Price Action

Brooks Trading Course - 2018

Al Brooks
 -------------------------- 1 of 1 1.Terminology

charts: purpose and types

1 of 4
markets: how they work

volume
2 of 4
news

what is price action 2.Chart basics and price action

3 of 4
what is the pain trade

candlestick patterns

what traders talk about 4 of 4

indicators

what is the forex market?

Getting Started
forex sessions 1 of 5
(01-07)
leverage, fundamentals

risks, costs, brokers

symbols 2 of 5

types of quotes

value of a pip 3.Forex basics

forex workspaces 3 of 5

futures or forex?

charts only approximte

4 of 5
scalps and swing trades

margins
5 of 5
profit and loss
 1111
1 of 1 4. My Setup
blinds closed, don't take calls, don't watch TV
what is program trading?
high frequency trading
1 of 1 5.Program Trading
spoofing
front running and HFTs
traits of great traders
6. Personality Traits of Successful
Doing stupid things 1 of 1 Getting Started
Traders
comfortable with uncertainty (01-07)

false beliefs
what is the big picture? BLSH! 1 of 2
chart types, time frames
starting out and advancing 7. Starting Out
emotions
2 of 2
fear and greed
uncertainty
trend Bars and TR bars
Signal Bars and entry Bars 1 of 4
Bad Signal Bars
Reversal Bars
Multi Reversal Bars 2 of 4
Inside and outside Bars charting analysys
8.Candles, setups and signal
Tight Trading Ranges as setups (08-11)
3 of 4
ii and Breakout Mode
what is a setup?
Weak setup, need more
4 of 4
2nd Signal
Countertrend needs Strong signal Bar
 what is pullback(PB)
1 of 3
whar is Bar counting?
Double Top bear flag and Double Bottom Bull flag
2 of 3
High 4 and Low 4 consecutive Reversals 9.pullbacks and bar counting
Endless pullbacks
Higher and Lower time frames 3 of 3
countertrend traders exit on High 2 or Low 2
what is Buying and Selling Pressure?
1 of 2
Gaps
10.Buying and Selling Pressure charting analysys
Trading Ranges
2 of 2 (08-11)
Channels
What are Gaps? 1 of 4
Moving Average Gap Bars
Exhaustion Gap 2 of 4
Micro gaps
11.Gaps
Gap open Bars 3 of 4
Gap mean Strength
Gaps often Lead to Trends
4 of 4
Stairs
Four parts of Market cycle?
Pullback is start of Channel 1 of 3
Channel becomes Trading Range
Market cycle: always Trend or Trading Range
Market Cycle
inertia & 80% Rule 2 of 3 12.Market Cycle
(12-18)
Definitions 1: Trends, Swing, Legs
Definitions 2: pullbacks
Definitions 3: Trading Range 3 of 3
Binary Decisions
Always Trend or trading range

Always in direction 1 of 3

Trader's equation
13.Always In
Always in long
2 of 3
Market Cycle
Always in short
(12-18)
Scalping And swing trading 3 of 3

what is Trend?

Bull trend needs Higher Lows 1 of 5

Bear trend needs Lower Highs

when not clear, then TR

Breakout is strongest trend 2 of 5

80% rule: Most Reversals Fail

Types of trends
14. Trends
Bull and Bear trends 3 of 5
Market Cycle
traps and brakouts
(12-18)
Trend from the open

Trending Trading Ranges 4 of 5

Broad Channel trend

Tight channel
5 of 5
Small pullback trend
 what is a breakout?
80% Rule: Most breakouts fail
1 of 7
Reversal is a brakout
Trading range means BLSHS!
Need follow-Through
Trends always try to reverse 2 of 7
Breakout can Begin Small
Breakout usually has 2nd leg
3 of 7
Trading Range breakouts 15. Breakouts
2nd leg trap
Signs of strong breakouts 4 of 7
Succeed or reverse?
Exhaustion or Measuring Gap?
5 of 7
Weaker BO has deeper PB Market Cycle
Failed BO, trend resumption or reversal? 6 of 7 (12-18)

5Tick traps, and 11 pip traps

7 of 7
Fade weak setups
channel is 2 lines
Lines need 2 points 1 of 6
70% Rule
How to draw channels: Forex bear channel examples
2 of 6
How to draw channels: Emini bull channel examples
New trend begins in old trend 16. Channels
Higher time frames 3 of 6
Reversals and breakouts
Types of channels
Tight and Broad Bull Channels 4 of 6
Tight and Broad Bear Channels
 Evolution into Trading Range
Channel breakouts usually fail 5 of 6
With trend BO of channel
Limit orders to fade test of line
16. Channels
Breakouts at start of trend
reversals and breakout failures 6 of 6
Broad Channel or Trading Range(TR)?
Every TR has bull and bear channel
what is a Tight Channel?
1 of 2
What is a Micro Channel?
17. Tight channel & Micro channels
Tight Trading Ranges
2 of 2
Breakout or Climax?
Definition of pullback and trading range Market Cycle
1 of 6
Hallmarks: Confusion, disappointment (12-18)

TR contains buy and sell setups

BOM(BreakOut Mode) 2 of 6
2nd leg trap
Trend resumption or reversal
3 of 6
Trend or leg in TR
18. Trading Ranges
Tight Trading Range(TTR)
4 of 6
Limit Order Market(LOM)
What is vacuum effect?
Pervers logic: Fade Bo 5 of 6
Trading Range: Don't bet on breakout
Breakout into trend 6 of 6
Early signs of TR
 what is support and resistance?(S/R)
S/R, not news, controls price
1 of 5
Monthly charts need monthly stops
S/R is usually precise
what is S/R is best?
Forex S/R not precise 2 of 5
Examples
Other types of S/R 19.Support and Resistance
Round numbers 3 of 5
List of S/R
Buy The Close, Sell The Close
4 of 5
Breakout(BO) Test
Highest and Lowest close
Bulls need HL, bears need LH 5 of 5
50% Pullback Support, Resistance,
and Basic patterns
Leg1= Leg2 1 of 2 (19-29)
Height of Trading Range(TR) 20.Measured Moves
2 of 2
Height of breakout(BO)
what is a reversal
Minor and Major Trend Reversals 1 of 4
Reversals can begin with breakots
Reversal is earliest entry
80% Rule 2 of 4
Cup and Handle
21.Reversals
Beginners love reversals
Buying and Selling Pressure 3 of 4
Nested pattern
40% winner
Ten Bars, Two Legs(TBTL) 4 of 4
Most reversals are Double Top or Bottom
What are major and minor reversals?
1 of 4
MTR is most important reversal pattern
Successful LH MTR 2 of 4
MAG (Moving Average Gap bar)
3 of 4 22.Major Trend Reversal
Most tops are Double Tops
MTR bottoms
Head and shoulders reversals 4 of 4
Failed MTR
what is a Final Flag? 1 of 2
Small Final Flags 23.Final Flags
2 of 2
ii Final Flags
what is wedge? 1 of 5
Wedges rarely perfect
Support, Resistance,
Most channels are Wedges 2 of 5 and Basic patterns
(19-29)
Wedge variations
Bad Wedges are not reversal setups
24.Wedges
Reversal begins before old trend ends 3 of 5
Earlier entry on smaller time frame
What is a parabolic Wedge?
4 of 5
Strong trends have bad Wedges
Failed Wedge 5 of 5
What is a Double Top or Bottom?
why Double Tops and Bottoms work 1 of 2
Double Top and Bottom Flags
25.Double Tops and Bottoms
Test of support and resistance
Failed Double Tops and Bottoms 2 of 2
Measured Moves
 Triangle

Wedge 1 of 2

Reversal or continuation(flag) 26.Triangles

Expanding Triangle
2 of 2
Bad looking patterns

Head and Shoulders is MTR

1 of 2
Most Head and Shoulder reversals are minor
27.Head and Shoulders
Markt resist change
2 of 2 Support, Resistance,
what happens when stop is hit? and Basic patterns
(19-29)
Always something else 1 of 1 28.Rounded Tops and Bottoms

what is climax? 1 of 5

V tops and bottoms 2 of 5

Climactic reversals
3 of 5
Gaps: exhaustion, measuring 29.Climaxes

Consecutive climaxes 4 of 5

Climaxes caused by option firms

5 of 5
Failed consecutive climaxes