AL Brooks , considered as one of the price action day trading legends . His contribution to price action trading studies is enormous . He has authored many books on price action trading . In this post , we share some of his timeless quotes. Readers may follow him and his works on brookstradingcourse.com
- If you cannot figure out what it is telling you, do not trade. Wait for clarity. It will always come. But once it is there, you must place the trade and assume the risk and follow your plan.
- When a market is trending, most attempts to reverse fail. When it is in a trading range, most attempts to break out fail.
- Never question it. Just keep things simple and follow your simple rules. It is extremely difficult to consistently do something simple, but in my opinion, it is the best way to trade.
- In trading, close is close enough and worrying about perfection can only cost you money
- Traders must be honest with themselves. This is not a dream. The money is very real, and when you lose it, it is gone forever. If you take a trade with a favorable trader's equation, you must manage it correctly to make the math work for you instead of against you
- The market changes with each tick, and if a successful strategy suddenly becomes a losing strategy, get out and don't rely on hope. Once your premise is no longer workable, just exit and look for another trade. You have to trade the market that you now have and not the one that you had a few minutes ago and not the one you hope will develop over the next few minutes. Hope has no part in trading. You are trading against computers that have no emotion and are coldly objective, and that is how you have to be as well
- If you are in a losing trade, ask yourself if you would put the trade on now if you were flat. If the answer is no, then get out. If your premise is no longer valid, then exit, even with a loss
- If traders hold on to their original premise, even when the market is not doing what they expected, they will have a difficult time making money trading. Their job is to follow the market, and if it is not going where they believe it should, they should exit and look for another trade
- Experienced traders look to exit on strength, and then look to reenter on a pullback
- The chances of making money are far greater if a trader can patiently wait for a pullback and enter in the direction of the trend, rather than hoping that a counter trend trade will be successful
- One way to decide if you should exit your trade is to imagine that you are not holding a position. Then look at the market and decide if you think that it would be wise to enter at the market and use that protective stop. If you would not, then the trader's equation for your current position is weak or negative and you should exit
- The market changes with every tick, and if your original target is now unrealistic, look for a new target and get out there, even if that means that you will be taking a loss
- Hope is never a sound basis for holding a position, because the market is based on mathematics and not luck, fairness, emotion, karma, or religion
- Whenever you scale in against a trend, as a general rule you should exit if the market makes a second move against you
- One of the most important concepts in trading is that most breakouts fail.Because of this, entering on every breakout in the direction of the breakout is a losing strategy.
- Whenever there is a strong outside up bar that breaks the market into a new trend, its low is the start of the trend and all bar counting gets reset
- Beginners often only see the most recent few bars and tend to ignore the much more impressive bars just a little to the left
- Once there is a trend and then a flag that has a breakout that fails and is followed by a reversal, that flag is the final flag of the trend.
- Price is truth and the market always leads the news.