I need to correct something. I said the SL in the chart above (i.e. the initial SL should be below the first bar of the BO. That is wrong and not the proper way to state it. So to clarify: the correct SL (initial SL) is below the first bar of the move up LEADING to the BO bar. The drawing actually shows that to BE so. I just worded it wrong. Blame my diabetes. Blame me being 65. Blame my sweet pea wife trying to talk to me while I am typing stuff. Blame my one track mind. Bottom line. It was MY bad. It is my responsibility to state things as clearly as I can. BUT but you do ask a legitimate question. I will answer in a post shortly.
ROFLMAO...Calm down now. No need to get bent out of shape mr gambler. I have Brooks first book. I have his subsequent Trilogy (in both hardback and digital form for when I travel...airplane ..etc and don’t wish to lug books around) I have his main video course (his first version and subsequent versions) I have his forex course I have the BEST TRADES course done by Brooks and Entwistle ALL BOUGHT AND PAID FOR. I have read and studied articles by brooks. I have studied his concepts for years. Made extensive notes. Reviewed numerous times. Traded the concepts, adapting them to my own personality and what works best for me. And I continue studying. So tell us about your Brooks experience.
First lets’ look at bars. What real in the markets in terms of price change? There is only price movement. And it has to be at least 1 tick to even be called price movement. What are bars? Simply graphical representations of price movement within a specific TF. If using time based charts. While they are a construct they do indicate momentum, velocity, the forces i.e. bullish/bearish at play, volatility, inertia, and probability. Let’s pretend you built up quite reputation of being right on the direction of price movement. Some not so upstanding dudes wanted your advice. So they kidnapped you. You were taken to a room where there were some computers showing a certain stock at play and it’s recent movements. On a 15 minute chart. A 357 magnum was placed upon your right temple. You were told to pick which direction price was heading next. Up or down? Over the next hour or two.” You are told to pick: “long or short. Pick it right now! You’ve got 5 minutes to make your decision. If you are right, you will live. If you are wrong somebody will be picking up your brains up off the floor.” So in this example you have a choice. You continuing to live would be contingent upon you making the RIGHT choice. WHICH DIRECTION WOULD YOU PICK, UP OR DOWN? Long or short? Which bar shows momentum more clearly? Which direction is a higher probability? Which implies velocity (rate of speed of something happening)? Where is the inertia, up or down? You got 30 seconds. DECIDE! LONG OR SHORT. WHAT WOULD YOU DO? WHAT would you tell those dudes? You are conscious of the barrel pressing hard on your right temple. Sweat is beginning to form on your brow. You feel a warm liquid running down your legs and a puddle is forming on the floor. You cannot believe you pissed your pants! But that is the least of your worries. You gotta decide...30 seconds left...you hear the pistol as they cock the hammer. Blurt it out quickly! LONG OR SHORT?
A little more about bars. Bars, ALL bars are either trends or ranges. All bear bars are bear trends. All bull bars are bull trends. All doji bars are ranges. It is easy to see this by dialing down to a smaller TF. Take one example, for instance. Take a five minute chart that has a sideways move...i.e. bear bar, bull bar, bear bar. Just take the 5 minute section of 5 minute bull bar sandwiched between the two bear bars and look at that 5 min bull bar as 1 min bars. As live price is unfolding. You will see that one 5 min bull bar is in fact a trend when seen as 1 minute bars and can be a multi leg trend depending on the size of the 5 min bull bar. Do the same on the 5 min bear bars on either side of the 5 min bull bar, you will see them as bear trends on the 1 min chart. Now look at a doji on the 5 min. On the 1 min it is sideways movement as in a range type behavior. The same thing can be done with say 15 min charts compared with 5 min charts. Or 60 min with 15 min. ...etc Try deducing that from line charts or MA crossovers. Not so easy. All trends are price movement. All price movement has inertia. Hence all trends have inertia. Price tends to keep doing what it is doing until a stronger force acts upon that movement. Bars show the depth of movement and clarity of movement better than moving averages. Moving averages purpose is to “smooth” movement out. Bars are raw data and are formed as data pours in live. There is no smoothing. WYSIWYG. Price often tests high peaks and low points. Hence bars are more useful than MA’s or crossovers...etc. I use moving averages but mostly to see where price is staying in regards to it’s average. For instance, if price is staying above a 20 EMA and when the bears push they cannot get price down to the moving average, much-less thru it, and when their effort ends, there is a gap between their lowest point and the EMA. They could not manage to get price to and through the EMA. That signals strength on the side of the bulls and not so much. strength on the side of the bears as they couldn’t even get price through the moving average. I use moving averages for other reasons too but this is one.
Using the extreme of a bar for entry or stops makes sense because the max peak and decline over a period of time. 5 min...15 min..30 min...etc. Try deducing that from a line chart or moving average “at a glance”. Say you got a bull trend going then a PB. You are looking to go long. There are 3 bear bars in the pb. Each PB bear bar is successively smaller. So, a trader is looking for the bull trend to resume. So price has three successive bear bars...each one decreasing in size. Then a bull bar is next and it breaks out above the high of the last bear bar in the decline PB. Doesn’t it make sense to go long at that point? Price appears to be resuming and the PB appears to be ending. Such a precise entry is harder to see in line charts. As far as stops go I will use the extreme of bars but not necessarily the extreme of the adjacent previous bar. It may be the extreme low of 3 or 4 bars back as in the chart I posted above. The stop has to make sense in the within the context of previous PA. Therefore I use PA stops. Some traders use money stops. Some traders use a specific amount of ticks for stops regardless of the contexts. I prefer PA stops. That means mine will vary depending on volatility and the PA context. I will use the extreme, or just beyond it, of the previous bar as a SL when trading MTR’s. But that generally means more stop outs until a MTR does work giving a bigger reward.
When you get a chance answer the questions in my post in post #124. Then I will respond and then lay off posting so much as this is padutraders journal.
yes it took me 10 years to understand what you explained in a few lines.......sometimes i wish brooks did the same
My experience is Al Brooks is not paying me a commision for the constantly shilling his books, courses and videos. Anyhow I've decided to buy some books on "How to become a cult leader". I'm pretty sure it pays better than actually trading.
you can post anytime. discussing my trades will help others too the idea is to add value to the discussion...which you do just saying brooks is an idiot is quite pointless you do discuss things in a very technical manner...... Brooks does make a lot of sense.....but there are many others who do.......Brooks does give a lot of detail so i prefer him. i have studied a few in my 30 years....many of whom i do not remember.....but these are the one i do.....Elliot, Gann, Demark, Toni Hansen, Linda Raschke, Martin Pring, John Bollinger, Bulkowski,