Today, we’re going to talk about a Bollinger Band Squeeze trading strategy that has dramatically improved my results over the years. Like I always say, the dollars are in the details. This is one of those details that can make a significant difference in your win-loss ratio.

Most traders learn the basic Bollinger Band Squeeze setup, but they often stop there. The problem is that a simple squeeze by itself isn’t enough. If you want higher-probability trades, you need to understand what separates successful squeezes from failed ones.

Let’s dive in.

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Bollinger Band Squeeze Trading Strategy: 3 Powerful Ways to Improve Your Win Rate – Video

Understanding the Basic Bollinger Band Squeeze

A Bollinger Band Squeeze occurs when the bands contract and move closer together after a period of expansion.

You might see the bands start wide apart and gradually narrow over time. Eventually, the market reaches a point where volatility has contracted significantly, setting the stage for a potential breakout.

Many traders immediately jump into a trade as soon as price starts pushing against the upper or lower Bollinger Band. However, that’s often where problems begin.

I’ve seen countless examples where price appears ready to break out, only to reverse shortly afterward and trap traders on the wrong side of the market.

The First Detail Most Traders Miss

One thing I look for is the behavior of both Bollinger Bands during the squeeze.

For a bullish setup:

• The upper Bollinger Band should be sloping upward.
• The lower Bollinger Band should be sloping downward.

This tells me that volatility is compressing in a way that favors an expansion move.

Many traders only focus on price touching the upper band. That’s not enough. I want to see both bands behaving correctly before I even consider the trade.

But even that isn’t the secret sauce.

Why Bollinger Bands Alone Are Not Enough

The biggest mistake traders make is treating a Bollinger Band Squeeze as a complete trading system.

It’s not.

A squeeze only tells us that volatility has contracted and may soon expand. It says nothing about the direction of the move or the probability of success.

Before I risk money, I want multiple pieces of evidence supporting the trade. I never rely on a single indicator by itself.

That’s where the bigger picture comes into play.

Volatility Moves in Cycles

Most traders think of market cycles as simple up-and-down price movements.

That’s true, but it’s only part of the story.

Markets also move through volatility cycles.

Volatility expands, contracts, expands again, and contracts again. Bollinger Bands make these cycles easy to visualize because the bands widen during high volatility and narrow during low volatility.

When the bands squeeze together, we’re entering a period of volatility contraction. The next logical expectation is volatility expansion.

But we still need one more piece of evidence.

The Missing Ingredient: Trend Direction

This is the detail that dramatically improved my Bollinger Band Squeeze results.

I only want to trade squeezes that align with the larger trend.

Think about it this way:

A Bollinger Band Squeeze measures volatility.

A trend indicator measures direction.

These are two different types of market information. When they agree with each other, the probability of success increases significantly.

For example, if the overall trend is down and a squeeze signals a bullish breakout, I’m very cautious. The setup may look attractive, but it’s fighting the dominant flow of money.

More often than not, those trades fail.

Trading Squeezes in the Direction of the Trend

The best opportunities occur when volatility expansion and trend direction point the same way.

When a squeeze develops within a strong downtrend, I want bearish opportunities.

When a squeeze develops within a strong uptrend, I want bullish opportunities.

This simple filter alone can eliminate many low-probability trades.

Instead of fighting the trend, you’re working with it.

Three Ways to Trade Bollinger Band Squeezes

1. Fade the Failed Squeeze

If a squeeze develops against the larger trend, don’t chase it.

Instead, wait for the breakout attempt to fail.

Once the market proves that the breakout lacks strength, look for an opportunity to trade in the direction of the dominant trend.

This can often provide a higher-probability setup than the original squeeze itself.

2. Wait for the Retracement

Another approach is to let volatility expand first.

After the initial breakout, wait for price to retrace and then enter in the direction of the trend.

This allows you to participate in the move while potentially obtaining a better entry price.

3. Trade the Pure Bollinger Band Squeeze

The traditional approach is to trade the breakout directly.

This can work very well when:

• The squeeze is significant.
• The breakout aligns with the trend.
• Additional indicators confirm the setup.

However, I rarely rely on the squeeze alone.

Building a Complete Trading System

A Bollinger Band Squeeze should be viewed as one component of a larger trading methodology.

For higher-probability trades, I combine:

• Trend direction
• Volatility analysis
• Momentum confirmation
• Market cycles
• Entry timing

When all of these factors align, you have a much stronger trading opportunity than you would from a squeeze alone.

Final Thoughts

Bollinger Band Squeezes can be incredibly powerful, but only when used in context.

The biggest lesson is this: don’t treat a squeeze as a standalone signal. Use it as evidence of a coming volatility expansion, then combine it with trend analysis and other market factors.

When volatility and trend align, your odds improve dramatically.

As always, trading is about stacking probabilities in your favor—not relying on any single indicator.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

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Hope you enjoy it!

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Average True Range (ATR) Explained: How to Use Volatility for Smarter Trades – Video

What Average True Range Really Measures

Let’s simplify this right away: Average True Range measures volatility, not direction.

That means it tells you how much the market is moving, not whether it’s going up or down. Many traders assume that a strong upward move automatically means high volatility, while sideways movement means low volatility. There’s some truth to that, but it’s not the full story—and relying on that idea alone can lead to poor decisions.

Why Strong Trends Can Have Low Volatility

Here’s where things get interesting.

You can have a market that’s trending nicely upward, yet Average True Range is actually declining. That seems counterintuitive at first, but it makes sense when you look at how volatility is calculated. ATR is based on the range of individual price bars, not the overall direction of the trend.

When a market trends upward with small, consistent candles, it’s actually a low-volatility environment. The movement is steady and controlled. On the other hand, when price swings aggressively with large candles up and down, that’s high volatility—even if the overall direction isn’t as clean.

Understanding Volatility Through Price Behavior

A helpful way to think about this is to look at the shape of price movement.

If price is moving in a smooth, gradual climb with relatively small bars, volatility is low. If price is jumping around with wide, erratic bars, volatility is high. This is why Average True Range often increases during pullbacks or reversals, where the market becomes more chaotic, and decreases during steady trends.

Common Mistakes Traders Make with Average True Range

One of the biggest mistakes traders make is scanning for high ATR markets because they want big moves. The logic sounds reasonable—more movement should mean more profit. But in reality, high volatility often comes with noise, unpredictability, and a higher chance of getting shaken out of trades.

Another common misuse is relying on ATR divergence. For example, traders may see price making higher highs while ATR makes lower highs and assume it’s a signal to exit or go short. This kind of thinking oversimplifies the market and can lead to repeated losses if used without context.

ATR is also frequently used as a trailing stop tool, but without understanding volatility conditions, this can backfire. In highly volatile markets, stops may be hit too easily, while in low-volatility environments, tighter stops tend to work much better.

Why Low Volatility Trends Are Often Better

This is where many traders need to shift their perspective.

Low-volatility trends are often easier to trade because price action is smoother and more predictable. You can place tighter stops, avoid unnecessary noise, and stay in trades longer without getting shaken out.

In contrast, high-volatility markets tend to produce wide swings that can trigger stops even when your overall analysis is correct. The market might eventually move in your favor, but not before knocking you out of the trade.

Risk Considerations in Volatile Markets

High volatility doesn’t just affect entries and exits—it also increases risk in a more serious way. Markets can gap suddenly, moving past your stop level entirely. When that happens, you may not get filled at the price you expected, which can lead to larger-than-planned losses.

Because of this, some traders use options strategies as a way to hedge risk rather than relying solely on stop orders.

Final Thoughts

The key takeaway is simple: Average True Range is a volatility tool, not a directional signal. Understanding that distinction can completely change how you interpret the market.

Instead of chasing high volatility, focus on clarity and structure. Often, the best trades come from steady, low-volatility trends where price moves in a more controlled and predictable way.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Average True Range (ATR) Explained: How to Use Volatility for Smarter Trades video? Enter your answer in the COMMENTS section at the bottom of this page.

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Those interested in this video of Average True Range (ATR) Explained: How to Use Volatility for Smarter Trades also showed an interest in this video:

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In this guide, we’ll break down the importance of options open interest, volume, and bid-ask spread, and how these factors determine whether a trade is worth taking at all.

Hope you enjoy it!

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Options Open Interest Explained: How to Choose Liquid Options for Better Trades – Video

Why Chart Setups Alone Aren’t Enough

Imagine you’ve found a strong technical pattern on a stock chart—perhaps a symmetrical triangle with tightening price action. Instead of trading the stock directly, you decide to trade options.

At this point, many traders jump straight into buying calls or puts without checking the quality of the option contract itself. That’s where problems begin.

Even with a perfect setup, a poorly chosen option can lead to:

• Bad entry prices
• Difficulty exiting the trade
• Increased slippage
• Reduced profits (or even losses)

What Is Open Interest in Options?

Open interest refers to the number of active contracts that are currently held by traders and have not yet been closed.

In simple terms, it tells you:

• How many traders are involved in that option
• Whether there’s enough participation in the market

High open interest means there are plenty of buyers and sellers available—this is exactly what you want.

Low or zero open interest is a major red flag. It indicates that no one is actively trading that contract, making it extremely difficult to enter or exit positions at a fair price.

Open Interest vs. Volume: What’s the Difference?

Although often confused, open interest and volume measure different things:

• Open Interest: Total number of outstanding contracts still open
• Volume: Number of contracts traded during the current day

Volume resets daily, while open interest is cumulative.

Both metrics are important because they reflect liquidity—how easy it is to trade that option.

Why Liquidity Is Critical in Options Trading

Liquidity determines whether you can:

• Enter a trade at a reasonable price
• Exit without large losses due to poor pricing
• Avoid unnecessary slippage

If liquidity is low, even a correct market prediction may not result in profit because you won’t get favorable fills.

In short: a great trade idea means nothing without liquidity.

Understanding the Bid-Ask Spread

Another key factor to evaluate is the bid-ask spread, which is the difference between what buyers are willing to pay (bid) and what sellers are asking for (ask).

A wide spread signals low liquidity and higher trading costs.

Rule of Thumb

A good benchmark is:

• The ask price should not exceed 10% above the bid price

For example:

• If the bid is $3.00
• The ask should ideally be no higher than $3.30

Anything wider than that becomes expensive and inefficient to trade.

Example of a Poor Options Setup

Consider an option with:

• Zero open interest
• Zero volume
• A bid of $0 and an ask of $10

This is a clear no-trade situation. There’s no liquidity, and the spread is extremely wide. Entering a position here would almost guarantee a bad fill.

Even if there is minimal activity—say one contract traded—the spread may still be too wide to justify the trade.

Example of a High-Quality Options Setup

Now compare that to a more active stock like Lululemon Athletica, where options often show:

• Open interest in the hundreds or more
• Consistent volume across strike prices
• Tight bid-ask spreads

This kind of environment provides flexibility. As the stock price moves and options shift in or out of the money, you’ll still have liquidity across multiple strike prices.

That’s exactly what you want for smooth entries and exits.

Why Clusters of Open Interest Matter

It’s not enough to find just one strike price with high open interest. Ideally, you want to see clusters of liquidity across multiple strike prices.

This ensures that:

• You can adjust positions if needed
• You’re not stuck in illiquid contracts
• There’s always a market for your trade

This becomes especially important as the underlying stock moves and option values change.

How to Get Better Trade Entries

Even with good liquidity, you don’t need to accept the asking price right away.

Instead:

• Start with a bid below the midpoint of the spread
• Gradually adjust if needed
• Allow a few minutes for the order to fill

With liquid options and a quality broker, you can often get filled at better-than-expected prices.

The Non-Negotiable Rule: No Liquidity, No Trade

Here’s the bottom line:

If an option lacks liquidity, you skip the trade—no exceptions.

It doesn’t matter how perfect the chart setup looks. Without sufficient open interest, volume, and a tight spread, the trade becomes too risky.

Think of this as a strict filter:

• Good setup + good liquidity = valid trade
• Good setup + poor liquidity = no trade

Final Thoughts

Options trading offers powerful opportunities, but it also comes with unique challenges. Understanding open interest, volume, and bid-ask spreads is essential for making smart decisions.

Before entering any trade, always ask:

• Is there enough liquidity?
• Can I get a fair price in and out?

By prioritizing these factors, you can avoid unnecessary losses and improve your overall trading performance.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Options Open Interest Explained: How to Choose Liquid Options for Better Trades video? Enter your answer in the COMMENTS section at the bottom of this page.

PLEASE PAY IT FORWARD BY SHARING THIS VIDEO & ARTICLE ON FACEBOOK OR TWITTER by clicking one of the social media share buttons.

FREE GIFT!

I’m giving away my favorite trading strategy that works in trading the markets. Just click on the button below, and I’ll personally send you an email with the first video.

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The post Options Open Interest Explained: How to Choose Liquid Options for Better Trades appeared first on Top Dog Trading.

In this guide, we’ll break down how the head and shoulders pattern actually works, why context and trend matter, and how to combine it with other tools to improve trade accuracy.

Hope you enjoy it!

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Forex Head and Shoulders Strategy: How to Trade This Reversal Pattern the Right Way – Video

The Head and Shoulders Pattern Works in All Markets

Although we’re looking at a Forex example—the EUR/JPY currency pair—the head and shoulders pattern applies across all markets. Traders can use it in stocks, commodities, futures, or cryptocurrencies because it’s a price-action pattern that reflects market psychology rather than a specific asset class.

This flexibility makes it one of the most widely used reversal signals in trading.

Why Most Traders Misunderstand the Pattern

Many traders simplify the head and shoulders pattern by saying it’s just a higher high followed by a lower high. While that idea is part of the formation, it doesn’t fully define the pattern.

The biggest mistake traders make is ignoring the broader market context. A true head and shoulders setup is not simply about the shape on the chart—it’s a trend reversal pattern.

Because of this, the market must already be in a clear and extended trend before the pattern has any real significance.

The Importance of an Existing Trend

Before even considering a head and shoulders formation, traders must first confirm that the market has been moving in a sustained direction.

A trend, by definition, is an extended movement in one direction, not a short-term fluctuation. Without a well-established trend, what might appear to be a head and shoulders formation is often just normal market noise.

If the market is simply moving back and forth between buyers and sellers without a clear direction, there is no meaningful trend reversal to trade.

Identifying an Inverse Head and Shoulders Pattern

Now let’s look at the opposite version of the pattern—the inverse head and shoulders, which signals a potential bullish reversal.

In this case, the market has already been moving in a strong downtrend. Once the trend becomes extended, traders can begin looking for signs that momentum is weakening.

The inverse head and shoulders pattern forms with:

• A left shoulder created by a temporary rally
• A head formed when the market makes a lower low
• A right shoulder where the market fails to drop as far as before

This structure suggests that selling pressure is fading and buyers are gradually gaining control.

Recognizing When a Trend Is Overextended

One way to determine whether a trend is mature enough for a reversal is by counting waves within the trend.

In Barry’s approach, trends tend to average around five waves. When the market extends beyond that typical length, the probability of a reversal increases.

This doesn’t guarantee a reversal, but it does signal that the trend may be approaching exhaustion.

A Pro Tip: The Right Shoulder Should Be Lower

Here’s an important detail many traders misunderstand.

In a valid inverse head and shoulders setup, the right shoulder should typically form at a lower high than the previous rally. Some traders believe the opposite, but keeping the right shoulder lower helps confirm that the pattern is forming correctly.

This also allows the setup to create two chart patterns simultaneously, increasing the trade’s probability.

Combining Two Patterns for Higher Probability

When the right shoulder forms correctly, the chart can often reveal both:

• An inverse head and shoulders pattern, and
• A symmetrical triangle formation

When two independent patterns align at the same time, they reinforce each other. This means the breakout signal can carry more weight because it reflects multiple market dynamics working together.

Understanding the Volatility Breakout

Triangles represent periods of low volatility, where price contracts into a tighter range. Markets naturally move through cycles of low volatility followed by high volatility.

When the price breaks out of a triangle while completing a head and shoulders pattern, traders often see a strong directional move. This combination captures both a trend reversal and a volatility expansion at the same time.

Why Timing Is Critical in Trading

Even the best chart pattern is only as good as its timing. Traders need a way to pinpoint when to enter a trade after identifying the broader setup.

A common approach is to first identify the large price pattern, such as a head and shoulders or triangle, and then use a secondary tool to refine the exact entry point.

This layered approach allows traders to combine broad market structure with precise timing.

Using Indicators to Refine Entries

After identifying the larger chart pattern, traders can use a timing tool—such as a cycle indicator—to determine the optimal entry point.

Instead of relying on indicators alone, they should be used as a fine-tuning tool after the larger trade setup has already been identified.

Think of the pattern as the overall strategy and the indicator as the instrument that helps execute the trade with precision.

Final Thoughts

The head and shoulders pattern is far more powerful than the simple three-peak structure many traders focus on. Its true value lies in understanding the broader market conditions surrounding the pattern.

By confirming a strong prior trend, recognizing when that trend becomes extended, and combining multiple chart patterns with proper timing tools, traders can significantly improve their chances of identifying high-probability reversals.

When used correctly, the head and shoulders pattern becomes more than just a visual formation—it becomes a strategic tool for understanding shifts in market momentum.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Forex Head and Shoulders Strategy: How to Trade This Reversal Pattern the Right Way video? Enter your answer in the COMMENTS section at the bottom of this page.

PLEASE PAY IT FORWARD BY SHARING THIS VIDEO & ARTICLE ON FACEBOOK OR TWITTER by clicking one of the social media share buttons.

FREE GIFT!

I’m giving away my favorite trading strategy that works in trading the markets. Just click on the button below, and I’ll personally send you an email with the first video.

Those interested in this video of Forex Head and Shoulders Strategy: How to Trade This Reversal Pattern the Right Way also showed an interest in this video:

https://www.topdogtrading.com/head-and-shoulders-patterns-advanced-technical-analysis/

Subscribe to my YouTube Channel for notifications when my newest free videos are released by clicking here:

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The post Forex Head and Shoulders Strategy: How to Trade This Reversal Pattern the Right Way appeared first on Top Dog Trading.

In this video, I’m going to walk you through the exact market logic behind this pattern, how to identify it on your charts, and most importantly, how to combine it with trend analysis, support and resistance, momentum shifts, and my Five Energy Methodology to create high-probability trade entries. If you’re serious about mastering candlestick trading, timing reversals, and improving your accuracy, this is the lesson you don’t want to skip.

Hope you enjoy it!

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My Favorite Candlestick Pattern for Reversals – Video

Introduction

Hi traders, Barry Burns here from Top Dog Trading. Welcome to Part Two of our Japanese Candlestick Charting Techniques series. If you missed Part One, you can find it on my channel—watch it later, but stay with this video first.

Review of the Rejection-of-Value Candlestick Pattern for Reversals

In the previous lesson, we focused on one of my favorite candlestick patterns—one that reflects a strong rejection of value. We looked at how it works in the direction of the trend.

Here’s a quick refresher: the ideal bar has a real body that opens and closes near the high, with a long lower wick. That wick shows that sellers pushed the market lower, but buyers stepped in aggressively and forced it back up. Lower prices were rejected, and demand won.

Context Matters: Why You Can’t Trade Candlesticks Alone

This pattern is powerful, but only when used in context. You can’t trade it by itself.

In the example I showed, it appeared during the first pullback of a new uptrend—wave one, wave two—confirmed with my cycle indicator. I prefer buying on retracements rather than breakouts because breakouts often mean you’re paying retail. Retracements let you enter at wholesale prices.

Again, market logic is everything. Whether you use a moving average, an indicator, or a candlestick pattern, you must understand why it works—what buyers and sellers are doing behind the scenes to form that pattern.

Using the Pattern Against the Trend

Now let’s flip it. Instead of using the pattern with the trend, let’s look at using it against the trend.

Here we have the same type of rejection-of-value bar, but this time we’re in a clear downtrend. This is where traders often make a mistake: they see a great candlestick pattern and jump in without considering the bigger picture.

Understanding Trend vs. Short-Term Signals

Candlestick signals are very short-term—they don’t define the trend. A trend is a long-term market structure.

Someone once asked me how long the trend continues after this candlestick pattern appears. Well, it doesn’t create a trend. You use it early in a trend for retracements, or late in a trend for potential reversals. It’s a scalpel, not a broad brush. Moving averages, especially longer ones, are broad-brush tools.

Ignoring Early Counter-Trend Signals and Waiting for a Retest

Back to our chart: the candlestick looks good but shows up early in the downtrend, so we ignore it. Instead, we monitor the area and wait.

Eventually, price comes back to retest that level—and that’s what we want. If I’m going to trade counter-trend, I only do it late in the trend. You’ve heard the saying: the trend is your friend until the end.

What We Need for a Valid Counter-Trend Trade

So here’s what we look for:

• A long-lasting trend
• A rejection-of-value candlestick
• Price testing a support level multiple times
• And ideally, a momentum shift

In our example, we get a rejection of value once, then again on the next touch of support. That support level holds three times. This is what I call the Top Dog Trading Rule of Three: if a level gets tested three times and doesn’t break, it’s less likely to break in the near future.

But again—never trade any one element by itself. Each is just a piece of evidence you combine to create a probability-based case.

Momentum Confirmation: The Final Piece of Evidence

Then we see momentum shifting upward, confirmed by my momentum indicator. At this point, we have multiple uncorrelated signals lining up, and that’s when a counter-trend trade becomes valid.

How This Fits Into the Five Energy Methodology

My overall system is the Top Dog Trading Five Energy Methodology, which combines five types of market “energies”—basically expressions of supply and demand—using indicators, price action, and multi-bar patterns. The goal is to stack evidence, build a strong case, and take high-probability trades.

Get the Free Cycle Indicator Training

If you want to learn more about this approach, including how to set up and use the cycle indicator, I’ve recorded a free training for you. Just visit indicatorwebinar.com and you can watch it anytime.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

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My #1 Japanese Candlestick Pattern for High-Probability Trades – Video

Introduction

Hey traders, Barry Burns here from Top Dog Trading! In today’s lesson, I’ll show you my absolute favorite Japanese candlestick pattern — one that clearly shows market rejection and helps you identify high-probability trading opportunities.

The Importance of Rejection in Trading

What we’re looking for in price action is rejection of value. Rejection tells us where the market tried to go but couldn’t — a key insight into trader sentiment and institutional control.

This is similar to Market Profile concepts, where rejection at certain price levels indicates imbalance between buyers and sellers.

The Candlestick Pattern Setup

The pattern itself is simple:

• You’ll often see a long wick or shadow on one side, showing where price was pushed but then sharply rejected.
• The body is relatively small, showing indecision after a failed move.
• Context is critical — you want this to appear at a key support or resistance level, or after a strong directional move.

When you spot this kind of pattern, it’s the market telling you, “We tried to go higher (or lower), but there was no more fuel.”

Applying Context and Confirmation

Never trade the candlestick pattern in isolation. Use it alongside:

• Trend direction (e.g., via moving averages)
• Cycle timing (to gauge where you are in the wave)
• Momentum confirmation (to ensure there’s strength behind the reversal or continuation)

The candlestick gives the signal, but the context gives the confidence.

Example in Action

Let’s say we’re in a strong uptrend. Price pushes higher, prints a long upper wick, then closes weak. That’s a clear sign of buyer exhaustion — a possible short-term reversal setup.

Conversely, in a downtrend, a long lower shadow with a strong close back up suggests seller exhaustion and a potential buying opportunity.

Key Takeaways

• The candlestick pattern shows rejection of value — a powerful visual cue of who’s in control.
• Combine it with trend, momentum, and cycle analysis for higher accuracy.
• Always confirm with market context before entering a trade.

Bonus Resource

Want to learn more about timing your entries and spotting these patterns in real time?
Check out my free training on the Five Energy Methodology and Cycle Indicator Setup at 👉 indicatorwebinar.com.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this My #1 Japanese Candlestick Pattern for High-Probability Trades video? Enter your answer in the COMMENTS section at the bottom of this page.

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Should You Use Pre-Market Data for Day Trading? – Video

Hey traders, Barry Burns here with Top Dog Trading! Today I’m answering a question I get all the time: Should day traders use pre-market and post-market (extended hours) data?

The short answer: Yes — I absolutely do. But I’ll also explain why you might sometimes want to look at a chart without extended hours data, and how I combine both approaches for the best results.

Why I Use Extended Hours Data

One big reason is pivot levels. I’m a huge fan of traditional floor-trader pivots (the classic calculation). These act as important support and resistance zones — decision points where money flow strengthens or weakens.

On very short-term charts (like the 200-tick chart of the Micro E-mini Nasdaq I’m showing), prices may overshoot these levels slightly. On longer timeframes, they line up more precisely.

I calculate my pivots using 24-hour data — pre-market and post-market included. Why? Because highs or lows often form during extended hours, and you don’t want to miss those when setting your levels.

However, I don’t include Sunday’s limited session in my Monday pivots. I base Monday’s levels on Friday’s high, low, and close instead, because Sunday’s thin trading can distort the numbers.

How I Configure My Charts

In NinjaTrader, I set my data to 24 hours, 5 days a week (not 24/7), and I use intraday data rather than manually entering daily values. That way, my automated pivot indicator plots everything correctly.

This ensures my support/resistance zones reflect the true highs and lows — including pre- and post-market activity — which I’ve found to be much more accurate.

Extended Hours & Wave Counts

Another advantage: wave counting and swing analysis.
I live in California, so the official market open is 6:30 a.m. my time. I count swings continuously, even across days, and using pre-market data gives me a smooth flow for my wave counts.

Without extended data, you’d often see gaps where there’s actually a continuous trend, which breaks the symmetry of your analysis. On the flip side, not including extended hours can highlight gaps — which can be useful too.

My Best-of-Both-Worlds Approach

Here’s how I handle it:

• I use charts with extended hours data for pivots, wave counts, and smooth price action.
• I also pull up a chart without extended data to see gaps clearly.
• Then I manually mark the previous day’s close on my extended-hours chart, so I know exactly where the gap exists.

This way, I get the advantages of both methods.

Wrapping Up

So yes, I include pre-market and post-market data in my analysis — but I also check charts without it to spot gaps. That combination gives me the clearest view of the market.

And if you’d like a proven setup I personally trade, check out my free Rubber Band Trade at rubberbandtrade.com. You’ll get five free video lessons and my complete strategy — the same one I still take every time it sets up.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Should You Use Pre-Market Data for Day Trading? video? Enter your answer in the COMMENTS section at the bottom of this page.

PLEASE PAY IT FORWARD BY SHARING THIS VIDEO & ARTICLE ON FACEBOOK OR TWITTER by clicking one of the social media share buttons.

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Simple and Easy Price Structure Trading | Stock Trading Strategies – Video

Welcome traders!

In this video, I’ll walk you through some of the core building blocks of technical analysis that I use when trading stocks. Let’s use Disney as an example.

On my chart, I’ve applied four key moving averages:

• 15-period EMA (black line)
• 50-period SMA
• 100-period SMA
• 200-period SMA

The last three are widely followed by traders and investors, which makes them very effective on daily, weekly, and monthly charts. They represent areas of dynamic support and resistance — not fixed price points, but zones that shift over time.

For short-term structure, I like the 15 EMA (some traders prefer the 9 or 20). It acts as a quick reference for pullbacks and retracements.

Using Moving Averages for Structure

When price gets trapped between clustered moving averages, it creates what I call a pinball pattern. This often signals a choppy market, which I generally avoid. On the other hand, when the averages spread apart, price tends to move more cleanly from one level to the next — from the 15 to the 50, then the 100, and sometimes all the way to the 200.

Support and resistance aren’t exact lines — they’re zones. Price might dip slightly below a moving average, then bounce back, which still validates the level.

Adding Horizontal Levels

Beyond moving averages, I also draw horizontal lines at significant highs and lows. These levels often line up with moving averages, creating “clusters” of support or resistance. The more traders notice these zones, the stronger they become due to collective behavior.

Markets may gap through these levels when there’s strong momentum, turning old support into new resistance (and vice versa).

Timing is Critical

Structure alone isn’t enough. The real challenge is timing — knowing when a market will bounce or break. That’s why I use a specialized timing indicator, which I share for free at indicatorwebinar.com. It helps me pinpoint precise entries with lower risk.

Wrapping Up

So, to summarize: moving averages and prior highs/lows provide the framework for understanding market structure. Add timing and momentum, and you’ll have a much more complete trading plan.

And if you’d like to take this further, check out my Rubber Band Trade strategy at rubberbandtrade.com. It’s a complete setup using the 50 SMA and a reversion-to-the-mean model, and I give it away free so you can test it for yourself.

Happy trading!

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Simple and Easy Price Structure Trading | Stock Trading Strategies video? Enter your answer in the COMMENTS section at the bottom of this page.

PLEASE PAY IT FORWARD BY SHARING THIS VIDEO & ARTICLE ON FACEBOOK OR TWITTER by clicking one of the social media share buttons.

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In this post, we’re diving into a powerful technique called Volume-Price Analysis. I’ll show you how to use volume spikes to identify key support and resistance zones based on actual trader behavior — not theory. By the end, you’ll know how to spot where big money is stepping into the market and how to use those levels to improve your trading decisions.

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Using Volume to Find Key Price Levels – Volume Price Analysis – Video

Introduction to Volume-Price Analysis

Hey traders, Barry Burns here with Top Dog Trading. Today, I want to walk you through one powerful aspect of Volume-Price Analysis—specifically, how to use volume spikes to identify key support and resistance levels in the market.

Spotting Significant Volume Spikes

We’re looking for moments where volume suddenly surges—dramatically higher than the bars before and after it. Ideally, the spike should be twice as high as surrounding volume bars.

This spike marks a point where heavy buying (demand) or selling (supply) came into the market. It’s not based on theory, math, or Fibonacci levels—it’s based on real trader behavior.

Drawing Support and Resistance from Volume Spikes

Once we see a volume spike, we place a horizontal support or resistance line at that price level.

• We’re not trying to trade the spike itself right away.
• Instead, we draw the level into the future and watch how the market reacts when it comes back to that price.

Why? Because when the price returns to that level, other traders are watching it too. They remember that strong buying or selling happened there before, so they’ll be deciding whether to jump back in or not.

Watching Market Reactions and Sentiment

Keep in mind—these levels are not guaranteed bounce points.
Market sentiment changes over time.

For example:

• When price comes back to a prior demand zone, but fails to bounce, it shows weakness and indecision.
• If the market then gaps down on high volume from that same level, it’s a strong bearish sign—showing that supply has taken over demand.

The Core Principle: Supply vs. Demand

At the heart of it all, markets only move because of supply and demand imbalances.

• When supply and demand are balanced, price consolidates and doesn’t move much.
• When one side overwhelms the other, price moves strongly—and that’s when we want to trade.

Volume spikes are great clues for spotting where these imbalances happened before and where they may happen again.

Example: Apple Daily Chart

In the video, I used Apple’s daily chart as an example.

• A gap up on a huge volume spike created a level of demand.
• Price later revisited that level several times—hesitating, consolidating, and eventually breaking down through it on big volume.
• That breakdown showed a shift from demand to supply—a bearish signal.

What’s amazing is that these price levels can remain relevant for months. Even long after the original spike, traders still react to those levels.

Combine Technicals with News

One important point: never rely on volume and price alone.

Major news events—like Apple’s product announcements or earnings—can completely override technical signals.

• News can cause emotional, knee-jerk reactions from traders.
• So always track economic calendars and company news.

As one of my mentors used to say:

“News trumps technicals.”
So use volume-price analysis, but always in context of current market news and sentiment.

Wrapping Up

Volume-price analysis is powerful because it’s grounded in actual trader behavior, not theory.
Use those volume spikes to mark key zones, watch how the market reacts when price returns there, and always combine it with broader context like news and sentiment.

If you’d like a free complete trading setup, grab my Rubber Band Trade strategy—no cost, just real value you can use right away.

Until next time…
Happy trading, my friends!

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Using Volume to Find Key Price Levels – Volume Price Analysis video? Enter your answer in the COMMENTS section at the bottom of this page.

PLEASE PAY IT FORWARD BY SHARING THIS VIDEO & ARTICLE ON FACEBOOK OR TWITTER by clicking one of the social media share buttons.

FREE GIFT!

I’m giving away my favorite trading strategy that works in trading the markets. Just click on the button below, and I’ll personally send you an email with the first video.

Those interested in this video of Using Volume to Find Key Price Levels – Volume Price Analysis also showed an interest in this video:

https://www.topdogtrading.com/good-trading-must-feel-unnatural-part-2/

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Scaling Into Trades – The Biggest Misconception – Video

Why Scaling Into Trades is NOT a Great Idea

Hey traders, Barry Burns here. Today I want to tackle the topic of scaling into trades. A lot of people like the idea, but my answer is simple: don’t. It’s not smart, it doesn’t work well, and I’ll give you three reasons why.

1. Lack of Confidence in Entries

Most traders scale in because they’re not confident in their initial entry. They don’t have a precise, rule-based system to consistently nail high-probability entries with small risk. So instead of entering with conviction, they add positions later to “average in.” But the real solution isn’t scaling—it’s learning how to get in with precision right from the start.

By the way, I teach this in detail in my free webinar at indicatorwebinar.com, where I show you the exact timing tool I use to identify cycle highs and lows.

2. Markets Don’t Trend Most of the Time

Scaling assumes you’ll catch a big trending move. But here’s the reality: markets only trend about 20% of the time. That means scaling into trades will fail you 80% of the time.

Even in a trending market, adding positions can backfire. Say you short after a retracement, then add more as it drops. If the market snaps back against you, you’re stuck with a bigger position in a losing trade. And in today’s markets—faster, choppier, dominated by algos—those nice, clean stair-step trends happen far less often than decades ago.

3. Risk-to-Reward Gets Worse with Every Add-On

Even in the best-case scenario, scaling still hurts you. Your first entry is always your highest-probability, best risk-to-reward trade. Every subsequent entry has:

• A lower win/loss probability (since trends weaken as they extend).
• A worse risk/reward ratio (because you’re entering further from the start of the move).

So statistically, every add-on makes the trade worse. Why build a strategy around making your trades progressively weaker?

The Better Alternative to Scaling into Trades

Trading is a game of probabilities, and scaling stacks the odds against you. Instead, focus on getting in early with a strong entry, managing risk tightly, and letting the market prove itself.

And if you’re looking for an alternative, check out my Rubber Band Trade at rubberbandtrade.com. It’s a complete reversion-to-the-mean strategy that works especially well in today’s choppier markets. It’s my free gift to you, so you can test it on a simulator before risking real money.

Free Offer!

I am offering one of my favorite trade strategies called the Rubber Band Trade. Absolutely free. And I want you to go and make some money. Try before you buy, or well, actually try and never buy because there’s no charge for this trade at all. And I’ll give you the setups, the exits, all the rules for it. It’s an objective rule-based method based on price pattern action that I don’t think anyone else teaches.

I’ve never seen anything else teach this particular price structure. So go get that by clicking on the green icon in the top right-hand corner of the video there, or by clicking on the green button below, and that’ll take you to a page where you can opt-in, get the video for the rubber band trade strategy, along with some other great free tutorials, one of my little mini-courses, absolutely free, courtesy of Barry Burns here at Top Dog Trading.

GET MY FREE MARKET ENTRY TIMING INDICATOR

BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at support@topdogtrading.com, and I’ll show you how to get access to that indicator.

What did you think of this Scaling Into Trades – The Biggest Misconception video? Enter your answer in the COMMENTS section at the bottom of this page.

PLEASE PAY IT FORWARD BY SHARING THIS VIDEO & ARTICLE ON FACEBOOK OR TWITTER by clicking one of the social media share buttons.

FREE GIFT!

I’m giving away my favorite trading strategy that works in trading the markets. Just click on the button below, and I’ll personally send you an email with the first video.

Those interested in this video of Scaling Into Trades – The Biggest Misconception also showed an interest in this video:

https://www.topdogtrading.com/why-the-market-turns-against-you-whenever-you-get-in/

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