3 Brooks On ScalpingWhen ES Daily ATR is pts, using a 2 pt protective stop is a reliable approachIf scalping for a 1 pt profit, you need to win more than twice as often as you loseTherefore, you need to be right about 70% of the time just to break evenFor this reason, Brooks mostly swing trades
4 Brooks on Intraday Swing Trading An ES swing setup has a high probability to achieve 10 pts during the intraday move when ATR > 15-25There 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.
5 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
6 Al’s Four Trend Categories The Trend: When price action becomes “Always in Long” or “Always in Short” in the eyes of the traderSwing: Two or more smaller trends with a series of higher highs and lower lows or vice versaPullback: a temporary countertrend move which can be part of a trend or swingLeg: a smaller trend which is part of a larger trend, swing or pullback
7 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” TrendStrong momentum moves have at least a test of the extreme following each PullbackAll strong moves usually have at least two Legs even if the 2nd falls short and reverses