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Book Discussion: Trading Price Action Trends, Reversals, Ranges by Al Brooks


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Book Discussion: Trading Price Action Trends, Reversals, Ranges by Al Brooks

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  #1 (permalink)
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Al Brooks has just released his new book:

Trading Price Action Trends: Technical Analysis of Price Charts Bar by Bar for the Serious Trader

(Amazon Link)

This is the first book in a 3 book series. With the great reviews of his first book (Book Discussion thread found HERE), I wanted to start a new thread where we could discuss his newest work.

Disclaimer: I have not read his first book, but am very excited to dig into this one.

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Thanks for the thread. I remember that Al mentioned during his last futures.io (formerly BMT) webinar, that this book was being edited differently than the first one, so that it should be much more readable. Looking forward to some reviews

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This is what we have to look forward to!

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My copy arrived from Amazon 3 days ago. Reading through the intro so far and skimming through the rest of the book to get an idea, since I've read the first book once and was waiting for the new books to read instead of re-reading the first one. It's truly a classic. The editing makes it much easier to read. For each chart there is an "in depth" section where the gritty details are covered and Al recommends skipping those until a second read through the book if you're new to his brand of PA. The charts are much better and sharper, like seeing an image in full resolution this time compared to the original. Al also lists the links to images of the charts of the book available online in the intro.

Some of the passages in the intro are the same as in the original. Some of the same advice which I noticed was present in a later section of the original book. He expands on his recent thoughts about institutional trading and high frequency trading and HFT firms. Having attended some of his live webinars some of his commentary are recaps of what he repeats often in his live webinars. I've only completely read up to the first chapter which starts at page 55. But he does extra prologue "summaries" of what's to come and mentions what will be in the 2nd and 3rd book. You can tell he is trying to address the confusing aspects of the first book addressed by feedback, and it's appreciated on my part and probably will be by everyone else who reads the new books.

For an example: I finally get more solidly what Al means by a "high1" and a "high2". With the clearly labeled chart on p.51, he shows a high1 or high2 only occurs after a "leg". So after a leg after a "high1", the next bar with a high higher than the previous bar counts as a high 2, only after a leg after the previous "high1". And the same goes for more "highs", like H1,H2, H3 and H4. Even after reading on the brookspriceaction.com forum, I didn't get this question answered sufficiently in my mind until now.

Overall, it's still not a book for an absolute beginner unless the beginner is willing to work through it and re-read pages as necessary. One has to get used to Al's terminology and style of his chart analysis but it gets easier and routine once you've gotten there. If you've read the original book the new book "Trading Price Action Trends" will be an easier and familiar read and a good review to consolidate what you've read in the first book. There's probably a lot more new material I haven't read yet, which may be new or further clarifies , illustrates, and promotes better understanding of his PA concepts. The three set I would root for to become an authoritative classic text on price action and trading, a good solid foundation reading for aspiring chart TA traders.

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Just in case you missed it. The web address and password to download the charts is on page 439.

I'm on page 129 and that is after a week of reading. It is easier to follow than the first book, but it's not easy.

It appears that around page 127 he puts the bar number next to the bar not above it, but I could be wrong.

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I've picked up a copy also - have not read the first book because of the reviews. Still in the Intro.

Besides exercising my brain, my goal in reading this book is to work on my 'short game', focusing on the short side with short term day trading. My main style of trading is to 'buy the dips' of an index, at 'apparent' short/intermediate term support areas, scaling in to more weakness, up to a point; selling/scaling out into the 'usually' pops back up. Managing my risk with selectivity, smallish position sizing and time - obviously, willing to hold overnight.

Want to balance that part of my trading via focusing on day trading on the short side, with the 5 minute -- or possibly larger -- charts.

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I'm about halfway through the Trends volume and the improvement from the first book is huge. It is very clear that Al spent a lot of time reworking the content and adding new insights to make the subject more easily accessible. That said however, this is still of necessity, very dense reading. Based on what I've seen so far, by the time one is finished with the three books one will have completed the equivalent of a graduate level course. To get the most out of the books, be prepared to devote that level of effort to them. My one complaint goes, again, to Wiley. I have come across several typos already and considering how long the publisher sat on the finished copy there is no excuse for the sloppy editing. Most of the mistakes were the result of reworking sentences and either leaving words out or not deleting words no longer needed. There was, however, one reference to the wrong number on a chart and one bull/bear mistake refering to a setup. Still, this is a vast improvement from the rate of errata in the first book and Al should be very proud of a fantastic achievement that fills a huge void in the trading reference universe.

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Here is an example of what can seem confusing, at least to me:

From page 135 the sentence that starts: "Bar 16 was a large bull inside bar... it was also a high2 in a trading range."

Definition: H1,H2 a high 1 is a bar with a high above the prior bar in a bull flag or near the bottom of a trading range. If there is then a bar with a lower high ( it can occur one or several bars later), the next bar in the correction whose high is above the prior bar's high is a high 2.

The problem is bar 16 the inside bull bar does not have a high above the prior bar. The H1 is the doji prior to the bear bar that hits the low of the day and proceeds the inside bull bar or bar 16. It seems to me the H2 bar is one or two bars after bar 16.

A possible explanation from Al's website: at Forum >>Al's Trade Setups >>[High/Low] Two Types of Trades For Beginners about 3/4 down the page. Apparently either the "signal bar" or the "entry bar" can be labeled H2. Al seems to confirm this by saying he references the signal bar more than the entry bar even though it's the entry bar that's labeled H2 in the book, referencing the prior book.

Back to the new book: Bar 16 also appears to be a two bar reversal at the low of the day. Is it a typo or is he referencing the inside bull bar as an H2 because it is a set-up for the H2 entry bar that follows it? He seems to answer the question by calling bar 16 an acceptable long setup. The "setup" being "a pattern of one of more bars used by traders as a basis to place entry orders. If an entry order is filled, the last bar of hte setup becomes the signal bar. Most setups are just a single bar."

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Well the label 16 appears to be under the bear bar not the bull bar but let's not nitpick. Once you understand the concept it doesn't matter which is referenced, the setup bar or the entry bar, they are both part of the same trade. It's the idea that is important; kind of like the New Math song by Tom Lehrer. The small bull reversal bar three bars before the bull bar 16 is the setup bar for the H1 and the trade triggered on the next bar. The bull bar 16 was the setup bar for the H2 which also triggered on the next bar. The big bear and bull bars under label 16 are the two bar reversal. What IS complicated is that sometimes a H1 or H2 may be a bull bar that doesn't go above a prior bar or a L1 or L2 may be a bear bar that doesn't go below a prior bar. These variants are rare but Al pointed one out in one of his early webinars. Also an outside bar can reset the count from H2/L2 back to H1/L1 which he explains in the new book. My advice is to concentrate on the setup and entry bar as a unit and don't get too hung up on which bar is labeled.

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