Only thing I know about Al Brooks is that it is price action at a very granular level (a bar-by-bar method of following price action). The book is very hard to read and follow and some people on ET really like the content and think there is real value in the content. Before I embark on any kind of research on this topic, I thought I will ask for opinion of traders who like to test ideas rigorously. Has anyone successfully coded the ideas in Al Brooks and done some rigorous backtesting on them? Is it even possible to codify the ideas or an element of discretion is involved? Thanks in advance.
If this question was directed at me, I have no idea As I said my knowledge about Al Brooks is very limited - I just know a lot of people swear by it and it is a bar by bar method. Thats all. I am asking other practitioners if they have been able to codify any ideas that Al Brooks talks about and rigorously test them.
Just curious, what do you mean by a "bar by bar method"? I've rigorously tested (by hand) a few ideas I got from Brooks' book, and have incorporated these ideas into my trading plan. My methods of trading these ideas is, for the most part, somewhat different from Brooks', but the core concepts I got from Brooks, just as I got a core concept from an AustinP webinar a few years ago and developed my own tactic based on the idea. No matter how "proven profitable" someone else's strategy or concept is, you will likely be unable to trade it manually or to allow an automated system to trade it without interfering, unless you make it your own and come to trust it fully.
Agree with rest of your post so not quoting it. You used to mention that Al brooks is a bar by bar method. Thats why I wrote. AFAIK, the method looks at how each bar is placed relative to bars before it. Thats all I meant. Do you think you can post an example of a simple piece that works? Basic rules - so that one of us can probably code it to see if it has value. Or do the rules involve a lot of discretion?
I find a lot of value in Brooks methods (and I haven't even completed studying all of the material as of yet as it is very extensive). Through years of working with markets I've always kept an eye out for opportunities to automate. Most of the time I found that regardless of the actual method, tactical automation is a strong possibility and adds a lot of value. At the same time I found that strategic automation (or the sort of automation that produces consistent results on a seemingly quantified, strategic level) is very elusive. With Brooks specifically, I find that certain aspects can be easily automated and acted upon. However, these aspects are only truly actionable (in the long run) in a well understood strategic context. Such context is hard to quantify, even if it looks simple to a trained eye. I think there is a lot (and I mean A LOT) of subtlety to Brooks strategy and I wouldn't even try to build a robot that can capture it. I do recommend trying to code certain basic building blocks of his approach though. That will prove to be time well spent. /Wulfrede
Thank You for dropping by. Its great to get comments from a long-term pro like you. Idea of Tactical Vs Strategic automation as you have defined makes a lot of sense. My personal experience is similar. Specifically, which asset classes have you applied Al Brooks methods on? Futures - Stocks?
Thanks for the compliment but I don't consider myself a pro. I've applied Brooks methods to stocks and SPY. The method seems to be universally applicable but there are some differences in tactics (he mentions some of them in his books) with respect to stocks and ETFs. Also, certain signal stabilities vary as well. Basically, Brooks has a way to what I call, "tokenize", the price stream into meaningful, discrete blocks which comprise micro and macro contexts. It isn't really that his methods work or don't work per se. Meaning, that's not the actual point. Brooks aims to give you a way to view the market in a concrete fashion which allows you to assign probabilities to future outcomes. As long as you let probabilities work in your favor, you'll be ok. But I digress. I find it very useful. Just like NoDoji has mentioned somewhere above, many of Brooks rules will (as they should) fit other "personal" methods because in the end the markets are made up of prices, sizes and we all see the same ones. /Wulfrede
Bar-by Bar coding is not complex. BUT. Make sure your platform is using the correct definitions of logic and operators and paradigm theory. To run a test simply do an AND and an OR circuit for both outputs. If this test fails then you cannot use the platform to complete additional work easily. when that is the case, then you do the math using work arounds that correct the platform shortcomings. As you do those, if you notice the platform slowing down, then save each thing you do to prevent losing it whe the platform crashes. youcannot restart a crashed platform by just reopening it. to fix the overloaded platform you have to go into the platform and delete what you did most recently and then do NOT reload that work on the same chart. go to multiple charts and assemble forom the spearate charts later in a minimalistic manner. Use color in "boxes" to test what you create. The future in trading will be a bar by bar sort of compilation of of "the market's operating system". BUT this will not be done on charts as they are known today. charts today are usually bar charts whereby bars are formed by some manner of "time oriented" rules. Too bad. I have never been able to get the trust of a platform provider or owner. They fear a set of things related to their limited view of how rich they want to be. To go to the Brooks level is not difficult. You have to use these bar variables: OHLC and volume. What is "good enough" is not hard to do. Shifting your "mindset" is the most difficult. as suggested, it is possible to "compromize". the best "compromize" is to color all the cases of the relative bars of price. "relative" is the Key word. My best try at platforms so far does not do relative as in Haskell or SQL. you can setup all of the "market's system of operation" in logic in a weekend. To put it into any coding system is difficult because you have to "learn" the coding. I tried that and found out the corruption in the platform I tried to use. The platform techies are forthright in telling you the platform will not work, usually. I tried a workaround of hiring two coders by giving each over half of the job, BUT.... they always do "need" the other half. The compromize is hot stuff. As dom993 said it is Christmas every day. In a nut sheel, there are only 56 elements you need to do a criteria, filter, formula, rule or statetgy for. The mindshift to see these is your barrier. Price has 10 cases: Sym, FTP, FBP, hitch. stitch R and stitch B as intenals. translation has XR and XB. One formation has three bars and can be longer and it has a BO. The last formation is the End Effect which is the null of all the others cases first typed. As you see bar by bar is not within the grasp of most mindsets. Schoeck quite nicely points out the mental causal combo on pages 226 anf 227 of his famous work. Raiga expanded on this and Schoeck references him as well. The global status of the minds in this world have formed a cloud where they are all on the outside and cannot shift their minds to step into the open doorframe. Have posted the expressions for most of the ten cases. I use the expressions to color boxes. The eyes do three major things in no time flat: space, shapes and the movement of the shape. Watch a new froming bar. It usually is a sym. (because bars do not close nor open at etremes usually). If a bar closes on an extreme, you look at volume to find out what the next bar will open as. And so on. The symptoms of knowing that you know and have gotten to "christmas" are: support comfort and confidence. Brooks has these three aspects as he communicates. People do not have the potential, usually, to think, however. My beginnings precluded my not having "christmas" quite rapidly. I had to draw my charts by hand. From this my mind, immediately, became open to having christmass in a matter of weeks. Your worst enemy is the PC, it turns out. Your mind cannot dwell on a forming bar in the simple context of finite mathematics. So no one is able to think through getting to "christmas". your thread informs us of the stage to which your mind has gotten. It IS completing its nightly merging work. It IS proferring questions to you yourself because of it thirst to complete becoming fully differentiated. Acrurary, from ET, acually documented his dropping of ststs to turn to finite math. It was years and years ago. Almost no one caught his drift in his final commentaires. I regarded it as amazing because he had to be so mentally tough to give up stats which were no good and then turn to the maths the market dictates. You probably notice no one "takes" the market's full offer. There is a reason. Say you are a person who is making money. At some point, you stop adding contracts. You "feel" the Lizard Syndrome creeping into your feelings. Say it is 7 contracts and you know you will have what you need for your lifestyle. You are mature so you do not "fool around" and you are "blingfree". BUT you sweep instead of going up to 50 contracts. For me this is just 2500 a point so I do not "feel it". My example is I drive 12 cylinders. On Sunday I flew (took a ride; Liz doesn't let me glide anymore) Four radial engines are enough for me. My 100 aniversary baseball cap from Hershey went out the port in a gust. (I still have my T shirts). A big gate in trading is ending the Entry/Exit mentality. This is the Lizard Syndrome acting out for you in another way. Whenyou do not know you know, you have fear, anxiety and anger when you are in a hold. When you sideline your mind is "different". Brooks wants your mind fully differentiated. So do I. I answer questions to help open the door. ET is moving forward. Bars are seen. A concept of bar-by-bar has appeared. I wish I could post my log here. 81 bars and each one had a name today. that is the Price bar had a name and so did the volume bar. Could dependent and independent variables be just a couple of years away?