I had a great pleasure and opportunity to speak with one of the world’s leading experts in Price Action trading, author of three best-selling books describing PA investing technique and creator of comprehensive course for all type of traders. My guest was Al Brooks – a person and a brand that all of you perfectly know. Let’s check the interview!
Can you tell us how did your trading adventure start?
I grew up poor and my mother always wanted to have a doctor in the family. Since I was the oldest boy, she thought that I should fulfill her dream. She is 102 years old today, and still very smart, and one of the nicest people in the world, but I discovered while in medical school that I really needed to think more about my dreams. I went to the University of Chicago, and all of the time I was in medical school, I debated whether I should quit and go work downtown at the futures exchange. Since I was poor and being a doctor was a good way to get rich, I was afraid to give up a sure thing and completed my training. After practicing for about 7 years, I began to trade. In fact, I started in October 1987. On the morning of October 19, I shorted the stock market heavily, but it began to rally. I had a full surgery schedule and had to go to work so I bought back my shorts for a loss. As I was driving to work, I listened to the radio and there was incredible panic. No one knew what the price of the Dow was, but they knew that it was down a lot. At the end of the day, it was down 26%, and had I held onto my shorts, I would have made $400,000 (about $1 million in today’s dollars). That was the day that changed my life and made me decide that I had to transition from eye surgery to day trading.
You always knew that you will daytrade for a living or it was just a “coincidence”?
I was a very good student and I assumed that being smart would give me a big advantage as a trader. After 10 years of losing money, I was humbled by the markets. During those 10 years, I read every book, took many courses, hired tutors, and had the most sophisticated indicators, but yet, I lost money. I decided to get rid of all of the indicators and all of the outside help and start all over. When I looked at a simple bar or candlestick chart, it was clear where to buy and sell, where to take profits, and where to put stops. Why did anyone need anything else? What I discovered is that all I need is on the chart in front of me. If I could get good enough at understanding what the chart was telling me, I could do very well as a trader. That realization changed my life. The movement on the chart is called “price action” and I believe that understanding it is the key to consistently making money as a trader.
When you see successful traders on TV, you never hear them talk about indicators. You always hear them talk about strong trends, trading ranges, breakouts, tests of prior highs and lows, and of moving average. They are telling you that they are basing their trades on price action, which is what most successful traders do.
