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

A completely original approach to trading using price bar charts

In Reading Price Charts Bar by Bar, Al Brooks-a technical analyst for Futures magazine and an independent trader-demonstrates how the information gleaned from this method can significantly enhance trading returns, while minimizing downside risk. Written with the serious trader in mind, this book reveals how to read the information content of every bar on a price chart, and manage trades all day long. It also provides a unique understanding of how to visualize entry and exit points as markets are trading in real-time. There is an important niche in technical analysis and price action: the bar-by-bar analysis of price charts. Brooks shows readers how to take advantage of the information this approach offers, and make great trades along the way.

Al Brooks, MD (Roseville, CA), is a technical analysis contributor to Futures magazine and an independent day trader. His approach to reading price charts was developed over a 20-year period in which he changed careers from ophthalmology to trading. He graduated from the University of Chicago Pritzker School of Medicine and received his BS in mathematics with honors from Trinity College.

The book is a comprehensive guide to understanding price action and is directed toward sophisticated traders and market professionals. However, the concepts are useful to traders at all levels. It uses many of the standard techniques described by Edwards and Magee and many others, but focuses more on individual price bars to demonstrate how the information they provide can significantly enhance the risk reward ratio of trading. Most technical analysis books point out three or four trades on a chart, which implies that everything else on the chart is incomprehensible, meaningless, or risky. Brooks believes that there is something to be learned from every tick that takes place during the day and that there are far more great trades on every chart than just the few obvious ones, but to see them, you have to understand price action and you cannot dismiss any bars as unimportant. Brooks learned trading, in a sense, from performing thousands of eye operations through a microscope, which revealed some of the most important things can be very small. 

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 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 2 or More Hours, Then Fade EMA and 1st 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 and 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 First Hour Often Predict Strength Later in Day in Same Direction. Opening Patterns and Reversals. Double Bottom and Double Top Flags. Trading Range Breakouts. First Pullback. Chapter 12. Detailed Daytrading 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.