One of the trading methods that has managed to attract the attention of many people around the world today is the price action trading strategy. Price action is actually a type of financial market technique that allows traders to make better decisions by examining price movements and fluctuations in their trades. L. Brooks price action is known as the best price action method in the analysis of financial markets, especially digital currencies, that many people around the world use this popular method today. In Al Brooks patterns, the basic explanation is based on 5-minute charts; But besides these short charts, daily and weekly charts are also checked.
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It is better to know that there is no need for indicators and complicated software to use this price action method. All you need to do is learn the candlestick process part by part and recognize the entry and exit points well. In this article, we are going to explain and review this practical method; We will also provide you with complete training on El Brooks patterns and finding the best time to enter and exit.
History of price action
It is interesting to know that in the past, traders used only classical financial knowledge to make daily transactions in the financial markets, but this method was not enough. In fact, at that time, indicators were the first word in financial market trading methods; But after some time, analysts realized that they can have a correct understanding of the price trend of the market without using indicators. In the years 2008-2007, the United States suffered a huge amount of financial crises, and in this regard, many economists and great analysts were forced to look for alternative methods to detect financial crises and to be prepared in advance to prevent the market from collapsing. to be
In this way, a person named Richard Wyckoff put forward the price action strategy based on the principles of economics and social sciences, whose nature was the basis for financial analysis. After some time, price action became one of the popular trading methods and attracted the attention of many people around the world. To learn more about price actions, you can read the article comparing different price action methods.
Who is Al Brooks?
As you know, Al Brooks price action trading strategy is the work experience of a trader named Al Brooks, and that is why they put his name on this price action. He was born on February 23, 1952 and has more than 30 years of experience in financial markets. It is interesting to know that El Brooks is a graduate of Ophthalmology from the University of Chicago. But after a while, he left ophthalmology and turned to financial markets. Currently, Al Brooks has an educational institute in Los Angeles, USA, which teaches trading methods and price actions.
According to L. Brooks, his goal in leaving the ophthalmology profession and turning to the financial markets was to teach other traders. In this regard, he tried to provide the best trading tools to help traders succeed.
Read more: What is Price Action RTM?
Advantages and features of Price Action
Price action has important advantages over other trading methods, which we intend to explain and examine in this section.
No need for trading software
Price action is one of the analysis tools in financial markets that is freely available to the public. You don’t need special software for analysis by this method and you can easily use candlesticks, dot and other charts.
Taking advantage of various time frames
As you know, price action is a method that can be used in many financial markets such as forex, stock exchange, digital currency, etc. and is used in different time frames. These time frames may be from a few minutes to a few weeks. Those interested can read the article What is a forex strategy to learn more about forex strategies.
Lower the risk
Price action is one of the low-risk methods of analysis in trading, and a person who uses this strategy in his trading minimizes the risk of his trading.
Speed and simplicity
Undoubtedly, the speed of a strategy can be its most important advantage. Price action, while being simple, works very fast and does not confuse the user in any way.
High success rate
Trading using price action strategies has a higher success rate than other analysis methods. Because before the formation of the price, price action trading starts according to the emotions and decisions of other traders, and when other traders stop their trading, price action analysts can still make a profit from their trading.
The advantage of the price action of L. Brooks
Now that you are familiar with the nature of price action and know its features, it is better to know the benefits of L Brooks price action.
- L Brooks price action is more accurate than other price actions, and more detailed analyzes can be done using it.
- One of the most important advantages of L Brooks price action is very low time delays. With the help of this feature, the user notices changes in price trends faster and makes better decisions as a result.
- Efficiency and high profitability are other advantages of L Brooks price action.
- Albrox price action is suitable for all ages and levels; The fact that beginners can easily use this price action just like professionals has made L Brooks one of the best.
Price action price patterns
Having price action price patterns is very important and practical in trading. If you are aware of these price patterns and candles and you can find them in the price trend or charts, you can get a good profit from these transactions.
Of course, keep in mind that you cannot decide to trade just by observing and finding these patterns in the price charts. Therefore, all patterns must have the right trading setup and the right conditions. Also, no style uses all candlestick price action patterns.
In this pattern, draw a line that connects the price valleys of a share and then draw another line that connects the price peaks, and these two lines continue to intersect each other. By doing this, a triangular pattern has been formed, which of course has three types.
Ascending triangular pattern : This pattern is formed when a horizontal line is formed at the top and an ascending diagonal line is formed at the bottom, and after these two lines are cut off, it indicates that the stock is going up.
Descending pattern : This pattern is the opposite of the upper pattern, and it is in such a way that a horizontal line is placed at the bottom and a diagonal line is placed at the top; It shows that the price trend is downward. Of course, after cutting the two sides of the triangle, the trend is downward.
Symmetrical triangle pattern : When this pattern occurs when two perfectly symmetrical lines meet from above and below and then intersect each other, which will indicate the upward or downward trend of the market when the two lines intersect.
The formation of this pattern occurs after a downward and upward trend and this pattern expresses the range of the Trading Range that the share in this trend is stabilizing the price. Therefore, for a period of time, the price will go up and down at a support and resistance level, which is suffering in the term. After this alco, the trend of the stock is determined, and after the trend of this point is determined, it will become one of the support and resistance points for the stock.
This flag pattern is basically formed in a downward or upward trend, which means that in an upward trend, we will see a price correction. But the candles are shaped in such a way that if we draw a shadow on it, it will be like the shape of a flag.
Hence, a flag pattern occurs when the stock closes its bullish trend. Also, this pattern can also exist in the descending chart. This is how, in a downward trend, we will observe the increase in price and dominant green candles and a small amount of red candles going up.
Many analysts call this pattern similar to the triangle pattern, but in fact, the corner pattern can be similar to the triangle pattern. This pattern consists of two lines that are approaching each other and this pattern is one of the types of reversal pattern considering its trading setup.
Read more: Price action supply and demand
Price action was actually a revolution in the financial markets industry, and until now this method of analysis has been able to maintain its essence and rank among the best methods of analysis and strategy. Which price action is better depends entirely on your circumstances and type of transaction. Undoubtedly, all price action methods can be considered favorable, but depending on what kind of deal you intend to open, you can get help from different price actions. Keep in mind that one of the important benefits of price action, especially L Brooks price action, is to lower the amount of risk in a transaction. But you should know that this does not mean that the trade you open by this method is 100% profitable and does not bring losses. In fact, you increase the probability of profit by this method and minimize the risk of capital loss.