The Al Brooks Strategy Rules

At the heart of TradingRight is a strategy rule engine — a catalog of discrete, testable rules drawn from Al Brooks' Day-Trader and Scalper price-action methodology. Instead of relying on a gut feeling about whether a setup is "good," the engine evaluates each rule against the live bar and returns a clear PASS, FAIL, or NA, with the reason. This page is the complete reference to every rule, grouped exactly as the engine organizes them.

New to the underlying ideas? Read Price Action Basics and The Market Cycles Explained first — the rules below assume you can recognize a breakout, a channel, a range, and a reversal.

How the rule engine works

The catalog is organized along three axes:

• Strategy / style — Trending (Day Trader) or Scalp (Scalper). See Trending vs Scalping for how these differ.
• Market cycle — Breakout, Tight Channel, Broad Channel, Range, or Reversal. The cycle decides which rules even apply.
• Rule kind — an ENTRY rule (a condition for taking a trade) or a STOP rule (how to place the protective stop and size the trade).

You multi-select the rules you want to trade by, and set a required pass rate (70% by default). For each bar, the engine scores your selected rules; if enough of them pass, the setup is considered valid. Each result carries a short detail such as "Body 72% — passes ≥ 70%," so you always see why a rule passed or failed rather than just a green or red light.

The Trending style reads context from the higher (5-minute) timeframe and aims to ride a meaningful portion of a move. It tolerates a lower win rate in exchange for larger winners, so its entry filters favor strong structure and trend alignment.

Breakout

• ENTRY
  Market mode is BREAKOUT5-min market mode is in a breakout phase aligned with the trade direction.
• ENTRY
  Strong breakout bar (body ≥ 70%)Large strong bar breaking through key level — body 70%+ of bar range.
• ENTRY
  Do NOT enter on the breakout bar itselfWait for second bar follow-through; never enter on the breakout bar.
• ENTRY
  Second bar confirms follow-throughSecond bar after breakout closes in breakout direction.
• ENTRY
  Enter on first pullback after breakoutStop order above/below the first pullback after breakout (1–2 bars max).
• ENTRY
  VWAP aligned (above for buy, below for sell)Institutional bias must align — price above VWAP for buy, below for sell.
• STOP
  Stop just inside the breakout levelStop placed just inside breakout level (below breakout bar low for buy).
• STOP
  Min R:R 1:1, max risk 1%Risk no more than 1% per trade and target at least 1:1 reward-to-risk.

Tight Channel

• ENTRY
  Market mode is TIGHT_CHANNELPrice consistently above/below 20 EMA — EMA sloping steeply.
• ENTRY
  Price respects 20 EMABull: price above 20 EMA. Bear: price below 20 EMA.
• ENTRY
  Pullback shallow (25–40% retracement)Pullback does not pass last swing low/high — 25–40% retracement only.
• ENTRY
  Signal bar body ≥ 70%Signal bar body is 70%+ of total bar range — strong conviction.
• ENTRY
  VWAP slope aligns with trendVWAP sloping in trend direction — price above (bull) or below (bear) all session.
• ENTRY
  No counter-trend tradeMost costly mistake — never trade against a tight channel.
• STOP
  Tight stop just beyond signal barStop just beyond channel line or signal bar extreme; tighten on 1-min.

Broad Channel

• ENTRY
  Entry only at channel boundaryNever mid-channel — only at upper/lower channel edges.
• ENTRY
  Strong signal bar at edge (body ≥ 50%)Strong signal bar at channel edge — body 50%+ of bar range.
• ENTRY
  Pullback held last swing low/highBull: pullback held last swing low. Bear: held last swing high. Structure intact.
• ENTRY
  VWAP aligns with directionAbove VWAP for buy, below for sell.
• STOP
  Reduced size, breakeven earlierMomentum weaker than tight channel — move stop to breakeven sooner.

Range

• ENTRY
  Market mode is TRADING_RANGEEMA flat, bars crossing EMA repeatedly, clear ceiling and floor.
• ENTRY
  Buy near support / Sell near resistanceLower edge of range only for buys; upper edge for sells.
• ENTRY
  VWAP flat (range day confirmed)VWAP flat — price oscillating above and below confirms range day.
• ENTRY
  Clear signal bar body ≥ 50% at boundaryClear signal bar at boundary, body 50%+ of range.
• ENTRY
  Do NOT chase range breakouts80% of range breakouts fail — fade boundaries instead.
• STOP
  Stop just outside range boundary1 tick beyond the boundary; ½ size.

Reversal

• ENTRY
  Strong reversal signal barLarge body against prior trend, closes near extreme.
• ENTRY
  At least 2 reversal signalsWedge + climax / failed breakout / double top — never on 1 signal.
• ENTRY
  Pullback reached 66–75% of prior legTrend exhausted — deep retracement confirms reversal.
• ENTRY
  VWAP crossed and held 3+ barsVWAP now acting as resistance/support on the new side.
• ENTRY
  Do NOT take reversal on a dojiReversal needs strong signal bar — doji not sufficient.
• STOP
  Stop beyond reversal extremeStop beyond extreme of reversal pattern (prior trend's last high/low).

The Scalp style works the 1-minute chart aligned to the 5-minute bias, taking fast trades for small, defined gains. Because each trade captures little, scalp rules demand stronger relative bars, mandatory tight stops, and a higher reward-to-risk to overcome noise and costs.

Breakout

• ENTRY
  5-min trending/breakout alignedScalp aligns with 5-min bias — no opposing trend.
• ENTRY
  1-min breakout bar body ≥ 60%Genuine conviction — body 60%+ of bar range.
• ENTRY
  Bar large vs recent 1-min barsRange ≥ 1.4× the 10-bar average — strong relative momentum.
• ENTRY
  Wait for pullback or 2nd barNever enter on the breakout bar itself.
• ENTRY
  VWAP alignsAbove (buy) / below (sell) VWAP — institutional bias confirmed.
• STOP
  Stop 1 tick beyond signal barTight, mandatory for all scalps. Never widen.
• STOP
  Min R:R 2:1Scalps need higher ratio due to noise — minimum 2:1.

Tight Channel

• ENTRY
  5-min in tight/broad channelScalp aligns with 5-min primary trend.
• ENTRY
  Price respects 9 EMABull: price above 9 EMA. Bear: below. EMA sloping.
• ENTRY
  Signal bar body ≥ 60%Closes near its high (buy) or low (sell).
• ENTRY
  VWAP aligns (or VWAP scalp)Pullback to VWAP with strong reversal bar — enter on stop above/below.
• ENTRY
  No counter-trend scalpHighest probability mistake — never scalp against a tight channel.
• STOP
  Stop 1 tick beyond signal barBelow signal bar low (buy) / above high (sell). Use 30-sec to tighten.

Broad Channel

• ENTRY
  Entry only at 1-min channel boundaryLower (bull) or upper (bear) channel edge — never mid-channel.
• ENTRY
  Signal bar body ≥ 60% at boundaryStrong commitment from buyers/sellers at the edge.
• ENTRY
  VWAP alignsAbove VWAP for buy, below for sell at time of entry.
• STOP
  ½ size, BE after 3 barsBroad channel = more noise; reduce size and breakeven early.

Range

• ENTRY
  AT absolute range boundaryNot near it — AT it. Buy lower edge, sell upper edge.
• ENTRY
  Signal bar body ≥ 60% at boundaryStrong reversal signal at boundary required.
• ENTRY
  VWAP flat (range day confirmed)Price oscillating around VWAP confirms range day.
• ENTRY
  Do NOT scalp range breakouts80% fail — most dangerous scalp.
• STOP
  Stop just outside range boundary1 tick beyond the boundary; ½ size.

Reversal

• ENTRY
  5-min trend structure brokenPrior swing low/high violated on 5-min.
• ENTRY
  1-min reversal bar body ≥ 60%Body against prior 1-min trend direction.
• ENTRY
  1-min VWAP crossed + held 3+ barsNow acting as resistance/support — confirmed flip.
• ENTRY
  At least 2 reversal conditionsFailed breakout + climax bar / double top etc.
• STOP
  Stop beyond reversal extreme1 tick beyond reversal bar high/low; ½ size.

Common threads across every cycle

Read the catalog top to bottom and a handful of principles repeat in every cycle — they are the real lessons:

• Never enter on the breakout bar. Both styles insist on a second bar or a pullback. Chasing the first big bar is how breakout traders get trapped.
• Body size signals conviction. Trending entries want ≥ 70% bodies; scalps accept ≥ 60% but add a relative-size check. A strong close is the engine's proxy for "someone meant it."
• VWAP must agree. Almost every entry rule checks VWAP alignment — a simple stand-in for institutional bias.
• Don't fight a tight channel, don't chase a range breakout. The two most expensive mistakes appear as explicit "do NOT" rules in both styles.
• The stop comes first. Every cycle pairs its entries with a defined stop and a reward-to-risk floor (1:1 for trends, 2:1 for scalps). See Risk Management & Reward-to-Risk.