal, and this pattern is going to occur on the weekly and the daily time frame, on the 4 hour, the 15-minute, the 30 second chart, etc. It doesn't matter: whatever you're looking at, this pattern is going to occur.


I use larger setups and then I start to break things down: I look at the date and day in the month, I look at the three-week cycle, at the three-day cycle, at what day are we in the week, and I look at the weekly range, what is the high and the low of the week. Are we working the low, are we working the high? 
 

Any unidirectional move – up or down - ends with a consolidation, followed by a break in market structure and a continuation to anther pivot level and/or it is followed by a reversal.
 
 
Three pushes to a high, a sideways consolidation, a break in market structure to the downside, then the dump. A lot of times the market will return down at least to the 50% retracement level or down to the level where the pump started or even below.


See also:

Thursday, March 9, 2023

Trading Inside or Outside the Daily and Weekly Range | Stacey Burke

When a market opens outside of the previous day's range and then auctions around the open, one's first impression is that there is no directional conviction present. In reality, the mere fact that the opening is beyond the previous day's range suggests that new other time frame activity has caused price to seek a higher or lower level. Given that the market has opened out of balance, there is a greater chance that directional conviction will develop than if the market had opened and auctioned within the range. An Open-Auction outside of range has the potential to be a big day, while an Open-Auction within value usually lacks conviction.
 
There are only three things price can do:
1. Breakout from a Range and Trend.
2. Breakout from a Range and Reverse.
3. Trading Range between Highs and Lows.

[...] In the large majority of cases, activity during any given day has direct and measurable implications on the following day. It is only on the relatively rare occasion when a market moves extremely out of balance that there is no correlation between two consecutive days. Understanding these implications enables a trader to more successfully visualize developing market activity.

The salient concept here is market balance. The relationship of the open to the previous day's value area and range gives valuable clues to the market's state of balance and what kind of risk/opportunity relationship to expect on a given trading day. In short, the greatest risk and opportunity arise when a market opens outside of the previous day's range. This indicates that the market is out of balance.

When a market opens out of balance, the potential for a dynamic move in either direction is high. Conversely, a market that opens and is accepted (auctions for at least one hour) within the previous day's value area embodies lower risk, but also less opportunity. The acceptance of price within the previous day's value area indicates balance, and therefore reduces the potential for a dynamic move.

Quoted from:
 
[The Value Area is a range where approximately 70% of the prior days volume traded. 
The range is derived from one standard deviation on either side of the mean which is roughly 70%.]
 
 
See also: