What are some useful things learned from Al Brooks price-action books?
- Thread starter learner88
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Regardless of how you develop your methods (Brooks, books, crooks, or whatever), the end result produces two kinds of trading approaches. Quantitative trading which is based on the analysis of numerical data. The other kind of trading is guessing. All sensible trading is quantitative. It is based on analyzing what has happened and extrapolating that to what will happen, and that can only be done by comparing numbers.
I think when it comes to audited records from teachers/mentors/gurus, what should be minimally required is statistics. Sure there might not be a way to verify, but at least we have an idea of what to expect, in so far as the person is willing to share or can be trusted.
Lately I've seen threads about all this stuff relating to geomerty, and bar naming, classifying, etc., and I cannot get anyone to share stats. Then you've got the wave counting people, once again, its all highly subjective, which is fine, and perhaps most won't even understand the method or spend any time on it, which is fine, but you would think that it should produce results that are better than random.
Any method should at the very least have a positive expectancy, but often times, so many people saying how wonderful their method is haven't found a way to make money with it. Of course if we had audited records, we could derive our own stats, but since this is so hard to come by, the least someone can do is share the stats of using their method.
If you consider guys who use fundamental analysis, spending hours going over reports, reading articles, finding clues, but then you see that they are hardly right more than 50% of the time with a roughly equal stop and target, you have to wonder about the viability of fundamental analysis.
Conversely, they might do all this, and still look at a chart to make their final decision, and it might just very well be that the chart analysis is what leads to the trade. In order words, the fundamental analysis might not have anything to do with it.
When you have access to stats, you have access to seeing if there is any viability to what the person is saying. Often times, people even delude themselves about what is really going on. The Gann trader, the wave trader, the astrology trader might not be any more successful than a coin toss, and this becomes apparent when stats are presented.
Lately I've seen threads about all this stuff relating to geomerty, and bar naming, classifying, etc., and I cannot get anyone to share stats. Then you've got the wave counting people, once again, its all highly subjective, which is fine, and perhaps most won't even understand the method or spend any time on it, which is fine, but you would think that it should produce results that are better than random.
Any method should at the very least have a positive expectancy, but often times, so many people saying how wonderful their method is haven't found a way to make money with it. Of course if we had audited records, we could derive our own stats, but since this is so hard to come by, the least someone can do is share the stats of using their method.
If you consider guys who use fundamental analysis, spending hours going over reports, reading articles, finding clues, but then you see that they are hardly right more than 50% of the time with a roughly equal stop and target, you have to wonder about the viability of fundamental analysis.
Conversely, they might do all this, and still look at a chart to make their final decision, and it might just very well be that the chart analysis is what leads to the trade. In order words, the fundamental analysis might not have anything to do with it.
When you have access to stats, you have access to seeing if there is any viability to what the person is saying. Often times, people even delude themselves about what is really going on. The Gann trader, the wave trader, the astrology trader might not be any more successful than a coin toss, and this becomes apparent when stats are presented.
Who can be sure "numbers" will extrapolate better than "patterns?". I will answer the question. NO ONE. Just because numbers are an exact science doesn't mean diddly squat. Why? The market is inexact..uncertain..based upon fickle human nature and emotions such as greed..fear..cannot be hemmed in ...by exact numbers nor subjective PA patterns. It can and will break ALL NUMBERS AND ALL PATTERNS when it gets good and ready to do so. Therefore, one is not better than the other. We operate in a grey fog. Nobody can be sure the market will go up or down on the next tick much less the next 2 points. ALL we have are probabilities whether they be numbers or patterns. It simply doesn't matter. You can't control or predict the market by numbers and I can't by patterns. However, i can say such and such a pattern puts prob in my favor of x move in x direction. The same can be done with numbers. But neither are 100%, and will never be. If numbers were then we would all be rich cause numbers are an exact science but alas even an exact science cannot, and will not ever, be able to predict the movements of the markets 100%. They will, and do fail, just like subjective patterns fail. Both are just different ways of gauging probability and nothing more. Sorry but that is the way it is. We stumble around at the train station in a grey fog waiting for the train to leave. We jump on board when it does. We know not exactly when it will arrive at our destination. Many factors..fuel..wind..mountains..injuns..cowboys..dead buffalo on the tracks..too many variables.
When i was young (so long ago) and went out on a blind date i knew not if the girl would allow me to kiss her. As much as I wanted. It was a grey fog decision..I had to guess the probabilities as I watched her reactions to shall i say certain movements. It was an emotional and exciting time. Full of uncertainty. Challenging. In particular i remember a blonde babe I went out with on a double date. Boy she was pretty and had the longest pretty straight blonde hair. Man i wanted a kiss. No deal. She said she wanted to talk. She would let me touch her hair. That was it. So we talked and I touched her hair. And we talked and talked. It was the only and last date i had with her. I know not what happened to her. I still remember that over 40 years ago. Should of...would of..couldn't of. That is the way the markets are. Uncertain.
They will raise you to heights like a soaring eagle only to tumble you out of the sky like a buzzard to eat the scraps left over laying on the highway from some other trader.
Sometimes the market only wants to talk...no kissing.
A common comment about Al's books is they are poorly edited, and people typically fault the publisher.
Well, there is a very simple explanation for it. Before you can edit anything that is very poorly written to begin with, you first have to understand it, only then can you rephrase to capture the essence, make it more concise and pithy. Simple and clear is the gold standard.
I didn't read his first book, I worked through it, so I'll hazard a guess that there isn't a publisher anywhere with an editor that can understand Al's stuff well enough to edit it. You'd need an editor with a passion for trading and boundless patience, there probably isn't such a beast anywhere because editors are usually hired for their language skills; scientific journals are edited by insiders or people with specialist knowledge, and though Wiley might have editors who 'know' trading, expecting them to edit Al's stuff well is a stretch.
Volman is an easier read, haven't read Beggs, he isn't shy shouting his price, Ross's stuff seems to be all at inflated prices on Amazon.
Now if someone could write a PA book on hourly bars, that would be more suited to my temperament, all this 5 minute stuff is too ephemeral for me.
Well, there is a very simple explanation for it. Before you can edit anything that is very poorly written to begin with, you first have to understand it, only then can you rephrase to capture the essence, make it more concise and pithy. Simple and clear is the gold standard.
I didn't read his first book, I worked through it, so I'll hazard a guess that there isn't a publisher anywhere with an editor that can understand Al's stuff well enough to edit it. You'd need an editor with a passion for trading and boundless patience, there probably isn't such a beast anywhere because editors are usually hired for their language skills; scientific journals are edited by insiders or people with specialist knowledge, and though Wiley might have editors who 'know' trading, expecting them to edit Al's stuff well is a stretch.
Volman is an easier read, haven't read Beggs, he isn't shy shouting his price, Ross's stuff seems to be all at inflated prices on Amazon.
Now if someone could write a PA book on hourly bars, that would be more suited to my temperament, all this 5 minute stuff is too ephemeral for me.
Thanks for your comments, Xela. Much appreciated.
I still see a disconnect though, between Brooks being a vendor like anyone else (albeit with poor writing skills, an unfinished system, some devoted fans, and success in another field) and the amount and bitterness of the criticism I have seen in my limited reading about him.
I still see a disconnect though, between Brooks being a vendor like anyone else (albeit with poor writing skills, an unfinished system, some devoted fans, and success in another field) and the amount and bitterness of the criticism I have seen in my limited reading about him.
Brooks is despised by the TA haters because of the substance behind everything he does. He has an acronym for everything he does, and he provides detailed descriptions of each component, along with the exceptions for when he prefers to lean on his other components. This causes the haters to experience more than their average jealousy. Particularly since Brooks is always available, and willing to answer any and all questions about how he trades.
I don't disagree with this, but the difference is you can't hand me the framework that allows me to replicate the results. With a quantitative approach, I can, and no one will you take you seriously if you can't. This is what makes it more sensible and viable.
The framework is in 4 books by Mr Brooks. And a set videos if you like visual. It is all there. ALL THERE. ALL THERE. @Just trading...IT IS ALL THERE FOR ANY TIME FRAME YOU WISH TO TRADE. Did I say it was ALL THERE?
Granted it will take a few years first, to just begin to understand it. Then a few to practice it. But then you get lots of years trading with it and i don't think it will go obsolete in our lifetime.
Alas...most will SKIM and fall off their stool laughing as they try to make heads or tails. A few will READ and shake their head. Very few will STUDY, but those that do and persist, will wake up one day AND "the light suddenly begins to flash repeatedly..over and over again."
So yes, i can hand you the structure. I just did. You may want to: Buy the books. Buy the videos. Study for several years. Practice for a few. Then trade.
But you probably won't cause you are a nomad treking from here to there somewhere in the arctic circle and who knows where else. Will you lug the monster books around? I doubt it.
The problem with numbers. They keep changing. Smart people figure out the algo's and what worked based on numbers suddenly nolonger works based on those same numbers. So back to the drawing board races the number people, to figure out a new set, to again put probabilities in their favor in order to give them a slight edge.
BUT, there will always be BO's, PB's, CHANNELS, TRENDLINES, TRIANGLES, FLAGS, PENNANTS, TREND BARS IN BOTH DIRECTIONS, TRADING RANGES...ad nauseam..
They were there in the 1920's they are here in 2017. They will be in 2018..19...20..21,.22..23 ad nauseum. Quants are the new kid on the block. Lots make it work for a while..then it doesn't work. So , just different ways. One must trade what suits them best. I am too old to deal with numbers and programming. But i can look at a chart and see patterns and judge the prob of success. Well not all the time but enough of the time. LOL.
NOW will your give your structure? I doubt it?
Happy trading quant! I wish you much success.
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The markets are not real cooperative with respect to replication.