This larger flag may also break out in the same direction, but it might instead break out in the opposite direction. The market often breaks out of a small flag to reach a scalper's profit and then pulls back, and the pattern then evolves into a larger flag. For example, if the market goes above a significant prior high and each subsequent bar forms a low that is above the prior bar's low and a high that is above the prior bar's high, this price action indicates that the market will be higher on some subsequent bar, even if it pulls back for a few bars in the near term. The most useful aspect of price action is what happens after the market moves beyond previous bars or trend lines on the chart. The market is very efficient, and there is a 50 percent chance that the next tick will be up and a 50 percent chance that it will be down. They must read the price action on the chart in front of them to make this decision. The most important decision for traders is whether the market is trending or not trending.

The smallest unit of change is the tick, which has a different value for each market. The most useful definition of price action for a trader is any change in price on any type of chart or time frame. Insights from Chapter 7 Insights from Chapter 1 Insights on Al Brooks's Trading Price Action Trends #4 The market often breaks out of a small flag to reach a scalper's profit and then pulls back, and the pattern then evolves into a larger flag. #3 The most useful aspect of price action is what happens after the market moves beyond previous bars or trend lines on the chart. #2 The most important decision for traders is whether the market is trending or not trending. #1 The most useful definition of price action for a trader is any change in price on any type of chart or time frame.

Please note: This is a companion version & not the original book.

Al Brooks Trading Wikipedia