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Book Discussion: Reading Price Charts Bar by Bar by Al Brooks
Last week everybody had free access to the live room during the trading sessions. Al did not only talk about what was about to happen, but also educational stuff like in a webinar. And Q&A after the close. I was for the whole week in the room.
This room is great value for edu or as a helper in understanding the book. For me, I had too many conflicts with my own trading, as he was talking too much different things. And to be fair, I was not only trading ES but also 6E.
If you want to learn, then I would recommend a month with sim. Worth the money.
After reading his book 2 times. I decided to join Al Brooks new trading room. Compared to other trading rooms I have been in I think he is one of the best in describing the price action. He always talks about both the Bull and the Bear scenerio for every setup. He also talkes about other traders stop loss locations and why and how things might shape up.
I am not endorcing his room nor do I get any money if anybody joins. But for anybody who wants to learn the language of the price bars. I think it is invaluable to join the room for just one month. It will open your eyes as to how experience traders look at price action. And how patient they are in taking trades with high probability setups. Some days it takes three hours before he takes a trade.
One final observation. if you find the book to be difficult to follow or understand, listening to him talk live about the market will make understanding some of the concepts a lot easier.
I have read/studied Al's book a few times, well a good chunk of it a few times at least. I have many pages bookmarked and highlighted Although not an easy read, it is filled with , what I believe, some good setups. I have used some of his setups in my real and paper account, and of course not every trade was a winner; but to keep it under control it is all about money management at the end of the day. I found that real time analysis of these setups is much more difficult than looking at a chart at the end of the day, which is true of any system, price action, or whatever your flavor of trading is I imagine. But in my short experience in trading the e-mini, about a year, this trumps any indicator I have used, and I have tried a bunch and they all worked until they didn't. I have used Demark's stuff, Linda Raschkes 10/3 MA, Bollinger bands, etc etc etc; I still use some TPO in conjunction with Al's setup. I just try to stay cognizant of reports and when they are released to get out of their way and trade mostly the first hour only. End of the day, worth taking a look at Al Brooks book, if you find that indicators in general are not working out for you.
One of the points I made on my previous post was that Al sometimes waits a long time before he takes a high probability trade.
As you read this post keep in mind that Al does not call trades in his room.
I tried to insert a copy of the image from his web site (ES Emini chart from 12/18/2009) but because I have less than 5 posts I couldn't. You can go to his website and look under "forum" and Fridays trading update. The bars count in my post are from the image from his Fridays Trading Update summary.
On bar 8 he was talking about an inside outside inside formation and a "possibility" of having a bull day. He said that it might be ok to buy the breakout of bar 8. Then he talked about not being happy with how weak bulls are on bars 9 and 10. Both bars had weak closes. By bar 11 he mentioned that it could develop to an outside bar and trapping the bulls but he wouldn't short it if it happened.
He did not elude strongly to any shorting opportunity from bar 12 to bar 22. He was thinking of good buy setups at bars 12, 16, 20 and 22. And he was eluding strongly on the buy side by bar 28. And I think he make good money on the long side after that.
Here is the point: To his eyes and based on his experience the short setups between bars 12 to 22 were not high probability shorts. But the long setup after bar 28 was a high probability setup. He didn't get emotionally stuck in the fact that he missed a 7 point down move (which most of us probably would if we missed the move). He stayed calm and stayed with his main goal which is to make "money". He waited about 90 minutes before his setup came about. That shows a lot of discipline and patience.
(p.s. since he doesn't call trades in his room, it is quite possible that he shorted between bars 12 to 22. Perhaps scalping some points. But as I was listening in the room it didn't sound to me that he did.)
I'm sure most of you know this already but I received this email, and thought some might be interested.
In December, the members of this website negotiated with Al to provide a daily webinar during the trading day. Al has said he may stop this as we approach summer and he pursues other ventures, so this is being done on a month-to-month basis.
The webinar is designed to be educational in nature, with Al pointing out the best Price Action setups as he sees them forming during the day. This is not a place where trading calls are made and you just follow along. It is beneficial to be familiar with Al's trading style and terminology before joining. See the Articles section below the left menu for more info on how Al trades. www.brookspriceaction.com
I have been participating in AL Brooks rooms for a few days when it was still free of charge.
My observations:
1. Al seems to be an honest trader (Hard to find people like that these days)
2. He does NOT call live trades
3. His EOD charts in the forum section of the site DO NOT tell you where he went long or short
4. He misses BIG moves often
5. He risks 2 points to make one (sometimes lets profits run)
So, I decided that I will not join the room since I believe it is NOT possible to learn his methods unless he calls LIVE trades and I can notate my charts. I think that if he called live trades his service would become a 1000% better.
I'm not a big fan of vendors who don't trade live with full transparency.
If what you say is correct, I wouldn't spend a cent in a room like that, despite the recent notoriety Brooks has been receiving. The trading educational landscape is filled with so-called traders who make their living from students instead of risking their capital.
Here is some sound advice from a trader who is also a vendor. His name is Ed Abrieu.
"I have a few thoughts about how to save yourself a bundle of headaches and heartaches, and maybe a few buck as you search for a trade room. First question is why do you need a trade room? Simple answer is that in the beginning it can help you get through some of the learning curve, and you have a place for some some sympathetic response and support for your trading woes. Also, a good trade room should help you make money while you learn.
Unfortunately, with 100's of methods and as many trade rooms out there, how can you wade through the junk and concentrate on the better ones? I have a few criteria that I think are an absolute must for a real trade room where your chances of succeeding and MAKING MONEY WHILE LEARNING are high.
Number one - You must be able to see the moderating traders charts in real time.
Number two - You must be able to see the trades entered in real time either through the moderators order dom, or chart trader or some method where it is apparent that the trade was entered, filled, and managed.
Number three - You must be able to follow the trades, or at least most of them. This issues gets a bit difficult in a fast market and may need some adjusting.
To my mind there are three basic types of trading rooms. One is where it's just pure trading, minimal instruction. The other is where the education has more emphasis, and trading takes a back seat...hence few trades. The third is a hybrid; a steady stream of trading towards a set room goal and a scheduled series of ongoing educational sessions in addition to the room's daily trading. So, first you need to decide which is right for you. Here's a tip. If you are considering a trading education in a particular trading method because you have none of your own, then look for the education emphasis. Otherwise, if you have a few good setups you know, and have some of your trading education already underway, then look for a trading room that will add to your knowledge, and help you make money as you learn their methods and tools. If, however, you have traded a bit and have some tools and know some setups and yet nothing is working or going well for you, then look to the hybrid.
Regardless, remember the #1, #2 and #3 rule. DO NOT SETTLE FOR ANYTHING LESS.
If you are unable to see the trade moderators charts and his trade entries then pass that place up. It may be a good place, it may not. But without the visual verifiable evidence you will find yourself not only having to watch your own chart, but also having to compile in your head what is happening, and keep that picture going along with all the other pressures of trading. I do not care what excuse is given...there is no excuse for not showing real time moderating trades taken in real time. Technology is not an issue, money cannot possibly be the issue, so it must be something else? Let's see...fear, exposure, stop fluffing, doubling up or bad trading habits or what? You tell me.
So, there is the absolute newbie (and it's going to be painful) who really needs a lot of luck to avoid the garbage rooms and there is the trader who is just looking to improve and there is the trader who really needs a better set of tools and methods to get him out of his funk.
So if you have found a room then the best way to take advantage of the room is to spend a few weeks just listening and watching. We are conditioned for immediate response syndrome, instant gratification syndrome and these are detrimental to your trading health. We can probably all agree on that. If you do take the time to watch and listen, then keep a notebook and write down every trade call, the time and the particulars...targets hit, stops etc. and review it after market while looking at your own chart.
Don't even look at your own chart while doing the assessment. Concentrate on what's going on in the room because if you decide on that room you are going to have to do the next thing to get the most out of the room. That is to trust the trading moderator and his trade calls. Why? Because you want to be able to make money while you learn. So your first task is to see if the room makes sense to you. Can you follow the logic of the trade moderator. If he is a really good trader, he may be a lousy moderator and vis versa. So you need to know that before you join.
Look for verifiable results. Verifiable results are the trade records 1st hand...not some spreadsheet made up afterward, or some list of trades posted in a chat window (even if in real time). In Ninja it's pretty easy. Look for the trade list records unadulterated right out of Ninja. Look for the summery records.
I have heard a lot of traders complain that sim doesn't count. Well, I think that is wrong thinking. What you need to see is the trade time of entry, the target completion and the stop. Add a tick of slippage in one direction, if you like, to the trade and see what it looks like. Often, a moderator will move to sim if he has hit his daily goal. The better moderators are not at all shy about letting you know they have moved to sim. I think it very unreasonable of traders who insist that a moderator continue to endlessly trade throughout the day without some kind of stopping criteria. The concepts of over trading, pointless trading, mental fatigue, and plain stupidity come to mind if anyone thinks that trading without some kind of daily goal or quota is going to make you a better trader. On the contrary. So why should a moderator be forced to practice bad trading habits just because you as a member may have strolled into the trade room at 10:56 and want a winning trade. Well , guess what. By 10:56 most good traders are done for the day! So, once the daily goal is hit and if the moderator is any good, then you should not have any problems with his moving to sim. What's important is does he continue to call winning trades? Do the tools continue to give high probability setups? Can you see his trades?
So, now you have a room you think is going to work for you. You took the trial, you signed up for 1 month. BTW, do not accept a room where you are required to sign up for a longer specified term...this is bs. If the room is a good room then there should exist the confidence that you will be so pleased and satisfied that you will return of your own desire.
Now, remember the part about trusting the moderators trading? This is where it is important that you accept that fact and live with it. You are not going to catch every trade call...no matter what room you are in. Its just the way it is. Hesitation, you coughed just as the trade was called, a bug distracted you...whatever...its going to happen that you will miss a couple. So, the bottom line is that to get the most out of any trade room AFTER you have done your homework and decided, is to take every room trade period. You homework should already have told you the performance expectation, the style of the rooms moderating trader, the basic methodology and trade setup rules, etc.
Your job now is to learn the method and the setups in great detail, practice them under guidance, and make money while you learn. I have been in some pretty crappy rooms (now I know they were crappy) and some pretty decent rooms (of course these are the ones I abandoned because I did not have my own act together).
Currently I do not need a trade room. If you are at that point then congratulations! If not, then even if you join any trade room remember to look forward to the day when you can graduate and trade independently, consistently successfully. Find a trading buddy and go make some money!"
I also thought about joining the room and decided not to. The main reason is because I think it is too over priced, it seems like they are just trying to make money (not Al, but the person running the website). The second reason is, I feel like you would not learn anything that isn't already taught in the book that Al wrote. The third reason is, I just don't need it.
The absolutely best way in the world to learn how to trade price action is just look at and observe charts. That's it. Look at where the moves happened and what caused it to happen. What the bars looked like (inside bar, outside bar, reversal, failure, etc.). The same things seem to happen over and over again. It takes a lot of screen time though.
Although not an easy read, it is filled with , what I believe, some good setups. I have used some of his setups in my real and paper account, and of course not every trade was a winner; but to keep it under control it is all about