Al Brooks - Trading Price Action Trends

[wrbtrader]

Quote from cornixforex:

Ya. Not that I use it a lot for trading decisions, but helps somewhat to clarify some things on the chart. 9/18 EMA combo is also good.

There are price action only (no indicators) traders and there are price action traders that only use "one" indicator regardless how many time they use it.

I'm curious if you've continue having indicators on your chart due to "habit only" prior to traversing completely (100%) to price action only (no indicators). Also, someone once said he asked Al Brooks the same question but Al gave no reply.

In my opinion, traders that are using indicators and then start to become more experience with "price action"...they slowly start to lose their dependence upon indicators. In fact, most seem to traverse from having a lot of indicators to only having one indicator and then to having "no indicators" as they get more trading experience in reading price action...

A few even go further in not using any charts and using only time & sales screens with bid/ask screens. Thus, there really is only two types of "price action only traders".

1) Price action trading (no indicators) with charts

2) Price action trading (no charts) with time & sales/bid & ask screens

Everybody else that are using price action in combo with 1 or 2 indicators are just in transition as their trading improves until they get to the point that they don't have any indicators on they charts.

Yet, technically, all traders with indicators on their charts regardless to the number of indicators can be called "price action traders" because in reality they are reading the price action in combo with indicator information...discretionary, mechanical or automated...

Main reason why I will never understand why some price action traders using one indicator are bashing other traders using "more" indicators.

 

[cornix]

Quote from wrbtrader:

There are price action only (no indicators) traders and there are price action traders that only use "one" indicator regardless how many time they use it.

I'm curious if you've continue having indicators on your chart due to "habit only" prior to traversing completely (100%) to price action only (no indicators). Also, someone once said he asked Al Brooks the same question but Al gave no reply....

...Main reason why I will never understand why some price action traders using one indicator are bashing other traders using "more" indicators.

Probably that's just a "habit". Honestly, I never thought much about it. I definitely move towards simple tactics, because realize over time, that complexity rarely means any significant increase in profitability and sometimes even leads to the opposite.

Also, holy wars about "price action" vs "indicators" including all shades of grey never seemed to me like anything even worth attention.

Our goal as traders is to make money, using whatever tools we find the most suitable for us over the course of practice. Exact tool set of every trader is of far lesser importance IMO, than being dedicated in practicing the given method.

 

[NoDoji]

Quote from wrbtrader:

There are price action only (no indicators) traders and there are price action traders that only use "one" indicator regardless how many time they use it.

I'm curious if you've continue having indicators on your chart due to "habit only" prior to traversing completely (100%) to price action only (no indicators). Also, someone once said he asked Al Brooks the same question but Al gave no reply.

Main reason why I will never understand why some price action traders using one indicator are bashing other traders using "more" indicators.

I use no indicators. Some believe that the 20-bar EMA is an indicator, but I use it as a mobile S/R level. Sure if it's rising, price is trending up, falling price is trending down, but you certainly don't need the EMA to tell you that; you can see trends right away if your chart time window encompasses enough bars.

I've traded without the 20 EMA briefly in the past, but I've added two "trap" setups to my arsenal that utilize price's proximity to it as part of the setup.

IMHO, any trader bashing another trader is probably a struggling, frustrated or failed trader. I can't imagine a nicely profitable trader bashing anyone. :eek:

 

[wrbtrader]

Quote from NoDoji:

I use no indicators. Some believe that the 20-bar EMA is an indicator, but I use it as a mobile S/R level. Sure if it's rising, price is trending up, falling price is trending down, but you certainly don't need the EMA to tell you that; you can see trends right away if your chart time window encompasses enough bars.

I've traded without the 20 EMA briefly in the past, but I've added two "trap" setups to my arsenal that utilize price's proximity to it as part of the setup.

IMHO, any trader bashing another trader is probably a struggling, frustrated or failed trader. I can't imagine a nicely profitable trader bashing anyone. :eek:

Yeah, SMA/EMA/WMA/CCI/MACD/STOCH/RSI or anything else along that lines of being plotted is in fact an indicator. Actually, I really don't know what is the definition of an indicator but if I'm wrong and it's not an indicator...than something like CCI, RSI must not be an indicator.

Seriously, I've seen others say the exact same thing about RSI...

some believe that the RSI is an indicator to imply "it is not" an indicator.

It really doesn't matter if someone is using something (anything) to help them with their price action setups. I just came to the conclusion one day recently that it doesn't matter how many indicators someone has on their charts...they're still reading the price action (if plotted as a graph) in combo with their indicator.

Therefore, technically, someone can have 100 indicators on their chart and still be using "price action trade methods". By the way, I have seen Al make a few "negative" commentary about others using indicators although I wouldn't call it bashing. At that time when the comments was said...I didn't know anything about him and assumed he had "no indicators" on his chart until someone said he does use the EMA indicator but not for "trade decisions".

If that's true, why does he have that indicator on his chart if it has no impact in his trade decisions. It must have some importance to him or else he would not have it on his charts. In fact, unless I'm mistaken...he doesn't even mention the EMA (exponential moving average) in his book glossary until you were to open the book and see it on the charts...correct ???

http://www.brookspriceaction.com/portal.php?page=4

If you read carefully in the description on his first book it saids the following (it must be a typo)...

...Brooks discovered ten years ago that reading price charts without indicators proved to be the most simple, reliable, and profitable way for him to trade...

Do you see what is stated in the above book description? It saids "without indicators". That must be a typo.

 

[SteveH]

Response to Donna's 20 ema comments...

Right. It's a great fixed point of reference. When you get to the midrange tick or volume based charts, it can also be used as a very accurate overbought / oversold indicator for scalping countertrend or even a stable pullback level to enter in a strong trend.

Keep track of the highest high and lowest low distance (in ticks) from your moving average for each price bar and measure the tendencies (last 10 days is fine) for your trading instrument in choppy trends, strong trends and sideways price action. This is reliable only during RTH. Your have a simple, measurable window into what the bots out there perceive as lower risk fade zones.

If you were going to trade this, I would recommend that you setup the entry for a computer to jump on the tick distance threshold you're looking for with a limit order. It's so fast sometimes that you're in the trade and up 5-8 ticks (on the CL) by the time your platform has acknowledged you're in the trade. You don't want negative entry slippage but you do want the chance to get a more favorable entry should price jump more on your side by the time your order hits the Exchange.

It's also an excellent exit mechanism for those of you wishing to maximize your segmented gains *in* the direction of the trend. In that case, I would also exit by computer by either moving the stop side of the bracket order to the target on the other side of the bracket or move the target bracket 1 tick inside the ask on a sell out of a long or 1 tick inside the bid on a sell out of a short.

If you try this sort of thing in a strong trend you are far, far better off using two accounts. One account trades your normal way with the trend while the other scalps the quick extreme retraces. This may be too advanced or error prone for those of you with no programming ability but it most definitely can be done by the at-homer futures daytrader. [Just pick a GOOD volatile contract like the CL.]

[This kind of thing has far less value on 5+ min charts]

On another note:

Some obscure trader named Bob Volman put out a book in Oct 2011 (cross-referenced on Amazon from Brooks) on scalping the Euro off of a 72 tick chart with price action setups. The reviews said it was extremely practical and an easy read.

 

[dv4632]

Quote from SteveH:

Keep track of the highest high and lowest low distance (in ticks) from your moving average for each price bar and measure the tendencies (last 10 days is fine) for your trading instrument in choppy trends, strong trends and sideways price action. This is reliable only during RTH. Your have a simple, measurable window into what the bots out there perceive as lower risk fade zones.

... it most definitely can be done by the at-homer futures daytrader.

[This kind of thing has far less value on 5+ min charts]

I actually tried this idea a year or so ago using a few different MA's and found it wasn't practical, however I was not using it on charts < 5 min. It seemed too frenetic on the lower timeframes so I never investigated those.

Though I will mention there is a trader I have exchanged emails with who was doing something like this in the past... scalping extremes on very small timeframes. I don't think he does it anymore though. I didn't ask how he was determining where to enter because the whole idea honestly seemed crazy to me! But unless he was faking his blotters and P/L shots then he was making consistent profits with it.

 

[BCE]

Quote from NoDoji:

IMHO, any trader bashing another trader is probably a struggling, frustrated or failed trader. I can't imagine a nicely profitable trader bashing anyone. :eek:

It's that way in life in general isn't it? Genuinely happy people are too busy being happy and enjoying their life to waste their time and energy ragging on other people. It's unhappy people, whose own life maybe isn't going so well, that spend so much time being critical of and bashing others.

 

[the bouch]

Quote from BCE:

It's that way in life in general isn't it? Genuinely happy people are too busy being happy and enjoying their life to waste their time and energy ragging on other people. It's unhappy people, whose own life maybe isn't going so well, that spend so much time being critical of and bashing others.

so if you're criticizing unhappy people does that make you unhappy?????

 

[NoDoji]

Quote from wrbtrader:

It really doesn't matter if someone is using something (anything) to help them with their price action setups. I just came to the conclusion one day recently that it doesn't matter how many indicators someone has on their charts...they're still reading the price action (if plotted as a graph) in combo with their indicator.

Right, PA comes first, anything else on the chart is secondary. If stochs tell me that this 3rd push up in a trend on my 5-min chart is deep in overbought territory and I take my profit and there's a shallow pullback on the 1-min that doesn't even break the low of the last 1-min containment bar and price comes back in for a test of that new high, I'm a buyer, not a seller, no matter what the stochs say is "supposed to happen". These are often the best trades, those final squeezes that take out the last of the counter-trend faders' stops.

 

[NoDoji]

Quote from SteveH:

This may be too advanced or error prone for those of you with no programming ability...

Dammit, Steve, all this time I thought you were calculating all this stuff in your head