What psychological phenomenon, also known as FOMO, often drives trends with very small pullbacks?
Fear Of Missing Out, where traders enter the market with small size rather than waiting for a pullback.
In a strong bull trend, traders experiencing FOMO are afraid to buy but are more afraid of _____, causing them to buy with smaller size.
not being long
According to Al Brooks, what an experienced trader calls ‘noise’ simply refers to price swings that are ____.
too small for them to bother trading, not that the movements are random
Why is entering a very strong trend often difficult for traders with small accounts?
The correct stop-loss is far away, representing a risk that is too large for the account size.
A common technique for trading a FOMO market with small pullbacks is to buy the _____ of strong trend bars.
close
When a strong bull trend has its first significant sell-off, what is the most likely outcome for the market?
The market will enter a trading range, not an immediate bear trend.
What do tails on the top of candlesticks late in a strong bull trend typically indicate?
Profit-taking by bulls, signaling that the trend might be transitioning.
If traders who ‘buy the close’ are disappointed by the immediate follow-through bars, what action do they often take?
They place limit orders to exit their trades at or near their entry price (breakeven).
The constant small losses from repeatedly trying to trade counter-trend in a strong market are described as ____.
death by a thousand cuts
One of the best techniques to avoid missing a strong trend is to enter at the market with a smaller position size and use a(n) _____ stop.
appropriate (wider)
What is the term for the candle with the highest closing price in a bull trend?
The final bull trend bar.
Many institutional traders use line charts, which only show the closing prices, making the highest close a key _____ level.
resistance
In a bear trend, the lowest close of the move acts as a significant _____ level.
support
What does it signify when a bear trend repeatedly fails to break below the prior lowest close and starts to reverse?
It indicates that bears are losing conviction and are buying back their shorts, signaling a potential trend change.
As a strong trend weakens and transitions into a channel or trading range, traders often shift their strategy from swing trading to _____.
scalping
The low of a buying climax bar often acts as a _____ for price, meaning the market is likely to pull back to test it.
magnet
What is a ‘give up bar’?
A strong counter-trend bar that occurs when trapped traders finally capitulate and exit their losing positions en masse.
When the largest trend bar of a move appears more than 20 bars into the trend, it is more likely to be a(n) _____ than an acceleration.
exhaustion climax
A very large, unexpected profit on a trade is often seen by traders as a ‘gift,’ leading them to do what?
Take profits quickly.
If a trader scales into a position (e.g., buys high and then buys more at a lower price), what is their initial goal during a pullback?
To be able to exit the entire position at the average entry price for no loss (breakeven).
The exit attempts of trapped traders often create visible price action, such as _____ above or below their entry prices.
tails (wicks)
A strong breakout of a trading range has approximately a _____% chance of leading to a measured move.
60
Advanced traders might sell the close of a _____ bar during a strong bear trend, betting that any reversal will be minor.
doji or bull reversal
What is the typical evolution of a trapped scalper’s profit goal as the market moves against them?
It shifts from a small profit, to a smaller profit, to breakeven, and finally to accepting a loss.
