AL brooks 5 min chart 18th bar | Google search

 

In Al Brooks's 5-minute chart analysis, the 18th bar often signifies the closing of the opening range. After 18 bars, or 90 minutes of trading, there is an 80-90% chance that the day's high or low has been set, and the high or low of the entire day's opening range is likely to be established by this time. Traders often look for a breakout of this 18-bar range to determine the day's expected trend and for a subsequent measured move. 

Significance of the 18th Bar 

• High Probability for Day's Extreme: 

  The 18th bar's significance is tied to the high probability of the day's high or low being set within or near this time.
• Opening Range Breakout: 

  A breakout above or below the price range established by the first 18 bars can signal the direction of the day's trend.
• Trading Range or Trend Day: 

  A breakout of this range can suggest the day will likely be a bull trend day, a bear trend day, or a trading range day.

Trading Strategy Around the 18th Bar

1. Observe the Opening Range: 

   Identify the high and low of the first 18 bars (which typically corresponds to the first 90 minutes of the trading day). 
2. Look for a Breakout: 

   Wait for a clear breakout move that closes above the high or below the low of this 18-bar range. 
3. Enter on Confirmation: 

   Enter a long position after a strong breakout above the high or a short position after a confirmed breakout below the low. 
4. Target a Measured Move: 

   After a breakout, traders look for a "measured move," where the price continues in the direction of the breakout for a distance roughly equal to the height of the 18-bar range.