ACS

So far the range call looks good. The problems I see are that the failure at the bottom, despite the overshoot, was a bad looking (bear doji instead of bull trend) reversal bar and the failure at the top never gave a second entry.

Just noticed (late as usual) that the first bar this morning in the ES was an H4 setup of a two legged correction from yesterday's high and very similar to the one on Tuesday morning.

Straight from the book: beginners should not be trading when the market is in the middle of the day and in the middle of the day's range. Almost all my losing trades come from ignoring (or forgetting) that.

You have the trend channel overshoot marked but the low of the day was also a setup for a H4 that ended a large two leg correction.

If you want to be spoon fed answers then I think you have come to the wrong place especially since there is no "right answer"; everyone here would likely mark up that chart at least a little differently. If you want to do a little work and mark the chart up yourself and submit it here for feedback than I think you will possibly learn something.

When I listen to the presentation, Dr. Brooks seems to count them so that your blue H1 is H2 and your second blue H2 is H3, he does not seem to count the others you have marked. Knowing which colored candles are countable H/Ls seems one of the trickier parts of his methodology although I think looking at a smaller time scale would make the valid ones more apparent.

Go back to post #168 on page 21. There is a link to a video file of his first presentation that does a great job of explaining the H & L counts. The most important thing to remember about them is to always be aware of the context in which they appear; not all H/L2s are created equal. The book is full of observations and guidance on that subject and there is no substitute for several readings to begin to assimilate the information.

Page 302. Trend Bar on Gap Open.

He says it works on all markets and timeframes. I don't recall any Forex charts in the book but on page 257 he writes: "Currency Futures and the Forex, and Treasury Bond and Note Futures can handle huge volume but give fewer entries than the Eminis on most days." Hope this helps.

New article by AB in the latest Futures magazine about trading price action in T-Notes and how it differs from the ES.

Beautiful L1 off the first strong bear bar at 902.25. Had my scalper's profit in 45 seconds and than sat on my hands the rest of the day. There were some other patterns like the bear flag at 11:15 but I now avoid anything that even looks like barb wire any where on the chart and at any time of the day. Enjoy the holiday all!

I don't have a lot of experience watching the ES but isn't 3 ticks within the range of noise in that contract?

You save 2 ticks on your losers but every trade that would have been good with a wider stop is a swing of 10 ticks in the P&L. You really need a large data base of trades to make the right decision. Al mentions smaller stops in some of his articles but the presentations and book all stress 8 ticks for normal markets. I defer to his experience.

I have to agree with Gabe. With 1 point wins and 2 point stops (and you do have to give 2 points for the stop) the math is brutal. It takes 3 wins to take you into the black after one loser (unless you are able to trade multiple contracts and get some bigger swing profits) therefore 2 losses are enough to trigger my daily stop. The odds of getting 5 or 6 consecutive wins after 2 losers is not something I want to risk. Discipline!

Once again a trend from the open. In my opinion the best trade was on the third bar. ES opened gap down and formed a bull trend bar. The second bar went below the first and below the low of the prior day then reversed up forming a bull bar and likely trapping bears. Entry was at 894.50 and quickly gave a scalper's profit. Those lucky enough to trade multiple contracts could have just let the swing portion go all day although getting out between 911 and 912 was not a bad strategy when the market went below the 911.50 swing low. Next best trade was at 897.00 when the market dipped below a small bear bar and reversed up also likely trapping bears. H2s after the next two bigger pullbacks came in barb wire and the two that worked were H3s at 903.25 and 912.75 likely leaving behind those waiting for the H4. The afternoon was a mess although the bull trendline was broken by the selloff from the highs and the late rally could have been a test of the extreme. That at least is how I'm marking my charts.

In the section on variations of high/low 2 setups he says "Anytime you can infer two legs, the market will likely behave as if there were two legs." If you look at a 3 minute chart from yesterday you will see the move up from 893.75 to 899.25 was a two leg correction and thus a valid L2 setup. Just an isolated bar of the opposite color without that underlying action does not qualify. At least that is my understanding.

I also saw that double top bear flag but the second entry L2 you have marked was in barb wire and I guess that is why the market came right back up above the entry before it finally went down. Funny, I think the area you have circled was the best trade of the day. The L1 is actually a L2 variant; the L1 was the red bar in between the two big green bars. If you follow the action it was a two step correction. There was also a double top pair and the market had quieted down by then. The things I didn't like were the doji signal bar and the proximity to the EMA but it did go for several points. Of course I only saw this at the end of the day when marking up the chart!

There are links to all three presentations here; the December 2008 and May 2009 are on page 2 and the May 2008 is on page 21.

Yes it is AlBrookDAYTradingPA.swf and was the first presentation from May 2008. It was called "Short term e-mini strategies that work".

Forgot how great this presentation is. Does a more thorough job of explaining legs and is aimed at beginners much more than the book. Nice to see it again after a year!

Classic trend from the opening. The best trade was the breakout of the first (strong bear) bar of the day at 905.00. Couple of good L2s in the morning at 899.00 & 896.75. Most of the afternoon was spent in barb wire/trading ranges so nothing for me.

On the 19th the ES gapped above a bear trendline that stretched from the 11th to the 18th. Could we be seeing the test of the extreme this morning?

I found this interview from last year around the time of his first I-Trade show. If anyone has the history, it would be great if you could post a 5 minute chart of May 9, 2008. He talks about patterns that day in the ES. (http://heavensembrace.org/media/albrooks050908.mp3)

The best clue about where to begin counting H/Ls comes in the last paragraph of page 320 and continues onto the next page. It's subtle but the best guide I could find.

My understanding is that a leg is a series of bars that generally move in one direction which start with the breaking of a trendline and end with the breaking of a trendline of the opposite direction from the first. Legs in a trend would be equivalent to atoms in a molecule.