Kardec Trader breaks down the bull flag setup using Tesla examples and ATR. A bull flag near the start of a move, like around 220, has roughly 90% success odds. One formed after an extended rally, like after 235 to 240, drops to about 10%.
Questions this video answers
14 days (ATR based on the prior 14 days).
2 ATR.
Examples include a rally from ~220 to ~480, and smaller examples: 220→235 and 235→240.
Claims a bull flag at ~235 might work ~10% of the time, while a bull flag at ~220 will work ~90% of the time.
Chapters
Say, for example, the market opened up at 9:30am Say, Tesla after elections. Tesla had a crazy rally from like 220 all the way to like 480 or something, right? Crazy. It was making a bull flag at 220 as well. Maybe it was making a bull flag at 480 as well. But this has a way more chance of working out than this bull flag because there are more buyers here. I'm going to talk about more buyers and more sellers because there's a buyer for every seller and there's a seller for every buyer. There's no such thing as more buyers or more sellers, because if you want to buy something, there will be a seller. Say, for example, the market opens up at 220 and Tesla moved from like, say, 2 ATR of that stock, which is the average true range. That is how much a stock moves on an average on a daily basis based on the prior 14 days. For example, it starts at 220. It makes a bull flag, pushes towards the upside. It goes from 220 to, say, 235. So this bull flag has a way more chance of working out than a bull flag that is, say, moving from 235 to 240 because it's very extended now. So the buyers are like, okay, we don't want to buy at 235. I'm going to wait for it to come back down to 220. So if you see a bull flag at 235, that might work out 10% of the times. But if you see a bul 20, that will work out 90% of the time.
