13

Question 1

According to Al Brooks, every market on any time frame is always in one of two states. What are they?

Answer 1

A trend or a trading range.

Question 2

What is the ‘Always In’ direction in trading?

Answer 2

The direction (long or short) it is better to be in if you had to be in the market at any one moment.

Question 3

What mathematical basis for taking and managing trades incorporates risk, reward, and probability?

Answer 3

The Trader’s Equation.

Question 4

What percentage of reversal attempts in a trend are said to fail?

Answer 4

0.8

Question 5

What percentage of breakout attempts in trading ranges are said to fail?

Answer 5

0.8

Question 6

In a strong trend, what is the recommended trading direction?

Answer 6

You should only trade in the direction of the trend.

Question 7

In a trading range, where should an ‘Always In’ trader look to buy and sell?

Answer 7

An ‘Always In’ trader should look to buy near the bottom and sell near the top.

Question 8

What emotional state is a hallmark of being in the early stages of a trading range?

Answer 8

Confusion about what the market is doing.

Question 9

What is an eight-bar bull microchannel?

Answer 9

A series of eight consecutive bars where each bar’s low is at or above the low of the prior bar.

Question 10

If you find yourself wanting to buy but waiting for a pullback that never comes, what state is the market likely in?

Answer 10

The market is likely in a strong trend.

Question 11

In a strong trend with no pullbacks, what is a simple way for an ‘Always In’ trader to enter?

Answer 11

Buy at the market or buy the close of any bull bar.

Question 12

When a bull breakout occurs but the next bar is a bear bar, this follow-through bar is considered ____.

Answer 12

disappointing

Question 13

After a strong bull breakout attempt in a bear trend that is followed by a bear bar, what might traders who bought the breakout do?

Answer 13

They will try to exit at breakeven.

Question 14

If you are uncertain about the ‘Always In’ direction, what should you assume the market is in?

Answer 14

You should assume it’s in a trading range.

Question 15

When a market is unclear, what is a good rule of thumb for determining the likely ‘Always In’ direction?

Answer 15

Look to the left and stay in the direction of the last clear trend.

Question 16

A pullback that is less than 20 bars is generally considered a _____ and the trend will probably resume.

Answer 16

pullback

Question 17

In a strong bull trend, is it easier to make money as a bull or a bear?

Answer 17

It is much easier to make money as a bull.

Question 18

A _____ means that traders are looking for a reward that is at least twice as big as their risk.

Answer 18

swing trade

Question 19

In a strong bear trend, where should a trader’s stop be placed if they sell a breakout?

Answer 19

Above the top of the bare breakout bar or the top of the two-bar breakout.

Question 20

A common profit target for a breakout is a _____ based on the height of the breakout bar(s).

Answer 20

measured move

Question 21

For a high probability trade, it is mathematically acceptable to exit with a reward equal to _____ times the risk.

Answer 21

one

Question 22

What can a single, large bull trend bar closing far above recent highs be enough to do?

Answer 22

It can be enough to make the market ‘Always In Long’.

Question 23

After a very strong breakout bar, what are the two groups of traders hoping for a pullback?

Answer 23

Traders who missed the entry and traders who are trapped on the wrong side of the market.

Question 24

Besides one large bar, what else can establish an ‘Always In Long’ condition?

Answer 24

A series of two or more medium-sized or several small consecutive bull bars.

Question 25

In a strong rally, a reversal attempt like a bear bar is more likely to represent buyers _____ that bar than sellers.

Answer 25

below

Question 26

Even after a strong rally, a 50% pullback is often just a test of the _____ and the market is still considered 'Always In Long'.

Answer 26

breakout point

Question 27

What is the single dominant feature on a chart that dictates the 'Always In' direction, even during a trading range?

Answer 27

An outstanding, exceptional, or very unusual strong move, such as a powerful breakout.

Question 28

An 'Always In Long' market simply means that there is more _____ pressure than _____ pressure.

Answer 28

buying, selling

Question 29

When the market has a high probability of doing something, what is usually true about the risk/reward?

Answer 29

The risk/reward is usually bad, meaning the stop is far away.

Question 30

In an 'Always In Long' market, where should the initial stop for any buy entry be placed?

Answer 30

Below the bottom of the bull breakout or the start of the bull swing.

Question 31

What is a major higher low?

Answer 31

A higher low that is followed by a reasonably strong bull breakout to a new high.

Question 32

After a new major higher low is established in a bull trend, what should traders do with their stops?

Answer 32

They should trail their stops up to below the most recent major higher low.

Question 33

A triangle late in a bull trend often becomes the _____ before a pullback or reversal attempt.

Answer 33

final bull flag

Question 34

In an 'Always In Short' market, where is the stop generally placed?

Answer 34

Above the most recent major lower high.

Question 35

What is a major lower high?

Answer 35

A lower high that is followed by a strong bear breakout to a new low.

Question 36

Instead of scalping in and out of a strong trend, it is often better for most traders to do what?

Answer 36

Stay short (or long) and hold through minor reversals with the stop in the appropriate place.

Question 37

A _____ is a bar where the price is completely above or below the moving average, often indicating strength but also possible exhaustion.

Answer 37

gap bar

Question 38

A selloff that forms a wedge bottom with three pushes down often indicates what?

Answer 38

Potential trend exhaustion and a possible reversal or transition into a trading range.

Question 39

An 'Always In' trade usually begins with some kind of a _____.

Answer 39

breakout

Question 40

A rally that lacks consecutive big bull trend bars and has many small bars with prominent tails is likely what?

Answer 40

A bull leg in either a broad bear channel or a trading range, not a new bull trend.

Question 41

Even if an 'Always In' trader steps aside during a counter-trend move, what must they be prepared to do?

Answer 41

They must look to re-enter in the original 'Always In' direction once a signal appears.

Question 42

A double bottom higher low major trend reversal is a credible pattern for what?

Answer 42

It is a credible buy setup where bears will exit and bulls will look to enter.

Question 43

If you are an 'Always In' trader and a credible reversal pattern forms, what should you do?

Answer 43

You should exit your position and possibly reverse.

Question 44

When a trend is very strong (a 'sell the close' bear trend), what is a good way to enter?

Answer 44

Sell the close of bear bars as they form.

Question 45

If your stop is far away due to high market volatility, how should you adjust your position size?

Answer 45

You must trade smaller.

Question 46

Some traders are not comfortable selling at the market as it's falling. What do they wait for instead?

Answer 46

They wait to sell a pullback.

Question 47

What happens when bears repeatedly try to break out to the downside and fail?

Answer 47

They will probably stop trying, and the market will likely have to go higher.

Question 48

Why might a 'third push' in a wedge pattern not fall below the second push?

Answer 48

Because too many traders anticipate the wedge and 'front-run' the buy entry.

Question 49

What is the primary risk of waiting for a pullback to enter a strong trend?

Answer 49

You risk missing out on a big trend if the pullback never comes.

Question 50

Why will most traders make more money by swing trading a clear trend than by scalping it?

Answer 50

Because they will likely fail to take enough scalp trades or manage them all correctly.

Question 51

If a swing trader sells a breakout and holds, where might they exit?

Answer 51

They would hold until there's a strong reason to exit, like a credible major reversal pattern or the end of the day.

Question 52

Is it possible for the 'Always In' direction to be long on a 60-minute chart and short on a 5-minute chart simultaneously?

Answer 52

Yes, the 'Always In' direction can differ across various timeframes.

Question 53

A rally within a bear trend is considered a bull leg in a _____.

Answer 53

bear flag

Question 54

A 'high two buy' is a pattern with two legs down, forming a second entry buy setup. What is another name for it?

Answer 54

A micro double bottom.

Question 55

What is the term for a pullback that makes a slightly higher high double top?

Answer 55

A double top bear flag.

Question 56

What is Al Brooks' general advice for trading on a specific timeframe, like a 60-minute chart?

Answer 56

He advises making decisions based only on that timeframe's chart, not switching to lower timeframes.

Question 57

When a scalper sells a pullback in a bear trend, their initial risk is to the swing stop, but what is their profit target?

Answer 57

A quick profit, often exiting within a few bars for a smaller gain.

Question 58

A bull breakout of a bear microchannel is usually a _____ opportunity.

Answer 58

selling

Question 59

What is a 'low two short' signal?

Answer 59

A two-legged pullback in a bear trend, creating a second entry sell setup.

Question 60

A strong bull reversal needs to break above a _____ to be considered the start of a new bull trend.

Answer 60

major high

Question 61

When bulls see a very strong bear breakout bar, they may see it as a _____, where the midpoint of the leg down becomes resistance.

Answer 61

measuring gap

Question 62

In a bull trend, what is a simple strategy for entering on pullbacks?

Answer 62

Buy above the high of a bull bar that forms after a pullback.

Question 63

What does a trader's decision to scalp versus swing trade often come down to?

Answer 63

Their comfort with making repeated decisions versus holding a position for a longer duration.

Question 64

Even after a strong reversal attempt, like a rally of 5-6 bars in a bear trend, the market is probably still 'Always In Short' because the reversal is considered ____.

Answer 64

minor

Question 65

In a trending market, resistance and support levels, particularly where stops are located, act as a _____ for price.

Answer 65

magnet

Question 66

A breakout that reverses after a double bottom is functionally a type of _____ bottom.

Answer 66

wedge

Question 67

If you are an 'Always In' trader who exits a short and goes long on a minor reversal, what must you do if the reversal fails?

Answer 67

You must get out of the long and get short again.

Question 68

How can a pair of consecutive medium-sized bear bars impact the market's state?

Answer 68

It can be enough for traders to conclude the market is 'Always In Short'.

Question 69

When a bull trend has a deep pullback that forms a triangle with three pushes down, it is often a _____ opportunity.

Answer 69

buying