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brownsfan019

Futures I Trade Show & Brooks Book

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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.

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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.

 

 

Identifying Legs is the "Art" of trading. ALso many Legs have Variances(Mutations) as Al mentions in his book. THERE IS NO SIMPLE Defintion or Explonation. hehee..as is with most of concepts in trading.

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But in the meantime, real time throughout the day, continue to mark it up.....trying not to get too caught up in how correct you are labeling everything. There is wiggle room for interpretation of all the pullbacks.

 

I agree. Mark the charts up as you see them and if you are marking them up wrong the P/A most likely wont look right. But at least at the end of the day in hindsight, you will be able to see any mistakes. and see why.

Good luck.

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Legs are really 'swings' they are an intrinsic part of price action anywhere you can draw AB CD type patterns you have two legs.

 

Here is a 5 minute chart see the 2 doji's? Maybe not so clear (though its not hard to learn to see things like that)

 

Drop down to 1 minute TF and the BC move is pretty plain :)

5aa70eec75459_FDAX06-0919_06_2009(5Min).thumb.png.f75fe7ede1be7b55e5946609674722d8.png

5aa70eec7a2e4_FDAX06-0919_06_2009(1Min).thumb.jpg.4fafa7176263b87cd1fed6ebd4ba6682.jpg

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Think Al has looked at these 1min charts in conjunction with his normal trading chart 5min for so long, that he is able to visualise action on 1min from his 5min charts, this comes through in many of his analysis in the book and as such many of the pattern names are clear to him, but it can lead another trader into a mindset where he or she begins to figure out which multiple types of pattern the unfolding setup matches, searching for 3/4 reasons to trade, whereas in many cases it is just a setup at a previous support or resistance level.

 

Today I was going through the chapter on trend reversals. Some straightforward reversal setups at least to me have complex analysis on the basis of if there is a Double Bottom Bull flag or not, is it a failed breakout of the 2 legged bear flag of the final 2hrs of yesterday, is it a L1 failure, page 192. By the time all this is processed in realtime, the trade is gone.

So although the method appears simple in terms of trading from only a 5min chart, it can get quite complex trying to figure out number of elements in realtime IM0

 

That is why the volume helps me a great deal to do away with all this.

But that is just my way:))

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I like the above post. This book is for someone who is breaking even or even

tiny profitible. Usually a trader with 5+ years Real Time experience. Also,

basic understanding of "everyday intraday tendancies" helps. I do not recommend this book to a newbie as it is too many things to look at. It might seem easy following those charts in the book In Hindsight, But real time its Guerilla Warfare.

 

Al even mentions he hasnt been Constantly Profitible only after 20 years. Seems like thats the average for every Constantly Profitible Pro.

 

One needs to take breaks, otherwise its easy to get burned out in emini daytrading.

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I've got a question for Al or anyone in the forum.

 

Does anyone know what rules reset the count for H1's and L1's besides a numbered H4 or L4?

 

Al has talked about how to mark the H1's to H4's and L1's to L4's in his seminars, articles, and book. But I've yet to see an explanation, or maybe I missed it, of what starts the count over except a numbered H4 and a L4. I must be a little slow, but I have been studying numerous charts and can not determine what rules consistently reset the count over.

 

I understand that a High (H1) occurs in a down or sideways leg of a bull move and it is the first bar with a high above that of the prior bar, and is marked as an H1. If there is then a high that is lower than the prior bar, the next occurrence of a Higher High is a High 2, and so on for H3's, and H4's when the count is reset set to H1.

 

The rules are the opposite for a Low (L1). It occurs in an up or sideways leg of a bear move and is the first bar with a low below that of the prior bar is marked as an L1. Then if there is a low that is higher than the prior bar, the next occurrence of a Lower Low is a Low 2 and so on for L3's, and L4's when the count is reset to L1.

 

Until I read page 120 I have been numbering H's until there was a close above the high of the last marked H bar, and I thought this reset the count to a new H1, (or there was a numbered H4 which restarted the count over again). I have been numbering L's until there was a close below the low of the last marked L bar, and I thought this reset the count to a new L1, (or there was a numbered L4, which restarted the count over again).

 

What restarts the count over again for both an H1 and L1 if you do not have an H4 or an L4?

 

I keep looking at figure 4.16 on page 120 of Al's book, and my H and L numbering system was incorrect.

 

Why did the L count continue with a L3 and L4 after the 052808 12:20 L2?

 

Why did the L count reset to an L1 after the 052908 7:30 L1?

 

Since properly numbering H's and L's is critical to understanding Al's Price Action analysis I would so much appreciate anyone's help with this issue.

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Zone, first don't kill your self with the labels, rather try to make sense of what the market is doing (telling you).

 

Imho page 120 should be edited. for example the H3 @9:00 is not the H3 for the day or the move It is the H3 of the bull flag that formed after the 8:00 L1

 

But Looking at the chart you should be able to see it is a bull and should be buying pullbacks regardless how you label the bars.

 

the way I Label the bars is as follows in bull I will label pull back H1, and H2, then when the market moves up I start over again H1 H2. So if I am getting H3 and H4 in the same pull back it is most likely barb wire or the trend has reversed. thats just how I do it right or wrong. If it make sense to me thats all that counts. If some how I label page 120 the same as Al but it didn't make sense to me it would not add any value to my trading. so I don't worry about it.

 

Maybe page 120 is Al's odd way of saying don't get cought up in his labeling system. use what works for you.

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The rules are the opposite for a Low (L1). It occurs in an up or sideways leg of a bear move and is the first bar with a low below that of the prior bar is marked as an L1.

 

 

Why did the L count continue with a L3 and L4 after the 052808 12:20 L2?

 

 

Yes I would like ask same question

In book in page 118 AL write "......when a bear trend or sideways market is corecting sideways or up,the first bar with a low below the low of the prior bar is a Low 1...."

Sorry but market on figure 4,16 page 120 is bear or sideways ???, why he marks L1, L2 ......???

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I marked up this chart a little the way I do when I am trading.

 

 

L2 down to bar 1 breaks the trend line (not drawn). so you can start looking for sorts but not yet. the L2 at bar 1 did not make a scalpers profit and could not close be low the 20ema. Bar 2 give you a low 3 and still no close below the 20ema.

bar 2 is a double bottom bull flag and a M2B. two reasons to go long. At the H4 but You could name that bar what every you wanted. would not change the fact that there was a double bottom bull flag and the market could not close below the 20ema. Its a good long.

Note the H2 long after bar 1 was a reasonable trade as well and only gave you six tics of heat as did the H3 but the H3 was not such a good entry Imho.

 

Hope it helps

es_bar_count.png.ae9bb95d7337adc3993d09ad864fc548.png

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Al's book can be summed up as hard harder and hardest. First you must learn chart pattern and their nuances and vierants. will take hard work and some time. He also attemps to show you how to think like larger operations do. By looking for traps, prices that are defended failed failures ext. harder to do.

Then the hardest thing is doing it all real time. But if this style of trading fits your mind set and you put in enough work and time in. I think you will be able to write your own paycheck. only time will tell :missy:

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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.

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Al even mentions he hasnt been Constantly Profitible only after 20 years. Seems like thats the average for every Constantly Profitible Pro.

 

One needs to take breaks, otherwise its easy to get burned out in emini daytrading.

 

In twenty years time I might be dead - I rather believe DB pheoniz saying "2 months to never" as being more realistic time frame to trade successfully. Also, I can't believe the twenty year time frame for Mr. Al Brooks to become consistently profitable as he had already stopped practicing medicine and was raising 3 daughters most likely from market profits. (Happy Father's Day to all the fathers).

 

I'll just follow Mr. Brooks advice and stick with the 1 or 2 setups he had recommended for beginners and build from there. Should'nt take twenty years.

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In twenty years time I might be dead - I rather believe DB pheoniz saying "2 months to never" as being more realistic time frame to trade successfully.

 

Though note I also said that one must define "successful". Turning a profit is not quite the same as making a living.

 

Look, for example, at the following:

 

Hi Folks,

 

I did two trades on the ES, +11 and + 6 points respectively. No Stock trades as my attention was really focused upon helping my daughter with her summer project - learning to trade a microlot forex account.

 

She did her first trade yesterday. ... She decided (and it was her decision, and it was she who identified the set up - though I did agree with her and told her as much) to go long with a buy stop above a small consolidiation area, and a fairly tight stop loss just below (about 15 ticks initial risk). We identified two areas of resistance above the morning's high, and decided to take profits on a sell limit at the upper range of that resistance. ...

 

The charts we use to watch price action are Ninjatrader charts with data provided by Gain Capital. The buy stop, stop loss, and profit targets are not precisley the same on the chart as the prices she actually traded, because there is a slight difference between the price data between FXCM and Gain. We use the FXCM charts to identify actual trading levels for entry, stop loss, profit objectives, etc., but we watch price action and identify opportunities using the Ninjatrader charts.

 

At any rate, if one eyeballs the Gain data on Ninjatrader, what looks to have been an 88 tick profit was, in her actual trade, an 83.7 tick profit, or $8.37 (one microlot = 1 tick = $0.10 which requires $2.50 margin).

 

So her $25 starting capital now stands at $33.37

 

Not a bad start!

 

Best Wishes,

 

Thales

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In twenty years time I might be dead - I rather believe DB pheoniz saying "2 months to never" as being more realistic time frame to trade successfully. Also, I can't believe the twenty year time frame for Mr. Al Brooks to become consistently profitable as he had already stopped practicing medicine and was raising 3 daughters most likely from market profits. (Happy Father's Day to all the fathers).

 

I'll just follow Mr. Brooks advice and stick with the 1 or 2 setups he had recommended for beginners and build from there. Should'nt take twenty years.

 

Boy, are you in for a rude awekaning. If this was that easy everyone would be doing it. Dont let these books fool you with end of day perfect examples.

You going against the best in the world in the e-mini arena.

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Just remember it's not 90% that fail. It is 10% that do all the work:roll eyes:

 

I agree.

The statistics about those who failed or succeeded, never mentions how much time did those that succeeded put in as compared with those who failed.

 

On another point, Al Brook's 20 years being the time it took him to be consistantly profitable makes no sense.

Apparently he is trading around 22-24 years. He started to publish articles about his trading about 2 years ago. Just about the time he was supposed to start being profitable.

He does not come across as a person who would try and teach something only after 2 years of being profitable.

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Think Al has looked at these 1min charts in conjunction with his normal trading chart 5min for so long, that he is able to visualise action on 1min from his 5min charts,

 

Indeed, really it's not hard to see when you have watched 'price action' for a time. Of course deciding what to trade can be a different matter :) You watch price and you know pretty much how lower time frame and higher time frame charts will look. Mind you it would be negligent not to point out the many warnings that Al sprinkles through his writing on leaning too heavily on timeframes under 5mins. (in short dont!). I am rather enjoying the 15second chart currently but I am not looking for 'signals' on it. He also cautions that if you aren't sure don't trade it - plenty of opportunities on a 5 min during the course of a day without needing to take things that aren't clear.

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Yes Al has gone through all of the many time frame charts from 1min to 60min etc and observed the price action on 5min chart relative to that over a long period, same with other indicators perhaps and volume for that matter. I have done that myself He has reached a point where he does not require any of this because he can visualise what is happening on those other timeframes.

But that would not be the case for anybody starting out with this book. He or she will have to keep it simple, and as Al points go straight to the Best setup chapter first and progress from there.

 

The more I read through the book the more I realise that trying to attach many labels to any particular setup will only lead to delay and hesitation, at least in the initial stages, best to print out charts at the end of day as Al suggests and mark them in, after a while , this training can leady to automatic recognition.

Yesterday I was going through some of the charts in the e-book by Dbphoenix and it is clear that if you try to achieve some understanding of vol, that most common patterns begin to make sense.

Edited by rigel

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It is easy to get bogged down in the shear amount of information in the book. "If this and that price has a tendency to do the other". Lots of observations of that nature that tend to fall outside core 'principles'.

 

I think it's one of those books where getting the broad brush down first is probably wise, then taking small bits of detail to go over slowly. I just wish the charts where larger and the notes where facing!

 

There is a whole chapter on timeframes and focus which contains pretty sensible advice.

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Agree with both you and rigel,

IMO volume analysis allows you get behind the patterns so to speak, the fundamental forces ie. buying and selling which go to create those patterns. and once you learn to see that, you don't need to get too involved with the various terms.

 

Al has presented some great insights for day trading and volume analysis would even enhance that understanding. In that respect I also found Dbphoenix's ebook very informative indeed as well as all the material on the Wyckoff forum. As Head2k on another thread has emphasized, there are just a few basic concepts to digest on price/vol.:)))

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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?

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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)

 

Here you go...

 

attachment.php?attachmentid=11600&stc=1&d=1245692853

 

Time is GMT so open is 14:30.

ES.thumb.png.188b680cba04f251e7a532f8c7bf3416.png

Edited by TradeRunner
added quote

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