Question regarding Brooks' book

[padutrader]

since we have accepted that everything is risky we have to take the smallest risk.

i have found that a breakout is the the most risky with entering the breakout pull back a little less risky while the least risk comes from a breakout test which generally comes back to the base of the breakout.

this is what i am concentrating on and i found it gives very good results.

both a breakout pull back and breakout test must take more time to complete than the main breakout...............

 

[volpri]

while it is easy to see opporrtunities on a chart.....managing these need some skill.......taking H1/2,L1/2, is one way .....because it shows where the stop should be

Yes bar counting is a viable technique.

 

[volpri]

since we have accepted that everything is risky we have to take the smallest risk.

i have found that a breakout is the the most risky with entering the breakout pull back a little less risky while the least risk comes from a breakout test which generally comes back to the base of the breakout.

this is what i am concentrating on and i found it gives very good results.

both a breakout pull back and breakout test must take more time to complete than the main breakout...............

Bo’s mean large risk. The stop has to be big. In strong trends PB’s need a big stop. The probability is high for a successful scalp but the risk is big because subsequent PB’s after entry can be deep. You just can’t have high probability, small risks, big reward. At least not most of the time. There are always trade offs. If you are talking about entry after the BO test ends then that is a MTR and is small risk with big reward potential but probability is lower. If you are discussing trading the test leg itself not so sure it would be less risk.

 

[volpri]

Remember in a bull BO the bears are, most of the time, going to try and reverse it. That is one reason PB’s show up on a chart. That PB action is bears pushing back and early bull taking profits. In a bear BO bulls are going to try and make it fail. PB’s are formed when they exert their pressure and when early bears grab profits.

 

[padutrader]

If you are discussing trading the test leg itself not so sure it would be less risk

it would be less risk but also low probability.........you are right...........

 

[padutrader]

to get back to the basic question of edge i think that if you stick to basic brook's set ups-bar counting.......inside bar.....ii, ioi, anyone of these should give you an edge over time

 

[padutrader]

Here is the last chart (5 min MES 12-7-2020):

View attachment 245842

Remember I mentioned watching a 50% PB from the wedge bottom as a logical place for shorting again. So there were two opportunities both for several points with the second one being the biggest one in terms of points.

I don’t watch Fibs but a 50% PB has a mathematical logic as well as a psychological one in the markets. Watch them closely often a reversal or two will happen around that area.

After the reversal down from the 50% line another major trend reversal took place this time a HLMTR i.e. a higher low major trend reversal. It is that second green arrow. And is actually the second leg up from the wedge bottom made at 12:45 or 1:00 whichever you wish to label the wedge bottom. It doesn’t matter. Both are roughly 3 pushes down, then we get the reversal.

After that tight BO Channel down from the bottom of the sideways range (grey box up top)the tight channel morphs into a larger sideways range (which I didn’t box in but it is there) we get the broad sideways range with multiple trading opportunities up till the close of the RTH’s. It was during the broad range we had the previous alluded to 50% pb areas with the two green rallies and two red declines and even more afterwards. Up and down. Race to the top. Race to the bottom.

The point is to highlight the market cycle. To the far left between 4:30 a.m. and 7:45 a.m. we see sideways motion (not depicted on the chart but you can check it out. Then we get a BO that morphs into a channel. That channel morphs into the grey box range at the top. Then we get a BO south of the range followed by a tight channel after an implied PB in the BO. Finally, that tight channel morphs into the broad range just before the wedge bottom reversal.

So range...BO..channel...range...BO...channel...broad range. There you have it the market cycle. For each phase of the cycle there are a number of tactical setups...such as wedge bottom....MTR’s...50% PB....implied PB...top and bottom of range entries....etc.

All this on this 5 min chart. Now if you really want to send your brain a spinning the market cycle happens on other time frames....15 min...30 min...1 hour...daily...weekly...monthly. Pick your TF and trade it!. I like a 5 minute TF because multiple trading opportunities in that TF and I can be flat by close of the session.

You might want to take a mental snapshot of this chart...clik...it is now yours locked in your brain. Seared, hopefully. ROFL

this is lovely stuff

but i find sticking to one thing helps a lot for people less experienced than volpri...
i simply count the 3 pushes and then the market will correct ........for 3 pushes in the other direction.....market keeps doing this some days for ever until it decides to break out in a strong trend........even in a strong trend you can count 3 pushes but they will be much 'tighter' and the corrective moves will be much smaller and may not have 3 pushes......once after a strong trend you can see 3 pushes in both directions you can assume a the market has got back to a situation where you too can play both sides

 

[padutrader]

the point is if you do follow Brooks to the letter or more broadly[like i do] the edge is there but only if you structure your trading on some set up and method and stick to that method systematically.

most traders doubt the method they are using and try to improve it when they has losing streak.........this will lead to disaster... trust your edge.

you do not see any casino trying to improve their edge...........

 

[Ego]

the point is if you do follow Brooks to the letter or more broadly[like i do] the edge is there but only if you structure your trading on some set up and method and stick to that method systematically.

most traders doubt the method they are using and try to improve it when they has losing streak.........this will lead to disaster... trust your edge.

you do not see any casino trying to improve their edge...........

I have this problem... always trying to tweak the entry/exit parameters, it’s just my personality. I’m a troubleshooter by heart, and the great puzzle of the market gives me endless troubleshooting. Unfortunately, that means I’ve spent years spinning my wheels getting nowhere (in trading at least).

 

[padutrader]

I have this problem... always trying to tweak the entry/exit parameters, it’s just my personality. I’m a troubleshooter by heart, and the great puzzle of the market gives me endless troubleshooting. Unfortunately, that means I’ve spent years spinning my wheels getting nowhere (in trading at least).

i have had the same problem and lost more than a decade and more than 100000 usd.

the solution is simple: the issue is that you may not like it [the solution].

you have to decide whether you want to make money, make a living or search for the secret of of the how market works.

and trying to perfect something is like chasing the pot at end of rainbow.

if you cannot change your personality change your profession....get a job as a scientist

in fact my childhood dream was to be a scientist and win the Nobel for maths.....but my parents did not pay the huge amount for my formal eduacation