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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

  #81 (permalink)
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This is gonna sound hella stupid, but one of the points he made in the book that has permanently stuck itself in my head (I think it's in the preface, not sure on that) is that even without a chart, you have a 50% chance of being right.

Think about that for a moment.

You have a 50% chance of being right in any trade without any chart at all.

Now, how many traders do you think there are out there... sitting next to some very expensive computers that are running incredibly complex formulii -- and yet performing at a rate beneath that of a coin-flip?

You have a 50% chance of being right in any trade without any chart at all.

That's a fact, right there.


Hi All,

A few thoughts...

If its just a coin toss, why do 85 percent of traders get their clocks cleaned?


I'll agree to this 50% notion only under specific criteria.


Both trades must be made at the same time with no slippage.

There cannot be any stops used with the trades.

Both trades must be sold at the same time with no slippage.


You only pay for fees and commissions!!!


Maybe I should write a book.

Maybe I'm just not smart enough to understand it.

I think I'll pass.

RJay

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  #82 (permalink)
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RJay View Post
If its just a coin toss, why do 85 percent of traders get their clocks cleaned?

Because picking the direction is not the factor that decides profitability. More than anything else, the three M's are --- money management, trade management, risk management.

You can give a new trader an indicator that is right 90% of the time and they will still loose their ass because they can't follow the rules and have terrible money management skills.

This is also why indicators are pointless. If you aren't making money, it isn't because of having the wrong indicator.

BTW, you mention commissions and fees --- that is also why this is not a zero sum game...

Mike

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  #83 (permalink)
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AL Brooks speaks


Bar by Bar readers,

Learn from real traders like Al Brooks, George Kleinman and more. Free On-line webcasts will provide detailed power point presentations with trading strategies and examples, along with live question and answer sessions with presenters. The I-Trade Show is for all traders of futures, options, forex and stocks; people who trade anything that moves.
Topics will include:

Wake Up! How to Prep and Trade the Market Open
Price Action, presented by Al Brooks

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[Gets Old, presented by George Kleinman


Live Show: December 8 & 9

On-Demand: Dec 10 - March 12

visit FuturesMag.com

Cost: FREE

Have a great one!

GarryM

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  #84 (permalink)
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I decided to order this book like the rest of you, I thought Al Brooks could teach me a lot of new stuff.

Man, I am still in chapter one and it's painful. Something about his writing style is not agreeing with me. I keep feeling like these super-long paragraphs of why a bar is, could, could not, might, might not be, sometimes is, sometimes isn't, a bear or a bull bar .... ugh, I just lost my train of thought again just typing that...

I wish he had used bullet points for describing some of it instead of writing it in paragraph format.

I've learned more about doji's though in the first chapter than I ever knew before. I'm also paying more attention to up/down bars like the two in the attachment.

He's also reminded me that if it looks like "xyz", it probably will behave very similar to "xyz". Trading is not an exact science, and too many times I (we?) get caught up in looking for the perfect symmetry or perfect bar.

As Douglas Adams said:

Douglas Adams
If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands.

Last, I'm also learning more about ii and iii bars. So as you can see, I am in fact learning from the book, but man, it's a tough lesson.

Are all of Al Brooks' books written like this?

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
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3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

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  #85 (permalink)
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Big Mike View Post
I decided to order this book like the rest of you, I thought Al Brooks could teach me a lot of new stuff.

Man, I am still in chapter one and it's painful. Something about his writing style is not agreeing with me. I keep feeling like these super-long paragraphs of why a bar is, could, could not, might, might not be, sometimes is, sometimes isn't, a bear or a bull bar .... ugh, I just lost my train of thought again just typing that...

I wish he had used bullet points for describing some of it instead of writing it in paragraph format.

I've learned more about doji's though in the first chapter than I ever knew before. I'm also paying more attention to up/down bars like the two in the attachment.

He's also reminded me that if it looks like "xyz", it probably will behave very similar to "xyz". Trading is not an exact science, and too many times I (we?) get caught up in looking for the perfect symmetry or perfect bar.

As Douglas Adams said:


Last, I'm also learning more about ii and iii bars. So as you can see, I am in fact learning from the book, but man, it's a tough lesson.

Are all of Al Brooks' books written like this?

Mike

Mike,

I just wanted to say that Brooks might be the worst author ever. His book is so mind numbingly painful to try and decipher. That being said I find the material brilliant. I'm still grinding through the book and I find that it just takes time to let the material sink in. Then as I watch the charts each day I'm noticing more and more setups from the book. It's a painful way to learn but ultimately I think very rewarding.

I'm hoping to start posting some charts of setups that I spot through out the day in this thread.

Blz

P.S. I don't think he has written any other books but don't quote me on that. He has done some writing for Futures magazine.

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  #86 (permalink)
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Glad to hear I am not the only with these thoughts... what a quagmire of insightful ideas. Mike thanks for your post... I am encouraged to reopen the book and trudge through.

Thanks.

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  #87 (permalink)
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I've read several chapters many times. I had to take a break so I started reading some other non-trading books. But I'll be back to Brooks. No one reads the Bible cover to cover, same with Brooks.

I'm not using any particular setup but I am incorporating his ideas into my trading:

- reversal bars
- trading ranges and the idea that a doji is a 1 bar trading range
- avoiding barb wire

I wish I had more time to lead this discussion more but I'm sorry that I don't. When I started it I didn't want me to be teaching the Brooks ideas, something I'm not qualified to do. I wanted it to be collaborative. So I hope others will contribute when they can and the thread won't die.

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  #88 (permalink)
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Attached is a picture of a Brooks pattern that he claims has very high reliability. In essence it is a second entry into a failed breakout of a tight trading range. So, in the attached example the 6B got into a tight range (Barb Wire as per Brooks) and gave a nice fakeout pop. When you get that first breakout you want to enter a sell stop 1 tick below the breakout bar. If it doesn't reverse you don't get executed but if it does you'll get triggered and there will be longs trapped that are looking to get out.

Blz

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  #89 (permalink)
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Big Mike View Post
I've learned more about doji's though in the first chapter than I ever knew before. I'm also paying more attention to up/down bars like the two in the attachment.

BTW Mike, I tried range bars for a while (part of dealing with the overlapping bars on the CL 5 min chart that I mentioned in the CL thread plus Jeff got me interested in them). But I decided yesterday that I was going back to tick & minute charts. I think the relationship of the close & open are very important and with range bars the close is always on the high or low. It makes detecting dojis and other trading ranges very difficult.

Yesterday I saw on my tick chart that price was in long trading ranges that didn't even show up on the range chart.

On a tick chart it can compress low volume periods but it doesn't compress price. A range chart compresses price (and can compress low volume activity too). I don't like compressing price. I want to see it all.

Obviously the brooks patterns won't work with range bars very well.

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  #90 (permalink)
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Blz17 View Post
Attached is a picture of a Brooks pattern that he claims has very high reliability. In essence it is a second entry into a failed breakout of a tight trading range. So, in the attached example the 6B got into a tight range (Barb Wire as per Brooks) and gave a nice fakeout pop. When you get that first breakout you want to enter a sell stop 1 tick below the breakout bar. If it doesn't reverse you don't get executed but if it does you'll get triggered and there will be longs trapped that are looking to get out.

Blz

Very nice Blz! You explain that much better than the man himself. I'm going to see if I can find that on my charts. Doing my homework!

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