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Book Discussion: Reading Price Charts Bar by Bar by Al Brooks
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Book Discussion: Reading Price Charts Bar by Bar by Al Brooks

  #311 (permalink)
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Brooks' Failed Failure in the CL

Just started watching the CL recently and saw two examples of an Al Brook's setup: Failed Failure.

For CL, it seems, this is up to a 3 pip event, rather than the 1 pip in the ES Al discusses.

On the chart below the failed failure on the left is more convincing as it happened in a region of multiple tests of going lower. The second just confirmed a sell based on BigMike's CMA/ExpEnv method and a divergence in the BuySellVolumeTotal Delta Momentum indicator
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  #312 (permalink)
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Are you sure about the short - just looks like a failed high to me but it could be the pic resolution?

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  #313 (permalink)
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It was a reversal at the high & it fell within the 3 pips I've noticed before. Shown below is an extreme close up. Combine it with the other signals, like the 5th Env Band of BigMike's CMA/EnvExp & it was a good place to sell. CL ended up making a double top at this point, that was not confirmed by the BuySellVolume in Delta Momentum mode, as shown on the chart. It was not until the next day that this price was surpassed.

The point I was trying to convey is that failed failures are some times good entry points with the best happening when there are multiple test of a price - like the buy - before there is a 1-3 pip reversal. But as an exit the criteria is less stringent. If you bought the failed breakdown and sold at the failed high that would have been a really nice trade.

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  #314 (permalink)
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This just happened earlier today: here is a 1 pip failed breakup in 6e at the end of the next rally 30 minutes later. Then on the next move up the price is 1 pip short of the high . Sorts head and shoulders like. The delta momentum shows buying on the 3rd attempt and then sellers step in and down 28 pips from the 3rd attempt to go higher.

I am liberal in my defining a Brooks failure, but sometimes, even this loosely based model works.

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  #315 (permalink)
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Hi ZTrade,

Nice charts.... Although I had to put my sunglasses on to look at the green one.

The thumbnail chart works best for me. The others are just to big for my monitor.

~Mike

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  #316 (permalink)
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Blame Big Mike for giving me unlimited storage. But an extreem close up was necessary.

Sorry about the color. Here is an example from today. that I discovered changing the colors, lol.

The premise: To be a Brooks' failure, short at the break of the sharky/mike adxvma with color (dotted line) for a long use the opposite. Especially good when the price crossed futures.io (formerly BMT)CMA & failed. There is also a NT7 version of both in the DoubleZTrading Package (sorry Elite only - some things are worth the price).

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Last edited by ZTR; April 7th, 2010 at 11:13 PM. Reason: Need to clairify
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  #317 (permalink)
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I think Al's price action trading works well on equity indexes. But I don't think it works that well on Forex, especially on 5 mins. Check yourself.

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  #318 (permalink)
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Haven't done FOREX, post a chart when you get a chance?

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Hey guys! Al Brooks will be presenting a webinar here at futures.io (formerly BMT) on price action! It is scheduled for June 21st at 5:00 PM ET.

There is more information on our webinars in the upcoming webinars thread:
https://futures.io/elite-circle/3383-upcoming-webinars-training-education-6.html#post36421

June marks our 1-year anniversary, and as such we'll be giving away a lot of really great stuff. This includes giving away autographed copies of Al Brooks book: Reading Price Charts Bar By Bar.

More details will be posted as we get closer to the event date.

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Hi everyone -

I hope this thread continues. I'm new, trading part time. I am consuming a lot of information just like everyone else and always looking for ways to fast track my learning curve.

I think I've learned a valuable lesson early in that price action is the way to go, but just like everything else it is not a holy grail.

That first part is nothing new but leads to this second part.

My thesis - Al Brooks must have greatly discounted his own ability to trade. The sentence, All you need is a 5m chart and a 20 period ema, should have also included 10 years of prior experience on that list. He will say Fibonacci is helpful, but don't use it because it is a distraction. I agree but only after you have trained yourself to apply it in your head.

Prerequisites to Trading similarly to Al Brooks

What I have gathered from the webinars, articles, book, youtube videos, website.

It's a mistake to think this striped down, simplified, clean chart method is easier to trade if you are a newer trader. In reality it requires much more focus and understanding than an indicator system.

With indicators you look for "events" crosses, overbought, zero line reject, divergence, whatever. These "events" give" "signals".

Al Brooks is watching every singe 5m candle putting it in context with the previous price action. Like he says "Everything is important" All day is an event.

He makes reference to many things at one time or another that provide context and frame potential trades. They are not part of the set-ups, but in my opinion are inherent in his application.

Elliot Wave, Wyckoff Wave, Whatever. he understands mark up, mark down cycles, impulse wave, corrective wave. He doesn't use this terms.

Fibonacci numbers, retraces, measured moves, harmonic patterns like gartly ab=cd.

Key price levels like previous days highs and lows. Swings highs and lows as normal people understand them.

He also has an advanced understanding of Volatility. He doesn't need Bollinger bands, Kelter channels or any price envelopes.

The big thing is candle addition and subtraction. He only needs the 5m chart because he knows what 3 candles on the 5m look like to the 15m traders, and so on. Also what single candle patterns on the 5m look like on the 1 and 3 minute charts. He talks about ii's and iii's. Those are similar to nr4 and nr7 patterns. Coiled spring patterns. That stuff is from Toby Crabel Book title "Day trading with short term price patterns and opening range breakout" I think.

So my point is that none of that stuff is entry level. It is hard to learn and harder to apply one concept at a time. Take it all together (because it all describes the same thing anyway) and use it real time with money on the line. Keeping emotional control when all you have in front of you is a 5m chart and a 20 period ema.

Most professional's have 4, 8 or more years of school before they start, and the education is not cheap. If you already have experience with these prerequisites than you will be a step ahead. If you are like me and you have only a cursory understanding of those concepts than this "simple price action method" may disappoint you.


Does anyone else feel like this?


In the end the question is whether or not it would be worth it to study those other concepts in detail or skip a step for now. Go with Al Brooks teaching alone and trade from there? Provided I'll never stop learning, but for the sake a fast tracking my learning curve and being more consistently profitable.

After typing all this I'm going to post it even though I think I came up with my own answer. Al's book is for the serious trader. If I consider myself a serious trader and I do, than I should not post a long whiny post and just put in the work. Sorry but sometimes I need to work it out.

Ron


Last edited by Rumble; May 29th, 2010 at 04:10 PM.
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