Price Action Trading Expert (Learn From Him!) - Al Brooks | Trader Interview

eventually if everybody's doing it it's not going to work anyway i i do think there are limits to ai and at least for the foreseeable future i think a really good discretionary trader is going to trade better than the very best on ai algorithms welcome back everyone welcome back to this interview with al brooks al is the the person i have dividend on the channel here that has the most views so your interview was the most viewed on the the podcast on the youtube channel which is really good uh good thank you again good to sit down with you once again i think it's been a while so what's been going on since we last spoke well as i said before you turn on recording the pandemic is the main thing i've been just working working working although over the past few months i'm starting to to take vacations again which is fine that's pretty good so one thing occurs is what i've been working on what are some things that kind of fascinate you or maybe you want to work on well you know it's interesting to me you know at this point in my life you know i i would have imagined that i would have been at a point where i feel like i know everything that i need to know but every day at the end of the day i print out charts and i review things and i feel like i'm still getting better and better and better which is satisfying you know otherwise i would be bored yeah so i'm still having a lot of fun doing what i'm doing always learning for sure so one thing i want to ask you in this we'll go into topics that are more kind of specific to how people can become better traders but i'm curious to know first what's your view on the market right now what are some of the common themes you see in the market and anything that you specifically look at right now that you are paying attention to more than in other markets i tend to try to be fairly simple when i look at markets and i sometimes make the analogy to forrest gump and you know i say that forrest gump probably would make more money than albert einstein because i think you're better off not overthinking and when you look at the market the market's in a bold trend it's in a bold trend on the monthly chart the weekly chart on the daily chart and it's had many attempts to reverse and it's kind of like trying to pull the beach ball underwater you're not going to be successful the market's going to keep going up at some point it's going to reverse and there are some things going on now that i've been writing about over the past few months that increase the chances that we're going to get a reversal you know for example on the weekly chart the market has been going up in a very tight full channel with very small pullbacks and i i labeled that kind of a trend i call it a small pullback old trend and the biggest pullback that we've had since the pandemic crash was about 10 percent and that was a year ago in september and a small pullback old friend can last a long time and there's one thing i look for to signify that the small pullback bull trend has ended and that's a big pullback and by a big pullback i mean a pullback that is 50 percent bigger than the biggest pullback in the trend and since the small pullback bull trend has had a 10 pullback and since i expect one that is 50 bigger i'm looking for a 15 pullback at a minimum and we might be in it now i think there's a 50 percent chance that the market is in a 15 pullback it's going to be interesting to see what happens if the market gets up near the september high will it reverse down and form a double top or will it break through the market's been sideways now for four months and i think even if we do go to a new high i think we're not going to get much above the old time we might get up to 4 600 46.50 but i really think the market is going to have a hard time going much higher because the small pullback bull trend has lasted a really long time and normally the market does one thing for a while and then it does something else a small pullback bull trend is a very strong trend it's unlikely to go from a bull trend into a bear trend without first transitioning into a trading range and therefore i expected trading engine i expect the bottom of the range to be at least 15 below the top so over the next several months i think there's a 50 percent chance that the september high will be the high and that we will correct down 15 and that means below 4 000 on the s p it works on the signs that the market's going into a sideways market is it just based on the highest the lows or do you have any other factors to consider like volatility or things that kind of showcase more insiders market compared to a trend well well first of all as i said we've been sideways now for four months and at some point either the bulls give up or the bears give up so either we break to the upside or the downside i don't think we're going to go much higher because i think we have exhausted bulls the small pullback bull trend has lasted such a long time and i do think we have the potential to go a lot lower than what people think that's why um because everyone sees the market going up forever they assume it'll keep going up and it's not going to keep going up and as i said one way to estimate how far down it will go is to expect it to go 50 percent more than the biggest pullback that we've had since the trend began and that's why 15 is what i'm looking at and that's below 4 000. also on the monthly chart since the pandemic crash there have been three times when we've had bear bars and this is the third time and if you look back at the cash index or the e-mini and for decades if the market is in a climax phase which it is now and you get a bear bar you normally get a second bear bar or even a third bear bar starting within a month or two so even if october is a bull bar on the monthly chart then probably november will be able uh will be a bear bar and that's consistent with what i'm saying about the weekly chart so there you know that's another reason to expect that the market will um correct for more time in other words two or three months and if it corrects for two or three months it's reasonable to expect it to correct more than what it has corrected already and that's why i go to the weekly chart and that's how i come up with the 15 correction interesting have you been following cryptocurrencies at all is it something that you you look at or you pay attention to yeah i bought cryptocurrencies and yes i pay attention to cryptocurrencies my fundamental i have two fundamental problems with cryptocurrencies i have the jamie dimon problem you know he's the ceo of jp morgan and he's generally considered to be the wisest banker in the world and he says well he uses a lot of um unkind words when he talks about cryptocurrencies but my problem is the same one that he has and that warren buffett has there's no there's no compelling reason for cryptocurrencies to exist however i understand the idea of a store of value and it's more practical to have a digital store of value than to have gold which is physical and you know you know who wants to have a bunch of gold in the house it's easier to have a bunch of code on your computer passwords on your computer to store your value and to have it be independent of all governments in the world i understand that appeal what i suspect ultimately is going to happen is that the governments are going to be significant and sufficiently bothered by the criminal element uh profiting from cryptocurrencies that the governments will ultimately come up with some kind of their own cryptocurrency and i think the ideal situation would be to have the western governments united states europe maybe africa and maybe south america get together and create it's their own cryptocurrency uh and one that can be overseen by uh governments in other words not so much crypto so you know so it makes make it very difficult for criminals to use it as a tool to um to maintain wealth and to make wealth so uh you know that's one problem with um cryptocurrency that's the other problem with cryptocurrencies you know i think ultimately governments are going to get involved so and the first problem is the one there's really um not a great um reason for it to exist and there's not great use for it at least not now so it's a trading vehicle and um you know i often people sometimes ask me al are you a gambler and i say i'm not any more a gambler than somebody buying a business hoping it'll go up in value somebody buying um an apartment building hoping hoping it'll go up in value and so i don't view myself as a gambler view myself as an investor but a very short-term investor you know i i invest sometimes for a minute sometimes for five minutes but i'm just i'm an investor cryptocurrencies is to me it's much more on gambling because there's no fundamental basis behind it it's just betting you know you know it's going up i'm going to buy if it goes down i'll sell you know i think that's more of the attitude it's not um that lack of a fundamental basis um makes me um you know i i'm willing to buy it and i sometimes do buy it you know for example bitcoin on big selloffs but um my concern much more i'm much more worried about um cryptocurrencies suddenly uh going bust than i am about um microsoft or amazon suddenly going bust and when cryptocurrencies go bust uh if they go bust i think it's going to be just over the matter of two or three days it'll go from 60 000 to zero and even if it weren't from even if it didn't go to zero if it went to 10 000 i wouldn't want to own something at sixty thousand and then have it be worth ten thousand uh two days later um you know if all of a sudden the group of major governments the united united states and the eu announces that they're going to go into the crypto business and create a government supervised crypto business you know i i think um and they heavily regulate or they make it illegal to transact in the current cryptocurrencies um you know i think there's a risk that very quickly they'll go to zero so it's kind of like musical chairs as long as the music is playing you can run around and have fun but when music stops um there's not going to be anybody to buy when you want to sell and this is a really good point and a really good segue into something else i want to talk about for sure is the fact that a lot of people use price action to enter trades like they look at these sit-ups to get in the market but it seems like a few people i talked to seem to be able to understand when to get out with price action like they cannot read the price action in order to get off the trade so what would be advice for people and what are some tips for them to be able to avoid losses with price action like being able to pick one price near it up or starting to decline changing phase how should people do that well there are two ways that i do do them do it first is what you're saying if it's near the top near the top of what near the top of a bold channel let's see let's talk about the longs if the market is near the top of a bold channel and if it suddenly creates whatever time frame you're trading so if i'm trading a five minute chart which is what i usually do and i see a bold channel and all of a sudden there's an exceptionally big bull bar and it reaches that top of the bold channel i'm always going to be exiting at least half of my position if not my entire position depending on what else is going on so one thing to do is exit during exceptional strength at resistance especially at the top of the bull channel if you look to the left on your chart and you see that it's also forming a double top atop is testing a prior high so is it both testing the top of a channel and testing a prior high that would make him much more likely to get out of the market and then the other thing is if the market goes down and how far down well it depends on your time frame and your goals as a trader you know if you're very short-term trader for example if i'm trading the five minute chart and we have a bull bar and i buy the close of the bar or buy on a stop above the high of the bar and we get a second bull bar a third and a fourth and a fifth and a sixth consecutive bull bar at that point i'll have a pretty good profit i will get out maybe the the height of a bar below the prior bar so let's say the let's say the bar is five points tall and then the next bar is another bull bar and then another bull bar i'll get out with a stop about the height of a bar five points below any bull bar also if there's a bear bar closing below its midpoint i'll get out one tick below the bear bar and you can say oh you know it's stupid it's if it's still forming higher lows and higher highs it's still a bold trend why not put a stop below the most recent higher low and i'll do that as well sometimes but if i'm if i'm trading i often will get out with a very tight stop for example below a bear bar closing here and slow and i'll do that because i feel confident if the bar after that is another bull bar closing nearest high i'll get back in and most people can't do that most people they get out and they say boy i need time to recover and they don't get back in but if you're able to get back in then you can get out with tight stops and you can just get out and get in get out and get in if if the bull trend continues up and this is an issue that i see a lot of people struggle with also is the fact that let's say they're long in any pair any trade then they have like this big bull bar and they think price will go more like further than that so they stay in the trade then they have the retracement price goes down then they want to keep getting that they want to keep getting to that high again to get up right so they hope for parts get back the height was before which is of course big mistake for people when they trade and yeah i want to say something about that let's say you buy a market that's going up which is reasonable because if the market's going up it's probably going to go up more and you'll be able to be able to get out of the profit but any time you buy at the high you should look at the most recent higher low because you probably will have to risk to below that higher low so you'll have a lot of risk if you have a lot of risk you have to trade small and what a lot of professional traders do what i do is if i'm buying high i'm hoping the market goes up higher and i can exit with the profit but i will use a very wide stock and really importantly i'm willing to add on so i'm betting on two things that the market is strongly bullish it's either going to go up and continue to be strongly bullish or it'll transition into a trading range not become a bear trend strong bold trends typically either continue or they convert into a trading range for a period of time before they become bear trends and if it enters a trading range trading ranges have legs that go up and go down if i buy at the high and then it starts to convert into a trading range it goes down i'm buying more and i expect it to go back up to the top and start to look like a trading range so if i buy let's say i buy it 100 and then it falls to 90 and it starts to go up again and buy more at 90 if it gets back to 100 now i'm thinking well maybe it's a trading range and not a bold trend and if it's trading range do i want to be long at the top of a trading range so what i'll tend to do is i'll tend to exit remember i bought it 100 and i bought at 90. when it gets back to near 100 i'll get out at 100 break even on my first buy and with a profit on my lower body and that sounds simple but the single biggest reason why traders lose money trying that strategy is they trade too big when they buy their initial position at 100 and they see the stop has to be at 90 they they're comfortable risking that amount and they think in their in their head yeah you know i'm okay i'll buy more if it gets done at 90. and what most beginners do is when it gets down at 90 they say oh my god i'm down 10 i better get out and that's the exact op exact opposite of what they should be doing they should be looking for an opportunity to buy again to double the size of the position so but as i said this sounds easy but you know it's very difficult for beginners to do beginners are much better off getting out early and not holding through the transition into a trading range and then scaling in but that is you know i do that i do that all the time and it's a very good strategy if you do it and you do it well i think you have an eighty percent chance of not losing money so if you buy it a hundred and it falls to ninety two things can happen well three things can happen if you keep going down i'm not going to buy more unless it looks like it's starting to turn back up and if i buy as it's starting to turn back up i'm expecting one of two things to happen if the sell-off is not too strong and the reversal up is reasonably good i'm going to hold for it to get back to 100 and then i'll get out of the entire position at 100 with a profit on the lower and break even higher the second thing that happens is it'll go a little bit more than halfway up that's one of the reasons why there are 50 corrections people buy at the top they buy a pullback and when it gets fifty percent they can exit break even on the trade they lose five dollars on the buy at 100 they make five dollars on the buy at 90 and they get out at on 95. that's one of the reasons why 50 corrections are so common the people who bought poorly and the people who bought well if they scale in you know that's their midpoint and they can get out without a loss so 80 of the time if you buy a strong trend and you buy more lower you're going to be able to avoid a loss that means eighty percent of the time you're going to get a fifty percent bounce interesting and this is really key so you just explain a big fact about the market that recent retracement i think is really big i didn't know why that was happening so it's really good to explain it and that that's a good thing yeah i think nobody thinks about it but you know i i i realized that decades ago because i was trading and that that's what i was doing yeah that's why 50 corrections are happening because people are doing what i'm doing how many times you tend to scale into a trade you have like a limit of like let's say two three times or can you scale it as much as you can or how do you decide how much it's scaling but scaling into a trade my basic rule is if i buy at 100 and i'm thinking that i'm willing to scale in [Music] i'm typically looking to double the size of my position so um so if i'm looking at it and it falls to 90 and i buy again i'm typically going to be doubling my position if i'm buying of a bull bar and the bull trend is resuming on the other hand let's say we have five bull bars in a row and i buy at the high of the bar and then it goes below a bull bar i might buy more at the bottom of that bull bar okay so let's let's let's use the e-mini as an example the market's going up and it's a buy the closed type of rally you've got four or five six consecutive bull bars closing near their highs if i buy at the market i'm going to be willing to scale in because i expect the market is either going to go higher or enter a trading range i might buy more with a limit order at the low of the bull bar thinking that the first reversal down will be brief but sometimes it won't be brief sometimes it'll just start going down down down down and remember once i put on my buy at the top so if i buy the high of the bar and then i buy more when the next bar goes below that bar so now i have two contracts right so that's my market order limit order entry and if it starts to sell off i'm looking for a stop order entry i'm looking for the market to eventually form another bull bar closing near its high it might be 5 or 10 bars later it might be a lot lower but for that stop order entry i want to double my position so if i bought two at the high and now i'm looking for my stop order entry on the pullback hoping for the old friend to resume i'm going to buy two more so i have four contracts and i know where my stock will be it'll be below the most recent major lower higher low and so i know how much risk i have and when i put on that original position at 100 i'm aware that i might buy more below the bar and then i might have to double my position to get four e-mini contracts and then i know where the stock would have to be so i kind of do the math in my head i don't want to risk more on any trade including a scale in trade than i would on any other trade so you have to be trading really small and you know as a general rule most traders should not risk any more than one or two percent of their account on any one trade so if i go if i buy one at 100 and i'm thinking i might have to buy a total of four and my stop has to be at 80 i have to do the math so that that does not add up to more than one or two percent of my entire trading account value at this point in my life i have a whole bunch of accounts with a whole bunch of brokers and [Music] yeah that's that's because you know once you know once you're you've been doing a long time you know you don't want you don't want to get messed up by some broker and i remember years ago i don't know maybe 30 years ago i had several accounts and one of the brokers said al you can't open an ira account unless you put the money uh with a trustee you can't directly own an ira account you know we can't have the money we have to have a trustee hold the money and i don't remember which broker it was that said this i think that was kind of the rule back then about 30 years ago and so i had the account at some point later six months a year later i got a message saying that the money was gone so here the broker told me i had to have the money in with this trust company and they recommended the trust company and the guy who ran the trust company ran off with everybody's money and they never found the guy again so i don't know it's like a hundred million dollars total of all the accounts that he stole so um that's another example that of when you think you're in a really secure situation your broker's telling you you have to put your money in this trust company so that you don't have to worry about us stealing your money they don't tell you that the trust company might steal your money and you know so stuff happens and you know shearson leaving brokers they went bankrupt and there are limits on how much the government will cover on any one account so i try to keep my accounts below the limits and i and i want many different accounts so that if any one account um [Music] if one any one company goes bankrupt i want to have you know i don't want to lose everything i don't want to lose too too much no i lost my thought where were we taking me back to where we were it's also a really good point in the fact that you should have multiple brokers account for sure sometimes the platform i might bug you you might have trouble with it or you like the capital thing also so multiple accounts definitely a way to go for sure i want to say one thing about that um risk i said traders should never risk more than one to two percent of their account and if you're starting out let's say you have a five thousand dollar account sometimes it's hard sometimes you might have to risk three percent but rarely you should do that you should only risk one or two percent and now that there are micro emitting contracts in the united states which is one-tenth the value of any mini you can trade that also with forex markets you can just trade you know 5 000 units 10 000 units instead of 100 000 units or a million units so you can trade very small and yeah i sometimes hear people tell me al if i trade one micro e-mini contract or 10 uh 10 000 forex units i'm never going to get rich and my answer to that is when you're starting out your goal is not to get rich your goal is to stop losing money and you want to be losing as little money as possible so the first objective is to stop losing money the second objective is to grow your account and that might take a year or two or three but at some point if you're doing the right thing you're you will be making money and you'll grow your account to the point that you can start to trade 100 000 forex units or you can you can start to trade a single full size e-mini contract and if you do that for a few years all of a sudden you can start you know trading doubling it or tripling it and at that point you can start thinking about making a lot of money as a trader so yeah everybody wants to get rich but it's their steps involved and when you start up you don't want to be losing much money and the best way to do it is to trade very small and then your first goal is to stop losing money your second goal is to become consistently profitable and then and grow your account and then you start thinking about making significant money i know the last time we in interview we discussed the topic of our goals and and high frequency trading and things and whether that would change price section or not in the future one of curious now is about ai it's artificial intelligence do you think that will affect how the market moves and transaction overall is it something that will just make the market the same as it now basically that that depends on again time frame you know artificial intelligence is intelligence you know you're intelligent i'm intelligent most traitors are intelligent we're all intelligent and if you put hundreds of thousands of intelligent people together even without ai you're going to get a manifestation of their behavior so what happens in the market is simply a representation of rational human behavior and artificial intelligence can come to rational decisions faster than you and i can it can place trades in and out faster than you and i can but it's still basically going to be rational human behavior it's not like there's an entirely different world of logic out there you know logic is logic you buy because you think it's going to go up you sell because you think it goes down and it's not like artificial intelligence is some um super force it's not it's just speed it just comes to the same conclusions that a group of traders would come to and it comes through it faster so i said if you look at a monthly chart the monthly charts today even though probably you know i don't know 70 80 90 of all trading is done automatically which means artificial intelligence the charts are the same they're indistinguishable from 100 years ago and therefore artificial intelligence is not trading not changing things on the higher time frames and it makes sense it really would not because the big advantage of artificial intelligence is speed and on a monthly chart you know who cares if um [Music] a computer can do things in a fraction of a second it's a monthly chart you know i have a week to make up my mind right but if you look at a tick chart where every you see every trade taking place every now and then you'll see in the e-mini you'll see the market jump you know three or four points in one or two seconds on a lot of volume like five or six thousand contracts and that's some computer or um two or three computers trading one or two thousand contracts and looking for a quick move a one or two point move on a profit and as an individual trader i can't compete with that also a lot of the trades that you see most of the trades that you see there's a lag between the time the trade took place and it appears on your computer and for example on a report fomc report you'll see the market makes a very big move very quick move but before the market even moves one tick there there are a whole bunch of computers in new york right next to the exchanges that have already bought and sold two or three times before you see the market move at all and there's no way you you know you can't compete with that even if even if you got the data as soon as they got the data you still couldn't make the transactions as fast they are trading in terms of you know milliseconds nanoseconds and they pay a lot of money to be right next to where the internet is in new york city so there are certain buildings that are right next to that uh internet where the internet pops up in new york city and those buildings cost more to rent than the building a block or two away because the people who are in those buildings their computers get to get the information a nanosecond or you know a few milliseconds faster than the computer's a block or two away so they can be in and out before the guy two blocks away can be in you know and they have to pay more rent to uh you know to get those extra uh fractions of a second so artificial intelligence it's important if you're trading at those time frames but we're not you know on a five minute chart i have seconds you know you know several seconds usually to make up my mind sometimes many minutes to make up my mind and artificial intelligence um you know speed is their advantage and you know there's no great advantage on a five-minute chart so as far as you and i are concerned um it doesn't affect us wouldn't the fact that you take emotions out of it that hey i will take kind of different trades that it wouldn't take the same trades as human would do because humans have into account emotions they act based on impulse and how they react to things right that's true so the computers are very good at being objective sometimes you'll look at a chart and you'll say huh if i'm willing to risk a whole bunch of money and go for a very small reward um i could i could win a very high probability of the time or the opposite if i'm willing to risk very little money and go for a very big reward i'll lose most of the time but sometimes i'll make a lot of money and both of those things are emotional and computers can do those and you and i cannot so let's say the market is falling right down to a really obvious prior higher low a computer might buy one tick above that high or low and exit one tick below risking a total of two ticks and hold on hoping to make 100 ticks or a thousand ticks so what are the chances of you risking two ticks and making 100 ticks is really small right but if the math makes sense the computers will take that trade you and i would never take that trade but a computer might take that trade so computers can take trades that have either very bad probability or very bad risk reward you know at the extremes that you and i would never take and they can handle it objectively but you and i if we took a really low probability trade we would need tremendous reward to offset on the low probability or if we were to take a trade with tremendous risk reward very little risk we would need incredibly high probability to offset the bad risk reward so at those extremes the computers can do well and not deal with the emotion also a lot of times you know the trade will have to take a lot of time and that causes a lot of pain to an individual trader so at the extremes of probability or risk reward the computers can do things that we cannot do but everything else in the middle you know we can do fine and i think a really good discretionary trader is going to do better than artificial intelligence and why is that because a really good experienced trader or someone who's really good at reading charts can analyze far more data than a computer program a computer program is only going to look at certain number of variables you know they can't program in you know 300 variables right it's just it's it's just not going to happen and every variable there are sub-variables whereas a really good discretionary trader can process things they can select the important variables pretty quickly and weigh them out and i artificial intelligence is nowhere near able to do that also if you think about it let's say some artificial intelligence algorithm could analyze all the variables that i can as an individual trader and weigh them properly and come up with instantaneous decision making well if one company can do it can another company do it of course eventually all the companies could do it right so if all the companies are going to be doing the same thing who's doing the opposite if you want to buy somebody's got to sell right and if all the companies are buying and there's nobody to sell they can't they can't buy so you know geese can't lay golden eggs um you know eventually if everybody's doing it it's not going to work anyway i i do think there are limits to ai and at least for the foreseeable future i think a really good discretionary trader is going to trade better than the very best on ai algorithms definitely fascinating to see how this will unfold and happen i'm really good to see that for sure yeah what would you advise for people who want to be able to get familiar with these patterns in the market either like cross-section patterns or patterns that repeat themselves in the market how can people get more familiar with them and kind of learn to execute them better well you know if you're a professional soccer player you know you play a game a match every two or three weeks what are you doing in the meantime you're practicing if you're a concert pianist you might perform you know you know every week or two or you may perform every night for a week but then not for two or three weeks you're practicing and as a trader every day and for all my life i look at the charts and i go through the charts at the end of every day and i try and i go through all every bar for example in the e-mini on the five-minute chart there are 81 bars in the day and i look at every bar and i i post charts i mark them up every day you know where i think reasonable buys are reasonable cells are and i draw a line showing what the major patterns are and i do it every day and as long as i'm going to trade which i hope is forever i'm going to do that every day and that's practice because sometimes the market will create some kind of a pattern like consecutive outside bars it might do it for two or three days and then not again for two or three weeks and in two or three weeks from now you know i want i want to be able to quickly pull it out of my head when i see it happening you know it's not like the market does the same cluster of things every day you know there's a big basket you know i have a an encyclopedia that um i make available to people on my website it has about 400 patterns in [Music] of variations of patterns and i'm i'm very familiar with all of them and because i i look every day for every one of those patterns and everyone that i see i mark up on the chart and then i post it and i think it's really important to every day you know rehearse practice at the end of the day you know look at look at the chart look at every trade you took look at every trade you did not take think about ways that you should manage trades so it's practice practice practice and i think you know that's forever and i think that's the single best way to get good and the more you practice the better you'll be i think that's really really important i heard some traders in the past who like let's say in their 20s 30s they scope really intensively and then over the years they kind of have to slow down go on higher entire frames start to spring trade instead of scalping do you think it's too stressful it's hard to do for them when they get a bit older how have you been able to keep up with that and to still like scoff right now and still achieve pretty big things in the market well you know when i was your age i did trade um at the extreme you know i would trade one minute charts back then they didn't have 15 second charts and 30 second charts and 30 years ago if they did i probably would have traded 15 second shots and um you know there's one point i i regularly make in the chat room and that is when you're a trader there are two objectives there's one obvious one make money and we're all doing this to make money but there's one really important other objective and that's to have fun and you need both if you're going to be doing this for a career you can't be doing it for 20 30 40 years if you're not making money and you won't do it for 30 40 years if you're not having fun you know you have to really enjoy what you're doing and there are many ways to trade now i could trade a five-second chart and i bet i could do very well trading a five-second chart where every bar is five seconds but um i'd be miserable doing it and also i would not be able to do it all day long after 30 minutes or an hour or so i would be bored and it's just too relentless and too fast and you know it's just it's too stressful and that's true for one minute charts as well i sometimes if i'm not in the chat room on days when i'm not in a chat room um if i have a lot of energy and i'm looking for some variety i'll trade a two-minute chart and i'll scalp all day long but um you know it's it's exhaustive it's exhausting and once you're exhausted it's not fun and even when i'm scalping two-minute charts i don't do it all day long i'll do it for an hour or two just for fun you know just it's fun to say yeah yeah i can still do it all right but you know i don't want to do it all day long a five-minute chart i'm very comfortable doing i look at 60-minute charts and hourly in daily charts and weekly charts and monthly charts but you get as a day trader you have so few trades on the higher time frames that i don't pay a lot of attention to them you know so for me a five minute chart is that's my comfort zone and there are 81 bars during the day in the e-mini and on the five-minute chart i see probably at least 40 or 50 reasonable trades i don't take 40 or 50 trades i might take 10 some days 15 or 20 but i see 40 or 50 trades and you know i just take as many as i can and i don't worry about taking every trade a lot of times i'll miss great trends why because i who knows i'm tired i'm distracted i got stuff coming i got contractors in the house you know who knows i never worry about missing every trade all i worry about is the trade in front of me am i taking a reasonable trade do i have it structured well in my mind you know why am i buying what size am i buying where am i getting out what will make me get out if the market changes what what kinds of things will happen that will make me want to get out well i want to add to my position so i'm really all i'm concerned about is the trades that i take and managing them well and i'm never hard on myself if i miss a trade i'm not even hard on myself if i do something stupid i'm pretty quick to get out if i do something stupid but you know i i have to be my my biggest advocate there's no one else out there rooting for al brooks so you know i got to be my biggest supporter and you know i'll let somebody else you know find all the problems with al brooks you know emotionally you have to you got to be positive and you can't dwell on the mistakes and you just have to keep looking for the good and looking for ways to get better and you can't let mistakes get big you got to get out quickly if you take a trade because you had a reason to take the trade and now the reason doesn't appear to be valid you get out and then look for the next trade and if you lost money don't worry about it you'll make it back if you consistently trade well for the next few trades this is a lot of good wisdom this is really awesome it's really good there's kind of like these two thoughts of traders who say that you gotta of course study the market and learn about the market some people are gonna go and talk to other traders about it they're going to ask their friend who trade what they think of the market some people will study the markets on their own what do you think it works the best for you is it like talking to other traders how they do things or is it really sitting down and going back and seeing the market to yourself that makes you learn better it's really interesting you know the point you bring up it's actually a fairly big point put a lot of pundits on television and the pundit will confidently say oh the market's going up and you think oh you know professor so-and-so or the you know whatever the chief trader at such and such a bank says the market's going up i gotta buy right he doesn't say the time frame he doesn't say where his stop will be and he doesn't say what changes the market would have to do to make him get out and he also doesn't say if he's buying that means another institution is selling so you're seeing one half of the argument there's there's another institution say the opposite it has to be because if one guy is buying he has to buy from somebody that means somebody else has to sell and i think it's kind of the religion thing everybody's looking for a protector a god a trading god you know let me have i want to see a trading god on television take care of me protect me so i won't die as a traitor my accountant won't die my dream won't die and i think that's natural when traders start out that you know they're looking for someone to protect them a father figure a mother figure whatever whatever so they're much more inclined to um listen to what other people say and for me i don't care what anybody says i've been doing this for longer than anybody you see on television i have looked at more charts than probably uh just about anybody on the planet and certainly more than the comments that they put on television and i am very confident about how i read how i read the market and i'm you know i don't care if the guy in television says uh it's going up if i think it's going down i don't care right you know it's an eat what you kill business you know no one's going to take care of you that guy on television is not going to tell you how to manage your trade he's on television today and you know what are you going to do tomorrow when the market is not doing what he said you know you have to get good at things yourself you have to develop experience you have to begin to trust your decision making and that takes time and that's it takes practice and that goes back to what i was saying you know you have to learn how to read charts if you're a trader if you're an investor it's an entirely different thing you know if you're looking at a 10 or 20 or 30 year horizon you know just go ahead you know buy microsoft buy amazon but you know buy google you know you know buy you know lyft buy uber buy you know tesla buy any of it right and don't look at it just hold it for 10 or 20 years because you know you'll make a lot of money 10 or 20 years from now but if you're sitting in front of your computer all day you're a trader and if you're a trader you're not going to be trading based upon fundamentals you're going to be based trading based upon charts and you have to be able to read charts well this is good advice and definitely your passion is contagious regarding the market i think people are getting a lot from this interview for sure i got a lot of it myself things that i didn't even didn't even know about before so it's really cool what can people find you know connect with your wee shot after the podcast i don't have a course that's really good we have people who watch channel who took your course before they really loved the content there they love that it's really systematic and things what can they find this out yeah well i you think they can just do a search of al brooks or al brooks trading and my website is brookstrainingcourse.com so brooks trading course one word dot com awesome let's just put a link below anywhere in the show notes for people to click on them if they want and that's really good i i really love your work i love what you do well it's really good to talk to you always and i definitely look forward to this again in the future

Channel: Etienne Crete - Desire To TRADE

Views: 92,701

Keywords: al brooks price action, al brooks price action trading, al brooks trading, best price action trading strategy, day trading, forex price action, forex trading, forex trading for beginners, how to trade forex, indicator trading, price action, price action forex, price action forex strategy, price action strategy, price action trading, price action trading forex, price action trading secrets, price action trading strategies, swing trading, trading, trading price action

Id: GwEtBdh9sEY

Length: 47min 23sec (2843 seconds)

Published: Sun Oct 31 2021