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Book Discussion: Reading Price Charts Bar by Bar by Al Brooks
does anyone know if the second edition of the price action book is out yet? i know he has three new books coming out but it appears as though they are based on the foundations he teaches in his original book.
Platform: "I trade, therefore, I AM!"; Theme Song: "Atomic Dog!"
Trading: EMD, 6J, ZB
Posts: 796 since Oct 2009
Amazon (the recognized easiest source for books) has three books, but it appears to be changes in the title and how they were listed, instead of vastly different books.
One is listing availability in Oct 2011, and its only April. Perhaps there really will be additional versions of the book.
Per his website, all three books can be pre-ordered. I'm guessing that BigMike would be okay posting that site (I think it is listed somewhere in this thread), but then, I'd rather not guess or go hunting to confirm that it's already been posted, so won't post it here. But google will find it for you.
Here are the links his website lists for pre-ordering the books; eventhough they may be listed at Amazon, they may not be available for delivery yet (as in this case), hence the confusion. Not to mention Amazon's (non)titling of the different books, though that could be via the publisher. I'll also copy the Table of Contents of each book that his website lists below the links.
Al's comments: "I tried to answer all of the questions that I have been asked over the past couple of years (and I have answered thousands), and have paid particular attention to making the books clearer, easier to read, and much more specific about trading compared to Reading Price Charts Bar By Bar. To achieve these goals, I asked a trader to proofread all three new books, and he made more than a thousand edits.
Reading Price Charts Bar By Bar was about 120,000 words, and the new books are 157,000, 178,000, and 146,000 words. There are many lists about the major topics (the longest has more than 30 buy setups and 30 sell setups for entering on limits), followed by detailed discussions and examples."
Wiley has all three manuscripts and the first book should be out on October 1. The other two books should follow at one month intervals.
Here are the tables of contents of the three books:
Table of Contents of Book 1: Trends Price Action Part 1: Trends and Basics Reading Price Charts Bar By Bar: The Technical Analysis of Price Action for the Serious Trader
Dedication
Acknowledgments
Introduction
Basics for All Three Books
· Table of Contents for the Three Books
· Signs of Strength: Reversal Bars, Trends, Breakouts
· Bar Counting Basics: High 1, High 2, Low 1, Low 2
· Definitions Price Action
· The Spectrum of Price Action: Extreme Trends to Extreme Trading Ranges
· Trend Bars and Doji Bars
· Breakouts, Trading Ranges, and Tests
· Bar Basics: Signal Bars, Entry Bars, Setups, and Candle Patterns
· Signal Bars: Reversal Bars
· Signal Bars: Other Types
· Outside Bars
· The Importance of the Close of the Bar
· Exchange Traded Funds and Inverse Charts
· Second Entries
· Late and Missed Entries
· Pattern Evolution Trend Lines and Channels
· Trend Lines
· Trend channel Lines
· Channels
· Micro Channels
· Horizontal Lines: Swing Points and Other Key Price Levels Trends
· Example of How to Trade a Trend
. Signs of Strength in a Trend
· Two Legs
· Common Trend Patterns
· Spike and Channel Trend
· Trending Trading Range Days
· Trend from the Open
· Reversal Day
· Trend Resumption day
· Stairs: Broad Channel Trend
Table of Contents of Book 2: Trading Ranges Price Action Part 2: Trading Ranges and Placing Orders Reading Price Charts Bar By Bar: The Technical Analysis of Price Action for the Serious Trader
Dedication
Acknowledgments
Introduction
Basics for All Three Books
· Table of Contents for the Three Books
· Signs of Strength: Reversal Bars, Trends, Breakouts
· Bar Counting Basics: High 1, High 2, Low 1, Low 2
· Definitions Breakouts: Transitioning into a new Trend
· Example of How to Trade a Breakout
· Signs of Strength in a Breakout
· Initial Breakout
· Breakout Entries in Existing Strong Trends
· Failed Breakouts, Breakout Pullbacks, and Breakout Tests Gaps
Magnets: Support and Resistance
· Measured Moves Based on the Size of the First Leg
· Measured Moves Based on Gaps and Trading Ranges
· Reversals Often End at Signal Bars from Prior Failed Reversals
· Other Magnets Pullbacks: Trends Converting to Trading Ranges
· First Pullback Sequence: Bar, Minor Trend Line, moving average, moving average Gap, Major Trend Line
· Double Top Bear Flags and Double Bottom Bull Flags
· Twenty Gap Bars
· Moving average gap Bars
· Key Inflection Times of the Day that Set Up Breakouts and Reversals
· Counting the legs of Trends and Trading Ranges
· High and Low 1, 2, 3, and 4 Patterns and ABC Corrections
· Wedge and Other Three Push Pullbacks
· Dueling Lines: Wedge Pullback to the Trend Line
· “Reversal” Patterns: Double Tops and Bottoms and Head and Shoulders Tops and Bottoms Trading Ranges
. Example of How to Trade a Trading Range
· Tight Trading Ranges
· Triangles Orders and Trade Management
· Scalping, Swinging, Trading, and Investing
· Mathematics of Trading and Directional Probability: The Odds of Making X Points Before Losing Y Points
· Need Two Reasons to Take a Trade
· Entering on Stops
· Entering on Limits
· Protective and Trailing Stops
· Profit Targets
· Scaling into and out of a Trade
· Getting Trapped In or Out of a Trade
Table of Contents of Book 3: Reversals Price Action Part 3: Reversals, Day Trading, Daily Charts, and Options Reading Price Charts Bar By Bar: The Technical Analysis of Price Action for the Serious Trader
Dedication
Acknowledgments
Introduction
Basics for All Three Books
· Table of Contents for the Three Books
· Signs of Strength: Reversal Bars, Trends, Breakouts
· Bar Counting Basics: High 1, High 2, Low 1, Low 2
· Definitions Trend Reversals: A Trend Becoming an Opposite Trend
· Example of How to Trade a Reversal
· Signs of Strength in a Reversal
· “Reversal” Patterns: Double Tops and Bottoms and Head and Shoulders Tops and Bottoms
· Major Trend Reversal: Trend Line Break Followed by a Test of the Extreme
· Climactic Reversals: A Spike Followed by a Spike in the Opposite Direction
· Wedges and other Three Push Reversal Patterns
· Expanding Triangles
· Final Flags
· Double Top and Bottom Pullbacks
· Failures
· Huge Volume Reversals on Daily Charts Day Trading
· Key Times of the Day
· Markets
· Time Frames and Chart Types
· Globex, Pre-Market, Post-Market, and Overnight Market
· Always In
· Extreme Scalping The 1st Hour (The Opening Range)
· Patterns Related to the Premarket
· Patterns Related to Yesterday: Breakouts, Breakout Pullbacks, and Failed Breakouts
· Example of How to Trade a Breakout
. Opening Patterns and Reversals
· Gap Openings: Reversals and Continuations Detailed Daytrading Examples
Daily, Weekly, and Monthly Charts
Options
Best Trades
Trading Guidelines
Actually maybe come October, I'll just about have finished it and be ready for the next one -- only kidding - I hope to get through it a bit quicker than that. But just reading up on this thread and the "Elusive Price Action" thread is taking a long time. I never realized the water was so deep when I went to dive in.
You can discover what your enemy fears most by observing the means he uses to frighten you.
As an antidote to the Royal Wedding I spent much of the afternoon watching the EUR/USD on a 5min chart with a 20 period EMA, seeing if I could do the bar counting correctly and pick some good entries and apply the right exits.
I've just taken the first step into the world of price action and I'd love to discuss all its details here if there's still people out there thinking the same way.
The first question I stumbled on was whether the day was actually trending or ranging.
Since Brooks recommends starting price action trading for beginners by just taking H1s and L1s in a trending market, I was worried I was diving in too quick when I couldn't tell if it was trending or not. EUR/USD spot forex has no clear 'opening range' that I could check - or does it have one for each new time zone session?
I'm using EUR/USD spot instead of the emini SP future because that's what I'm used to, and it suits me better being in the London/UK time zone.
I picked an entry and it made good pips and reached the target, and I figured if I'm going to follow Brooks by the book then I'd leave half the position on after the target is hit, so it can run. The market kept climbing and put in another H1 so I would have re-entered - but how much? The same original position size, or just half?
I have a dozen more questions - it seems this stuff is massively subjective. I can see now why it can't be programmed and run mechanically, after hearing and reading Al Brooks state several times "close is close enough". That would require some serious fuzzy logic to get anything like the same level of decisiveness from a machine.
I also think that Brooks implies without ever saying that "precisely correct can be ignored sometimes". If the rule for an H1 is that it's the first high after a bear pullback, then how bearish does a bear pullback have to be? Can it be a lower high just one pip down from the prior high followed by several bars with highs all exactly the same? I saw that today and it didn't look like an H1 but I bet an indicator would have flagged it as one.
ps hope i'm getting the lingo right. When I say pullback, I meant retrace. suddenly i'm not sure that they're the same thing.
You can discover what your enemy fears most by observing the means he uses to frighten you.
He says "close is close enough", but also says "take only the best signals"... while warning against cherry picking. I never understood that contradiction.
I believe he says that until you are profitable, take only good lookin' H2 and L2 pullbacks to EMA in strong trends (nevermind that many strong trends don't have those at all).
Anyway, despite all that, Brooksie's stuff is generally very good.
You are never in the wrong place... but sometimes you are in the right place looking at things in the wrong way.
I am prefacing this post with my opinion that Al Brooks is THE MAN! I've learned so much from that guy - his trading room is a fantastic value (whoa, does that make me a shill?) and his book is the bomb. In short, I bow low to Al Brooks.
That said, I'd like to discuss something that is a newer realization for me. Before I launch into that I want to observe that just the titles of Al's new books ALONE tell us a lot about reading price action: Trends, Trading Ranges, and Reversals. That is all there is IMO - these three landscape features of charts represent the 3 modes that the market can be in. If you can determine which of these is happening on the timeframe you're trading on - you've got pretty much all you need.
Al spends a ton of time in his book categorizing these three landscape features and their behaviors. That categorization is intense! He's got names for all kinds of market behaviors on different scales and tons of observation-based information - he's the Charles Darwin of trading! When I was in his room I watched as he kept evolving his terminology and updating the distinctions he made about the various patterns and landscape structures.
Herein lies my insight (its an insight to me - it may not be helpful to anyone else): His terminology is so complex and constantly evolving because every Trend is different from the last, every Reversal is different from the last and every Trading Range is different from the last. The market keeps evolving and generating new versions of these same landscape features every day. Yes, today's trend may look almost exactly like that trend that happened last week or last month but the reality is, its different. This is why every trade has an uncertain outcome and why every time you punch the trade button, you better do so with the mindset that you really have no idea what's going to happen and you better be ready for whatever does happen.
One possible trap that Al Brooks followers can fall into (and I know from experience) is that with all that knowledge of market behavior you've got every eventuality covered and you just need to place the current price action within the proper context of that taxonomy of market behavior. The fact is, you'll never reach a state of knowledge in which you will know what's going to happen next in the market - and every time you make a trading decision it will carry with it a degree of uncertainty.
This is why I think trading can be so hard - our knowledge exists in this static state (the very essence of a book is that its written down and static) and the right edge of the chart is this dynamic, boiling, uncertain beast. Learn everything you can about what price does, how people make decisions under uncertainty, and the factors that affect a market's reaction to the left side of the latest price bar! But just remember that to trade successfully you need to do the thing that aligns with whatever the highest likelihood is at the time and its never anything more than a sophisticated guess. Use all that price action knowledge but just remember that that next price bar is going to reflect a different market than every price bar that's ever come before.
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