Futures I Trade Show & Brooks Book

[ACS 10]

Rather then complaining you should focus on your own trading. If you can't read the signals end of day you should re-read the book.

 

complain

1.To express feelings of pain, dissatisfaction, or resentment.

2.To make a formal accusation or bring a formal charge.

 

We must be using different dictionaries.

[Mr_black 10]

Nice 1'st hour 4 trades 3W 1L ....+6-6+8+6 for +14 ticks total....

[Fletch 10]

For those that don't already know, Al Brooks has a new, new website.

 

www.brookspriceaction.com

 

It is a volunteer effort (by me) to get enough interest in a central location so that Al will continue to post an end of day commentary. Please join, help spread the word, and try to get people interested!

 

Fletch

[Mr_black 10]

Done for today (I am trading only the 1'st Hour)....have a nice weekend all:)

[rigel 10]

Done for today (I am trading only the 1'st Hour)....have a nice weekend all:)

 

Notice you employ 1min charts, presume the MA is 20ema, although Al does not recommend trading from this timeframe, however whatever is comfortable and profitable for you, I guess.

[forrestang 10]

Notice you employ 1min charts, presume the MA is 20ema, although Al does not recommend trading from this timeframe, however whatever is comfortable and profitable for you, I guess.

 

Just my

 

The intraday splitting of the bars is completely arbitrary..... as price is continuous, it moves exactly the same speed no matter what interval you use.

 

The 5min bar is just a summary of what happened in 5mins. The smaller you cut the interval down, the smaller the bars, and the closer you get to what price is actually doing.

 

Once one figures out WHERE to initiate the best trades from, it doesn't make sense to use a 5min bar and a 1 min is even better for the Brooks style of trading.

 

But if one is just taking each setup that occurs, a 1min chart would probbaly kill that trader.

[Mr_black 10]

Notice you employ 1min charts, presume the MA is 20ema, although Al does not recommend trading from this timeframe, however whatever is comfortable and profitable for you, I guess.

This is a brief explanation of these trades ...1'st trade was a short sale from Resistance Level @1014.25....2'nd Long on 1'st pullback after breakout confirmed by volume ....I use 6 tick stop and 6 tick profit target and this is the reason to trade shorter time frame when volume is in high pace usually the 1'st hour

[rigel 10]

Just my

 

The intraday splitting of the bars is completely arbitrary..... as price is continuous, it moves exactly the same speed no matter what interval you use.

 

The 5min bar is just a summary of what happened in 5mins. The smaller you cut the interval down, the smaller the bars, and the closer you get to what price is actually doing.

 

Once one figures out WHERE to initiate the best trades from, it doesn't make sense to use a 5min bar and a 1 min is even better for the Brooks style of trading.

 

But if one is just taking each setup that occurs, a 1min chart would probbaly kill that trader.

 

Was merely making an observation:)

Agreed, although overall Al prefers trading from 5min charts, he often makes references to 1min, 3min and even higher time frame charts.

 

and yes what you stated regarding price being in continuous motion and any illustration of it being arbitrary has been eloquently explained and emphasized by Dbphoenix a number of times on the Wyckoff forum. Infact he trades from tick charts using TD against relevant S/R

[ACS 10]

Besides the problem of cherry picking smaller time frames, there is another reason for using 5 minute charts that is alluded to in the book and lectures but not stated explicitly. Based on magazine articles, blogs, web sites, etc, the 5 minute time frame seems to be one of the most popular. If you are looking for setups that trap other traders then wouldn't you want to be looking at the same chart that they are trading?

[DbPhoenix 42]

Besides the problem of cherry picking smaller time frames, there is another reason for using 5 minute charts that is alluded to in the book and lectures but not stated explicitly. Based on magazine articles, blogs, web sites, etc, the 5 minute time frame seems to be one of the most popular. If you are looking for setups that trap other traders then wouldn't you want to be looking at the same chart that they are trading?

 

I don't know about "cherry-picking", but if I were looking for setups that "trap other traders", I'd want to be in the trade before the 5m bar "completes". By doing so, those who are waiting for it to complete will either propel me into profit or, if they are faded, enable me to get out at breakeven or better. The last thing I'd want to do is trade using what everybody else is using.

[Kiwi 16]

I don't know about "cherry-picking", but if I were looking for setups that "trap other traders", I'd want to be in the trade before the 5m bar "completes". By doing so, those who are waiting for it to complete will either propel me into profit or, if they are faded, enable me to get out at breakeven or better. The last thing I'd want to do is trade using what everybody else is using.

 

 

db this is a yes and a no situation. I would say that unless you had developed a real feel for the market you should wait for the signal rather than anticipate it (hence the no bit). Its surprising (or maybe not) how many newbies anticipate signal completion and are wrong much more often than they expect (they didn't really test "taking it before the bar closes or the bar breaks" and it isn't what they deceive themselves into expecting by selective perceptual distortions).

 

With a bar break setup such as Brooks once the bar is broken the the bar break is important (like horizontal snr) because lots of people can see it. They read it as "the retracement is probably over (unless it retests of course)." It is a good signal for a small player because they can fill at a reasonable price after the break occurs. For a large participant it isn't though so big players have to buy as the retracement moves down or in anticipation of the break. Thats the beauty of Brooks approach - it only works if you're small.

 

So the idea of using a very common timeframe for bar break trading is useful. On ES that timeframe might be 5. On HSI it might be significantly shorter. In some tradables 1 tick is the valid break. In others it might be a larger number and making that distinction can be the difference between success and failure.

[jolee 10]

We must remember that Al Brooks PA strategies and set ups are based on his many years of trading sucessfully. He has integrated whatever relevant and significant chart info such as S/R , HOY, Open , etc along with his price pattern set ups when trading. He mentions these and others are the things to be mindful of in his webinar and book. The set ups themselves are not that complicated. Failed (bear - bull) flag , channel line, wedge, trend line breakouts are traded because they had failed to follow thru but reversed after the break out at support or resistance, thus you're buying near resistance and selling near support. His set up to buy H2s and sell L2s is the basic buy or sell the pull back of a trend/20 ema strategy. The trigger to enter all his trades is when price moves 1 tick above / below the prior set-up bar's high/low (entry bar need not close). This is just his preferred entry method. Just be mindful when he uses those setups.ie. from Al " At the open, price gapped down and it's a bearish bar. but I won't swing short because the bar is still above yesterday's low." So should'nt look at those price patterns alone as setups to enter trades.

As I see it , it was clear that Forrester mentioned not to trade 1 min patterns. Rather his emphasis was on trading market logic, ie sell at resistance - buy at support kind of thing. In which case, a 1 min will provide the better read for entry. All of above easier said than done in live trading. Still banging my head.:crap:

[thalestrader 14]

We must remember that Al Brooks PA strategies and set ups are based on his many years of trading sucessfully.

 

I do not mean to demean Mr. Brooks and the fine folks who contribute to this thread, but characterizing Mr. Brooks as having experienced "many years of successful trading" is based upon what evidence?

 

Just a simple question that such statements bring to mind.

 

Best Wishes,

 

Thales

Edited August 21, 2009 by thalestrader
grammar

[jolee 10]

I do not mean to demean Mr. Brooks and the fine folks who contribute to this thread, but characterizing Mr. Brooks as having experienced "many years of successful trading" is based upon what evidence?

 

Just a simple question that such statements bring to mind.

 

Best Wishes,

 

Thales

 

I'm sorry, I don't have any factual hard evidence that Mr. Brooks is a successful trader. It was an assumption on my part. I know what people say when one assumes...

[thalestrader 14]

I'm sorry, I don't have any factual hard evidence that Mr. Brooks is a successful trader. It was an assumption on my part. I know what people say when one assumes...

 

No problem, and I wasn't expecting anyone to post such proof. But it may be somewhat beneficial to remind ourselves that just something isn't necessarily true just because it is printed in a book. There are some folks who post to this thread on occassion who I suspect actually do have years of successful trading experience behind them. As such, what those folks have to say about aspects of Brook's method may be useful in determining the advantages and disadvantages of Brook's method for trading.

 

Best Wishes,

 

Thales

[DbPhoenix 42]

db this is a yes and a no situation. I would say that unless you had developed a real feel for the market you should wait for the signal rather than anticipate it (hence the no bit). Its surprising (or maybe not) how many newbies anticipate signal completion and are wrong much more often than they expect (they didn't really test "taking it before the bar closes or the bar breaks" and it isn't what they deceive themselves into expecting by selective perceptual distortions).

 

With a bar break setup such as Brooks once the bar is broken the the bar break is important (like horizontal snr) because lots of people can see it. They read it as "the retracement is probably over (unless it retests of course)." It is a good signal for a small player because they can fill at a reasonable price after the break occurs. For a large participant it isn't though so big players have to buy as the retracement moves down or in anticipation of the break. Thats the beauty of Brooks approach - it only works if you're small.

 

Unfortunately, if one is waiting for the same signal that everybody else is waiting for, he is opening himself up to exactly those conditions which more experienced traders fade.

 

As for where and when large players buy, it is unlikely that they are waiting for a retracement since they created the breakout in the first place.

 

This is not to say that those who are following this system are unsuccessful with it in real time with real money. But the system itself may be tangential to their success, as with VSA or MP. My post above was made in response to the comments about cherry-picking and using the same bar interval that everybody else uses. I suggest that the assumption that "everybody" uses a particular bar interval is the best reason for avoiding it. But then this is the advantage in trading price action rather than trading bars.

[VolumeJedi 10]

Just my 2 cents.

 

One does not have to use obscure timeframes to "get ahead" of the herd. The issue is that the herd is not looking at what matters, regardless of timeframe, and that is price action. They are concerned with arrows and candles turning green or this indicator going above that line or line A crossing line B.

 

In fact, if one uses the same timeframe as the herd, one would be able to both see what the herd does, and more importantly, does not see.

 

Ultimately, markets are moved by imbalances in supply and demand. These imbalances are created by the BBs. These BBs are on all timeframes, but if they want to manipulate the herd, then they have to be on the herd's timeframes.

[Head2k 10]

I don't believe in manipulation. The market is simply one big bazaar where auction takes place at all time frames and scales. The closer one wants to get to the extreme, the smaller auction scale he should observe. Then the only limit is tick size as a resolution, so if one is looking for some kind of a behavioral pattern or setup he needs some space for a tradable setup to form.

But the tinier one wants to get the better he must understand what he is doing. The better he must know what the immediate obstacles are and what confirms or invalidates his setup on larger auction scales. If one wants to get in before the others he must be also ready to bail out quickly if they don't propel the move on a larger scale. And he must know what he is going to do well ahead of the actual moment, because taking setups and managing your stop at a 1 tick chart requires much faster reactions than waiting for a 5 min bar to form.

But if one is able to do that, like Db for example, his reward is a huge reward to risk ratio, maybe accompanied by qute a lot of breakevens, but only a few full stops. And even if there are full stops, they are ridiculously small compared to that ones which one must use when trading off a 5 min chart.

 

As for myself, I distinguish between a trade auction scale and an entry auction scale. If these two are equal I call that scalping. The greater the difference is between these two, the more obstacles and harder trade management one can have, but the sweeter is the reward related to risk.

[rigel 10]

Interesting discussion folks, however get the feeling we are veering off the main topic of this thread .

 

As jolee pointed out Al's setups are pretty straight forward and many of them are well documented in other technical analysis book i.e trendline breaks, retest, pullbacks to 20ema etc (Tradervic,Nqoos website).

 

What comes through from the book and Al's webinars and other articles, is that he has gone through all of the indicators including pivots, s/r, vol , various timeframe analysis etc over his trading career and has arrived at an intraday trading method based on simple 5min and 20ema analysis and it works for him. Over the years as he says he has printed these charts EOD and marked out the various setups which repeat themselves on a daily basis and he has assembled them in various chapters in the book. That is all.

 

Traders have taken notice of these and are verifying with their own experience on a daily basis. It will work for some and not others. Nothing wrong with that.

Don't believe Al is saying mine is the only way. Whether he is successful or not is largely irrelevant, one only needs to take a few setups from the book and find out for him or herself if they can be observed on the charts intraday and whether or not one is able to trade with them on a consistent basis, if not move on.

 

Al could have easily like the Tradeguider crowd(with their herd, dumb money, BB, smart money jargon) gone on to establish trading rooms, seminars, DVD's , bootcamps - easier route to making money than realtime trading;)

[forrestang 10]

This thread is huuuge!!!

 

In all seriousness though, whatever one needs or uses to find the very best trades..... either that or good money management is the goal to be attained.

 

:helloooo:

[bakrob99 11]

Just my

 

The intraday splitting of the bars is completely arbitrary..... as price is continuous, it moves exactly the same speed no matter what interval you use.

 

I disagree with this. When you realize that you are trading against other traders, many of whom have selected the same "arbitrary" 5minute bar, you realize that it is the failure of the breakout or breakdown in that 5 minute context that creates the signals. Any reduction in time is really trading some other "system" which has to be validated for other non-Brooks reasons.

 

In fact, I felt the best part of the Brook's book was his discussion of what makes a market, and how trapped traders create your winning position. watch for failures which result in trades going in the direction which agrees with your market analysis. That is the key for selecting the correct trades.

 

And to do this you must wait for 5 minutes to elapse, or run the risk of taking an entry which proves to be an error when the price action reverses on you in the opposite direction.

[ACS 10]

And to do this you must wait for 5 minutes to elapse, or run the risk of taking an entry which proves to be an error when the price action reverses on you in the opposite direction.

 

That is so true. Anyone who watches markets for a while will quickly realize how dramatically the configuration of a bar/candle can change in its final 30 seconds.

[DbPhoenix 42]

I disagree with this. When you realize that you are trading against other traders, many of whom have selected the same "arbitrary" 5minute bar, you realize that it is the failure of the breakout or breakdown in that 5 minute context that creates the signals. Any reduction in time is really trading some other "system" which has to be validated for other non-Brooks reasons.

 

In fact, I felt the best part of the Brook's book was his discussion of what makes a market, and how trapped traders create your winning position. watch for failures which result in trades going in the direction which agrees with your market analysis. That is the key for selecting the correct trades.

 

And to do this you must wait for 5 minutes to elapse, or run the risk of taking an entry which proves to be an error when the price action reverses on you in the opposite direction.

 

Do you truly believe that big money players are sitting in front of their screens, drumming their fingers, waiting for a 5m bar to "complete" before taking a position?

[Kiwi 16]

Yeah. Agreed. Off topic.

 

I'm not going to convince db any more than he will convince me that Wyckoff is the only way. And importantly we shouldn't be doing it in this thread. This thread is about Brook's way so if anyone wants to debate the unprovable then we should take it outside.

 

Start a new thread on bar completion vs etc etc. Personally I won't join because after reading db's reply to my point above I realized that his Map wouldn't get "it" and this was a good thing. What makes the market tradable is that there are so many different maps pushing it up and down. Rock on!

[FulcrumTrader 10]

My ongoing confusion, though, is the concept of "breakout pullback." Is this simply a little pullback after a breakout? It seems, from what I read and parse something more.

 

Like: price is in a bullish uptrend, say at 900. It "breaks out" downward to 890. This is the breakout. This fails, and price returns to the 898-900 area. This is a failure of the breakout. It then attempt to break out again, and falls back to the 890-892 area. Is this the "breakout pullback?" Is it a pullback to the area of the original breakout, and a potential setup for a long if it fails? Am I making this hard and it is it just the 2nd of two attempts to breakout and thus a with trend setup?

 

Help! Please!

 

There is a pattern that I see frequently in the order flow when an imminent breakout/breakdown movement in price is about to take place at a key support or resistance level of resting inventory. Those holding the resting inventory, counter to the current trending movement of price, get active in the order flow to optimize a clean exit strategy.

 

I would have to type out a long explanation for the details of what I am talking about, but then it may still seem confusing. Instead I just made a quick video to explain the repeating pattern in the order flow for a type of pullback breakout;

 

TL! Videos

 

This may help to see what goes on in various situations of pullbacks prior to breakouts in price.