Is Al Brooks the solution to false breakouts?

[mason macgregorson]

As is widely known, false breakouts are an unavoidable part of most breakout strategies. As an example, let's say we have determined that there is resistance at 100 USD. Price breaks out of 100 USD. It reaches 105 USD. We become excited and buy in. Price then climbs to 110 USD before abruptly dropping down to 95 USD and hitting our stop loss.

Perhaps a better strategy would be as follows:

(a) Price is consolidating around 95 USD. We see an ascending triangle, and think that price may break out. (There are a series of higher lows starting from 95 USD. The highs are all around 100 USD.)

(b) Using Al Brooks's scalping techniques, we buy at a suitably-low point, while price is still ranging in the ascending triangle.

(c) We set the stop loss at break even. If price breaks out for real, then we make a big profit. If there is a false breakout, we don't lose any money.
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Al Brooks comes into the picture, as his concepts are supposed to tell us which candle to buy into. Afterall, his book is named Reading Price Charts Bar by Bar. In theory, after reading that book, we should be able to tell when the next candle will likely reverse upward, when price is at the bottom edge of the ascending triangle.

Has anyone tried this?

Al Brooks does not trade, has no trade data and is not an NFA member, as he goes on to claim he earns a living trading but is really a book salesman (sort of what Gann was). There are a thousand such sites that measure nothing, trade nothing ever and go on to claim something. That is why we struggle and fumble around trying understand and apply such "acclaimed trends, ranges and reversals" books, all of which are a decade old.

 

[padutrader]

in those situations, the best thing to do IMO is to wait for confirmation. Remember that if the market in a trading range, most of the breakouts will fail.

i fade breakouts from ranges.....it is my daily bread....... and jam sometimes

especially when the market is trading in range whole day

 

[padutrader]

a breakout means it is breaking out of something.......if it is out of a range it will fail........if it falls rapidly to the past the bottom of the range it is a trend in the opposite direction.

if the failure is NOT rapid but forms a sort of consolidation on the way towards the range it broke out of-a consolidation is a range- and then breaks out 0f the consolidation then this break out will also fail and it will again reverse forming what is called a breakout pull back.

 

[SunTrader]

Trading involves probabilities. Gee there's an original thought.

But for those looking for certainty try something else.

Breakouts/breakdowns work sometimes and sometimes fail.

Thems the breaks.

 

[padutrader]

Al Brooks does not trade, has no trade data and is not an NFA member, as he goes on to claim he earns a living trading but is really a book salesman (sort of what Gann was). There are a thousand such sites that measure nothing, trade nothing ever and go on to claim something. That is why we struggle and fumble around trying understand and apply such "acclaimed trends, ranges and reversals" books, all of which are a decade old.

that does not mean he does not trade.

his knowledge is far greater than the whole financial industry put together and he need not prove anything to anyone.if you want his ideas his knowledge it is there for you

his methods -they are NOT his originally as he clearly say in the preface- and he does not make claims that he discovered them

 

[padutrader]

Trading involves probabilities. Gee there's an original thought.

i have always wondering why they say that...

market follows laws.

market does not play with dice, but traders do

 

[padutrader]

Trading involves probabilities.

yes it does, when you have no clue about where the trend is going...which, hearing all the talk about probability, no one knows.

trends are not defined by trend lines and ema.....they are defined by the bars that make up market structure.

market trends . markets range.

trading involves management...not probability.......

where is probability in a trend? the definition of a trend is that it is sure.....

wake up guys.

bars.......that is what shows trends

that is why I love Al brooks......but i disagree with his declarations that probability defines trading.

markets do not play with dice. traders do

 

[mason macgregorson]

i have always wondering why they say that...

market follows laws.

market does not play with dice, but traders do

volume, an independent variable dictates price, a dependent variable, according to the law of supply and demand.

 

[padutrader]

volume, an independent variable dictates price, a dependent variable, according to the law of supply and demand.

yes but the problem here with volume is that if there is no supply, no sellers, which in a bull there is not, then market will go up on no volume.

so in that case, according to laws of volume, a market going up on low volume is suspect.

and since volume does not support price, the bull has no balls so to speak.......totally wrong

 

[DevBru]

i fade breakouts from ranges.....it is my daily bread....... and jam sometimes

especially when the market is trading in range whole day

You must be very hungry then.