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Yemelyan Rybakov
Yemelyan Rybakov

Al Brooks Trading Price Action Reversals: A Comprehensive Guide for Traders


Al Brooks Trading Price Action Reversals PDF to Excel




If you are looking for a comprehensive guide on how to trade reversals using price action, you might want to check out Al Brooks Trading Price Action Reversals, a book by Al Brooks, a professional trader and author of several books on technical analysis. In this book, Brooks explains the concepts, patterns, strategies and techniques of trading reversals with price action in various markets and time frames. He also provides hundreds of examples from real charts to illustrate his points.




al brooks trading price action reversals pdf to excel



In this article, we will give you an overview of what the book is about, what is price action trading, what are reversals, how to trade reversals with price action, and how to convert the book from PDF format to Excel format. By the end of this article, you will have a better understanding of trading price action reversals and how to apply them in your own trading.


What is Price Action Trading?




Price action trading is a form of technical analysis that focuses on the movement of prices rather than indicators or other external factors. Price action traders use candlestick charts, support and resistance levels, trend lines, chart patterns, volume, breakouts, pullbacks and other tools to analyze the market behavior and identify trading opportunities.


Some of the benefits of price action trading are:


  • It is simple and universal. You don't need any complicated indicators or software to trade price action. You can use it in any market, time frame or instrument.



  • It is flexible and adaptable. You can adjust your trading style and strategy according to the market conditions and your personal preferences.



  • It is objective and logical. You don't rely on emotions or opinions to make trading decisions. You follow the rules and signals that the market gives you.



Some of the challenges of price action trading are:


  • It requires patience and discipline. You have to wait for the right setups and signals to enter and exit trades. You also have to stick to your trading plan and risk management.



  • It requires practice and experience. You have to learn how to read and interpret the price action correctly and consistently. You also have to develop your own trading edge and confidence.



  • It is not a holy grail. You will still have losing trades and drawdowns. You have to accept them as part of the trading process and learn from them.



Some of the examples of price action trading are:


  • Trading with the trend. You look for higher highs and higher lows in an uptrend, or lower highs and lower lows in a downtrend, and trade in the direction of the trend.



  • Trading support and resistance. You look for areas where the price has bounced or reversed in the past, and trade them as potential entry or exit points.



  • Trading chart patterns. You look for shapes and formations that indicate a continuation or reversal of the trend, such as triangles, flags, wedges, head and shoulders, double tops and bottoms, etc.



What are Reversals?




Reversals are changes in the direction of the price movement. They can be either major or minor, depending on the magnitude and duration of the change. Reversals can occur at any time and in any market condition, but they are more likely to happen when the market is overbought or oversold, when there is a divergence between price and indicators, when there is a news event or catalyst, or when there is a break of a significant level or trend line.


Some of the types of reversals are:


  • Trend reversals. These are reversals that end an existing trend and start a new one in the opposite direction. For example, an uptrend reversal is when the price makes a lower high and a lower low, breaking the previous pattern of higher highs and higher lows.



  • Climactic reversals. These are reversals that occur after a sharp and fast move in one direction, followed by a spike in the opposite direction. For example, a climactic reversal in an uptrend is when the price makes a sudden and large drop, followed by a strong bounce.



  • Wedges and other three-push reversal patterns. These are reversals that occur after a series of three pushes or swings in one direction, forming a narrowing or expanding shape. For example, a wedge reversal in an uptrend is when the price makes three higher highs and three higher lows, forming a rising wedge that breaks to the downside.



  • Expanding triangles. These are reversals that occur after a series of five swings in one direction, forming a widening shape. For example, an expanding triangle reversal in an uptrend is when the price makes five higher highs and five higher lows, forming an expanding triangle that breaks to the downside.



  • Final flags. These are reversals that occur after a strong trend move in one direction, followed by a small consolidation or pullback in the same direction. For example, a final flag reversal in an uptrend is when the price makes a strong rally, followed by a small sideways or upward correction that breaks to the downside.



  • Double top and bottom pullbacks. These are reversals that occur after a failed attempt to break above or below a previous high or low, followed by a pullback in the opposite direction. For example, a double top pullback reversal in an uptrend is when the price makes two equal highs, fails to break above them, and then pulls back below them.



  • Failures. These are reversals that occur after a failed breakout or breakdown of a support or resistance level, trend line, chart pattern or other technical structure. For example, a failure reversal in an uptrend is when the price breaks above a resistance level, but fails to hold above it and falls back below it.



  • Huge volume reversals on daily charts. These are reversals that occur after a large spike in volume on daily charts, indicating strong buying or selling pressure. For example, a huge volume reversal in an uptrend is when the price makes a new high on very high volume, but closes near its low for the day.



Some of the signs of reversals are:


```html action signals, volume analysis, or other tools to spot the climax in the price movement.


  • Look for signs of exhaustion. You can use candlestick patterns, price action signals, volume analysis, or other tools to spot the exhaustion in the climax.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the climax.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading a climactic reversal in a downtrend on a 15-minute chart of GBP/USD. You can use the following steps to trade it:


  • Identify the climax. You notice that the price makes a sudden and large drop on very high volume, forming a long bearish candlestick.



  • Look for signs of exhaustion. You notice that the price makes a small bounce and forms a pin bar with a long lower tail, indicating rejection of lower prices.



  • Wait for confirmation. You wait for the price to break above the high of the pin bar and close above it.



  • Enter the trade. You place a buy stop order above the high of the pin bar and enter a long trade when it is triggered.



  • Manage the trade. You place a stop loss below the low of the pin bar and a profit target at the next resistance level. You also trail your stop loss as the price moves in your favor.



Wedges and Other Three-Push Reversal Patterns




Wedges and other three-push reversal patterns are one of the most reliable and profitable types of reversals in price action trading. They occur after a series of three pushes or swings in one direction, forming a narrowing or expanding shape. To trade wedges and other three-push reversal patterns with price action, you need to:


  • Identify the pattern. You can use trend lines, swing highs and lows, or other tools to draw the boundaries of the pattern.



  • Look for signs of divergence. You can use indicators, price action signals, volume analysis, or other tools to spot divergence between price and momentum in the pattern.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the pattern.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading a wedge reversal in an uptrend on a 30-minute chart of USD/JPY. You can use the following steps to trade it:


```html the higher lows of the uptrend and a falling trend line connecting the lower highs of the wedge.


  • Look for signs of divergence. You notice that the price makes a higher high in the wedge, but the RSI indicator makes a lower high, indicating bearish divergence.



  • Wait for confirmation. You wait for the price to break below the rising trend line and close below it.



  • Enter the trade. You place a sell stop order below the low of the breakout bar and enter a short trade when it is triggered.



  • Manage the trade. You place a stop loss above the high of the breakout bar and a profit target at the next support level. You also trail your stop loss as the price moves in your favor.



Expanding Triangles




Expanding triangles are one of the most rare and tricky types of reversals in price action trading. They occur after a series of five swings in one direction, forming a widening shape. To trade expanding triangles with price action, you need to:


  • Identify the pattern. You can use trend lines, swing highs and lows, or other tools to draw the boundaries of the pattern.



  • Look for signs of volatility. You can use indicators, price action signals, volume analysis, or other tools to spot increasing volatility in the pattern.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the pattern.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading an expanding triangle reversal in a downtrend on a 1-hour chart of EUR/GBP. You can use the following steps to trade it:


  • Identify the pattern. You draw a falling trend line connecting the lower lows of the downtrend and a rising trend line connecting the higher highs of the expanding triangle.



  • Look for signs of volatility. You notice that the price makes larger and wider swings in both directions, indicating increasing volatility.



  • Wait for confirmation. You wait for the price to break above the falling trend line and close above it.



  • Enter the trade. You place a buy stop order above the high of the breakout bar and enter a long trade when it is triggered.



```html the breakout bar and a profit target at the next resistance level. You also trail your stop loss as the price moves in your favor.


Final Flags




Final flags are one of the most deceptive and dangerous types of reversals in price action trading. They occur after a strong trend move in one direction, followed by a small consolidation or pullback in the same direction. To trade final flags with price action, you need to:


  • Identify the trend. You can use trend lines, moving averages, swing highs and lows, or other tools to determine the direction and strength of the trend.



  • Look for signs of exhaustion. You can use candlestick patterns, price action signals, volume analysis, or other tools to spot exhaustion in the trend move.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the flag.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading a final flag reversal in an uptrend on a 4-hour chart of AUD/USD. You can use the following steps to trade it:


  • Identify the trend. You draw a rising trend line connecting the higher lows of the uptrend.



  • Look for signs of exhaustion. You notice that the price makes a strong rally on low volume, forming a long bullish candlestick.



  • Wait for confirmation. You wait for the price to make a small sideways or upward correction that breaks below the rising trend line and closes below it.



  • Enter the trade. You place a sell stop order below the low of the breakout bar and enter a short trade when it is triggered.



```html the breakout bar and a profit target at the next support level. You also trail your stop loss as the price moves in your favor.


Double Top and Bottom Pullbacks




Double top and bottom pullbacks are one of the most classic and effective types of reversals in price action trading. They occur after a failed attempt to break above or below a previous high or low, followed by a pullback in the opposite direction. To trade double top and bottom pullbacks with price action, you need to:


  • Identify the level. You can use horizontal lines, swing highs and lows, or other tools to mark the previous high or low that acts as a resistance or support level.



  • Look for signs of rejection. You can use candlestick patterns, price action signals, volume analysis, or other tools to spot rejection of the level.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the pullback.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading a double top pullback reversal in an uptrend on a daily chart of EUR/AUD. You can use the following steps to trade it:


  • Identify the level. You draw a horizontal line at 1.6000, which is the previous high that acts as a resistance level.



  • Look for signs of rejection. You notice that the price makes two equal highs at 1.6000, forming a double top pattern. The second high forms a bearish engulfing bar, indicating rejection of the level.



  • Wait for confirmation. You wait for the price to pull back below the neckline of the double top pattern and close below it.



  • Enter the trade. You place a sell stop order below the low of the breakout bar and enter a short trade when it is triggered.



```html the breakout bar and a profit target at the next support level. You also trail your stop loss as the price moves in your favor.


Failures




Failures are one of the most common and frustrating types of reversals in price action trading. They occur after a failed breakout or breakdown of a support or resistance level, trend line, chart pattern or other technical structure. To trade failures with price action, you need to:


  • Identify the structure. You can use horizontal lines, trend lines, chart patterns, or other tools to mark the structure that acts as a potential breakout or breakdown point.



  • Look for signs of false break. You can use candlestick patterns, price action signals, volume analysis, or other tools to spot false break of the structure.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the failure.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading a failure reversal in a downtrend on a 1-hour chart of USD/CAD. You can use the following steps to trade it:


  • Identify the structure. You draw a falling trend line connecting the lower highs of the downtrend.



  • Look for signs of false break. You notice that the price breaks above the trend line and forms a bullish pin bar, indicating a potential breakout.



  • Wait for confirmation. You wait for the price to fall back below the trend line and close below it.



  • Enter the trade. You place a sell stop order below the low of the pin bar and enter a short trade when it is triggered.



```html the pin bar and a profit target at the next support level. You also trail your stop loss as the price moves in your favor.


Huge Volume Reversals on Daily Charts




Huge volume reversals on daily charts are one of the most significant and rare types of reversals in price action trading. They occur after a large spike in volume on daily charts, indicating strong buying or selling pressure. To trade huge volume reversals on daily charts with price action, you need to:


  • Identify the volume spike. You can use volume bars, indicators, or other tools to spot the volume spike on daily charts.



  • Look for signs of reversal. You can use candlestick patterns, price action signals, volume analysis, or other tools to spot reversal in the price movement.



  • Wait for confirmation. You can use support and resistance levels, chart patterns, breakouts or breakdowns, or other tools to confirm the reversal in the volume spike.



  • Enter the trade. You can use stop orders, limit orders, market orders, or other types of orders to enter the trade in the direction of the reversal.



  • Manage the trade. You can use trailing stops, profit targets, risk-reward ratios, or other methods to manage your trade and protect your profits.



For example, let's say you are trading a huge volume reversal in an uptrend on a daily chart of SPY. You can use the following steps to trade it:


  • Identify the volume spike. You notice that the volume on SPY reaches a record high on a daily chart.



  • Look for signs of reversal. You notice that the price makes a new high on very high volume, but closes near its low for the day, forming a long bearish candlestick.



  • Wait for confirmation. You wait for the price to break below the low of the bearish candlestick and close below it.



  • Enter the trade. You place a sell stop order below the low of the bearish candlestick and enter a short trade when it is triggered.



```html the bearish candlestick and a profit target at the next sup


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