Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader

Description

While new technology and complicated theories promise to take your trading to "the next level," the truth is that long-term success in this field is rooted in simplicity. That's why Al Brooks has created Reading Price Charts Bar by Bar. With this book, Brooks--a technical analyst for Futures magazine and an independent trader--demonstrates how applying price action analysis to chart patterns can help enhance returns and minimize downside risk. Along the way, you'll discover 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. Throughout these pages, some of the most useful tools for deciphering price action are covered in detail, including: Trendlines and trend channel lines Prior highs and lows Breakouts and failed breakouts The size of bodies and tails on candles The relationship between current bars to prior bars And much more Learning what the market is telling you can be difficult, but with the right approach, you can achieve this goal and capture consistent profits in the process. Reading Price Charts Bar by Bar has all the information you need to succeed at this endeavor and will put you in the best position possible to make the most of your time in today's turbulent markets. Praise for Reading Price Charts Bar by Bar "Al Brooks has written a book every day trader should read. On all levels, he has kept trading simple, straightforward, and approachable. By teaching traders that there are no rules, just guidelines, he has allowed basic common sense to once again rule how real traders should approach the market. This is a must-read for any trader that wants to learn his own path to success." --Noble DraKoln, founder ofwww.SpeculatorAcademy.com and author of Trade Like a Pro and Winning the Trading Game "Al Brooks is a trader's trader. He understands the focused energy it takes to be successful at trading and works long, hard hours in front of the computer screen to beat the markets. In his first trading book, he outlines, selflessly, his strategy step by step. A doctor and educator in his previous life, he uses his eye for detail and transfers lessons he learned in training himself on the art of trading to the written page. For those who are willing to delve into the details of day trading and dedicate the time and energy to do it seriously and most likely profitably, Al Brooks's book Reading Price Charts Bar by Bar, is a must-read." --Ginger Szala, Publisher and Editorial Director, Futures magazine Cover Title Page Copyright Page Contents Preface Chapter 1: Price Action TREND BARS AND DOJI BARS 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 (ETFs) AND INVERSE CHARTS SECOND ENTRIES LATE AND MISSED ENTRIES Chapter 2: Trendlines and Trend Channels TRENDLINES MICRO TRENDLINES: SMALL, STEEP TRENDLINES IN STRONG TRENDS HORIZONTAL LINES: SWING POINTS AND OTHER KEY PRICE LEVELS TREND CHANNEL LINES DUELING LINES: INTERSECTING TRENDLINE AND TREND CHANNEL LINE Chapter 3: Trends TWO LEGS SIGNS OF STRENGTH COMMON TREND PATTERNS TREND FROM THE OPEN REVERSAL DAY TREND RESUMPTION DAY TRENDING TRADING RANGE DAYS TIGHT CHANNELS AND SPIKE AND CHANNEL BULL OR BEAR STAIRS: BROAD CHANNEL TREND Chapter 4: Pullbacks FIRST PULLBACK SEQUENCE: BAR, MINOR TRENDLINE, EMA, EMA GAP, MAJOR TRENDLINE DOUBLE TOP BEAR FLAGS AND DOUBLE BOTTOM BULL FLAGS EMA AND GAP EMA PULLBACKS 2HM: IF AWAY FROM EMA FOR TWO OR MORE HOURS, THEN FADE EMA AND FIRST EMA GAP BAR TREND DAY 11:30 STOP RUN PULLBACK TO TRAP YOU OUT COUNTING THE LEGS OF A TREND HIGH/LOW 1, 2, 3, AND 4 VARIATIONS OF HIGH/LOW 2 SETUPS THREE PUSH PULLBACKS Chapter 5: Trading Ranges TIGHT TRADING RANGES BARB WIRE MIDDLE OF THE DAY, MIDDLE OF THE RANGE BIG UP, BIG DOWN TRADING RANGES SETTING UP TREND REVERSALS Chapter 6: Breakouts BREAKOUT ENTRIES IN STRONG TREND BREAKOUT PULLBACKS ANDS BREAKOUT TESTS Chapter 7: Magnets MEASURED MOVES BASED ON THE FIRST PULLBACK (AB = CD) MEASURED MOVES ON BREAKOUTS BASED ON THIN AREAS AND ON FLAGS REVERSALS OFTEN END AT SIGNAL BARS FROM PRIOR FAILED REVERSALS OTHER PRICE MAGNETS Chapter 8: Trend Reversals TRENDLINE BREAK TREND CHANNEL LINE FAILED BREAKOUTS: CLIMAXES, PARABOLAS, AND V TOPS AND BOTTOMS SIGNS OF STRENGTH IN THE FIRST LEG OF A REVERSAL TRENDS REVERSE WITH A TEST: EITHER AN UNDERSHOOT OR AN OVERSHOOT DOUBLE TOP AND BOTTOM PULLBACKS CLIMAX: SPIKE AND TRADING RANGE REVERSALS CLIMAX: THREE PUSHES AND WEDGES (TREND CHANNEL LINE OVERSHOOTS AND REVERSALS) EXPANDING TRIANGLES Chapter 9: Minor Reversals: Failures FAILED SIGNAL AND ENTRY BARS AND ONE-TICK FAILED BREAKOUTS FAILED HIGH/LOW 2 FAILED HIGHER HIGH AND LOWER LOW BREAKOUTS FAILED TRENDLINES AND TREND CHANNEL LINES FAILED REVERSALS FAILED FINAL FLAGS: TIGHT TRADING RANGE FAILED FINAL FLAGS: HUGE TREND BAR FAILED WEDGES FAILED SCALPS: FIVE-TICK FAILED BREAKOUTS AND FAILURE TO REACH A SCALPER’S PROFIT TARGET Chapter 10: Day Trading SELECTING A MARKET TIME FRAMES AND CHART TYPES GLOBEX, PRE-MARKET, POST-MARKET, AND OVERNIGHT MARKET SCALPING, SWINGING, TRADING, AND INVESTING ALWAYS IN THE MARKET HAVE AT LEAST TWO REASONS TO ENTER A TRADE ENTERING ON STOPS PROTECTIVE STOPS AND GETTING TRAPPED IN OR OUT OF A TRADE Chapter 11: The First Hour PATTERNS RELATED TO THE PREMARKET PATTERNS RELATED TO YESTERDAY TREND BAR ON GAP OPEN: FIRST OR SECOND BAR GAP OPENINGS: REVERSALS AND CONTINUATIONS TREND FROM THE OPEN OR TREND FROM THE FIRST BAR THIRD BAR OF THE DAY AND THE 15-MINUTE CLOSE STRONG TREND BARS IN THE FIRST HOUR OFTEN PREDICT STRENGTH LATER IN THE DAY IN THE SAME DIRECTION OPENING PATTERNS AND REVERSALS DOUBLE BOTTOM AND DOUBLE TOP FLAGS TRADING RANGE BREAKOUTS FIRST PULLBACK Chapter 12: Detailed Day Trading Examples Chapter 13: Daily, Weekly, and Monthly Charts HUGE VOLUME REVERSALS Chapter 14: Options Chapter 15: Best Trades MAJOR REVERSALS MINOR REVERSAL SCALPS DURING TRADING RANGE DAYS PULLBACKS IN A STRONG TREND INTRADAY STOCKS Trading Guidelines Glossary About the Author Index Eula