Al Brooks Vegas

TradersEXPO 2017
Trading
the Open
Al Brooks
How to Trade Price Action
Brooks Trading Course
BrooksTradingCourse.com BrooksPriceAction.com
Main Points
Slide
▪ H or L usually comes early 2
▪ Most days have early TR, then BO 11
▪ Gap openings: 4 trends 14
▪ Flags on the open 19
▪ 2nd entry reversals 24
BO on Open: 50% Reverse, No Matter How Strong
Market looks for direction early in day Test of support or resistance can be very strong
Tries one way Still will reverse 50% of time
50% of time, decides it is the wrong way
Strong selloff on open Strong rally on open

Became L of day Became H of day
/17
BrooksTradingCourse.com BrooksPriceAction.com Slide 3

Early BO: What Is Chance H or L of Day Already Formed?
At the close of any bar, The 1st bar has 20% chance of
what is the chance that either the Bar 7 being either the H or L of the day
H or L of the day has already formed? Bar 12 By the close of the bar,
50% chance the day has already
made either the H or L
There is often a 7 am report at
the close of bar 6 that is catalyst
By the close of the 1st hour (bar 12),

70% chance the day has already
/17

Early BO: What Is Chance H or L of Day Already Formed?
By the close of bar 18 (90 min) Nothing magical about the number 18
90% chance the day has already Bar 16 has a slightly lower % chance
made either the H or L Bar 23 has a slightly higher % chance
Traders just need an approximate time
when the probability is high
By the close of bar 80,
99.9% chance the day has already
Bar 18 Knowing this does not help trading
/17

Reversal on 5 Minute Chart: Creates Tail on Daily Chart
90% of time, low tail of bull bar 10% of time, bottom tail of bull day Tails in doji day form any time,
on daily chart is created by is created by late reversal up but one usually created early
early reversal up on 5 min chart
and top tail is caused by
High
late PB
Close
Open of day
Low of day
90% of time, top tail of bear day 90% of time, low tail of bear day 10% of time, top tail of bear day
is created by early reversal down is created by late reversal up is formed by late reversal down
Daily
chart
5 minute chart

Context: TR on Higher Time Frame
If most days on daily chart were TTR on daily chart

dojis and reversals, Higher probability of TR today
especially if within Tight Trading Range (TTR), Expect strong moves to reverse
probability is higher for today being a TR day
Daily chart
5 min chart
If today broke out below TTR,
BO probably will fail and tomorrow will rally High probability of test of open of day
Bulls will look for early low tomorrow in final 2 hours

Context: Bull Trend on Higher Time Frame
If most days on daily chart were bull trend bars, Bulls want an early test of the bears,
probability is higher for today having an early low confident they will be able to trap the bears
that creates tail on bottom of bar on daily chart and create an early low of day
Daily chart
5 min chart
Tail on bottom of bar on daily chart

Bulls buy the bear close
usually created by failed bear BO on the open and the reversal up
on the 5 minute chart (here, 2nd signal, bull signal bar)

Daily Chart: Tail Forms Early in Day
If most days on daily chart were bear trend bars, Bears want an early test of the bull strength,
probability is higher for today having an early high confident they will be able to trap the bulls
that creates tail on top of bar on daily chart and create an early high of day
Bears sell above weak buy signal bar

and the reversal down
(here, 2nd signal, bear signal bar)
Daily chart
5 min chart
Tail on top of bar on daily chart

usually created by failed bull BO on the open
on the 5 minute chart

Main Points: Most Days Have Early TR, Then BO
Slide
▪ H or L usually comes early ▪ 2
▪ Most days have early TR, then BO ▪ 11
▪ Gap openings: 4 trends ▪ 14
▪ Flags on the open ▪ 19
▪ 2nd entry reversals ▪ 24
Most Days: Early TR, Then BO
Breakout Mode (BOM) BO of range of 1st 18 bars

Here, also 18 bar BO Here, not BOM since never went below L of bar 1
Look for BO and then Sell failed bull BO
Bar 18
about a Measured Move (MM) and then sell bear
BO of 18 bar range
BO Mode
After 1st 10 bars:
Bar 18
Reversal down from new H
and up from new L
Today, bull BO, so 90% chance of Bear BO, so 90% chance of
either bull day or TR day either bear day or TR day
/16

Most Days: Mostly Sideways, Legs Up and Down
Gap down
Wedge Bear Flag (Opening Reversal down from MA)
But, close above MA and closed the gap
Many big bull bars
Became failed Wedge
I am NOT talking about
these TR days today
(even though they are
more common than trend days)
Today, I am talking about trends
(breakouts or reversals)
DB HL MTR
/17

Main Points: Gap Openings – 4 Trends
Slide
▪ Gap openings: 4 Trends ▪ 14
Gap Up: Bull Trend from the Open
Many early big bull bars closing near H
make bull trend or TR likely Exit long
and make bear trend unlikely Final Flag Top
Must buy early 3 bear bars so Sell The Close

End of day profit taking is common
Rally with lots of dojis and overlapping bars

Looked like bull leg in TR
Negative gaps and Tight Bull Channel so
Small PB Bull Trend
/17

Gap Up: Reversal down, Then Bear Trend from the Open
Even with big gap up,
many early big bear bars closing near L
make bear trend or TR likely
and make bull trend unlikely
Consecutive bull bars on open,
then 3 consecutive bear bars
closing near lows
Sell The Close
Consecutive Parabolic Wedge Bottoms

Buy reversal up, and
Buy HL MTR
2017

Gap Down: Bear Trend from the Open
Many early big bear bars closing near L
make bear trend or TR likely
and make bull trend unlikely
Consecutive big bear bars closing below midpoint
Always In Short
Sell close of follow-through bar
Despite strong bull bar on open,

was Trend From the Open bear trend
After 3 hour TR, got
trend resumption down in final hour
/17

Gap Down: Reversal up, Then Bull Trend from the Open
Even with big gap down, Trading Range so BO Mode setup for tomorrow
many early big bull bars closing near H Expect either trend resumption up
make bull trend or TR likely or trend reversal down
and make bear trend unlikely
Gap down
Failed BO below yesterday’s L
1st 2 bars are bull bars Trend from the Open bull trend
One is big bull bar Buy the Close, bull Micro Channel
Either buy the close of 2nd bar
or above H of 1st bar
/14

Main Points: Flags on the Open
Slide
Big Gap Up: 8 Bear Bars, Then DB at MA
8 bear bars
DB with L of day so Opening Reversal up from MA (support)
Also, about 50% from rally up from yesterday’s close
/17

Gap Up: Wedge PB to MA
Wedge Bull Flag is usually a High 3

It can also be a High 2 if there are 3 bottoms
(3 attempts to rally)
Opening Reversal up from MA (support)
When there is a strong 30 – 60 min rally on the open,

often goes sideways for hours
Stop
Buy above strong buy signal bar
Wedge Bull Flag, but High 2
About 50% PB and near MA
Micro DB
/14

Gap Down: Double Top Bear Flag Just below MA
Gap down
Double Top so Opening Reversal down from MA (resistance)
Possible High of day
Higher probability of profit if sell below bear bar
or sell the close of consecutive bear bars
/14

Gap Down: Wedge Bear Flag at MA
Gap down
Wedge Bear Flag so Opening Reversal down from MA (resistance)
Sell below bear bar for possible H of day
/14

Main Points: 2nd Entry Reversals
Slide
2nd Failed BO H of Yesterday: Micro DT
On the open, if the market reverses down
from above yesterday’s high, it might be
making the H of the day
Higher probability is 2nd signal Micro DT so
L2 Opening Reversal down
from H of yesterday
Wedge Bull Flag, HL MTR, Micro DB

Too late to also call it an Opening Reversal up
/16

2nd Failed BO above Yesterday’s H: Strong Bear
Sell failed BO above yesterday’s high

2nd entry sell, below bear bar closing on low,
L2
and from higher H
L1 All create higher probability sell
/17

ORV: 2nd Reversal up from below Yesterday’s Low
Failed BO below yesterday’s low

Buy 2nd reversal up (Opening Reversal)
Want bull signal bar
Stop
/16

2nd Failed BO below Yesterday’s L: Reversal Day, Doji Day
Reversal days usually

fail to get much
above H of open
Often close near open
so doji day
2nd failed BO below yesterday’s L
DB with L of 2 days ago
Bear buy signal bar
Ok to buy above bull bar
/17

Review
Slide
▪ H or L usually comes early 2
▪ Most days have early TR, then BO 11
▪ Gap openings: 4 trends 14
▪ Flags on the open 19
▪ 2nd entry reversals 24
TradersEXPO 2017
Trading
the Open
Al Brooks
How to Trade Price Action
Brooks Trading Course

Al Brooks Vegas

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TradersEXPO 2017

Strong selloff on open Strong rally on open

BrooksTradingCourse.com BrooksPriceAction.com Slide 3

By the close of the 1st hour (bar 12),

BrooksTradingCourse.com BrooksPriceAction.com Slide 4

BrooksTradingCourse.com BrooksPriceAction.com Slide 5

BrooksTradingCourse.com BrooksPriceAction.com Slide 6

If most days on daily chart were TTR on daily chart

BrooksTradingCourse.com BrooksPriceAction.com Slide 7

Tail on bottom of bar on daily chart

BrooksTradingCourse.com BrooksPriceAction.com Slide 8

Bears sell above weak buy signal bar

Tail on top of bar on daily chart

BrooksTradingCourse.com BrooksPriceAction.com Slide 9

▪ Most days have early TR, then BO ▪ 11

▪ Gap openings: 4 trends ▪ 14

▪ Flags on the open ▪ 19

▪ 2nd entry reversals ▪ 24

Breakout Mode (BOM) BO of range of 1st 18 bars

BrooksTradingCourse.com BrooksPriceAction.com Slide 11

BrooksTradingCourse.com BrooksPriceAction.com Slide 12

▪ Most days have early TR, then BO ▪ 11

▪ Gap openings: 4 Trends ▪ 14

▪ Flags on the open ▪ 19

▪ 2nd entry reversals ▪ 24

Must buy early 3 bear bars so Sell The Close

Rally with lots of dojis and overlapping bars

BrooksTradingCourse.com BrooksPriceAction.com Slide 14

Consecutive Parabolic Wedge Bottoms

BrooksTradingCourse.com BrooksPriceAction.com Slide 15

Despite strong bull bar on open,

BrooksTradingCourse.com BrooksPriceAction.com Slide 16

BrooksTradingCourse.com BrooksPriceAction.com Slide 17

▪ Most days have early TR, then BO ▪ 11

▪ Gap openings: 4 trends ▪ 14

▪ Flags on the open ▪ 19

▪ 2nd entry reversals ▪ 24

BrooksTradingCourse.com BrooksPriceAction.com Slide 19

Wedge Bull Flag is usually a High 3

When there is a strong 30 – 60 min rally on the open,

BrooksTradingCourse.com BrooksPriceAction.com Slide 20

BrooksTradingCourse.com BrooksPriceAction.com Slide 21

BrooksTradingCourse.com BrooksPriceAction.com Slide 22

▪ Most days have early TR, then BO ▪ 11

▪ Gap openings: 4 trends ▪ 14

▪ Flags on the open ▪ 19

▪ 2nd entry reversals ▪ 24

Wedge Bull Flag, HL MTR, Micro DB

BrooksTradingCourse.com BrooksPriceAction.com Slide 24

Sell failed BO above yesterday’s high

BrooksTradingCourse.com BrooksPriceAction.com Slide 25

Failed BO below yesterday’s low

BrooksTradingCourse.com BrooksPriceAction.com Slide 26

Reversal days usually

BrooksTradingCourse.com BrooksPriceAction.com Slide 27

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