tradersmentality

tradersmentality

In the previous article we discussed only trading on strong trend days or strong markets. We also identified what increases the likelihood of a day (or market) becoming a strong trend. As said before, there are only a handful of strong days a month (or only a few strong markets at any given time). Because of this, it is just as important to identify and...

tradersmentality

ABBV is selling off this week in a third leg down from the buy climax and all time high. Although it looks strong at first glance, this is more likely a sell vacuum (sell climax) than the start of a strong bear breakout. A vacuum is created when strong bulls step aside and wait for prices to reach a location they want to buy, and the strong bears continue to...

tradersmentality

The S&P 500 reached a new all time high last week, leading many to believe the bull trend is still intact and the market is strong. However, this is not necessarily the case. Look at what happened the past 3 times prices reached this level - strong bulls and strong bears sold. Although the rally up from the 2400 low has contained strong buying pressure, prices...

tradersmentality

BYND is in a strong and tight bull channel since the IPO. This bull trend from the open is what a trader wants to see when buying for long term investments. Last week formed a reversal attempt. When the market is strong, first reversal attempts fail 80% of the time and instead create the start of a second leg up. The bears will likely need some form of second...

tradersmentality

There are signs of profit taking at the new all time high of GWPH (tails, weak breakouts, reversal attempts). One more push up would form a nested wedge and a larger wedge reversal, increasing the probability of two legs sideways to down. If there is also a buy climax, it would form a parabolic wedge reversal where strong bulls will take windfall profits and...

tradersmentality

WMD sold off in two legs sideways to down from a buy climax. It is currently testing the low of the second leg down and bull 1.2 breakout gap near the bottom of the bull flag trading range. Bulls will probably soon look to buy, and want to keep the 1.2 gap open. The bears want a strong breakout below and a test of the .80 bull gap. Most likely, prices will...

tradersmentality

CGC is beginning to develop some two sided trading and transitioning into a broad bull channel / bull flag trading range. (All channels are a form of a slanted trading range and ultimately evolve into a large trading range). Prices are currently around the middle of the trading range, where the directional probability is close to 50/50. The high 2 buy setup a...

tradersmentality

MJ is the center of a large bull flag trading range and expanding triangle. Last week formed a second entry for a higher low and a potential start of a second leg up. The selling pressure down from the 38 lower high has not been strong, but the directional probability at this location is close to 50/50 with a slight bull advantage. There are still bull gaps...

tradersmentality

So far this week is a bull follow through bar. The bull breakout gap is still open below. The bulls will likely get two legs sideways to up even if only a small rally and test of the 78 tight trading range. If the bulls get strong consecutive bars over the coming weeks, it will increase the likelihood of a second leg up and test of the 160 high. If instead,...

tradersmentality

BTC is currently testing the start of the bear channel where a trading range is likely to form soon. Although the bulls have been strong the past few months, it is likely a buy vacuum test of the bear channel. We will probably start to see two sided trading soon. With this said, the bulls have been strong enough to likely get some form of a second leg up. The...

tradersmentality

ACB NYSE is currently in the dead center of the bull flag trading range, and a converging triangle. This is where the directional probability is very close to 50/50. However the bulls have a slight advantage because it is a bull flag trading range, and there are bull gaps below. Prices are currently stalling at the failed bear reversal, where trapped bears may...

tradersmentality

ACB is currently in the dead center of the bull flag trading range, and a converging triangle. This is where the directional probability is very close to 50/50. However the bulls have a slight advantage because it is a bull flag trading range, and there are bull gaps below. Prices are currently stalling at the failed bear reversal, where trapped bears may...

tradersmentality

SNAP is in a strong bear trend from the open (IPO). These types of stocks are very risky to buy because they rarely convert into a strong and healthy bull trend. Most of the time if you look at many stocks, they remain in some sort of bear trend or large trading range. This makes trading and profiting very difficult for most traders. However, over the past 6...

tradersmentality

There is no one clear definition of price action. It can be as simple as "Every tick on any given chart, of any given market." However this definition is too broad and does not adequately describe the term. A better definition is "The collective result of buyers and sellers entering the market for any logical reason, which together create reoccurring patterns that...

tradersmentality

There is no one clear definition of price action. It can be as simple as "Every tick on any given chart, of any given market." However this definition is too broad and does not adequately describe the term. A better definition is "The collective result of buyers and sellers entering the market for any logical reason, which together create reoccurring patterns that...

tradersmentality

FB has converted from a bull trend into a bull flag trading range. The bulls are currently attempting to test the all time high. The bears want a large second leg down and will attempt to form a double top or lower high over the coming weeks. One more push up for the bulls may lead to a wedge retest of the high, and start the second leg down. If the bulls get...

tradersmentality

TSLA reversed up from a parabolic wedge bull flag / double bottom / failed breakout of the 180 low. The selloff down was climactic (sell vacuum). Prices are now testing the top of the sell climax around 240. The bears will try to form a double top around this level, but since prices were previously in a bull flag trading range and the breakout below failed, the...

tradersmentality

Last week broke out strongly above a tight trading range. This week and last week are two very strong bull bars - but a possible buy climax. These two bars are the strongest pair of bars since the Dec rally began, increasing the probability of a buy climax and correction soon. Prices may continue higher for a week or two, but it is a risky time to buy. More...