How to apply Brooks' PA?

[padutrader]

h1 failure or L1 short trade put on now liveView attachment 187544

closed trade breakeven did not like the inside bar doji

 

[padutrader]

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."

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."

if you understand his stuff, it is ridiculously simple.
it is sheer irony that Brooks, himself, is guilty of complicating it, himself by,as one ETian has said "flogging a dead horse" !!!!

 

[MarketEater]

Hi everyone!

Recently finished reading Brooks' Reading Price Charts. It was not easy but I made it.

Next question is how to apply it to trading? What have you found helpful in Brooks' approach? How do you apply it to your trading?

If you did not find it helpful, what do use instead?

Brooks recommends to start with this,

"Here are some possible reasons for entering a trade (remember, you need two or more):

• Reversal bar
• Good signal bar pattern
• EMA pullback in a trend, especially if two legged
• Breakout Pullback
• Breakout Test
• High/ Low 2 or 4 (there must have been a prior trendline break if fading a strong trend)\

• Failure of anything: Prior High or Low, flag breakout, reversal from an overshoot of a trendline or a trend channel line, 5 tick failure"

Succesful trades to everyone!

Do you realize just how ironic your thread is? Not knowing how to apply a trading method after studying it--WTF? why even study it then?

 

[MarketEater]

Why not just join Al Brooks forum ???

I always wonder why people go to other forums like here at ET (elitetrader.com) to ask for those using the methods to communicate with them about their use of the methods (Al Brooks) when the guy has his own forum for such type of communication especially via the fact that the forum is free to join.

Is there something wrong with the forum for Al Brooks that would send users of the trade method to other forums ???

It just seems like there would be too much of a distraction to talk about Al Brooks methods (how to use it) at other forums by the non believers when they obviously would not be able to do the same at his own forum.

Anyways, if you do find others here at ET to communicate with...I strongly recommend to do such only via private message...this forum is setup nicely for private thread conversations.

wrbtrader

It's called "stealth marketing" . Selling the Brooks mythos is the only reason for this thread. The non-thinkers, desperate, and illiterate obviously like the obfuscation of Brooks dribble so threads like these attract them.

remember, the market attracts the exact people who are the least suited for it-- as evidenced in this thread. Carry on

 

[padutrader]

Do you realize just how ironic your thread is? Not knowing how to apply a trading method after studying it--WTF? why even study it then?

i really like his honesty....learning a method is one thing to apply it in live markets is another.
we are here to help each other, share trades, share charts and he has shared even losing trades,god knows there are hardly any charts posted here, and only comments mocking others is prevalent

 

[padutrader]

It's called "stealth marketing" . Selling the Brooks mythos is the only reason for this thread. The non-thinkers, desperate, and illiterate obviously like the obfuscation of Brooks dribble so threads like these attract them. remember, the market attracts the exact people who are the least suited for it-- as evidenced in this thread. Carry on

is that why you posted here?

 

[padutrader]

Why not just join Al Brooks forum ???

what then should we discuss here, in a thread about Brooks method? are you a moderator? report this thread then.
if you do not like the posts please post in anther thread....this is a forum for discussion.

 

[MarketEater]

is that why you posted here?

Just pointing out facts. Trying to help you out!

 

[MarketEater]

i really like his honesty....learning a method is one thing to apply it in live markets is another.
we are here to help each other, share trades, share charts and he has shared even losing trades,god knows there are hardly any charts posted here, and only comments mocking others is prevalent

The blind leading the blind. Why not learn trading from proven traders like with fundseeder for example?

 

[wrbtrader]

what then should we discuss here, in a thread about Brooks method? are you a moderator? report this thread then.
if you do not like the posts please post in anther thread....this is a forum for discussion.

Your large caps clearly misunderstood my message post.

I did not say "don't discuss". In contrast, I specifically recommended to discuss at this forum in the private thread section to avoid the trolls or non-believers that tend to show up in Al Brooks threads.

In addition, I did not say I did not like his post. Instead, I asked a few questions to see if there was a problem at Al Brooks forum because I notice traders posting simple questions at "other forums" instead of posting the same questions at Al Brooks forum.

I even recommend that he look for the free chat room specifically for Al Brooks method users (you probably missed that part of the message post). There were 15 active users of Al Brooks method only discussing & answering questions about Al Brooks method. A few were members of this forum ET.

Here's an analogy. Pretend you bought a Harley motorcycle and there's a Harley forum. Instead, you post questions about your Harley motorcycle at the Kia forum. In fact, you then notice others are posting questions about their Harley motorcycle at the Kia motorcycle forum.

It would seem logical to ask them why are they posting questions about their Harley motorcycle at another forum for KIA motorcycles when there's a Harley motorcycle forum ???

Once again, I did not state, nor implied nor suggest that he should not post at this forum. Instead, I recommended this forum's private thread section after he meet others using Al Brooks method.

Regardless, he did explain that he did try using Al Brooks forum but that he got not reply. I responded that it was odd that he didn't get a reply...you probably missed that part of the conversation too.

P.S. You can loosen your belt now.

wrbtrader