The killer flaws? They are:
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Archives of “price charts” tag
rssBrooks, Trading Price Action Reversals
The third and final volume of Al Brooks’s series is Trading Price Action Reversals: Technical Analysis of Price Charts Bar by Bar for the Serious Trader (Wiley, 2012). A trader does indeed have to be serious to read all three volumes because, according to the author himself, the task is daunting: some 570,000 words.
Only half of the final volume is about trend reversals. The rest deals with day trading, the first hour (the opening range), and putting it all together, including 78 trading guidelines, some of which you may not have encountered elsewhere.
This volume is the most accessible of the three, but then my very tired eyes did a lot of work before getting here. It would be difficult to skip the first two volumes and expect to understand the third.
Brooks himself is not primarily a reversal trader. As he writes, “I prefer high-percentage trades, and my most common trades are pullback entries and trading range fades. I especially like breakouts because when they are strong the probability of follow-through is often more than 70 percent. I look less often for reversal trades, because most reversal attempts fail, but I will take a strong reversal setup.” (p. 463) (more…)
6 Stages Of A Trader
Ten Ways to Trade Like the Legendary William J. O’Neil:
- Do not diversify broadly, instead focus on the leading stocks in the best industry groups.
- Cut any loss when the stock is down 7%/8% from your buy point.
- Buy stocks that are going up in value, not down.
- Add to a position as the stock goes up in value from your buy point not at lower prices.
- Buy stocks near their highs for the year not their lows.
- Study price charts to discover how the best stocks behaved historically in price action.
- Trade in the right direction based on the trend of the general market.
- Buy the best stocks in the market as they break out of properly formed bases or when they bounce off their 50 day moving averages.
- Do not be influenced by others, trade your plan.
- Buy stocks with the best earnings and sales growth at the right time using charts.