Actually, it's not whether you use charts or not that's relevant. What's relevant is that you're using price HISTORY. The past. What happened. There are people who don't use charts at all, but still utilize price history in an attempt to predict.
I have bought Al Brooks' Trading Course
- Thread starter Visaria
- Start date
Actually, it's not whether you use charts or not that's relevant. What's relevant is that you're using price HISTORY. The past. What happened. There are people who don't use charts at all, but still utilize price history in an attempt to predict.
6 months isn't that much in this business, to be honest. And you won't know if it works until you've actually put together a robust and proven methodology.
Like I said earlier, it's very easy to think you know something, when you don't really know that much at all. This is typical with Brooks' stuff and similar methods. Telling the tale of price history and what happened (like many here are expert at after the market close) and annotating charts isn't THAT hard. It's impressive to the newbie because he's finally able to makes sense of market movement. Here sellers gave up and buyers came in, look at this double top, oh, here's a head and shoulder, OH, there's a fake head and shoulder. This gives the illusion of knowing and thinking that you one day can be able to be more consistent in your predictions of price movement. NEXT time, you'll figure it out, right?
The problem is that the market is a complex machine and there are many more variables to consider than the bar-by-bar approach (which would be the micro) in order to put together a robust system. With the intuitive and subjective bar-by-bar approach you're oblivious to all this stuff. First, you need to master the macro and have an expectation of what will happen on any given day (the broad strokes).
Utilizing statistics can help with this. I don't ever heard Brooks (please tell me if he has added this by now) recommending the use of something simple as the N-day true range or average range. Pivot levels (don't use them myself) CAN also be useful. Or the average range per 30 or 60 minutes after the open or within the close. There's of course a LOT more to consider than this.
Now, you may become emotional by this and want to prove my wrong, but I promise you it's meant to be helpful.
6 months isn't that much in this business, to be honest. And you won't know if it works until you've actually put together a robust and proven methodology.
Like I said earlier, it's very easy to think you know something, when you don't really know that much at all. This is typical with Brooks' stuff and similar methods. Telling the tale of price history and what happened (like many here are expert at after the market close) and annotating charts isn't THAT hard. It's impressive to the newbie because he's finally able to makes sense of market movement. Here sellers gave up and buyers came in, look at this double top, oh, here's a head and shoulder, OH, there's a fake head and shoulder. This gives the illusion of knowing and thinking that you one day can be able to be more consistent in your predictions of price movement. NEXT time, you'll figure it out, right?
The problem is that the market is a complex machine and there are many more variables to consider than the bar-by-bar approach (which would be the micro) in order to put together a robust system. With the intuitive and subjective bar-by-bar approach you're oblivious to all this stuff. First, you need to master the macro and have an expectation of what will happen on any given day (the broad strokes).
Utilizing statistics can help with this. I don't ever heard Brooks (please tell me if he has added this by now) recommending the use of something simple as the N-day true range or average range. Pivot levels (don't use them myself) CAN also be useful. Or the average range per 30 or 60 minutes after the open or within the close. There's of course a LOT more to consider than this.
Now, you may become emotional by this and want to prove my wrong, but I promise you it's meant to be helpful.
I'm not going to try to prove you wrong, or get emotional
Just kidding.
You offer plenty of good advice, and I appreciate that. 6 months is a very short time. Agreed. I've added 6 months (more if you count his first book) studying his method, to my 12 years of trading (with one year off after a very bad year...I didn't blow up account...I've never blown one up, but might have had I not taken a break), which became profitable in 2013 in my long term account (22%...I mistakenly stated in an earlier thread 22% last year...was the prior year) last year: (8.5% ) This year(.19% ... I've executed very few trades this year in that account), and now I'm working on making my daytrading account profitable (down 3% after 1320 round trips as of the end of Aug.)
This is my first year back to daytrading since I took my break some years back. I began reading Brooks original articles 2011 (might have been sooner) and his first book shortly after. It was a difficult read for many reasons, but I liked what I understood in it. It offered new insights to how I was already trying to trade. I'm not a newbie, and I wouldn't necessarily recommend his books to a newbie. (I know, I know...many here wouldn't recommend it to anyone.:eek
I simply state that his material is helping me turn the corner by giving me a different perspective to what I've already seen over and over again for years. Now if you believe it's just coincidental that I'm doing much better after studying Brooks (I've studied others over the years, including many books regarding indicators), but rather just finally been trading long enough to be figuring other things out, I would say you might be right, but you might be wrong. Kind of like taking a trade.
I'll let my long term gains for the last two years speak for themselves. And at the end of the year I'll post my return, + or - in the daytrading account, and long term account if I place more trades there...which I might very well do...after FOMC Thu.
If I turn my DT account profitable, you may feel free to consider it pure luck.
Last edited:
ok I stand corrected then. If just using a naked chart and nothing else is TA then I use TA.
Great Post!
I would probably say 3 of my personality issues which are a problem in the market are, and this is what I mean by seeing my reflection:
Anger (getting much better about that)
Seeking Perfection (I've done this in all aspects of my life)
Lack of patience
These have all hurt my trading in the past, and are still a work in progress.
Anger over the years has made a lot of other people money on the other side of trades I took at just the wrong time because I would be angry over a loss. I've now reached a point where I play small enough not to care. Since I don't care, I don't get angry over losses, and I've had my share over the last few months. Trading down to less than an amount that is meaningless to me was something I took from Brooks. I also no longer get mad if I miss a good play. I used to, even though that's more of a hindsight thing. There will always be more opportunities.
Seeking perfection in the markets was probably re-enforced years ago when I studied other mentors who never bothered to show a "typical set-up". This was absolutely a problem until I got into Brooks, who constantly reminds that perfection, when it occurs, is fleeting because everyone sees it. I would never have looked for some of the patterns I now play because they weren't perfect. Additionally, accepting losses is in the same category as accepting lack of perfection, though I now try to view a loss as perfect if I took my stop, and didn't move it further away to give my play "a little more room".
Patience is a big thing, too. I would want to immediately get into plays, would enter too early way too often, or after getting into good plays, exit way to fast, and on the failed plays (often a result of the too early entry), get stopped out followed by anger and the "revenge trade".
The reason I'm focusing on the 15' now instead of the 5' is to deal with patience since I've learned to remove the anger (except once in a very long while). The double leg pull back I posted 2 or 3 days ago forced me to take over 2 hours just to get my full size on...I am learning to apply such patience to waiting for certain plays, like that pullback to the MA last night ( I see that triple bottom now, {Oanda chart}, and had factored in the recent double bottom at the 20, though not a perfect one (lessons learned), and last but not least, the outside bar, which after going down to test the micro down trendline break (that test was nearly perfect on the Oanda chart, and right at the 20ma, too), became the high 4 above the doji (the bar before that doji was a H3 IMO), where I bought at market.(Only posting the chart again to show that broken micro trendline retest).
View attachment 156825
I was already planning on taking that play after the close Fri providing there was no gap up or down (which gave me ample time to think about it
Strange difference on TS chart verse Oanda at the open on the 15, though the charts did line up on the second 15 min bar, which would have been a potential H2, and making my play a H3 at TS. I don't use TS to enter trades on Oanda because the spread is different. Another thing I take from Brooks is how he often discusses that different traders will see different reasons to take the same play (as you indicated with your reason why you would have entered), and that helps me to overcome the perfection issue in a certain way, too.
Anyway, I now want to apply the patience to getting my win average higher, also, by letting the final part of my position run until it trails out, or hits a strong S or R. I want to be able to wait hours or days for tradable moves or setups, or wide enough ranges to fade the edges of. I don't fear fading ranges if they are wide enough, though I don't scale. I only use limit orders with money stops in those trades.
My accounts will never have money added in to again accept by successful trading (I have 2, one for day trading, one for longer term trades). They will have to grow from successful trading to reach the level where I can make the kind of money that traders dream about. I believe it can be done, though that, too, will take patience, but it will have then been earned if achieved. I will have developed my tolerance to where I won’t even blink if I lose 10k, as long as I make 20k on the next trade ( some years ago, I had lost 4k in a very short period of time {a lot of money for me at the time} because I was angry over something not even market related. Not good to trade when outside issues are in play. I stopped trading for a year after that, then came across the Brooks articles in futures mag, and got interested again.) His books are the primary reason I’m now coming to terms with these issues, as RN indicates, and I like the technical stuff lessons, too. (Lots of great trades to be taken in those less than perfect setups).
This may be incorrect, but I believe the only permanent edge a trader can have is rock solid discipline to follow the rules one sets for one’s self, and for me, that means getting the emotion all the way out of the game. I wouldn't be surprised if the issues I'm learning to control have been the death of many other aspiring traders.
I like your ideas, and thanks for you very informative post. Good Trading!
lots of good ideas and suggestions, i am very interested in the chart you posted,
would you be kind enough to post the whole chart, so we may learn even more from
what you explained and your chart which would represent more than thousand words?
thanks in advance for your generosity and compasion for those who want to move to
the next level of trading for a living, pls?
I can't explain much more than I already have. Many in here will disagree with my reasoning. This type of pullback to the 20ma, including after a bull spike, is repeatedly explained in Brooks' book, in particular, the one regarding trends, and probably many books by many other authors. In it's simplest terms, it's just a bull flag. There was no guarantee that this play would work (especially at the time of day I traded it). It could have just as easily gone against me. I can assure you other traders who took the same direction might have done so for different reasons than I did. Brooks explains that in great detail. (Disregard the red line. Unrelated to the chart from the other night.)
I like the chart you posted the other day. Looking back at your chart, I think you've got a perfect system for yourself.
Good luck in your trading!
Last edited:
thx much for your kind words which meant very much, as one trader to another.
on the contrary, i admired your willingness to share which is incidentally my weakest personality, for i am the only spoiled child in my family. trading-wise, the markets have been
more often than not, cooperative; otherwise, the same setups, as many old timers
already
eluded to, will without the slightest warning, turn the other direction to many
experienced traders' dismay. most profitable trading to you and everyone.
on the contrary, i admired your willingness to share which is incidentally my weakest personality, for i am the only spoiled child in my family. trading-wise, the markets have been
more often than not, cooperative; otherwise, the same setups, as many old timers
eluded to, will without the slightest warning, turn the other direction to many
experienced traders' dismay. most profitable trading to you and everyone.
You're most welcome! The reason I had so many words in my other post wasn't to explain the trade, but I was trying to convey that my greater understanding of the basics of technical trading have been helping me to overcome the parts of my personality that interfere with my ability to trade effectively (and objectively). Once those are removed from the equation, it's much easier to see things in the charts that might increase our ability to make more than we lose.
Again, best of luck to you, and certainly we'll have future discussions.
From Wikipedia (Investopedia has a similar definition):
In finance, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.