Al Brooks - Trading Price Action Trends

You make a fair point. I bought his first book soon after it came out, and returned it shortly thereafter for a refund. If memory serves, I read about 100 or 150 pages, give or take. More recently, I even had a look at a couple of the video presentations Brooks has made available on the Internet. I managed to only endure a portion of each of those videos. (I now know why Ferris Bueller took the day off.) And so, I confess I did not read his book from cover to cover, or watched any of his videos from beginning to end.

However, I did manage to form an opinion on the material to which I had been exposed and which I did my best to digest. (Over an admittedly brief period of time, but in my defense, I've been around for a while). Here is where I have a problem with the overall premise of his approach. As I understand it, Brooks is a discretionary trader. He appears to have numerous guidelines, as evidenced by his mountain of material, and he picks and chooses at crunch time which of his guidelines he will adhere to, as circumstances warrant in his opinion. Got that? Depending on the number of guidelines one choose to have at his disposal, that can be a lot of information for the prefrontal cortex to juggle in the short amount of time available to react to short-term intraday price activity. Information is important and more information is better, but there comes a point where additional information (however configured) can potentially become detrimental to your decision-making. Too much overhead. This is a judgment call that we must each make for ourselves, dependent on our processing capacity and the nature of our chosen game.

Personally, I think Brooks has too many guidelines, some of which may or may not conflict with one another depending on other moderating criteria. And so, he might buy at Point X because of A, B and C, but he might not if D occurs unless it is offset by E. You get the idea. I do not know Brooks and I do not mean to smear him in any way. However, employing a discretionary method with a multitude of overlapping and potentially contradictory guidelines (of either a high or lower order, so the combinations can be endless), allows one to draw any conclusions he wants after the fact. That provides very fertile ground for someone who would want to exploit the naiveté of others. I’m not in any way saying Brooks is doing so, but the general observation should be made.

My own approach is largely systematic, and completely so when it comes to entry and initial protective stop. My discretion is largely limited to scaling in and out, albeit with very few and specific guidelines. Personally, I find it very liberating to travel light. It is what works for me, and it is what I prefer. Therefore, it is only natural that I would have a bias against an encyclopedic discretionary approach. Evidently, it works for some people. Given my bias, however, I wonder to what extent their trading would be just as profitable, if not more so, without quite all that overhead. A person with properly functioning legs can use crutches, but I wonder how much more efficiently he would walk without them.

Another point of contention I have is that, if memory serves, Brooks relies to some degree on measured moves or some derivative thereof. I think this is nonsensical regardless of how many people swear by them. It is flat out predicting. And while some people regard all trading as one manner of predicting or another, we should at least make the distinction between lower order “predicting” such as when to enter a position at perceived low risk, and the much higher order outright prediction of foretelling how far a move will go. By way of one trader as an example, read “Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading” and judge for yourself. The author, Peter Brandt, advises at the outset that he will limit his trading to reacting rather than predicting, and then, counterintuitively, often relied on price targets. Interestingly, and although I don’t recall his drawing this conclusion in his book, I found that his reliance to, or consideration of, price targets cost him money, either actual or by way of opportunity cost, in the aggregate. If you read the book you will see that he holds positions after they show decent profit but have not yet reached target, and then some of these positions get stopped out at a loss. In other trades, he exits at his predetermined price target for no other reason than because it was reached, only to watch the price continue on without him. Bottom line: I think his adherence to “measured moves” and “price targets” were an expensive diversion. If you do read his book you will see it for yourself. I don’t think his experience with targets is unique. One observation Brandt did specifically make is that diagonal lines (trend lines) have rather limited trading value. I’m surprised it took him so long to figure it out. All in all, however, I would heartily recommend Brandt’s book for your reading pleasure. The thing is, he made money over the course of the exercise that comprises the book. My view is that he was profitable despite the profit targets and trend lines rather than because of them. Judge for yourself. Again, his is only one trader’s documented experience over a limited period of time, but I doubt it is unique. Can you see the parallel I am trying to make? Again, I am expressing nothing other than an opinion. My own.

 

First off the bat, I am not an advanced, intermediate or GURU trader.
I am simply a profitable trader (pulling hundreds and thousand of dollars) after blowing my account thrice and went thru a massive learning experience. Make no mistake, this has not come to me easy.

I read part of Al brooks' first book and then stop reading further after seeing a sentence that gives me the aha moment that I prefer spend time wisely somewhere else.

I have written a SIMPLIFIED book myself in 2000 in engineering (my field of expertise) after reading massive literature on the topic, spanning 75 years since the topic was introduced, and come to the conclusion that everyone makes the topic even more complicated. Why ? because it keeps everyone in business. The more complicated it is, the more research (hence funding) is done to unravel what has been said and decipher the cryptic language. It took me four years of research to bring the whole topic to 256 pages explained so clearly mostly in a few pictures what others have explained in 10000 words.

I would not be surprised if Al Brooks published nine books down the line to explain the three books he recently published or about to be published.

Now, would I write a book on trading ? NO ! WHY ! because I make money on trading, why waste my time write a book or create a forum and charge for subscription ? Well, unless I have other motives that are left to anyone's imagination.

Just my 2 cents on this Al Brooks business.

 

Thank you for your excellent response, im about to hit the sack but I will just say your post has articulated some of the worries I have regarding this method.

Having read a small part of the book I am thinking that there is an awful lot to remember for an intraday method. I am sure there are some things I will learn though and already have from the book though.

Using a very simple systematic entry trigger strikes a chord with me also.

Mark

 

Well written post, except for this, you could not be more wrong here.

It's not the trendline is how the sheep uses them, don't think like one.

Crazy A

 

Only read the first book (Bar by Bar) so far. A nightmare to read and comprehend indeed, but think it's hardly possible to describe so many nuances in a simpler way.

I would even say Brooks lacks some of the important nuances of price action trading, so there's a way for his books to grow a few more hundreds of pages.

Cannot say I found something completely new to me there, but surprisingly, as someone already wrote in this thread, it was a catalyst to creative thought process and eventually helped me to pay much closer attention to trends (before I tended to almost entirely scalp reversals).

So overall it turned out to be a valuable use of time for me.

 

Thanks, but you should take it up with Brandt, who made the observation in his book, as I noted in my post. He is a professional trader with an impressive resume that spans decades. I only noted that I was surprised it took him so long to arrive at that conclusion, because I came to it much sooner and years ago despite my far more modest background and credentials.

 

I made the point that the originator of a very successful method would not release the details as others would copy and hammer out the edge. If only one hundred people copy a successful trading strategy, by the time they grow the position size to 20 contracts each they are collectively trading 2,000 lots on the same signals, which is not possible in short term daytrading of CL. The maximum practical in something like the mini Dow may be 2-300 contracts for shorter term intraday trading. It does not take many "copycats" to hammer out this edge and interfere with the execution for the originator of the method.

A strategy published on the Internet for free or a few dollars is available to enough people that it is plausible that at least a few hundred people would try it out and if it were as successful as claimed it would be arbed out almost overnight.

In short, very successful people are not selling signals or methodologies for pennies when this would directly interfere with their ability to continue building a larger position size. It then follows that the claims of Brooks and his followers are suspect to say the least. It would take overwhelming evidence to the contrary to persuade a rational man to even investigate this particular author.

Yes, we know this is your sales pitch here. For the novice trader looking for a methodology this is as useful as my claiming that I place profitable trades every day by using tea leaves or astrology. Sensible people value evidence based decisions, not anecdotal evidence.

If this is the same Al Brooks who writes here at futures mag, I see no evidence of anything other than the usual trading cliches. No original thought whatsoever.

http://www.futuresmag.com/Pages/Futures-Magazine-Author.aspx?key=AL BROOKS

 

It seems you have no idea what Al Brooks teaches, it's not a system where all proponents will trade exactly at the same entry point or signals. Also there are likely to be many traders trading at the same price in the same direction as you for any number of reasons, does that mean you can't be succesful. You obviously have very limited knowledge about trading and are simply trolling.

 

That's my take as well.

Zen, do you think all CL traders are speculators and all are trading in the same general time frame for the same general reasons?

Heck, no.

As for the hundreds of pages Brooks has written:

He's offering his "10,000 hours" of experience and providing a COMPREHENSIVE course in price action.

He could've taken a single price action concept and produced a 20-page booklet with illustrations to instruct other traders in how to recognize and trade that concept, but instead he produced a COMPREHENSIVE book from which you can extract a few setups and develop a trading plan, or you can study all the nuances of price action by spending months or even years mastering them.

Still not a single naysayer here has provided concrete examples of strategies out of Brooks' book that fail more often than they work.

 

The 10,000 of hours are required to find the diamond in the rough not to explain the findings. It took mankind an eternity to develop the wheel, but once the simple concept was understood, it was smooth sailing past that.

Comprehensive, not exactly, more like overly complicated, not due to the concepts but because his writing and teaching skills are severely lacking.

We have a mutual friend that read his book and then summarized the concepts in about 5-10 pages, sort of like Cliff Notes; which I might add, it was nothing special, even if it makes you money.

Four books on 5min 20 ema scalping, it's absolutely ridiculous but then again when you write a book and make reference to concepts you have not even explained yet then such "comprehension" might be required

Last post on this subject, the concept or author is not worth this much time, actually feel a little embarrassed I already wrote a few posts about it.

Crazy A