The Two Greatest
Single Bar Entries and
Exits
A Powerful Entry, Exit and Stop Loss System
For Short Term Movements
Congratulations!
Not many people make it this far. It is becoming a well known fact that up to 90%
of traders will close their account within a year of starting to trade, so if you are up
to the stage of learning single bar entries and exits, well done and congratulations!
We Need This Knowledge Now More Than Ever
Learning single bar entries and exits is an important part of any trading or
investment strategy. This is because the price movement of a single day can often
tell us where the supply and demand is at any given time.
With markets around the world becoming more and more volatile, it’s important to
be able to recognize possible false signals, moves or shake outs.
Of course, many people will teach you what single bar signals look like – there are
hundreds of books on Candlestick patterns out there – but very few if any will
teach you how to actually trade with them.
That is the aim of this lesson, ebook and video.
The methods outlined in this mini course, video and ebook may seem simple, but
please do not underestimate how powerful they are. They are the result of backtesting the market, then trading the market and finding what really works.
I hope you enjoy it!
The First Single Bar Signal Outlined:
Our first single bar signal is one of the most powerful single bar signals you can
find. It has the power to end a trend – to stop it in its tracks. For this signal at the
end of a downtrend, we want:
1. A daily bar that starts in the top half, goes down throughout the day, and
closes in the top third of the bar.
Conversely, for this signal at the end of an uptrend, we want:
2. A daily bar that starts in the bottom half, goes up throughout the day, and
closes in the bottom third of the bar.
The bars would look like this:
Figure 1: An example of an up signal (possible end of a downtrend) and a down signal (possible end of an
uptrend).
Note: If the bar has a long tail, but only closes in the top (bottom) half of the bar,
this can still be a signal, it is just often not as strong. The principle is the same.
Using These Single Bars In Your Trading:
There are three ways we use these bars in our trading:
1. As a standalone entry or exit: With your entry (exit) at the top (bottom) of
the bar, and your stop loss at the bottom (top) of the bar.
This is a very short term way to trade, and it would look like this:
Figure 2: An example of trading with a single bar entry on WTF.
Figure 3: An example of trading with a single bar entry on RIV.
Figure 4: An example of trading with a single bar entry on PPT.
Managing Your Trade Using The First Entry / Exit
While knowing where to enter a stock is important, knowing where to exit is
equally as important.
We already know where to put our stop loss – the bottom of the bar. But what
about as the trade evolves? This signal is a short term signal, where can we exit?
There are two ways:
1. We can exit if price makes an opposite pattern – for example if it forms a
down signal and trades below the low of that bar.
2. We can exit if price closes below a previous trough.
3. We can exit using our regular system exit signal – like trend lines.
Below is an example, and then we’ll get into the other ways to use this single
bar in our trading!
Figure 5: An example of exiting a trade with a previous trough on PPT.
We can also increase our probability by combining this with the “Greatest
Stock Market Idea, Ever”.
The Second Way To Use These Bars In Our Trading
2. To provide new support or resistance: These bars, once they form, provide
new support (resistance) levels at the bottom (top) of the bar.
Here is an example:
Figure 6: An example of long tailed bars providing support on CPU.
Figure 7: An example of long tailed bars providing resistance on DML.
The Third Way To Use These Bars In Our Trading
3. To recognize false signals: If the “trigger bar” for your entry or exit signal
happens to be one of these bars, it could be a false signal and it is wise to
make the new signal beyond the tail of the bar.
Here is an example:
Figure 8: An example of a long tailed bar indicating no exit signal on CSL.
Figure 9: An example of a long tailed bar indicating we should not enter yet on EHL.
Figure 10: An example of a long tailed bar indicating no exit signal on LYC.
The Second Single Bar Method Outlined:
The second most powerful bar is the opposite of our first bar. For an upward
signal, we are looking for:
1. A bar that starts on or near its low, and closes on or near its high.
Conversely, for a downward signal, we are looking for:
2. A bar that starts on or near its high, and closes on or near its low.
The bars would look like this:
Using these bars in your trading:
One of the best ways to use these bars in your trading is with your current trading
system as the “trigger bar”. The idea behind these bars is that they tell us when
there is a large amount of strength and buyers (or weakness and sellers) present
during that day. For that reason, if your signals “trigger bar” is a strong up bar,
there is a higher probability that this strength will continue and price can rise.
Likewise, if your exit signal’s trigger bar is a strong down bar, it is likely that the
weakness displayed during that day will continue and form a down trend.
Here are examples of this:
Figure 11: An example of a strong trigger bar confirming an entry signal.
Figure 12: An example of a strong trigger bar confirming an entry signal.
Back-Test Your Method
While this strategy is simple, it is still essential that you practice it and ensure it
works for you.
To do this, it is recommended that you test the theory over 10 or more years of
market history. Record your trades mechanically and look at your results.
You are aiming to get:
1. More than 60 to 70% for your win percentage
2. More than 2 to 1 Profit to Loss
Of course, if you want to increase your win percentage further you can combine it
with the ebook and video “Entries And Exits” and the “Greatest Stock Market
Idea, Ever”. These two courses will complement your knowledge and help take
your trading to new levels.
Once you have tested the method and found it works for you, use it live in the
market with very small amounts of money to get used to pulling the trigger at the
right times. When you are successful at doing this, then use the portion of your
trading account you are comfortable with.
Please Enjoy
Please enjoy, test and use this method, and keep it for your own private use. If
you have any questions about the method, you can email me at
dave@asxmarketwatch.com . I hope it allows you to take advantage of a market
that no longer goes up all the time!
Happy trending,
Dave McLachlan
Legal Information
The information in this ebook, video and course is for educational purposes and should not be interpreted as
investment or trading advice or a financial recommendation of any kind. It is displayed with the intent to help
readers make their own decisions in the stock market. It therefore follows that this material neither purports
to be, nor is intended to be, advice to trade or to invest in any specific financial instrument or to use any
particular methods of trading or investing.
Readers should not act on the basis of any material found in this course without properly considering its
applicability to their financial circumstances. If not qualified to do this for themselves, readers should seek
professional advice. For personal advice regarding investing or your investments, please see a licensed
Financial Planner, licensed Stock Broker, or Accountant.
All care is taken with the information in this course, but it may contain errors which will be fixed when
discovered. If you are relying on this information for investment decisions, you are advised to carry out your
own checks of their accuracy. If errors are found, letting the owner know would be appreciated.
The decision to invest or trade is for the reader, viewer or student alone. The author expressly disclaims all
and any liability to any person, with respect of anything, and of the consequences of anything, done or omitted
to be done by any such person in reliance upon the whole or any part of the contents of this short course.
Investing and trading involves risk of loss, past results are not necessarily indicative of future results, and
Dave McLachlan is not a licensed investment adviser.