Trading Price Action Trends

“ I have found that I consistently make far more money by minimizing what I have to consider when placing a trade.

“ I have found that I consistently make far more money by minimizing what I have to consider when placing a trade. ” e.style.display='none');if(typeof getContentsSections==='function')setTimeout(getContentsSections,50)" /> Brooks spent over 10,000 hours testing indicators and automated systems before concluding they obfuscate rather than elucidate. He now trades exclusively off a single 5-minute candle chart with a 20-bar exponential moving average — no oscillators, no MACD, no Bollinger Bands. His reasoning: every indicator is derived from price action, so you're looking at a delayed, filtered version of what's already on the chart. When multiple setups appear simultaneously, you simply can't process several indicators fast enough to place accurate orders. The temptation to add complexity is powerful. Beginners assume Goldman Sachs must use some supercomputer with secret software. But Brooks argues that even Goldman's edge comes from reading price action well and trading institutional volume. Adding inputs beyond a single chart creates analysis paralysis and causes you to miss clear setups hiding in plain sight. TAKEAWAY 2

“ Ninety percent or more of all trading in large markets is done by institutions, which means that the market is simply a collection of institutions. ” e.style.display='none');if(typeof getContentsSections==='function')setTimeout(getContentsSections,50)" /> Most traders dismiss quiet bars as noise or irrelevant program activity, but Brooks insists every bar carries the same volume as the bars traders find significant. Whenever the market goes up, institutional money is predominantly buying; whenever it goes down, they're predominantly selling. You can't hide volume. Your job is to piggyback onto their trades — not predict, just follow. The practical application changes everything. Strong bulls buy below prior swing lows — exactly where weak traders get stopped out. If the market keeps rising despite a bearish-looking pullback bar, institutions are buying that bar. Brooks compares this to reading a chest X-ray: most people see nothing, but a trained eye spots patterns everywhere. Each bar is a data point institutions cannot conceal. TAKEAWAY 3

“ In trading, the odds are more like 70 percent or better that what just happened will continue to happen again and again. ” e.style.display='none');if(typeof getContentsSections==='function')setTimeout(getContentsSections,50)" /> Market inertia is the most exploitable tendency in price action. About 80% of attempts to reverse a trend fail and become continuation flags. Similarly, about 80% of attempts to break out of a trading range fail. This is the opposite of coin-flip reasoning, where beginners assume three losses mean the next trade must win. This principle should govern every trade. In a bull trend, most sell setups fail — so stop hunting perfect short entries and start buying imperfect pullbacks. In a…