| Probability
|
Items
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| 90%
|
|
| 80%
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in a trend, 80% of reversal attempt fails; in a TR, 80% of BO attempt fails.[1]
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| 75%
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if yesterday was climactic, there is 75% chance of trading range for a few hours today[2].
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| 70%
|
- if a bar is exceptionally bigger than other bars, 70% chance at least MM, especially when it has ok FT (at least doji).[3][4]
- Probability of success of 70 percent or better (reward has to be at least half as big as risk just to break even):
- Scalps, but since most traders cannot consistently pick trades with a 70 percent chance of success, they should trade a scalp only if the reward is at least as large as the risk. For example, if you believe that a two-point stop is needed in the Emini, take the trade only if at least a two-point reward is reasonable[5].
- If bull BO(of triangle), 70% chance of PB to apex of Triangle[6].
- 70% outside down days closes at lower 1/3 of the range, only 20% closes above middle point[7].
|
| 60%
|
- Probability of success of 60 percent or better (reward has to be at least as big as risk to break even)[8]:
- Buying a high 2 pullback to the moving average in a bull trend.
- Selling a low 2 pullback to the moving average in a bear trend.
- Buying a wedge bull flag pullback in a bull trend.
- Selling a wedge bear flag pullback in a bear trend.
- Buying a breakout pullback from a breakout of a bull flag in a bull trend.
- Selling a breakout pullback from a breakout of a bear flag in a bear trend.
- Buying a high 1 pullback in a strong bull spike in a bull trend, but not after a buy climax.
- Selling a low 1 pullback in a strong bear spike in a bear trend, but not after a sell climax.
- Shorting at the top of a trading range, especially if it is a second entry.
- Buying at the bottom of a trading range, especially if it is a second entry.
- Trend reversals:
- After a strong break of the trend line, look for a reversal after a test of the trend's extreme where there is a good reversal signal bar. Traders are looking to buy a higher low or a lower low at a bottom, or to short a higher high or a lower high at a top.[9]
- Strong final flag reversal.
- Buying a third or fourth push down in a bear stairs pattern for a test of the low of the prior push down.
- Selling a third or fourth push up in a bull stairs pattern for a test of the high of the prior push up.
- Entering using limit orders; this requires more experience reading charts, because the trader is entering in a market that is going in the opposite direction to the trade. However, experienced traders can reliably use limit or market orders with these setups:
- Buying a bull spike in a strong bull breakout at the market or at the close of the bar, or on a limit order at or below the low of the prior bar[10] (entering in spikes requires a wider stop and the spike happens quickly, so this combination is difficult for many traders).
- Selling a bear spike in a strong bear breakout at the market or at the close of the bar, or on a limit order at or above the high of the prior bar (entering in spikes requires a wider stop and the spike happens quickly, so this combination is difficult for many traders).
- Buying a bear breakout at around a measured move, if the breakout is not too strong—for example, if the range is about four points tall in the Emini, buying on a limit order at four points below the range, risking four points, and expecting a test of the breakout point. Only very experienced traders should consider this.
- Selling a bull breakout at around a measured move, if the breakout is not too strong—for example, if the range is about four points tall in the Emini, selling on a limit order at four points above the range, risking four points, and expecting a test of the breakout point. Only very experienced traders should consider this.
- Buying at or below a low 1 or 2 weak signal bar on a limit order in a possible new bull trend after a strong reversal or at the bottom of a trading range.
- Shorting at or above a high 1 or 2 weak signal bar on a limit order in a possible new bear trend after a strong reversal or at the top of a trading range.
- Buying at or below the prior bar on a limit order in a quiet bull flag at the moving average.
- Shorting at or above the prior bar on a limit order in a quiet bear flag at the moving average.
- Buying below a bull bar that breaks above a bull flag, anticipating a breakout pullback.
- Selling above a bear bar that breaks below a bear flag, anticipating a breakout pullback.
- 60% chance a climactic sell off for 15-20 bars on the open evolves into TR[11].
|
| 50%
|
50% of strong moves on the open reverse.[12]
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| 40%
|
An average MTR setup has about a 40% chance of leading to a profitable swing[13].
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| 30%
|
An average MTR setup has about a 30% chance of a small loss, and a 30% chance of a small profit[14].
|
| 25%
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25% of the time after a buy climax day, you get an hour or two rally the next day[15].
|
| 20%
|
only 20% of time the first bar leads to H or L of the day[16]
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| 10%
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|
