How to apply Brooks' PA?

[padutrader]

just search for something like price action trading journal you will get a ton of stuff. YOU might already be an expert and you don't even know it... if you shop for grocery or electronics or cars what not, and if you are a savvy shopper, you watch the trends, you gather information and try to come up with a 'story' of why price does what it has done, and what it will likely to do, so you can decide when to buy what at what price, for the purchase of certain grocery item or a car...

stocks are no different.

all this will work on daily and longer time frames.
not everyone is able to trade those time frames because of financial or psychological constraints /demands.
and i do not believe everyone should trade those time frames if that method does not fit their psychological profile.

 

[padutrader]

sold the low 2 or low 1 if you like...View attachment 187519

booked profit....took screen shot before closing trade....this should show how to apply bpa

 

[padutrader]

So, should have been like this?
View attachment 187520

you had that trade where you went long expecting a second leg up .....but it fell- we discussed it remember ...here you have looked to go long expecting a second leg up
with so much up momentum and not much strong counter trend price action why short?
the second swing /leg up that tested the trendline had too much, up momentum and no red bars so too early to short

 

[Alfing]

you had that trade where you went long expecting a second leg up .....but it fell- we discussed it remember ...here you have looked to go long expecting a second leg up
with so much up momentum and not much strong counter trend price action why short?
the second swing /leg up that tested the trendline had too much, up momentum and no red bars so too early to short

Looks like I got whipsawed each time, trying an opposite approach. I am trying to comprehend what went wrong and how to avoid it in the future.

 

[padutrader]

No, in fact, he states at the beginning of his book,

" The most useful tools for under standing price action are trendlines and trend channel lines, prior highs and lows, breakouts and failed breakouts, the size of bodies and tails on candles, and relationships between the current bar to the prior several bars. In par ticular, how the open, high, low, and close of the current bar compare
to the action of the prior several bars tells a lot about what will happen next. Most of the observations in this book are directly related to placing trades, but a few have to do with simple curious price action tendencies without suffi cient dependability to be the basis for a trade. "

thank you for this quote.....you have learnt well

 

[padutrader]

Looks like I got whipsawed each time, trying an opposite approach. I am trying to comprehend what went wrong and how to avoid it in the future.

there were just not enough red bars to go short....to put it very crudely

i could only see green bars

 

[padutrader]

this is a H1 buy

 

[padutrader]

this is a H1 buy View attachment 187541

booked profit just after i took the screen shot 40 pips in 5 min.....

Sadly, you just wasted your time.

yep just wasted 5 min THIS IS THE WAY TO APPLY BROOKS PA

 

[Alfing]

Brooks starts his book with a similar trade, showing advantages of PA versus everything else. Here is his example,

"· Yesterday, Costco's earnings were up 32 percent on the quarter and above analysts' expectations. It gapped up on the open, tested the gap on the first bar and then ran up over a dollar in twenty minutes. It then drifted down to test yesterday's close. It had two rallies that broke bear trendlines, and both failed. This created a Double Top (Bars 2 and 3) Bear Flag or Triple Top (Bars 1, 2, and 3) and the market then plunged three dollars, below the prior day's low.

· If you were unaware of the report, you would have shorted at the failed bear trendline breaks at Bars 2 and 3 and you would have sold more on the Breakout Pullback at Bar 4. You would have reversed to long on the Bar 5 big reversal bar, which was the second attempt to reverse the breakout below yesterday's low and a climactic reversal of the breakout of the bottom of the steep bear trend channel line.

Alternatively, you could have bought the open because of the bullish report, and then worried about why the stock was collapsing instead of soaring the way that TV analysts predicted, and you likely would have sold out your long on the second plunge down to Bar 5."

 

[padutrader]

h1 failure or L1 short trade put on now live