Dominating price action, probability,
and where to buy vs sell
A podcast special event this week with Al Brooks by Cam Hawkins of the 52 Traders website. Podcast was first published on July 13, 2016, and replicated here with the kind permission of the producer Cam.
In the podcast Al revealed to Cam:
- 3 indicator types that will trip you up
- How you should be trading a range and a trend
- His unique discretionary approach to trading
- Where you should place your stops
- Why he’s no longer an automated trader
- What’s missing if you just look at risk and reward
- Audio duration: 1 hour 2 minutes
Download MP3 Right-click and ‘Save link as…’
Podcast host and disclaimer: Cam Hawkins gets inside the minds of 52 of the world’s best traders to find out if he has what it takes to become one of them. Join Cam every week on the 52 Traders podcast, or at 52Traders.com to learn how to trade like the pros. This podcast is for educational and entertainment purposes only, and is not investment, trading, or financial advice of any kind. Trading is very risky and could lose you all of your capital. Any comments about historical performance are not an indication of future results.
Audio quality note
With Cam in New Zealand, and Al is California, the Skype interview suffered from interference and occasional poor quality. Much of the noise has been edited out, and here are the words for two points where audio was best left intact despite missing words!
- 25:30 – …at least a 50% chance of winning.
- 28:55 – If yesterday was a very strong trend day.
Questions used by Cam to organize the interview:
- Tell us a bit about you personally and what first attracted you to trading?
Fundamental Round (long form answers/stories)
- Can you give the listeners some insight into your trading? Your trading style, strategy, time frames, ave. trade duration, % winner’s, typical risk reward ratio, typical yearly/monthly return, number of instruments you trade, maximum/average number of active trades, typical drawdowns you experience… those sorts of things.
- What does your typical trading day look like?
- In the beginning, what made you different from the average mom or dad trader out there? What traits did you have, what actions did you take?
- If you were a retail trader working a day job, what steps would you take to start earning an income as a trader?
- Can you explain to the listeners your preferred trading strategy, the ins and outs of how it works and why you choose this type of strategy over others?
- If you split your trading up into technical vs fundamental, what would that split look like?
- Diving a little deeper, thinking about any price chart, what 3 things would you recommend a novice or intermediate trader educate themselves on when reading a chart?
Technical Round (quick fire questions and answers)
- How long did it take you to go from trading newbie to consistently profitable trader?
- What’s your mental approach to trading and what special techniques do you use to keep your emotions in check?
- What’s your favourite entry setup?
- What strategies do you use to exit and manage active trades?
- What’s your recommended “must read” trading book?
- If there was one thing you would recommend any retail trader spend the next month mastering, what would it be, why and how could they go about mastering it?
- What trading related internet resource, like Bloomberg, do you always use?
- What’s the biggest mistake most retail traders make?
- What’s your preferred broker and trading platform?
- If you could leave our listeners with one piece of advice what would it be?
- We’d like you to give us the “bones” of a full trading strategy – the entry setup, stop loss, take profit targets, market, timeframe… Something our listeners can try out at home?
- Before we wrap up, what’s the best way for traders to get hold of you?
Cam Hawkins completed a thorough write up of the podcast on his website. As a taster only, here are brief extracts of the podcast content. Follow link to Cam’s site to read full summary.
- A doctors approach to learning to trade was a failure, i.e. trying to copy what other people were doing
- Nobody uses Gann lines anymore because they’re a fraud – Al doesn’t know anyone who consistently makes money using Gann lines
- Indicators are just another variation of a price chart
- Trend lines on time charts are very reliable
- There are 81 five minute bars in the day – an average day he’ll see 40 one point scalps, 20 two point scalps and 60-70 setups
- A lot of Fibonacci is fraudulent
- 50%, 75% and 100% retracements are extremely important
- … more on 52traders.com (link below)
- He removed all indicators from his charts and just looks at price
- He uses time charts only, not tick charts or other types of charts
- He trades the 5 minute chart only and doesn’t need any other timeframes or charts
- He likes watching every tick during the day
- On an average day he’ll take 10-30 trades
- On a good day he’ll win 100% of trades (He knows several day traders who win 90% of the time, every day or almost every day)
- He’s never had a year where he’s won every day of the year, he’ll always mess up one day for some reason – his goal is to do a full year of winning days
- … more on 52traders.com (link below)
Al’s Trading Strategy
- If the market is flat for a while and then it breaks out and rally’s for 100 pips, buy for any reason (at the market, below the low of the prior bar, above the high of the prior bar, any reason)
- But only buy the breakout if it’s well above the highs of the past few days to be sure that it’s truly broken out of everything
- The stop will be 100 pips away below the flat trading range
- It’s a high probability trade, so we need a reward at least equal to risk. So the initial take profit is 100 pips
- … read more on 52traders.com