Al Brooks Overview

Presenter: Bill Bouwmeester

Al Brooks’ Daily Analysis Website

http://www.brookspriceaction.com

Brooks On Scalping

When ES Daily ATR is 10-20 pts, using a 2 pt protective stop is a reliable approach

If scalping for a 1 pt profit, you need to win more than twice as often as you lose

Therefore, you need to be right about 70% of the time just to break even

For this reason, Brooks mostly swing trades

Brooks on Intraday Swing Trading

An ES swing setup has a high probability to achieve 10 pts during the intraday move when ATR > 15-25

There are 3-6 setups a day where you can make 4 points while risking 2. If you trade these with a 4 pt. profit target and a 2 pt. stop, you only have to win 40% of the time to be profitable. 

In practice, you will exit some trades at 1-3 pts because of an opposite signal. Your 2 pt stop should rarely be hit. However, once the mkt has moved 2-3 pts in your direction, Brooks suggests moving stop to break even.

Never risk > 4-5 ticks once profit =>2 pts. 

Brooks Defining Trends

A Trend: “a series of price changes that are either mostly up (bull) or down (bear)”

A trend can be as short as one bar or longer than all bars on a screen

Al’s Four Trend Categories

The Trend: When price action becomes “Always in Long” or “Always in Short” in the eyes of the trader

Swing: Two or more smaller trends with a series of higher highs and lower lows or vice versa

Pullback: a temporary countertrend move which can be part of a trend or swing

Leg: a smaller trend which is part of a larger trend, swing or pullback

Most Profitable Trend Pattern

In an “Always In Long” Trend, Swings should be trending upward with each Pullback above the prior Pullback resulting in a new high; Vice versa in “Always In Short” Trend

Strong momentum moves have at least a test of the extreme following each Pullback

All strong moves usually have at least two Legs even if the 2nd falls short and reverses

Always In Long & Short

H1,H2, H3

H1,H2 Signal Bars In Uptrend

Where To Place Entries

Analysis of H1 Setup

Analysis of H2 Setup

Placing Trades In A Down Trend

Analysis of L1 & L2 Setup

Where To Place Stops

Bull Flag with Measured Move

5 Min Measured Move H1 Entry

ES Same Action On Heiken Ashi

Pre Election ES Bull Flags

Bear Flags

Bear Flag with Measured Moves

Yesterday’s H & S w/ L1, L2 Entries