Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader (Wiley Trading) [Hardcover]

Al Brooks (Author)

Book Description

ISBN-10: 0470443952 | ISBN-13: 978-0470443958 | Publication Date: May 4, 2009 | Edition: 1

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

Editorial Reviews

From the Inside Flap

While complex strategies and systems maywork 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 sig-nificantly 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 youbecome 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.

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.

Product Details

• Hardcover: 432 pages
• Publisher: Wiley; 1 edition (May 4, 2009)
• Language: English
• ISBN-10: 0470443952
• ISBN-13: 978-0470443958
• Product Dimensions: 9.1 x 6.1 x 1.5 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.9 out of 5 stars  See all reviews (70 customer reviews)
• Amazon Best Sellers Rank: #80,639 in Books (See Top 100 in Books)

More About the Author

Al Brooks is a frequent technical analysis contributor to Futures magazine and an independent day trader. His approach to reading price charts was developed over two decades after changing careers from eye surgery to trading. Brooks graduated from the University of Chicago Pritzker School of Medicine in 1978 and received his BS in mathematics with honors from Trinity College in 1974. His website, brookspriceaction.com, outlines his trading approach and views as well as hosts a subscription-based daily trading chat room in which Brooks talks to other traders about the market in real time.

Customer Reviews

Most Helpful Customer Reviews

127 of 137 people found the following review helpful:

3.0 out of 5 stars Recommended in spite of many flaws., July 1, 2009

By 

Newton Fawcett (Hattiesburg, MS) - See all my reviews
(REAL NAME)   

This review is from: Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader (Wiley Trading) (Hardcover)

I am a trader who, as the author does, uses price action to trade. I advance-ordered this book, because its title promised a detailed discussion of price action well beyond what is generally available in the typical books on trading. In this regard I am not disappointed. The author, who is a scalper, does offer what I consider to be the best presentation of how to select trade entries and exits using price action. This is an approach that many good traders use, but it is an art rarely written about in great detail. If an in depth discussion of bar to bar price action is what you're after, the Brooks' book may be your only choice.

Unfortunately the book has many annoying faults that could have easily been remedied by better writing, careful editing, and better layout and printing. The main fault is the writing. What the text needs is careful editing by one skilled in technical writing and armed with a red pencil. There are too many needless words and too many awkward sentences. Sentences such as "Bar 15 was a break to a new low, and it had a strong bull reversal bar off the new low, and it overshot two bear trend channel lines." (Pg 298) Sadly, this kind of writing confronts us on every page. Presumably, the author meant to say: "Bar 15 broke to a new low but closed as a strong bull reversal bar that overshot two bear-trend channel lines." There are so many run-on sentences that one wonders whether the author is trying to start a war on commas. Punctuation is far too lax. This may seem like nitpicking to some, but these faults, all easily corrected, make reading this book far more of a chore than it ought to be. There is really no excuse for such poor editing in a fifty-dollar book. I suppose the publisher, John Wiley & Sons, is as much at fault as the author.

In spite of its faults, this book must be commended on being the first to take on an analysis of price action in such depth. Perhaps with a second edition we will get a book that looks and reads as it ought to. If so, Dr. Brooks' book could potentially find itself in the top rank of books on trading.

74 of 80 people found the following review helpful:

5.0 out of 5 stars Excellent for the Serious Trader 5 STARS- Not for the Beginner, April 27, 2009

By 

Mr. Allnut "Charlie" (United States) - See all my reviews

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This review is from: Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader (Wiley Trading) (Hardcover)

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.

48 of 54 people found the following review helpful:

5.0 out of 5 stars Excellent hard read, May 6, 2009

By 

Jon French - See all my reviews
(REAL NAME)   

This review is from: Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader (Wiley Trading) (Hardcover)

The best book on trading I have read so far. Rather than a book however, it is more like a text book. You can spend an hour on 3 pages and still need to read it over again. He introduces and uses a vocabulary not used elsewhere, basically because he has a unique view on the market. Do a search on "EMA gap bar", or "Final Failed Flag", or "M2S second entry" on google and you will find no one else, yet they are such important concepts.
As the book title states, he describes bar by bar the battle going on in the market between bulls and bears. His bar analysis (trending bars, doji bars) is also unique but also accurate. I think anyone adopting this books style will become a successful trader. However, as the other reviews state, this is not an easy read, but neither are the markets easy to profit from.
He describes the various faces that the market reveals and how to respond to each. This is not a trading system book, rather a book trying to teach the reader the language that the market speaks.
The focus of the book is for scalping and occasionally swing trading, but the principles can also be extended for long term trading.
I am glad I found this book.