Brooks Trading Course

Charting Analysis

08A	Candles, Setups, and Signal Bars Trend bars and TR bars Signal bars and entry bars Bad signal bars
08B	Reversal bars Multi bar reversals Inside and outside bars
08C	Tight Trading Ranges as setups ii and Breakout Mode
08D	What is a setup? Weak setup, need more 2nd signal Countertrend needs strong signal bar
09A	Pullbacks and Bar Counting What is a pullback? What is bar counting?
09B	Double Top Bear Flags, and Double Bottom Bull Flags High 4 and Low 4 Consecutive reversals
09C	Endless pullback Higher and lower time frames Countertrend traders exit on High or Low 2
10A	Buying and Selling Pressure What is Buying and Selling Pressure? Gaps
10B	Trading Ranges Channels
11A	Gaps What are gaps?
11B	Moving Average Gap Bars Exhaustion Gap
11C	Micro gaps Gap Open Bars Gaps mean strength Body Gap (Negative gap)
11D	Gaps often lead to trends Stairs

Market Cycle

12A	Market Cycle Four parts of market cycle? Pullback is start of channel Channel becomes Trading Range
12B	Market cycle: always trend or TR Inertia and 80% rule Definitions 1: Trends, swings, legs
12C	Definitions 2: Pullbacks Definitions 3: Trading Range Binary decisions
13A	Always In Always trend or TR Always In direction Trader’s Equation
13B	Always In Long Always In Short
13C	Scalping and swing trading
14A	Trends What is a trend? Bull trend needs Higher Lows Bear trend needs Lower Highs
14B	When not clear, then TR Breakout is strongest trend 80% rule: Most reversals fail
14C	Types of trends Bull and bear trends Traps and breakouts
14D	Trend from the Open Trending Trading Ranges Broad Channel trend
14E	Tight Channel Small pullback trend
15A	Breakouts What is a breakout? 80% rule: Most breakouts fail Reversal is a breakout Trading Range means BLSHS!
15B	Need follow-through Trends always try to reverse Breakout can begin small
15C	Breakout usually has 2nd leg Trading Range breakouts
15D	2nd Leg Traps Signs of strong breakouts Succeed or reverse?
15E	Exhaustion or Measuring Gap? Weaker BO has deeper PB BO Test
15F	Failed BO, trend resumption or reversal?
15G	5 tick traps and 11 pip traps Fade weak setups
15H	Surprise Bars 2nd Leg Traps and exhaustion Give-up Bars – Minor reversal
16A	Channels Channel is 2 lines Lines need 2 points 70% Rule
16B	How to draw channels Forex bear channel examples Emini bull channel examples
16C	New trend begins in old trend Higher time frames Reversals and breakouts
16D	Types of channels Tight and Broad Bull Channels Tight and Broad Bear Channels
16E	Evolution into Trading Range Channel breakouts usually fail With trend BO of channel
16F	Limit orders to fade test of line Breakouts at start of trend Reversals and breakout failures Broad channel or Trading Range (TR)? Every TR has bull and bear channel
17A	Tight Channels & Micro Channels What is a Tight Channel? What is a Micro Channel?
17B	Tight Trading Ranges Breakout or climax?
18A	Trading Ranges Definition of pullback and Trading Range Hallmarks: confusion, disappointment
18B	TR contains buy and sell setups BOM (BreakOut Mode) 2nd Leg Trap
18C	Trend resumption, or reversal? Trend, or leg in TR?
18D	Tight Trading Range (TTR) Ledges Limit Order Market (LOM)
18E	What is vacuum effect? Perverse logic: Fade BO
18F	Trading Range: Don’t bet on breakout Breakout into trend Early signs of TR

Support, Resistance, and Basic Patterns

19A	Support and Resistance What is support and resistance (S/R)? S/R, not news, controls price Monthly charts need monthly stops S/R is usually precise
19B	What S/R is best? Forex S/R not precise Examples
19C	Other Types of S/R Round Numbers List of S/R
19D	Buy The Close, Sell The Close Breakout (BO) Test
19E	Highest and lowest close Bulls need HL, bears need LH 50% Pullback
20A	Measured Moves Leg 1 = Leg 2
20B	Height of Trading Range Height of breakout
21A	Reversals What is a reversal Minor and Major Trend Reversals Reversals can begin with breakouts
21B	Reversal is earliest entry 80% rule Cup and Handle
21C	Beginners love reversals Buying and Selling Pressure Nested pattern
21D	40% winner Ten Bars, Two Legs (TBTL) Most reversals are Double Top or Bottom
22A	Major Trend Reversals What are major and minor reversals? MTR is most important reversal pattern
22B	Successful LH MTR
22C	MAG (Moving Average Gap bar) Most tops are Double Tops
22D	MTR bottoms Head and shoulders reversals Failed MTR
23A	Final Flags What is a Final Flag?
23B	Small Final Flags ii Final Flags
24A	Wedges What is a Wedge? How to draw lines
24B	Wedges rarely perfect Most channels are Wedges Wedge variations
24C	Bad Wedges are not reversal setups Reversal begins before old trend ends Earlier entry on smaller time frame
24D	What is a parabolic Wedge? Strong trends have bad Wedges
24E	Failed Wedge
25A	Double Tops and Bottoms What is a Double Top or Bottom? Why Double Tops and Bottoms work Double Top and Bottom Flags
25B	Tests of support and resistance Failed Double Tops and Bottoms Measured Moves
26A	Triangles Triangle Wedge Reversal or continuation (flag)
26B	Expanding Triangle Bad looking patterns
27A	Head and Shoulders Head and Shoulders is MTR Most Head and Shoulder reversals are minor
27B	Markets resist change What happens when stop is hit?
28	Rounded Tops and Bottoms Always something else
29A	Climaxes What is a climax?
29B	V tops and bottoms
29C	Climactic reversals Gaps: Exhaustion, Measuring
29D	Consecutive climaxes
29E	Climaxes caused by options firms Failed consecutive climaxes

How to Trade Prerequisites

30A	Trader’s Equation and Probability Edge and perfect trades Trader’s Equation
30B	Trader’s Equation and Probability Three variables
30C	Trader’s Equation and Probability Z-score Probability is most important
30D	Trader’s Equation and Probability 50% pullback Math can improve after BO
30E	Trader’s Equation and Probability 70% – 90% probability! 40 – 60 Rule TR probability high near top and bottom
31A	Swing Trading and Scalping What are swing trading and scalping? Ideal environments
31B	Swing Trading and Scalping Swing trade means reward is 2x risk
31C	Swing Trading and Scalping Scalping not for beginners Minimum scalp size
31D	Swing Trading and Scalping Converting swing to scalp Scalping in strong breakout Lose if manage scalp like swing
32A	Orders Stop orders Limit orders Bracket orders Market and other orders
32B	Orders Stop orders are better for most traders Skilled traders use market and limit orders TR Limit Order Market and trends
32C	Orders Price action determines order type With trend and countertrend limit orders Enter early on smaller time frame
33A	Protective Stops Why use stops? Stop determines position size
33B	Protective Stops After a stop is hit Use correct stop
33C	Protective Stops Price action stop Bulls need Higher Lows Trailing stops Stops in bear
33D	Protective Stops Trends respect major pullbacks Exit if premise changes
33E	Protective Stops Wide stops
33F	Protective Stops Measured Moves/other S&R Small signal bar
33G	Protective Stops Breakeven stops and BO tests Stops for scalpers
34A	Actual Risk Trader’s Equation and risk Actual Risk
34B	Actual Risk Small Actual Risk is useless Use risk to find profit targets
35A	Scaling In Who scales in, and why? Scaling into winning trades
35B	Scaling In Scaling into losing position
35C	Scaling In Sample strategy: 2 parts Sample strategy: 4 parts
36A	Trade Management and Taking Profits Management is after entering trade Other People’s Money is never true
36B	Trade Management and Taking Profits Defaults for Profit Taking

Trading Price Action Patterns

37A	How to Trade What can markets do? Summary of How to Trade
37B	How to Trade Use market cycle Trader’s Equation and 40 – 60 Rule Default targets
38A	Trading MTR Tops Higher High MTR Minimum profit targets
38B	Trading MTR Tops Higher probability after BO Plan for taking profits
38C	Trading MTR Tops Lower High MTR Higher probability after BO
38D	Trading MTR Tops Have plan to take profits Minor reversals
39A	Trading MTR Bottoms Bottoms needs strong bulls Anticipate bottoms Minor reversals become bear flags
39B	Trading MTR Bottoms Weak setups can succeed Take profits
39C	Trading MTR Bottoms No perfect setups 2nd signals Bull trend needs Higher Lows
40A	Entering Late in Trends Bear Fear of Missing Out (FOMO) Bull Fear of Missing Out (FOMO)
40B	Entering Late in Trends Highest and lowest close Disappointment means TR
40C	Entering Late in Trends Final Trend Bars Trapped bulls Trapped bears
40D	Entering Late in Trends End of bear trend End of bull trend
40E	Entering Late in Trends Bull trend evolves into TR Buy The Close when Sell Climax
41A	Trading Breakouts Bull breakouts Buy The Close bull trend Sell The Close bear trend
41B	Trading Breakouts If now channel, trade like channel Breakout often follows trap
41C	Trading Breakouts Enter early on smaller time frame Weak breakout, then TR
41D	Trading Breakouts Bear breakouts Stop management How to sell
42A	Trading Climactic Reversals Weak BO means TR soon BO can succeed (MG) or fail (EG) Weak and strong bulls and bears
42B	Trading Climactic Reversals Major climactic reversals Micro Channel can be climax
42C	Trading Climactic Reversals Minor climactic reversals

Trading Channels & Ranges

43A	Trading Tight Bull Channels What is a Tight Bull Channel? Breakout on higher time frame Tight Bear Channel as Bull Flag
43B	Trading Tight Bull Channels 1st reversal usually minor Tight Bull Channel means only buy
43C	Trading Tight Bull Channels Scaling in Can bears make money?
43D	Trading Tight Bull Channels How to buy a Tight Bull Channel Stops and taking profits Tight Channel evolves into TR
44A	Trading Tight Bear Channels What is a Tight Bear Channel? Breakout on higher time frame Tight Bull Channel as Bear Flag
44B	Trading Tight Bear Channels 1st reversal usually minor
44C	Trading Tight Bear Channels Tight Bear Channel, so better to only sell Difficult for bulls means bears are strong
44D	Trading Tight Bear Channels Bear trend so sell! Trail stops Take profits All trends end
45A	Trading Broad Bull Channels What is a Broad Bull Channel? Often contain Trading Ranges Often last several days Usually Tight Channel on higher time frame
45B	Trading Broad Bull Channels Tight on higher time frame Reversals are common, but fail Contain major Higher Lows
45C	Trading Broad Bull Channels Try to diagnose early Bears can sell rallies Bad follow-through after BO to new high
45D	Trading Broad Bull Channels Swing trade with wide stops 2nd Leg Traps Bears sell in Broad Bull Channel Bears use wide stops and scale in
45E	Trading Broad Bull Channels Buy zone Bulls take profits above prior highs Buy 50% Pullback (PB) Contain Trading Ranges, but are Bull Flags
46A	Trading Broad Bear Channels What is a Broad Bear Channel? Why not common on 5 minute chart? Major Higher Low
46B	Trading Broad Bear Channels Channel usually last at least 3 days Reversals are common, but most fail Diagnose early
46C	Trading Broad Bear Channels Bears sell, but bulls can sometimes buy Sometimes briefly Always In Long
46D	Trading Broad Bear Channels 2nd Leg Trap Bulls buy below lows Bulls use wide stops and scale in
46E	Trading Broad Bear Channels Sell zone 50% Pullback (PB)
47A	Trading in Trading Ranges Is Trading Range (TR) broad or tight? Look for signs of Trading Range
47B	Trading in Trading Ranges 80% Rule Legs in TR, not in trend Buy in top half, sell in bottom half
47C	Trading in Trading Ranges 2nd Leg Trap Fade breakouts (bet will fail) How to enter on reversals Wide stops and scaling in
47D	Trading in Trading Ranges Entering with limit orders Taking profits Late test of open Tight Trading Ranges (TTR) Eventually breaks out into trend

Buy Low, Sell High, and Scalp. ➟ More about BLSHS

Pullback. ➟ More about PB

➟ More about 18B

Breakout Mode means trading range. About 50% chance successful breakout up or down, and then about a measured move based on the height of trading range. 50% chance 1st breakout up or down will reverse.. ➟ More about BOM

Tight Trading Range, limit order market, bad for scalping with stop orders. Most traders should wait. Usually the bars are small and tends to reverse every 2 or 3 bars, but sometime the bars can be big, however if they still reverse every 2 or 3 bars, bad for stop entry traders, making it essentially still TTR, for e.g. the TR open on 20221115.. 窄幅震荡。 ➟ More about TTR

Limit Order Market so easier to make money with limit orders than with stop orders. Bears will probably sell above and many will scale in higher, and bulls will buy below and many will scale in lower. Both expect small moves and will mostly scalp.. ➟ More about LOM

Sell or Short, depending on context. ➟ More about S

Higher Low. ➟ More about HL

approximately Ten Bar correction with at least Two Legs. ➟ More about TBTL

Major Trend Reversal. ➟ More about MTR

Moving Average Gap Bar. ➟ More about MAG

➟ More about PA

Measuring Gap, a gap of any kind that can lead to a measured move (only certain in hindsight). ➟ More about MG

Exhaustion Gap, a gap at any kind at the end of a trend, just before a reversal (only certain in hindsight). ➟ More about EG