Futures I Trade Show & Brooks Book

[forrestang 10]

DB - I've never heard Al Brooks say support and resistance is something he doesn't use.

 

He calls all support and resistance double tops, even though it may be triple of quadruply pivoted.

 

Actually, starting on page 61 is the section about S/R. Starting on Page 55-70 is the chapter on areas of conviction.

 

The problem here is what is being presented in the thread, which has left a lot out as many are still learning. For whatever reason nobody has really spoken of it. If you notice, most of the trades in the material are trades that at least 'base' at some prior S/R level.

 

What is not done in the book is going out on say a 100K CVB chart, and looking for levels. I guess he may have found that complicated his trading at some point, which is one of the problems I have had, but it is a learning process so maybe eventually it will add to my trading?

[forrestang 10]

Hey forrestang,

 

How come you didn't take the L3/Double top/channel overshoot and decided to wait for L4?

 

Simply because you wanted a bear trend bar?

 

No, I will usually try to wait for a second entry. Other than the am breakout type deals, I usually will wait, I guess that's why I always have so fewer trades than everyone else during chat?

 

The L3 to me is not a second entry. It's an entry AFTER the second entry, once that rolls by, I look for the second entry OF the second entry which is an L4. So I'm usually excited about the L2 and L4s.

 

Obviously sometimes this works both ways though.

[DbPhoenix 42]

 

What is not done in the book is going out on say a 100K CVB chart, and looking for levels. I guess he may have found that complicated his trading at some point, which is one of the problems I have had, but it is a learning process so maybe eventually it will add to my trading?

 

Depends on what you're going for: a few ticks, a few points, or letting your profits run until the trend is done. That, unfortunately, is a decision you have to make all by your lonesome.

[mbfromla 10]

Here is a chart for July 7 guys,,,

[djohnsonhot 10]

Very Nice Charts, you all! I appreciate these.

 

DJ

[szubaark 10]

7/7

 

Total 12 trades for -3.50

On one trade Price never went below prior candle low but BID Flashed and i got filled anyways, got Mad -2 Loss

After the consolidation around 1:35 i thought market is trying to put bottom so got stubborn and rode my Long for a -5 Loss.

 

Another tough day for me. This is REAL Trades i took. Not marked up end of day crap that i see a lot being posted here. REAL TIME trading and end of day are not same.

[djohnsonhot 10]

Szu:

 

One thing I read in your post caught my attention:

 

........."around 1:35 i thought market is trying to put bottom so got stubborn..."

 

For one thing, I agree that we need to post real trades.....I also think that you are showing that you are studying your trades post-session and are man/woman enough to admit when you see yourself as stubborn.

 

I did the EXACT same thing on Monday, if I recall: I thought we were going short all day and entered a VERY stupid trade SHORT AT THE BOTTOM!

 

I have many trading rules, and one of them is a combination:

 

" Never enter short at the bottom of a range (esp. if several waves have occurred short) and NEVER go long at the top of ranges."

 

Allow me to add another rule: let the VOLUME, the PRICE ACTION, and S/R and ATTEMPTS to go further or roll-over, or reverse course to guide you. Do what Brooks says and let TWO attempts guide you.

 

Also, one of my main trading rules: NEVER trade against the prevaling trend, even if the entry is into a lucrative counter-move (pull-back in my book)....always go for the meat of a nice trend trade and keep looking for those pull-backs into the 20EMA (I use 22 periods, Exponential and TRIPLE EXP)....and look for that SIGNAL bar (doji, esp those STARS or those LONG-WICKED candles with that long wick on the top or the bottom - - which tells you that there was an ATTEMPT to go long against a short trend and vice-versa in a long trend.

 

In essence, stubborn is the word for it if you THINK that there is something happening, and in fact the PA is telling you, shouting to you, that you are against a trend.

 

FINALLY! There is always another trade in the session to be had. Wait out those trades that you say to yourself: "Would I bet a thousand dollars on this entry I am ABOUT to take." Bet that thousand on MORE THAN ONE indicator, more than ONE attempt, and more than one reason.....never WILLINGLY trade short or long against the prevailing trend.

 

 

I have shared with you pretty much all of my rules.

 

DJ

[rigel 10]

A suggestion. Once upon a time I became involved in a "Ross Hook" thread. The participants were having all sorts of trouble making them work, as well as the "1-2-3s". The key problem as I saw it was that they were finding these "hooks" all over the place, even in the middle of nowhere. Even worse, they were often getting trapped into a counter-trend-trading loop. I suggested that they first locate support and resistance in their charts (if they knew how to do so), then play only those Ross setups that occurred against one or the other, i.e., against either support or resistance. The success rate was, of course, much higher.

 

Moral of the story is that those who are having trouble making these setups work may want to plot support and resistance first, then take only those setups that bang up against one or the other, as you suggest. If it doesn't help, then at least the trader is no worse off than before.

 

Spot on Db, folks have a similar problem with VSA as well,

S/R levels play a crucial role and infact as pointed out Al does highlight this in a section dealing with horizontal line: swing points and other key price levels and I am sure he takes note of these levels from higher timeframe charts as well. Having gone through the book it is clear that he has watched both higher timeframe charts like 15, 30 etc and 1,2,3min, that he does not need them anymore now, he is able to blend the candles mentally, very similar to what happens with indicator divergences like RSI, MaCD etc, after a while you can see them coming just by observing the peaks/retracements of price moves against a MA.

[BlowFish 10]

I'll get it right eventually.

 

Welcome to the forums, if you are having trouble with something just ask

[BlowFish 10]

.............snip.................

 

If I'm not mistaken, you were the same one who said that price never signals the big moves before they happen, to which I responded that my experience has led me to believe the oppposite is true. You may have found a decent book to read, but there is a big difference between reading a book and reading price. I mean no disrespect to Brook's or his book, but his book is a book of "set-ups." .......................

 

Of course to a break out trader it doesn't really matter whether price signals the big moves before they happen . If you take trades in a location where there is good potential for a big move (at major S/R), well chances are better to get a good move.

 

You are right about the Brooks book. It is 'setup' orientated, It is also very firmly 'scalping' for ticks focused (though he talks about holding for longer). It is not really a 'why things happen book' it is a book of observations and gudelines (and there are a hell of a lot of them) The only 'why' he talks about (correct me if I am wrong here) is from the point of view of where traders have entered, where their stops will be, where they will be locked in from, or where they will be locked out. This makes sense for a scalp orientated approach.

 

..... given that so many of the people posting here are new, I'll point out once that ignoring overnight activity is a mistake since this is so often where the movement of price after the NY open is "telegraphed". There are no "gaps" in instruments that are traded around the clock.

 

 

This particular behaviour is one of the many observations that Brooks makes. It was not something that 'jived' with me for the reasons you mention (also a 'gap' is no reason to ignore the longer term context of where price is at). Thats not to say it may or may not have merit. It would be very simple to test by eye balling charts.

 

I found it an interesting book and took away a couple of things (which I think I mentioned early in the thread). Having said that it is quite difficult, I imagine particularly so for someone who does not have a reasonable understanding of price action to start with.

[BlowFish 10]

Thanks for the explanation. Anything that helps understanding price behavior is useful and provides an extra edge to a trader , there is no need to be blinkered in this business. If somebody does not find use of S/R or volume, leave it out of your trading. Personally have no problem incorporating sound, logical concepts. Think it is totally childish to squabble over my and your thread.

 

True, though a threads value can be diminished if focus becomes too diluted. DB makes a valuable point and anyone who is ontrested should at the bare minimum refer to his blog. Chances are everything you might want to ask has been answered there. Failing that he has a thread specifically to answer questions that still remain.

 

As for the many Al brooks setups, it is relatively easy to mark them up in hindsight, like all patterns and indicators, but in realtime it is not that easy to read and act upon with confidence.......

 

However just because it is not easy does not mean that at is not doable. The setups themselves are pretty consistent. You are spot on about confidence. Chances are if you are not confident in the setup (i.e. done enough checking to ascertain it 'works') you wont be able to act on them. If you can not identify them consistently.......well then you should not even be thinking about trading them.

 

The 'core' setups are far fewer. If having difficulty identifying them I would take one or two and stick with them.

[Shamal 11]

You are right Blowfish,

The book can be difficult for a total beginner.

The setups do materialise day in and day out and as rigel pointed out Al does look at Support/Resistance levels, clearly evident in the Best Trades chapter right across various timeframes.

 

And also a good point by rigel, Al has been looking at these various timeframe charts and analysing them daily and hence has been able to reach a stage where he is able to trade only from 5min charts, but somewhere I think he still mentions printing out lower timeframe charts at the end of the day for analysis.

[rigel 10]

Also Al has mentioned climaxes a number of times in the book, so obviously he has included volume analysis at some point in his trading history.

[thalestrader 14]

Of course to a break out trader ...

 

Something about the way you say that makes being a "break out trader" seem rather unseamly (nudge nudge wink wink)

 

You are right about the Brooks book. It is 'setup' orientated, It is also very firmly 'scalping' for ticks focused

 

I realize that now. I somehow had a different notion of what his book was about when I first posted here in this thread. I did read his article in Futures magazine, but not until after I had begun posting here. As Db points out in an excellent post, trading "bar by bar" is not the same thing as trading price action itself.

 

I meant no disrespect to Brooks, nor to those endeavoring to learn to employ his method to their trading. My only comment after having viewed the annotated charts posted here by the various Brooks Method Traders is this: It seems like a very difficult and stressful way to trade. It obviously suits some folks just fine.

 

As for me, I think I'd feel rather frantic very quickly as I concentrated so closely on each particular bar. I prefer to trade less frequently and hold for a bit larger swing than to trade many times for a few ticks each time. This is a personal observation regarding my own preferences and not a judgement on those whose preferences differ from mine.

 

Best Wishes,

 

Thales

[Guest Maletor]

Here are my trades today.

[szubaark 10]

7/8

Total 10 trades.. +4.25 - $50 commissions=+3.25

coudnt get Scalpers Profit at Open (first hour or so) because of of the Tight Range even thought i took entries at Tops and Bottoms.

 

After we broke out of Range i Realized we are in downtrend now. So held Shorts for Longer. What reall helped me was my "intuition" Long at end for +6 after the DB Reversal and 4 days of non stop selling, we were due for a POP.

 

This is real trades i took so they wont look as pretty as some of the end of day charts that get marked up and posted here LOL

[mbfromla 10]

good trading today guys,,,her's the chart for today...

[Guest Maletor]

Here is a chart of the ZN today.

 

I marked this up, after 3:00PM EST.

 

That being said, those trades are all trades that were in my plan.

 

Was wondering if anybody had read the remarks Brooks had about trading bonds and would care to share.

[szubaark 10]

Here is a chart of the ZN today.

 

I marked this up, after 3:00PM EST.

 

That being said, those trades are all trades that were in my plan.

 

Was wondering if anybody had read the remarks Brooks had about trading bonds and would care to share.

 

Nice trades Maletor. im having hard enough time with ES, so wont trade Bonds. I hope you keep posting your trades trading Bonds.

I remember Al said that they go into BW a lot.

[jolee 10]

What do you consider "break" and what "holds"? Do we have to Close below the black line for it to break? or just Poke through it? Price doesnt just Break S/R. It will usually do fakeouts back and forth LOL, especially low Volatility summer days

 

Yeah, I hear you. I lost lots of money on breakouts. I think Thalestrader must have the knack of reading charts and market conditions so well that he picks the breakouts that work. I wish I had seen this webinar from the Money Show about Oliver Velez's breakout trade criteria when I'd started, gonna test it out also along with Thalestrader's breakout pattern. Al Brooks doesn't seem to incorporate breakouts- maybe he can elaborate why if he happens to drop by this thread again. (not sure if this webinar and material is allowed here but available from Money Show )

MoneyShowBreakOutSetup

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[Guest Maletor]

Brooks rarely trades breakouts, they are unreliable; over the long run you will lose trading breakouts.

 

What he does trade is *failed failures* / breakout pullbacks / cup and handle patterns. (All the same thing if you think about it).

 

He even fades breakouts of trading ranges (with price action setups) because they are that much more likely to fail.

 

That is the far more probable trade.

[BlowFish 10]

...... Al Brooks doesn't seem to incorporate breakouts- maybe he can elaborate why if he happens to drop by this thread again. (not sure if this webinar and material is allowed here but available from Money Show )

MoneyShowBreakOutSetup

[ATTACH]12037[/ATTACH]

 

In some respects every brooks trade is a breakout....... well it is with respect to the previous 5 minutes range.

 

Most trades boil down to either a breakout or a 'fade'. (Some argue that pull backs warrant there own heading though I am not sure I agree).

[BlowFish 10]

Brooks rarely trades breakouts, they are unreliable; over the long run you will lose trading breakouts.

 

What he does trade is *failed failures* / breakout pullbacks / cup and handle patterns. (All the same thing if you think about it).

 

He even fades breakouts of trading ranges (with price action setups) because they are that much more likely to fail.

 

That is the far more probable trade.

 

I am sure there are a few that would disagree about BO's being unreliable....or less reliable Having said that, if you buy into the idea that markets congest ( or are range bound, or are in balance) 70% of the time, then the obvious course of action is to fade break outs (or extremes at least). However if you can identify when or where a BO might succeed then you are likely to hit the long runs. 'Trend traders' often are BO traders and surprise surprise if they don't filter there entries they might expect 3 out of 10 winners. With proper money management they do OK. Just a couple of random thoughts.

[bakrob99 11]

Here are my trades today.

 

That first L1 trade was not one that Brooks would have taken according to his book. My reading suggests that he would have waited and not traded that doji bar. It was also too close to the EMA. He would have entered after the next down bar on a stop; your "nailbiter" trade. Remember - you were above the EMA but not by much. He wants to see signs of selling coming in.

 

Thanks for posting.

[bakrob99 11]

Maletor - which "ROOM" are you talking about?