CME July 20, 2018

Advanced Big
Bar Techniques
Al Brooks
Price Action Fundamentals
Brooks Trading Course
BrooksTradingCourse.com BrooksPriceAction.com
Main Points
Slide

▪ Big Bars (Surprise Bars)

Breakout, Reversal, Exhaustion, Give-up 2

BrooksTradingCourse.com BrooksPriceAction.com Slide 1

Surprise Bar: Price Needs to Change
Give-up Bar (type of Surprise Bar) Most trend bars do not give much information
Bulls giving up, but no major top BO Bar Sometimes get unexpected big bar (Surprise Bar)
2nd leg sideways to down likely Unexpected means low probability event
Huge bear bar
Surprise Bar tells traders something has changed
Measured Move
Market needs to move to new price
down likely

1
2

2
Reversal Bars
2 Strong reversal up
Measured Move up likely
Exhaustion Bars
(open of 1st bar to close of last bar in BO)
Big BO late in trend
Probable exhaustion
BrooksTradingCourse.com BrooksPriceAction.com Slide 2
Give-up Bar Up: Bears Giving Up

Bull bar too big

Surprise bar usually has at least 2nd Leg Up
Often pulls back a little 1st
Context favors minor reversal since no major bottom formation
6/26/17
2
2?
1

BrooksTradingCourse.com BrooksPriceAction.com Slide 3

Bear Give-up Bar: Big Bear Bar Means Bulls Giving Up
Biggest BO late in trend so Exhaustion Gap
50% chance of 2nd Leg Up
before 2 legs sideways to down
1st target is bottom of BO
(Also, bull BO above bull channel
fails 75% of time)
1 2?

2
Big bear bar so bulls giving up (Surprise Bar, Bear Give-up Bar)
2 legs sideways to down likely
12/12/17

BrooksTradingCourse.com BrooksPriceAction.com Slide 4

Context Affects Probabilities: Look at Bars to Left
Bull BO above Bull Channel Bull BO above Trading Range
Sell reversal down Buy above bull bar
Gap is from close of final bull bar or at close of bull
to low of 1st bull bar in BO follow-through bar

Big bull bar late in bull trend

but also BO above TR
60% chance of MM up

Huge bull bar late in bull trend

BO above bull channel Began as bull leg in TR
Strong sell signal bar Became bull trend as
70% chance of swing down prior bear trend resumed

BrooksTradingCourse.com BrooksPriceAction.com Slide 5

Context Affects Probabilities: Look at Bars to Left
Bear BO below Bear Channel Bear BO below Trading Range
Huge bear BO below bear channel
Strong buy signal bar
70% chance of swing up Sell below bear bar
75% chance trend has ended or at close of bear
follow-through bar

Big bear bar late in bear trend

but also BO below TR
Gap is from close of final bear bar 60% chance of MM down
to high of 1st bear bar Began as bear leg in TR
Buy reversal up Became resumption of
prior bear trend

BrooksTradingCourse.com BrooksPriceAction.com Slide 6

Gap Up Bars: Strong Buying

7/5/18

Open of bar is above close of prior bar so Gap Open Bar

So many traders buying the close
that the next bar gapped up
Strong buying pressure so higher prices likely
Bulls eager to B, bears desperate to exit

BrooksTradingCourse.com BrooksPriceAction.com Slide 7

Surprise Bar: When Big, Often Get 3 or More Legs
60 - 70% chance of MM up based on body,
and at least 2 more legs up, usually to Wedge Top

Extremely big
bull bar so12/15/17
Surprise Bar Bears tried for 2nd Leg Bull Trap (failed BO above TR)
Low probability Good sell signal bar since close on low
event 4 consecutive bear bars
Closed far above bars to left so not test off top of TR
1 More likely successful bull BO than 2nd Leg Trap
When bull bar is unusually big, usually can buy 50% PB
with limit order or on reversal up
Became bull flag in Spike and Channel bull trend day
TR
BrooksTradingCourse.com BrooksPriceAction.com Slide 8
Wedge Bear Flag: Bull BO

Wedge bear flag

Moving Average Gap Bars
Bears sell below bear bar

2 big bull bar BO above bear flag

Buy the close of BO bar
5/3/18 or above high of 2nd bar

BrooksTradingCourse.com BrooksPriceAction.com Slide 9

Gap on 5 Min Chart: Rarely Stays Open
On 5 min Emini chart,
1 bar in 1,000 opens above prior bar’s H or below its L
99% close before bar is complete

Opened below L of prior bar

Rare for gap to stay open
on 5 min Emini chart
1/17/17

Opened below close of prior bar,

but not below low
Not traditional gap down

BrooksTradingCourse.com BrooksPriceAction.com Slide 10

Always In Short: From 1 Big Bear Bar

Wedge
Failed BO above yesterday’s high
1 unusually big bear bar so Always In Short
Close below lows of 14 bars
Exceptionally big bear bar so Surprise Bar
70% chance of MM down (minimum goal)
8/15/14
based on size of body

BrooksTradingCourse.com BrooksPriceAction.com Slide 11

Bull Flag: Bear BO
Endless PB in Tight Bear Channel
Failed BO above Becoming less bullish
Parabolic Wedge Strong bear BO
Possible high of below Wedge bull flag
day Bear bar for follow-through
Likely Measuring Gap

15 min chart 5 bar bear

Micro Channel
Sell below
1st strong
bear close
6/24/14
Strength of bears
sometimes easier
MM down to see on higher time
frame chart

BrooksTradingCourse.com BrooksPriceAction.com Slide 12

Weekly Chart: Consecutive Exhaustion Gaps

2nd consecutive Buy Climax late in trend

Blow-off top
Should test below bottom of Buy Climax
Odds favor 2nd leg sideways to down

Biggest pair of bull bars late

(more than 20 bars) in bull trend
Probably Exhaustion Gap Bars
Strong BO so 60% chance of one more leg up
after 1 – 3 bar pause (here, one small bull doji bar)
Then, 60% chance of test to below bottom of Buy Climax

BrooksTradingCourse.com BrooksPriceAction.com Slide 13

Biggest Bear Bar Late in Trend: Exhaustion Gap Bar
EURUSD 120 min

Biggest bear bar in more than 20 bars into bear trend

Exhaustion Gap Bar and end of trend
more likely than Measuring Gap and new swing down

60% chance of one more Sell Climax

before reversal up

BrooksTradingCourse.com BrooksPriceAction.com Slide 14

Huge Bear Surprise Bar: If in TR, Possible 2nd Leg Trap
Emini example

Strong bear BO so early bear trend

1 But, look to left
Still Higher Low so bull channel or TR,
as well as early bear trend
TR or Strong bull reversal
2
bull channel Bear BO was 2nd Leg Bear Trap (failed BO)
in TR and bull channel

BrooksTradingCourse.com BrooksPriceAction.com Slide 15

Bull MC in Extreme B Climax: Expect 2 Legs Down
Bulls disappointed by big bear bars
14 bar bull MC They exited at high close, creating
Very strong, usually expect Micro Double Top
only minor reversal 2nd entry sell for at least
Here, got major reversal test of bottom of Buy Climax

Bulls who bought

the highest close 11/30/17
were disappointed
by bear bars

60 min chart
But, bought more 2 bar buy climax
when returned to highest close
Got strong bull BO

BrooksTradingCourse.com BrooksPriceAction.com Slide 16

Buy The Close (BTC): Deep PB, So TR
Bulls who bought high close bought more lower
Can exit break even on 1st buy
and with profit from lower buy
Other bulls bought lower, expecting test of highest close

When taking reasonable entries

and managing well,
80% chance of profit or no loss

Buy The Close (BTC), 8 consecutive bull bars

Strong selloff but deep or prolonged PB and TR more likely than bear
3/29/18
Sometimes take 20 or more bars to get back to highest close
Reasonable Buy The Close, but no micro DT to let bulls exit without loss
Odds favored test of highest close so bulls could scale in and avoid loss
BrooksTradingCourse.com BrooksPriceAction.com Slide 17
STC Disappointed Bears: Minor Reversal Up and TR Likely
Sell The Close If disappointed bears get out,
Disappointed by big bull bar but still Always In Short,
Exit breakeven must sell again below bear bar
or above bull bar Here, Double Top bear flag
near MA

7/6/17

If bears disappointed by lack of follow-through after selling close,

become afraid might have sold final Sell The Close bar
Now, know PB and TR more likely than more bear trend
Expect at least one more selloff to test that close

BrooksTradingCourse.com BrooksPriceAction.com Slide 18

4 Small Bars: Can Also Lead to Big Moves

TR is about half height of average day’s range

Odds favor BO and about MM up or down

6/8/18
4 – 5 consecutive small bull bars
Every close at or above prior close (Trending Closes)
Highs and lows also trending up
9 bars Tight Bull Channel
Buying Pressure
Increases chance of bull BO
Buy the Close or buy above bull bars,
or buy close of BO Bar

BrooksTradingCourse.com BrooksPriceAction.com Slide 19

 Buying Pressure: 8 Consecutive Bull Bars

Only 2 bear bars in 1st 25 bars

7 bars without a pullback

Many bull gaps and micro gaps (not shown)
7/16/18 Odds favor at least a little more up
B below prior bar
B above prior bar
Yesterday’s L

8 consecutive bull bars so bulls owning many bars

Very few bear bars so eager bulls
Buying pressure makes higher prices likely
BrooksTradingCourse.com BrooksPriceAction.com Slide 20
Bad Flags: Fade
Buyers and sellers above and below every bar
50% of time, stop order traders win and BO succeeds
50% of time, limit order traders win and BO fails
BO pullback buy, but big bear bar,
and consecutive bear bars at top of TR
Bad Bull Flag
More sellers than buyers above
Sell and scale in higher for scalp
6/8/18

BO pullback sell, but bull bar and

PB from bull leg in TR
Bad Bear Flag
More buyers than sellers below
Buy at low for scalp
Be willing to scale in lower

BrooksTradingCourse.com BrooksPriceAction.com Slide 21

Review
Slide

▪ Big Bars (Surprise Bars) 2

Breakout, Reversal, Exhaustion, Give-up

BrooksTradingCourse.com BrooksPriceAction.com Slide 22

 CME July 20, 2018

Advanced Big
Bar Techniques
Al Brooks
Price Action Fundamentals
Brooks Trading Course
BrooksTradingCourse.com BrooksPriceAction.com