5 Steps to Finding Today's Trades

Summary

Al Brooks在视频中分享了他超过三十年的交易经验。他强调了每天交易结束后对图表进行标记和分析的重要性，以识别模式并为未来的交易做准备。Brooks介绍了他的五个日常步骤，包括寻找通道、楔形、双顶双底和三角形等模式，并强调了在所有市场和时间框架中应用相同方法的重要性。此外，他还讨论了如何通过练习和日常图表分析来发展交易技能，以及如何结构化和管理交易以实现盈利。

Takeaways

• 📊 交易员Al Brooks分享了他超过三十年的交易方法，强调了日常图表分析和交易模式识别的重要性。
• 🗓 Brooks每天结束时都会审视和标记他的图表，思考可能的进出点以及交易管理，以识别模式并为实时交易做好准备。
• 🔍 他提出了五个日常使用的步骤，并希望观众能够发现它们有用。
• 👨‍⚕️ Brooks曾是一名医生，拥有医学学位，并在交易领域有着丰富的经验和教育背景。
• 🌐 他通过博客、讲座和交易课程与全球的交易者分享他的知识和经验。
• 📈 他认为交易是一种基于理性人类行为的活动，因此所有市场和时间框架的交易图表都应该是相似的。
• 📝 在标记图表时，Brooks首先寻找通道、楔形、双顶、双底和三角形等模式，并用线条突出显示。
• 📊 他关注异常的K线，例如特别大或小的K线、内部K线、连续的内部或外部K线等。
• 🟢🔴 他使用红色和绿色框来表示理想的买入或卖出点位，并在图表上添加文本框来解释交易决策背后的原因。
• 🎓 他强调交易员应该像专业运动员或音乐家一样每天练习，通过回顾市场行为和图表模式来提高交易技能。
• 🛠️ Brooks使用PowerPoint来创建他的每日图表，并分享了如何使用不同的工具和对象来快速标记图表。

Q & A

Al Brooks在视频中提到他有超过三十年的什么经历？

Al Brooks在视频中提到他有超过三十年的交易经验，并且每天都会分析图表，标记可能的入场和出场点，以及如何管理交易。

Al Brooks是如何描述他的每日交易例行公事的？

Al Brooks描述他的每日交易例行公事包括在每天结束时查看图表，绘制线条，思考可能的交易入口和出口，以及如何管理交易。他还强调了发展交易例行公事的重要性。

Al Brooks曾经在哪些大学工作过，并且他发表了多少篇科学论文？

Al Brooks曾在芝加哥大学获得医学学位并在那儿完成眼科住院医师培训，之后在埃默里大学教授眼科手术，并在加州大学洛杉矶分校担任临床教职。他在1980年代发表了数十篇关于眼病的科学论文。

Al Brooks提到了哪些交易图表上的标记方式？

Al Brooks提到了在交易图表上标记线条、特殊条形图、红绿框以及文本框。他用线条来突出通道、楔形、双顶、双底和三角形等模式；用红绿框来表示理想的交易入口；用文本框来提供关于模式的额外信息。

Al Brooks如何定义和识别交易中的'Micro Double Bottom'模式？

Al Brooks将'Micro Double Bottom'定义为在2到4个条形图上发生的双底模式。如果在更小的时间框架图表上观察，它将是一个实际的双底模式。

Al Brooks提到了哪些交易模式，并解释了它们的交易策略？

Al Brooks提到了多种交易模式，包括通道、楔形、双顶、双底、三角形以及特殊条形图。他解释了如何识别这些模式，并根据这些模式来构建和管理系统交易。

Al Brooks如何使用PowerPoint来创建他的交易图表？

Al Brooks使用捕获程序捕获交易平台的图表，然后将其粘贴到PowerPoint幻灯片中。他在幻灯片上添加线条、入口框、有时是出口框，然后添加文本来解释他的行为原因。他还创建了一些小对象，以便快速标记图表。

Al Brooks为什么强调在交易中发展例行公事的重要性？

Al Brooks强调发展例行公事的重要性，因为这有助于交易者每天以相同的方式处理交易，从而提高识别模式、构建和管理交易的能力。

Al Brooks提到了哪些关于交易者练习和准备的观点？

Al Brooks提到交易者应该像专业足球运动员或音乐家一样每天练习。他们不应该只在市场开放时才出现并期望表现良好，而应该在市场关闭后花时间回顾当天的价格行为，寻找模式，并思考他们所做的事情以及他们本可以做的事情。

Al Brooks如何解释交易图表上的'Wedge'模式，并提供了哪些交易策略？

Al Brooks解释说，'Wedge'是一种至少有三点的通道模式。当一个'Wedge'上升时，他寻找向下的反转，因此只对顶线感兴趣。他强调寻找有超调的线，并避免使用有未射穿的线。他建议在可能的通道线上方买入，特别是在看涨的条形图关闭在其高点时，希望得到上升趋势。

Al Brooks提到了哪些可以用来提高交易技能的资源？

Al Brooks提到了他的网站提供了多种资源，包括他的交易课程、每日博客、以及他网站上的图表模式百科全书，这些都可以帮助交易者提高他们的交易技能。

Outlines

00:00

📊 交易图表分析与日常例程

Al Brooks介绍了他超过三十年的交易分析方法。他每天结束时都会审视自己的图表，标记可能的入场和出场点，以及交易管理策略。他强调了识别模式的重要性，这样在实时交易中能预测后续走势并成功管理交易。Al分享了他每天遵循的五个步骤，并希望这些对观众有所帮助。他还提到了自己的医学背景，作为交易员的经历，以及他在芝加哥商品交易所的教学和著作。Al认为，作为交易员，每天进行同样的例行公事非常重要，他通过在图表上画线和标记来创造自己的交易模式，并强调所有市场和时间框架的交易都基于相同的理性人类行为。

05:02

🎼 交易员的练习与日常

Al Brooks强调了交易员需要像专业运动员和音乐家一样每天练习的重要性。他建议交易员在市场关闭后回顾当天的价格走势，寻找模式，并思考自己的交易行为。Al提到，他使用相同的方法来分析所有市场和所有时间框架，因为所有图表都是理性人类行为的展现，具有普遍性。他通过识别图表中的通道、楔形、双顶、双底和三角形等模式来练习交易，并解释了如何通过这些模式来构建交易。Al还分享了他如何使用PowerPoint来创建带有线条和文本框的图表，这些图表每天都会发布在他的博客上供人免费查看。

10:06

📈 交易图表的标记与模式识别

Al Brooks详细说明了他如何标记交易图表，包括识别和绘制通道、楔形和其他模式。他解释了如何通过至少三个点来绘制通道，并强调了选择有超调（overshoot）的线的重要性。Al还讨论了楔形的不同类型，包括收缩和扩张楔形，并说明了如何识别和利用这些模式来构建交易。他强调了模式的不完美性，并指出完美的模式更可能被计算机识别和交易，从而更可靠。Al还分享了他如何通过标记图表来结束他的交易练习，并提供了一个典型的每日设置图表的例子。

15:13

📉 楔形与双顶/双底模式的交易策略

Al Brooks继续讨论了如何识别和交易楔形、双顶和双底模式。他指出，这些模式很少是完美的，而是需要灵活地识别。Al解释了如何使用这些模式来寻找反转信号，并强调了在交易中考虑上下文的重要性。他还提到了微双顶（Micro Double Top）和微楔形（Micro Wedge）的概念，并解释了如何将这些模式与其他图表模式结合使用来增加交易的信心。Al强调了在图表上标记和练习识别这些模式的重要性，以便在实时交易中快速做出决策。

20:17

🛠️ 特殊K线模式与交易入口

Al Brooks讨论了特殊K线模式，如大阳线、大阴线、内包线（inside bars）、外包线（outside bars）以及连续的内外包线组合，并解释了这些模式如何指示潜在的买入或卖出机会。他强调了在交易中考虑这些特殊K线的重要性，并说明了如何结合这些模式来提高交易的成功率。Al还分享了他如何使用颜色框来标记潜在的买入和卖出点，并解释了为什么他认为某些设置是特别好的交易机会。他鼓励交易员在每天结束时标记自己的图表，以练习识别模式并提高交易管理能力。

25:20

⏳ 日常交易练习与模式识别

Al Brooks总结了他的日常交易练习和模式识别的重要性。他提到了交易员在交易日中可能遇到的各种干扰，并强调了在交易图表上标记和练习识别模式的必要性。Al解释了他如何为潜在的买入和卖出设置绘制红色和绿色框，并如何使用文本框来解释交易决策的理由。他鼓励交易员通过每天的练习来发展识别模式的能力，并强调了拥有日常交易例行公事的重要性。Al Brooks以感谢观众观看视频并希望视频对观众有所帮助作为结尾。

Keywords

💡交易模式识别

交易模式识别是指在金融市场中识别价格行为的特定模式，以预测未来的市场趋势。在视频中，Al Brooks强调了通过识别如通道、双顶、双底和三角形等模式，来预测市场行为并据此构建交易策略的重要性。例如，他提到了'Wedge'（楔形）和'Double Bottom'（双底）模式，并解释了如何使用这些模式来识别可能的交易入口。

💡日常交易例程

日常交易例程是指交易者在每个交易日结束时所执行的一系列标准化活动，以提高交易技能和市场理解。Al Brooks分享了他30年来坚持的交易例程，包括在图表上绘制线条、思考可能的交易入口和出口，以及如何管理交易。这有助于交易者在实时交易中快速识别模式并做出决策。

💡理性人类行为

理性人类行为是指人们在交易中基于逻辑和理性分析做出的决策。Al Brooks在视频中提到，所有市场和时间框架的图表都是理性人类行为的体现，因此交易者应该以相同的方式分析所有市场。例如，他指出无论是在非洲交易水果还是在欧洲交易房地产，图表所展示的模式都是相同的。

💡交易管理

交易管理涉及到在交易过程中对风险和收益的控制，以及对交易策略的调整。Al Brooks强调了在交易中不仅要识别模式，还要学会如何管理交易，包括设置利润目标和风险水平。例如，他提到了'至少两倍风险的收益目标'的概念，说明了如何根据市场情况调整交易策略。

💡图表标记

图表标记是指在图表上使用线条、框和文本框等工具来突出显示潜在的交易机会和模式。Al Brooks在视频中展示了他如何使用图表标记来识别和计划交易，例如通过绘制通道线和识别特殊条形图（如大阳线或小阴线）来预测市场动向。

💡交易练习

交易练习是指交易者在市场关闭后通过回顾和分析价格行为来提高自己的交易技能。Al Brooks提倡交易者应该像专业运动员一样每天进行练习，通过分析图表和寻找模式来提高对市场的理解。例如，他建议交易者在每日交易结束后标记自己的图表，以加深对市场行为的认识。

💡交易一致性

交易一致性是指交易者在不同市场和时间框架中应用相同的交易策略和分析方法。Al Brooks在视频中强调了使用一致的交易方法的重要性，无论是在股票市场、外汇市场还是期货市场，都应该采用相同的分析逻辑。这有助于交易者在不同市场环境中快速适应并做出决策。

💡风险回报比

风险回报比是衡量交易潜在风险与预期收益之间关系的指标。Al Brooks在视频中提到了设置至少两倍风险的收益目标，以确保交易的盈利潜力大于潜在的损失。例如，如果交易者在某个价格水平设置止损，并期望获得至少两倍于止损幅度的收益，这就体现了良好的风险回报比。

💡特殊条形图

特殊条形图是指在图表上具有显著特征的条形图，如异常大或异常小的条形图，或者是内部条形图和外部条形图。Al Brooks在视频中解释了如何识别这些特殊条形图，并利用它们来预测市场动向。例如，他提到了'inside bar'（内部条形图）和'outside bar'（外部条形图）的概念，并展示了如何使用这些模式来识别交易机会。

💡交易结构

交易结构是指交易者在进入交易前对交易的各个方面进行规划和组织，包括确定交易的大小、利润目标、风险水平和退出策略。Al Brooks在视频中讨论了如何根据市场模式和个人交易计划来构建交易结构，以提高交易的成功率。例如，他提到了在识别到'Wedge Bottom'（楔形底部）和'Micro Double Bottom'（微型双底）模式时，如何设置买入订单。

Highlights

Al Brooks分享了超过三十年的交易经验。

他强调了每日图表分析和标记的重要性，以识别交易模式。

Al Brooks介绍了他的五个日常交易步骤。

他曾是一名眼科医生，后成为专业的交易员和讲师。

Al Brooks在芝加哥商品交易所（CME）教授高级交易课程。

他创立了Brooks Trading Course，并在网站上提供。

交易员应该每天练习，就像专业运动员一样。

Al Brooks认为交易是一种理性的人类行为，所有市场和时间框架都适用。

他解释了如何使用线条、通道、Wedges等来标记图表。

Al Brooks讨论了特殊条形图的重要性，如大条形图和内部条形图。

他使用红色和绿色框来表示理想的买入和卖出点。

Al Brooks依靠多年的经验，创建了数百种交易模式。

他强调了在交易中设置利润目标和风险管理的重要性。

Al Brooks展示了如何使用PowerPoint创建和标记图表。

他提供了Daily Setups图表示例，展示了他的标记方法。

Al Brooks讨论了如何在不同的市场和时间框架中识别相同的模式。

他解释了如何通过标记图表来发展日常交易例程。

Al Brooks鼓励交易员通过标记图表来练习和提高交易技能。

视频最后，Al Brooks再次强调了日常练习和例程对交易成功的重要性。

Transcripts

Hi, I’m Al Brooks.

Thank you for watching this video.

I want to share with you today an approach

that I’ve had for more than three decades.

At the end of every day, I look at my chart and I mark it up.

I draw lines on it.

I think about possible entries, possible exits, how to manage trades.

What I’m trying to do is recognize patterns so that when I see them tomorrow

or next week or next month, real time, I can anticipate what will follow

and I can structure a trade and then manage my trade successfully.

I have the same routine, and I’ve been doing it for 30 years,

and I want to go through it.

I’ll give you the 5 steps that I use every day,

and I hope that you find it useful.

Thank you.

As many of you know, I’m a physician.

I got my medical degree

and I did my ophthalmology residency at the University of Chicago.

I taught eye surgery at Emory University,

and I was on the clinical faculty at UCLA.

I published dozens of scientific papers on eye diseases way back in the 1980s.

As a trader, I’ve been day trading in five decades since the 1980s.

I’ve lectured on four continents.

I write a daily blog, which reaches about a million people a month worldwide.

And I am a Master Trading Class instructor

at the Chicago Mercantile Exchange (the CME).

I’m also an author, and I’ve received some nice compliments from people

who run very big platforms in the trading world.

I created the Brooks Trading Course, which is available at brookstradingcourse.com,

and I also speak daily in a trading room at brookspriceaction.com.

I think it’s really important as a trader

to do the same thing every day, to develop a routine.

I want to talk about the routine that I use.

You may have seen many charts from me, either in books or on websites

or on my daily blog, or on my daily blog on other websites.

You’ll see lines and boxes and textboxes.

I want to talk today about how I create all of that.

It’s important to approach every market and every timeframe the same.

When you think about trading, trading is exactly that: it’s trading.

You’re buying and somebody else is selling; you’re selling, somebody else is buying.

It’s rational human behavior.

Every chart is just a portrayal of rational human behavior,

and it doesn’t matter what market it is.

Doesn’t matter if you’re trading fruit in Africa.

It doesn’t matter if you’re trading property in Europe.

Buying an apartment, selling an apartment.

It doesn’t matter if you’re doing stocks or commodities.

It’s all the same.

It doesn’t matter on the timeframe, either.

Therefore, when I look at a chart, a map of interaction between humans,

it doesn’t matter what the market is.

It doesn’t matter what the timeframe is.

It’s all going to be the same.

It’s based upon the same rational human behavior.

When I look at a chart and I’m going to mark it up, put lines on it,

and try to look for patterns, I typically begin with the lines.

I look for channels, Wedges.

I look for Double Tops, Double Bottoms, and Triangles,

and I draw lines to highlight those things.

Next I look at unusual bars, special bars.

Very big bars.

A bar that is small, its low above the low of the prior bar,

its high below the high of the prior bar.

An inside bar.

Consecutive inside bars.

An outside bar.

A big bar followed by a bigger big bar.

And then a combination of an inside-outside-inside bar.

Things like that.

I’ll talk about those as we go on.

Then finally, after I’ve highlighted the lines and the special bars,

I next draw red and green boxes for where I would enter

or where I think an ideal entry is.

Then finally, I add textboxes.

I have hundreds of patterns that I rely on when I’m trading.

I’ve developed them over the years.

I’ve been watching pretty much every tick

in the stock market now for well over 30 years.

When you do that for such a long time, you tend to notice things.

I have names for things.

I classify things.

I have an Encyclopedia of Chart Patterns available to traders on my website.

I have things categorized.

I look for those patterns to repeat every day,

and I know what the market will tend to do once it starts to develop a pattern,

and that helps me structure a trade.

When I’m marking up a chart at the end of the day for other people to study,

I put the names of the patterns and some information about the pattern

to help traders understand what they should do

the next time they come across that pattern.

Traders must practice.

If you’re a professional football player, you play on Sunday.

You’re not staying home watching TV the rest of the week.

You’re practicing every day.

If you’re a professional musician and play for a major symphony orchestra,

you’re going to practice as well.

You may perform a few times a month, but you’re going to be practicing every day.

Traders should not just show up when the market opens and expect to do well.

They should practice after the market closes.

Spend some time reviewing the day’s price action on the charts

that you trade and look for patterns.

Think about what you did and what you could have done.

I said I use the same approach for all markets and all timeframes, and that’s true.

What’s the key to practicing as a trader?

It’s simply looking at charts and trying to find patterns.

It’s obvious.

The more you understand about what the market is doing

and the better able you are to anticipate what it’s about to do,

the more money you stand to make.

The quicker you recognize a pattern,

the faster you’ll be able to structure a trade.

Here we’ve got a bear channel

and we have a line drawn in across the top, but we’re trending down.

We have a channel.

We’re breaking below the channel and we are reversing up.

We have three legs in a channel – one, two, and three.

It’s a Wedge.

Also, on this bar, we went down, we went up.

On this bar, we went down and we went up.

That’s a Micro Double Bottom.

I call it a Micro Double Bottom because it takes place over 2, 3, or 4 bars.

If you were looking at a much smaller timeframe chart,

it would be an actual Double Bottom.

The lows could be 10 or 20 bars apart depending

on what timeframe that you looked at.

So it’s important to recognize this.

You have a Wedge Bottom and a Micro Double Bottom,

and now you have a bull bar closing on its high,

and it’s a second consecutive bull bar.

The odds are we’re going higher.

It’s reasonable to buy on a stop 1 tick above the high of that bar.

So you’d get filled on this bar.

At a minimum, you should always be trying to go for a profit

that is at least twice your risk.

If you buy on a stop above this bar and you put your stop just below it,

this is two times your risk.

So your risk is from your entry price to your stop,

and that’s twice that distance.

Therefore, your reward is twice your risk.

If you do that, you’ll have structured a good trade.

And if you do that consistently,

you have a very good chance of being a consistently profitable trader.

When I talk about structuring a trade,

I’m talking about thinking about your position size.

Where’s your profit target?

How much risk?

How likely is it that you’re going to make your profit?

You also have to be aware of what the market would do that

would make you decide your plan is no longer valid.

You should get out early sometimes.

I create my charts in PowerPoint.

What I do is I use a capture program,

like Snagit or the Windows snipping program.

On my trading platform, I just capture the chart,

and then I paste it into a slide on PowerPoint.

Then I add the lines and the entry boxes, sometimes the exit boxes.

Then I add text with the reason for my behavior.

Then look on the right over here.

I have a bunch of objects,

and I have that on all the slides in my PowerPoint.

What I did was I created a bunch of little objects,

and they allow me to quickly mark up a chart.

So I have a small line.

I can just hold the Control key, grab that line, move it over here,

and then I can change its orientation, its starting point, its end point.

A textbox, if I want to create a textbox, I just grab this,

hold the Control key, drag it down here, and then just change the text.

If I want to change the color of the text,

I just click on this and then over here,

the format painter, and then drag it through the text.

That’s how I create these charts.

I create charts every day.

You’ll see them on my blog.

I call them my Daily Setups.

In my blog, it’s free.

Anybody can look at them.

This is a sample of a Daily Setup chart that is on my blog for anyone to see.

It’s for the Emini, a 5-minute chart.

I have price over here, I have time over here.

I have lines, I have boxes, I have big things highlighted.

And then for people who subscribe to my charts – I have a service

that they can subscribe to – I have much more information

about what’s going on on the chart.

Some people prefer the extra detail.

This is a 4-hour chart of the euro versus the dollar, Forex market.

So every bar is 4 hours.

Here’s price here, here’s time here.

I said before that traders trade based upon logic.

It results in reliable patterns.

People use the same logic in everything they do,

and the result is that the patterns are present on all markets and all timeframes.

And therefore, traders look at all charts and all markets the same.

I don’t pay attention to price.

I don’t pay attention to time.

I just look at the charts.

If you watch TV and you see professional traders talk

about a chart – they’ll sometimes talk about gold, crude oil, stocks,

stock index futures – you never hear them say,

“Oh, this is Apple, and therefore I’m going to trade it differently

from how I trade gold or stock index futures.”

They don’t say that, because they understand

that the chart is just a representation of rational human behavior,

and it’s going to be the same for all markets and all timeframes.

If I were to mark up this 4-hour chart of the euro versus the dollar,

I would do it something like this.

If you did not know it was a Forex chart,

you would not be able to tell that it was a Forex chart.

It could also be a stock index futures chart, an Emini chart.

It could be gold.

Because all charts look the same, and patterns are the same.

Here’s a gold futures chart, and it’s a monthly chart.

If I remove the price and time and mark up the chart,

it looks the same as any other market and any other timeframe.

Again, this is the monthly chart, but it has the same patterns

that you see on any other chart and any other timeframe.

When I’m marking up any chart, I’m always beginning with lines.

As I said, I think it’s really important to develop routines

to do the same things every time, and I want to talk to you about my daily routine.

How do I go from this slide to the next slide?

I’m going to show you step by step.

I start with this slide, a slide with nothing on it

other than a 20-bar Exponential Moving Average – again,

this is a 5-minute Emini chart.

81 bars to the day session.

At the end of the day, when I’m marking up the chart,

this is what I have, and that’s the end of my practice.

I have everything drawn in.

I have a lot of textboxes explaining why I would do certain things.

This is an example of a typical Daily Setup chart

that is available for traders on my website.

All right, let’s talk about how I got there.

First of all, I have a chart with nothing on it.

Then I look for channels, Wedges.

A Wedge is a channel, and it has three or more points.

I can draw a channel up like this.

There’s Point 1, Point 2, and Point 3.

Sometimes Wedges are contracting; sometimes they’re not.

This one’s fairly parallel, maybe a little bit contracting the way I have it drawn.

When a Wedge is rising, I’m looking for a reversal down,

so I’m really only interested in the top line.

I don’t want too many things on my chart,

so I don’t even draw that bottom line.

No pattern is perfect.

Most patterns are not perfect,

and therefore I would not expect the three points to be exactly at the line.

One of the two points here or here is going to be above the line.

The more perfect a pattern is, the more computers will find it,

the more computers will trade it, and the more reliable the pattern will be.

The higher the probability it will unfold the way you want it to unfold.

I always start with Point 1, and then I could draw a line using Point 2,

and the line would be there.

Or I could use Point 3 to draw the line.

Point 1 and Point 3.

So there are two ways to draw the line.

All lines start with Point 1,

and I can either create a line using Point 2 or Point 3.

It’s rare to have a perfect Wedge where the three points are on the line.

Almost all Wedges have either one of the two points above the line,

or one of the two points below the line.

The blue line, Point 3 is below, but the pink line,

Point 2 is above the pink line.

Point 2 overshot the pink line.

Point 3 undershot the blue line.

My routine is to always choose the line where there’s an overshoot.

I like overshoots.

Since the blue line has an undershoot, I’m not going to use the blue line.

The pink line, here, Point 2, is an overshoot,

and I want an overshoot either at Point 2 or Point 3.

So I’m going to use the pink line and get rid of the blue line.

I’m looking to sell a reversal down from the top of a channel.

If we start to reverse somewhere around a possible line using 1 or 2,

I’m going to look to sell a reversal down,

especially below a bear bar closing on its low, expecting lower prices.

After I draw the first line, I then look for other channels,

other Wedges, and there are many varieties.

I have an Encyclopedia of Chart Patterns that talks about all the different ways

that patterns can unfold and appear.

For example, we have another channel here.

This is a bear channel, and we’ve got three or more points – one, two, and three.

You can draw the line using Point 1 and Point 3.

You can draw the line using Point 1 and Point 2.

If I do that, Point 3 overshot the line.

And remember, I want lines that overshoot.

Here, Point 2 overshot.

Here, Point 3.

Point 2 here undershot the line.

I don’t want lines that undershoot; I want lines that overshoot.

So, I’ll get rid of the blue line.

This is an example of a channel where the line

from Point 1 to Point 2 created an overshoot at Point 3.

Here’s an example of a line using Point 1 and 3 as an overshoot at Point 2,

and therefore I’m going to choose 1 and 3 to draw the line here,

but I’m going to choose 1 and 2 to draw the line there.

There were many other Wedges on this chart as well,

and I just keep adding lines for every conceivable Wedge.

Some of them are hard to see.

For example, there are three pushes down here – one, two, three.

I have a little pink line there.

It’s hard to see.

And here, there are three points down – one, two, and three.

When the pattern is small, it’s a Micro Wedge.

And then here, I could also use one, two, three or four.

Remember, a Wedge is at least three lines.

So we have a channel with at least three points in it,

so that blue line is another way to draw a Wedge, and I’m looking for a reversal.

We’ve got a reversal.

I want to buy above a bull bar that closes near its high,

hoping that we get a trend up.

Sometimes patterns fail.

We got a push up here, big bar, and then a small bar.

Then a big bar, a second push up, and then a bear bar, and then a third push up.

So we have a Wedge and a very Tight Channel.

I would call that a Parabolic Wedge.

But we did not get a reversal down below the bear bar.

Instead we get an upside breakout.

So I would look to buy above the high of this bar,

betting that the Wedge Top has failed.

Next I’m going to look for Double Tops and Double Bottoms.

Double Tops and Double Bottoms are rarely perfect.

If you look for a perfect pattern, you’re not going to find many setups

and you’re not going to trade very much.

It’s better to be flexible.

The more perfect something is, the more likely it will lead to a profitable trade.

Here we’re rallying.

We broke above this high.

But I always look to the left to see the context.

If there’s a possible Double Top, we might get a reversal down.

Here, we rallied, and it looks like we’re turning down.

I’d be inclined to sell below this bar depending on reasons.

I’ll look to the left to see if there’s a Double Top.

This high might simply be a test of these highs,

so it might be a Double Top with these highs.

Remember, I also had a Wedge here – one, two, three.

So it’s a Wedge and possibly a Double Top with that high,

maybe a Lower High Double Top with that high.

So a Wedge and a Double Top is an added reason to look for a reversal down,

selling below a bear bar closing near its low.

There’s also a Micro Double Top here.

This bar went up and down, and this bar went up, and here we’re going down.

So we have a Micro Double Top, a Double Top, and a Wedge.

So there are several things going on here

that would make me more inclined to take that short.

Here’s another Double Top.

The market tried to reverse up, but it failed in the neighborhood of that high.

So it’s a Double Top bear flag.

I also want to look for Double Bottoms.

The second low of a Double Bottom can be below the low of the first low.

Here we tried to get a Double Bottom.

Did not go very far.

And here we have a Higher Low Double Bottom.

Here’s a Lower Low Double Bottom.

This low is below that low, and here, this low is above that low.

So it’s a Higher Low Double Bottom.

Again, a Micro Double Bottom.

We went down here, we went up, we went down, and now we’re trying to go up again.

You could buy above this bar or above a bar buying on its high.

Here we have a very big Double Bottom

and it’s a Higher Low above the bottom of the bear trend.

So it’s a Double Bottom Higher Low, and that has the possibility

of being a Major Trend Reversal into a bull trend.

There are often Triangles on charts, and again, they’re rarely perfect.

We have rising lows here and we’re basically sideways here.

We tried to break to the upside and that reversed down.

So that’s a contracting Triangle.

Sometimes Triangles are expanding.

Here we have this high above that high, and this high is above that high.

So we’re going up, and then here we’re going down.

So an Expanding Triangle, five points – one, two, three, four, five

– and we keep getting false breakouts.

A new low, new high, new low, new high.

Again, a reversal pattern.

I’ll sell below that bar.

I also look for special bars, big bars or small bars, inside bars or outside bars.

Here we have 3 consecutive bull bars.

Not much overlap, and this bar was closing on its high,

this bar was closing on its high.

So this is sustained, strong buying, and the context is good.

Remember, it’s possibly a Double Bottom with this low,

and the Double Bottom is above that low, so it’s possibly

a Double Bottom Higher Low Major Trend Reversal.

It’s a surprisingly strong rally.

It’s a bull surprise rally, and bull surprises tend to have higher prices.

What took place here?

This bar, its high is at the high of that bar; its low is below.

So that’s a variation of an outside bar.

Look at the bar before it, this bar.

Its high is above that bar; its low is below that bar,

and therefore it’s an outside bar, and this is a bigger outside bar.

So outside-outside, consecutive outside bars.

It’s a BreakOut Mode pattern.

Traders will buy if the market goes above, and they’ll sell if it goes below.

So I’m looking for an OO,

and I would sell below the low of that bar and below that bar.

A bear bar closing near its low, I’d sell below that bar as well.

Here is the chart with all those lines drawn in

and with the special boxes drawn in.

Next, I’m looking for entries.

If I’m looking to buy, I want to buy above a bull bar,

preferably one that is closing near its high.

If I’m looking to sell, I want to sell below a bear bar,

preferably one that’s closing near its low.

Theoretically we have consecutive bull bars here.

It’s reasonable to take that buy.

However, it turned out to be a failure, and I would get out

either below this outside bar or certainly below that,

because at this point there’s a sell.

Sometimes I’ll put an outline around a green box or a red box,

and when I do that, I’m trying to highlight setups that are particularly good.

They’re ones that a person starting out should try to take.

Nobody’s going to take all of these setups.

What you’re trying to do is take as many as you possibly can.

Stuff happens.

You could be trading on the markets, you have to go to the bathroom,

you’ve got to eat lunch, you could get a phone call.

All kinds of things happen.

It’s hard to watch every tick all day long.

If this was a daily chart, it would be easier.

You could simply look at the chart at the end of the day

and place your orders for the open of the next day.

But if you’re day trading and if this is a 5-minute chart – in this case,

it is a 5-minute chart – it’s very easy to miss a lot of setups.

After I draw in the buy entries, I then draw in the red boxes, or sell setups.

So this bar, reasonable to sell below.

And here we have an OO pattern below the Moving Average.

It’s an especially good sell, so I would sell below that

or I’d sell the first pullback.

And then here we have a whole bunch of things.

We have an Expanding Triangle, a Micro Double Top, possibly a Double Top here,

and we have a Wedge rally to a Double Top, and it’s nested.

We have a smaller Wedge here and a bigger Wedge here.

So this is a very good sell.

We have a second consecutive bear bar closing on its low.

That’s also a higher probability sell, so I put a blue outline around the red box.

Then I add textboxes so people can understand

some of the rationale for why I’m taking the trades.

This is something you should consider doing every day at the end of the day,

marking up your charts.

You don’t have to write the textboxes in,

but I would certainly draw lines and highlight special bars.

If you do this for several months, you’ll begin to recognize patterns

unfold during the day, and that will allow you to anticipate trades,

and then when the trade triggers, you’ll be able to take it

and you’ll be able to manage it well.

That is what I mean by practicing trading.

Again, it’s important as a trader to do the same thing every day, have routines.

One routine is to mark up a chart at the end of every day to practice

so that you’ll develop a lot of experience in your ability to recognize patterns.

Second, use the same approach for every market and every timeframe.

When I’m marking up a chart, I begin with lines.

I usually begin looking for channels, Wedges,

and then Double Tops, Double Bottoms, and Triangles.

After that I’m looking for unusual bars – for example,

big bars or a series of big bars, Surprise Bars.

I also look for small patterns like consecutive inside bars

or consecutive outside bars, or an outside bar followed by an inside bar.

That is an ioi pattern.

Finally, on my daily charts that I mark up for my website,

I add boxes for buy entries and for sell entries, and then finally,

I add textboxes that explain why I think something is a good buy or a good sell.

Again, this is Al Brooks, and I want to thank you very much for watching this video.

I hope that you found it helpful.

I think it’s very important to have a routine every day

that you do at the end of trading.

It’s good to practice recognizing patterns and thinking

about how you’ll manage them real-time,

because you’re going to keep encountering the same patterns.

The more patterns that you know, the faster you are at recognizing them,

the more chance you’ll have at structuring and managing profitable trades.

Thank you very much.