Active since the late 1980s · Index futures · Price action trader

Al Brooks Price Action: Key Concepts Explained

Read every bar: who is in control now, and are traders trapped? Second entries in trends are his bread and butter.

Who they were

Al Brooks worked as an ophthalmologist before becoming a full-time trader of S&P 500 futures. He is the author of a series of detailed books on price action, including "Reading Price Charts Bar by Bar" (2009) and the "Trading Price Action" trilogy (2011–2012).

His work is known for its depth: he describes the market almost candle by candle, mostly on the 5-minute chart, with only a 20-period moving average.

Principles and rules

1. Always in

At any moment, decide which side you would have to be on if forced to hold a position: always-in long or always-in short.

2. Trends, ranges and transitions

Markets are either trending or in a trading range; most breakouts from ranges fail, and most attempts to reverse a trend fail.

3. Bar counting

In a pullback, count the attempts to resume the trend: High 1, High 2 in bull trends; Low 1, Low 2 in bear trends.

4. Second entries

Second attempts are more reliable because traders on the other side have been trapped twice.

5. Trader's equation

Only take a trade when probability × reward is clearly greater than (1 − probability) × risk.

Key lessons

Context first: trend or range?
Most reversals fail; trade with the trend unless there is a clear failure.
Think in probabilities and the trader's equation.

Strategies from this method

Second entry (H2 / L2) - Al BrooksIn a trend, the first attempt to resume often fails; the second attempt, the High 2 or Low 2, traps the counter-trend traders and usually works better.Moving average pullback strategyIn a clear trend, wait for price to come back to the 20 or 50 EMA, then join the trend on a rejection candle with the stop behind the swing.

How to practise it

The second entry (H2/L2) strategy page has the rules. In Candlemind read 5m candles one by one with the 20 EMA and say aloud who is in control after each candle.

Frequently asked questions

What is "always in" in Al Brooks' method?

The direction you would choose if you had to be in the market right now. It summarises who is in control.

What is the trader's equation?

A trade is worth taking when its probability of success times the reward exceeds the probability of failure times the risk.

Summaries and paraphrases of public books and interviews, for education. Not investment advice.