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

Al Brooks

Mar 2009 · Sold by John Wiley & Sons

About this ebook

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 approach 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, breakouts 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.

Ratings and reviews

Haven't read the whole book yet, but the author does not seem to define unknowns properly before using them. There seem to be vague definitions used. This problem makes understanding the author's point difficult. Otherwise, there seem to be interesting setups to learn from the book.

It is a very well written and comprehensive description of moving ahead financially. I liked his emphasis on personality and inner strength as a success determinant. If a reader can understand the secrets these guidelines provide then she could become a extremely wealthy for sure.

Al Brooks has published several articles for Futures Magazine. He has also done online seminars for the ITRADE Futures show. The style of trading Brooks utilizes a simple, but it is not easy. He trades strictly price action, no indicators, which is the only true path to trading success. This style of trading goes all the way back to the greats like Jesse Livermore. This book covers just about every price signal combination imaginable. It is chocked full of great signal explanations and illustrations. If you study the material in this book, it is guaranteed to help your trading. That being said, as the cover of his book states, this is a study for the "Serious Trader". This is NOT an easy read. It is obviously written by a trader for traders and not a polished author. I do not believe Brooks intended to appeal to the masses. Beginners will most likely be completely lost. Hobbyist traders will find it long and boring. Trading is like any career. It takes hard work, dedication and many years of study. Brooks himself admits it took him 10 years. If you are a serious trader, then this book is for you, 5 stars, excellent. If you are looking for the magic indicator or a get rich quick system, you will be disappointed.

About the author

AL BROOKS is a technical analysis contributor to Futures magazine and an independent day trader. Changing careers from ophthalmology to trading twenty years ago, he discovered consistent success and profitability as a trader once he developed his unique approach to reading price charts. He graduated from the University of Chicago Pritzker School of Medicine and received his BS in mathematics with honors from Trinity College.