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As many of you know, Wiley has released Al's three-book series on trading price action:
Trading Price Action: Trends
Trading Price Action: Trading Ranges
Trading Price Action: Reversals
Al's comments: "I tried to answer all of the questions that I have been asked over the past couple of years (and I have answered thousands), and have paid particular attention to making the books clearer, easier to read, and much more specific about trading compared to Reading Price Charts Bar By Bar. To achieve these goals, I asked a trader to proofread all three new books, and he made more than a thousand edits.
Reading Price Charts Bar By Bar was about 120,000 words, and the new books are 176,000, 211,000, and 185,000 words. There are many lists about the major topics (the longest has more than 30 buy setups and 30 sell setups for entering on limits), followed by detailed discussions and examples."
Trading Price Action: Trends
Technical Analysis of Price Charts Bar by Bar for the Serious Trader
Basics for All Three Books
· Signs of Strength: Reversal Bars, Trends, Breakouts
· Bar Counting Basics: High 1, High 2, Low 1, Low 2
· Definitions
Price Action
· The Spectrum of Price Action: Extreme Trends to Extreme Trading Ranges
· Trend Bars and Doji Bars
· Breakouts, Trading Ranges, and Tests
· Bar Basics: Signal Bars, Entry Bars, Setups, and Candle Patterns
· Signal Bars: Reversal Bars
· Signal Bars: Other Types
· Outside Bars
· The Importance of the Close of the Bar
· Exchange Traded Funds and Inverse Charts
· Second Entries
· Late and Missed Entries
· Pattern Evolution
Trend Lines and Channels
· Trend Lines
· Trend channel Lines
· Channels
· Micro Channels
· Horizontal Lines: Swing Points and Other Key Price Levels
Trends
· Example of How to Trade a Trend
. Signs of Strength in a Trend
· Two Legs
· Common Trend Patterns
· Spike and Channel Trend
· Trending Trading Range Days
· Trend from the Open
· Reversal Day
· Trend Resumption day
· Stairs: Broad Channel Trend
Trading Price Action: Trading Ranges
Technical Analysis of Price Charts Bar by Bar for the Serious Trader
Basics for All Three Books
· Signs of Strength: Reversal Bars, Trends, Breakouts
· Bar Counting Basics: High 1, High 2, Low 1, Low 2
· Definitions
Breakouts: Transitioning into a new Trend
· Example of How to Trade a Breakout
· Signs of Strength in a Breakout
· Initial Breakout
· Breakout Entries in Existing Strong Trends
· Failed Breakouts, Breakout Pullbacks, and Breakout Tests
Gaps
Magnets: Support and Resistance
· Measured Moves Based on the Size of the First Leg
· Measured Moves Based on Gaps and Trading Ranges
· Reversals Often End at Signal Bars from Prior Failed Reversals
· Other Magnets
Pullbacks: Trends Converting to Trading Ranges
· First Pullback Sequence: Bar, Minor Trend Line, moving average, moving average Gap, Major Trend Line
· Double Top Bear Flags and Double Bottom Bull Flags
· Twenty Gap Bars
· Moving average gap Bars
· Key Inflection Times of the Day that Set Up Breakouts and Reversals
· Counting the legs of Trends and Trading Ranges
· High and Low 1, 2, 3, and 4 Patterns and ABC Corrections
· Wedge and Other Three Push Pullbacks
· Dueling Lines: Wedge Pullback to the Trend Line
· “Reversal” Patterns: Double Tops and Bottoms and Head and Shoulders Tops and Bottoms
Trading Ranges
. Example of How to Trade a Trading Range
· Tight Trading Ranges
· Triangles
Orders and Trade Management
· Scalping, Swinging, Trading, and Investing
· Mathematics of Trading and Directional Probability: The Odds of Making X Points Before Losing Y Points
· Need Two Reasons to Take a Trade
· Entering on Stops
· Entering on Limits
· Protective and Trailing Stops
· Profit Targets
· Scaling into and out of a Trade
· Getting Trapped In or Out of a Trade
Trading Price Action: Reversals
Technical Analysis of Price Charts Bar by Bar for the Serious Trader
Basics for All Three Books
· Signs of Strength: Reversal Bars, Trends, Breakouts
· Bar Counting Basics: High 1, High 2, Low 1, Low 2
· Definitions
Trend Reversals: A Trend Becoming an Opposite Trend
· Example of How to Trade a Reversal
· Signs of Strength in a Reversal
· “Reversal” Patterns: Double Tops and Bottoms and Head and Shoulders Tops and Bottoms
· Major Trend Reversal: Trend Line Break Followed by a Test of the Extreme
· Climactic Reversals: A Spike Followed by a Spike in the Opposite Direction
· Wedges and other Three Push Reversal Patterns
· Expanding Triangles
· Final Flags
· Double Top and Bottom Pullbacks
· Failures
· Huge Volume Reversals on Daily Charts
Day Trading
· Key Times of the Day
· Markets
· Time Frames and Chart Types
· Globex, Pre-Market, Post-Market, and Overnight Market
· Always In
· Extreme Scalping
The 1st Hour (The Opening Range)
· Patterns Related to the Premarket
· Patterns Related to Yesterday: Breakouts, Breakout Pullbacks, and Failed Breakouts
· Example of How to Trade a Breakout
. Opening Patterns and Reversals
· Gap Openings: Reversals and Continuations
Detailed Daytrading Examples
Daily, Weekly, and Monthly Charts
Options
Best Trades
Trading Guidelines |
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I am happy that readers have been finding the book helpful, but I don't want to repeat the entire book on this site. If you want to understand more about what I do, the book is a good resource, however, it is a difficult read.
From the inside flap:
While complex strategies and systems may work for some traders, understanding price action is all you really need to succeed in this arena. Price action analysis is an effective app-roach to trading today's markets—whether you're involved in stocks, futures, or options. It allows you to focus on the process of trading without being overwhelmed by a complicated collection of trading techniques. And while this method may appear elementary, it can significantly enhance returns as well as minimize downside risk.
One way to apply price action analysis to your trading endeavors is with chart patterns. Nobody understands this better than author Al Brooks, a technical analyst for Futures magazine and an independent trader for more than twenty years. Brooks discovered ten years ago that reading price charts without indicators proved to be the most simple, reliable, and profitable way for him to trade. Mastering that discipline is what made him consistently successful in trading. Now, with Reading Price Charts Bar by Bar, Brooks shares his extensive experience on how to read price action.
At the end of the day, anyone can look at a chart, whether it is a candle chart for E-mini S&P 500 futures trading or a bar chart for stock trading, and see very clear entry and exit points. But doing this in real time is much more difficult. Reading Price Charts Bar by Bar will help you become proficient in the practice of reading price action—through the use of trendlines and trend channel lines, prior highs and lows, break-outs and failed breakouts, and other tools—and show you how this approach can improve the overall risk-reward ratio of your trades.
Written with the serious trader in mind, this reliable resource addresses the essential elements of this discipline, including the importance of understanding every bar on a price chart, why particular patterns are reliable setups for trades, and how to locate entry and exit points as markets are trading in real time. Brooks focuses on five-minute candle charts to illustrate basic principles, but discusses daily and weekly charts as well. Along the way, he also explores intraday swing trades on several stocks and details option purchases based on daily charts—revealing how using price action alone can be the basis for this type of trading.
There's no easy way to trade, but if you learn to read price charts, find reliable patterns, and get a feel for the market and time frame that suits your situation, you can make money. While price action trading doesn't require sophisticated software or an abundance of indicators, this straightforward approach can still put you in a better position to profit in almost any market. Reading Price Charts Bar by Bar will show you how.
Incidentally, I make very little off of the book so please do not feel compelled to buy it. The book has a lot of information, too much to repeat here, so I often will refer to it on this site even though you may not understand all of my posts without reading the book.
I apologize for the typos in the book. I am not a good proof reader and was surprised that Wiley's editor was not stronger. If the book goes to a second edition, I will try hard to fix everything as well as add new material.
Since many readers have requested that Wiley post all of the charts in the book in a larger format, I asked them to do so. Here is the link:
Larger charts |
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