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In this interview, price-action legend Al Brooks sits down with host Etienne to unpack four decades of hard-won trading wisdom. Brooks matters because he turned chart reading into a systematic craft—wringing emotion out of entries, exits, and risk. He talks candidly about the beginner trap of averaging down, the danger of “hope,” and why being at peace during the session starts with accepting you’ll be wrong often. If you’re new to trading, this is a rare window into how a veteran actually reads bars, trends, and reversals in real time.
Here’s what you’ll learn: why “hope is not a trading strategy,” how to use protective stops and premise-based exits, and when scaling into a loser is acceptable—and when it’s suicide. Al Brooks breaks down his 40–60% probability world, shows how to think in reward-to-risk, and explains the opening vs. end-of-day behaviors that trip up newbies. You’ll walk away with a cleaner mental model for spotting when a pullback morphs into a bear trend, how to react to breakout pairs of big bear bars, and how to trade only when you’re sharp—because the edge between winning and losing is razor-thin.
Al Brooks Playbook & Strategy: How He Actually Trades
Core Philosophy: Probability, Risk, and the Trader’s Equation
Before chasing patterns, he frames every decision in terms of probabilities and risk/reward. The goal isn’t to be “right,” it’s to find repeatable setups where the math pays—even if many individual trades don’t. Think in small edges, managed well.
- Aim for trades with ~40–60% win rate but ≥1:1 reward: risk; if R: R < 1:1, pass.
- Define your initial stop the moment you enter; never widen it after entry.
- Size so a full stop is emotionally tolerable and ≤1% of the account per trade.
- Enter only if you can state the premise in one sentence; if the premise breaks, exit without debate.
- Favor trades where the price has to do less to reach the target than to hit your stop.
Read Context First: Trend, Trading Range, or Breakout Mode
Before any entry, label the day type and “always-in” direction. Most mistakes come from fading strong trends or trend-trading inside a range. If you can’t label context, you don’t have a trade.
- Mark the “always-in” bias: bull, bear, or neutral; trade with it unless there’s a clear reversal.
- Strong trend bars closing near their extremes imply follow-through; expect at least one more leg.
- In a trading range, buy low/sell high and take profits quickly; avoid chasing breakouts until you see follow-through.
- In breakout mode (tight coil, shrinking bars), plan both directions; place stops beyond the coil and expect measured moves.
- If context flips (e.g., failed breakout that reverses sharply), flip your bias or step aside—don’t fight.
Entries: Stop, Limit, or Market—How to Pull the Trigger
He’ll use all three, but only when the structure says so. Stop entries align with momentum; limit orders fade edges in ranges; market orders get you in when the signal is already breaking, and you mustn’t miss it.
- Use stop entries above/below signal bars in trends; avoid stop entries inside choppy ranges.
- Use limit orders at range extremes to fade “too far, too fast” moves; add only with a clear scalp target.
- Enter on a market order when a breakout is clearly succeeding (big body, little tail, volume/urgency).
- Avoid mid-bar decisions; wait for the bar close unless the move is explosive and fits your plan.
- If a signal bar is weak (dojis, long tails against you), skip or reduce the size.
Managing the Trade: Stops, Targets, and Scaling
Trade management is where the edge compounds. He uses tight premises, logical stop placement, partials, and—selectively—scales into winners or trapped losers when the context justifies it.
- The initial stop goes beyond the most recent swing or opposite side of a signal bar; don’t move it further out.
- Take partial profits at 1R when volatility is average; let a runner target measured moves or prior swing magnets.
- Trail under/over higher lows/higher highs in trends; if structure breaks, flatten.
- Scale in only when the context is favorable (range edges or first pullback in a strong trend) and total risk is pre-planned.
- If the premise is gone (e.g., breakout failure, opposite signal with strong follow-through), exit—even if not at stop.
The Open: Trend From the Open vs. Opening Range Chop
The first 30–60 minutes set the tone. He distinguishes between “trend from the open” days and rotational opens that resolve into ranges. Your job is to decide quickly and trade accordingly.
- If you see two or more consecutive strong trend bars from the open, assume a trend day and buy pullbacks/sell rallies with stops.
- If early bars overlap heavily with tails, treat it as opening range chop—fade extremes, reduce size, take quicker profits.
- A failed breakout on bar 1–5 that reverses hard often sets the day’s direction; trade the reversal with the new bias.
- Don’t average down on the open against a strong trend; wait for a clear pullback or transition signal.
Patterns He Actually Trades
Patterns are just context plus probabilities. He favors simple, repeatable structures: pullbacks, wedges, double tops/bottoms, and breakouts with measured moves.
Pullbacks to the Moving Average (MA)
These are bread-and-butter trend entries. Let the market show a pause, then enter with the trend as momentum resumes.
- In a bull trend, buy a 1–3 bar pullback to/near the MA that prints a bull signal bar; stop below the pullback low.
- Target prior swing high or measured move; if pullback deepens with bear closes, skip or cut size.
- In a bear trend, mirror the logic: sell rallies to the MA with a bear signal bar; stop above the pullback high.
Wedges (Three-Push Patterns)
Wedges often end swings or start ranges. They’re powerful when they align with higher-timeframe levels.
- Count three pushes (higher highs for a bear reversal, lower lows for a bull reversal); enter on the break of the wedge trendline or signal bar.
- Place stops beyond the extreme of the wedge; first target is back to the start of the wedge, then the MA.
- If the breakout after a wedge lacks follow-through, scratch quickly—failed reversals can trend strongly.
Double Tops/Bottoms and Micro Double Tops/Bottoms
These show hesitation at a key price. Micro versions form over a few bars and are great for intraday timing.
- Sell a double top in a weak or aging bull trend after a bear signal bar closes; stop above the top.
- Buy a double bottom in a weak or aging bear trend after a bull signal bar; stop below the bottom.
- For micro DT/DB, require a decisive signal bar and immediate follow-through; scalp first, swing only if context improves.
Breakouts and Measured Moves
Breakouts pay when they’re real; manage risk tightly when they’re not. Use simple projections to plan targets.
- Enter breakouts with a stop order a tick beyond the signal bar; cancel if you don’t get triggered on the next bar or two.
- Expect a pullback; add only if the pullback is shallow and prints a fresh signal bar.
- Target measured moves: project the height of the prior leg or range from the breakout point.
Trading the Range Like a Pro
Most days have long stretches of range. He exploits the edges, avoids the middle, and keeps expectations realistic.
- Fade tests of prior highs/lows with limit orders or stop entries after reversal bars; take profits at the midline or opposite edge.
- If a range breakout fails within 1–3 bars, reverse with the failure and aim back to the other side.
- Cut size in ranges, widen stops modestly (still inside your fixed risk), and shorten targets.
Timeframes, Instruments, and Session Choices
He adapts rules to the instrument and timeframe but keeps principles constant. Your session and market shape your tactics.
- Pick a primary timeframe (e.g., 5-min) and one higher for context; align trades with the higher-timeframe bias.
- If volatility expands, increase stop size in ticks but reduce position size to keep risk constant.
- Focus on liquid instruments with clean intraday structure; avoid news minutes unless your plan specializes in them.
Psychology and Discipline—Rules That Survive the Open
The mental edge is rule-following under stress. He removes debate by coding decisions into if/then statements and sticking to them.
- Trade only when alert; if you feel rushed, skip the setup—even good patterns fail when you’re not sharp.
- Cap daily loss (e.g., 2–3R). If hit, stop trading for the day.
- Log every trade with context, entry type, reason to exit, and whether the premise held; refine rules weekly.
Risk Events and News
News creates traps and opportunities—often both in minutes. He respects the spike and trades the second move.
- Flatten or reduce the size right before high-impact releases unless your plan covers them specifically.
- After a news spike, wait for two-sided trading (overlap, tails) before considering mean-reversion fades.
- If a breakout sustains post-news with strong closes, treat it as a trend day and trade pullbacks.
Building Your Personal Variant
He expects traders to adapt the core to their own tolerance and schedule. Start small, standardize, then scale.
- Choose two A+ setups (e.g., pullback to MA in trend, wedge reversal at HTF level) and ignore everything else for 20 sessions.
- Predefine entry, stop, and two targets (scalp + swing) in your checklist; execute without second-guessing.
- Increase size only after 40–60 trades with stable execution and positive expectancy.
Size Risk First: Trade Small Enough to Think Clearly
Al Brooks hammers this point: your position size dictates your psychology. If you’re too big, you’ll manage emotions, not trades. He argues that clarity comes from knowing a full stop is tolerable—financially and mentally—so you can execute the plan without bargaining mid-trade.
Brooks keeps it simple: decide maximum risk per trade first, then let that number size every position, every day. When volatility expands, reduce size to keep risk constant; when it contracts, you can scale modestly without changing the dollar risk. This turns randomness into math you can survive, turning shaky “hope trades” into clean, rule-driven decisions. Trade small enough to stay calm, and your edge—entries, exits, reading context—finally shows up in your P&L.
Let Volatility Dictate Stops, Targets, and Position Allocation
Al Brooks treats volatility like the weather report—he checks it before every trade and adjusts his plan accordingly. When bars expand and ranges widen, he widens stops but cuts position size to keep dollar risk constant. Targets also stretch in higher volatility, aiming for realistic multiples that the tape can actually deliver. In quiet markets, he tightens stops, reduces expectations, and takes profits sooner because the “distance to target” shrinks.
This volatility-first approach keeps entries and exits consistent without pretending the market’s mood is static. Brooks focuses on average bar size and recent swing distance to place stops beyond noise, then calibrates size so a full stop still fits within his fixed risk. He refuses to “hope” a tight stop survives a wild tape or to oversize just because the market feels slow. Match stop and target to current volatility, right-size the position, and the same setup becomes survivable in chaos and profitable in calm.
Diversify by Setup, Timeframe, and Instrument—Not Just Directional Bets
Al Brooks pushes diversification beyond the usual “own more tickers.” He spreads risk across setups (trend pullbacks, wedges, breakouts), across timeframes (higher-timeframe bias, lower-timeframe execution), and across instruments with different personalities. The point isn’t more trades—it’s uncorrelated edges, so one bad market condition doesn’t sink your day. If your entire book is just “long momentum,” one regime shift wipes it out; mixed setups buffer that shock.
Brooks builds a core play or two per context, then rotates: trending sessions get pullback entries; range sessions get fades and failed breakout reversals. He’ll align with the higher-timeframe direction but time entries on the intraday chart, letting the bigger picture filter noise while the smaller picture controls risk. Different instruments help too—an index future for structure, a currency pair for continuity, maybe crude for asymmetric bursts. Diversify the how, the when, and the where, and your P&L depends less on guessing direction and more on repeatedly executing edges.
Trade the Mechanics: Context, Signal Bar, Follow-Through—Forget Predictions
Al Brooks strips out the crystal ball and replaces it with a checklist. First, read context: trend, trading range, or breakout mode, and the “always-in” direction. Then wait for a proper signal bar that fits the context—body, tails, and location matter. Enter only if follow-through appears within a bar or two; if it doesn’t, scratch or reduce fast. Predictions don’t pay; execution on objective mechanics does.
Brooks emphasizes that every trade must have a clear premise tied to structure, not a hunch about where price “should” go. If a bull signal bar prints in a strong bull trend and the next bar fails, he treats that information, not as betrayal, but as a command to exit. Conversely, when a breakout delivers immediate follow-through, he adds or trails with structure, not hope. The outcome of any one trade is irrelevant; the integrity of the process is everything. When the mechanics align—context, signal, follow-through—pull the trigger; when they don’t, stand down.
Define Risk, Define Exit, Execute—Process Discipline Beats Hope
Al Brooks is uncompromising about this sequence: risk first, exit second, entry third. Before clicking buy or sell, he fixes the dollar risk, the stop location based on structure, and the exit conditions that would prove the premise wrong. Only then does he take the trade. If the stop is hit, there’s no story—just the rule doing its job. That discipline turns scary trades into routine business decisions.
Brooks also preplans profit-taking, so he isn’t negotiating with the market mid-move. He’ll take partials at logical magnets—prior highs/lows, measured moves, the moving average—and trail the rest behind structure. If follow-through fails, he scratches fast; if momentum accelerates, he lets the plan unlock more R without improvisation. The point isn’t never being wrong; it’s being wrong small and right according to plan. Define the risk, define the exit, execute without debate—and hope never gets a vote.
Al Brooks’ core message is ruthless simplicity: hope is not a trading strategy, and the market—not your ego—decides when you’re wrong. Beginners should always anchor trades with protective stops, while experienced traders exit the instant the premise breaks and, at times, even flip with the new momentum. He points out that clinging to losers is exactly how weeks of good work get erased.
He frames every decision in probabilities and repeatable patterns rather than opinions. After decades of daily chart study and systematic markup, he treats setups—wedges, double tops/bottoms, breakouts—as vehicles for measured, statistical edges, not predictions. The craft is documenting patterns, assigning likelihoods, and trading only what the tape is proving right now.
Context also matters by time of day: opening fireworks often reverse, while later sessions more reliably produce measured moves or surprise trends. He highlights how four–five bar breakouts in a range later in the day commonly reach measured targets, whereas early big bars can be vacuums into support or resistance that flip direction. Read the clock, read the behavior, and adapt your tactics to the session.
