My Trading Rules

My trading rules follow Al Brooks’ price action principles — staying patient, reading context carefully, and only acting when probability, risk, and reward are in balance.

I trade S&P 500 ES Futures using pure price action, focusing on context, structure, and strict discipline.
While I originally traded the PATS (Price Action Trading System) taught by Mack, I’ve transitioned to a more flexible Brooks-style approach — fewer mechanical rules, but deeper focus on market behavior and trade logic.
 

📈 Trade Selection

I look for trades where context, structure, and risk/reward align:

• Major Trend Reversals (MTRs)

• High 2 / Low 2 setups

• Bull and Bear Flags

• Breakouts

• Breakout Pullbacks

• Failed Breakouts

• Higher Low or Lower High setups confirming strength or weakness
   

• 🎯 Daily Trading Objective

• 1–3 high-quality swing trades per day

• Focus on context and quality, not quantity
   

⚖️ Risk & Reward Principles

Risk management is the foundation of this strategy.

Every trade must make mathematical sense according to Al Brooks’ Trader’s Equation:

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(Probability × Reward) – [(1 – Probability) × Risk] = Positive Expectation

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This equation helps determine whether a trade has a real edge.
It reminds me that even a good-looking setup isn’t worth taking if the math doesn’t work.

For example:

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• A 60% chance of winning with a 1:1 trade has a positive edge.

• A 40% chance setup can still be valid if the reward is twice the risk (1:2).

• A low-probability reversal can work if the potential reward is three times the risk (1:3).
   

The key is understanding the relationship between probability, risk, and reward — not aiming for perfection, but for trades that make sense over time.

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Practical guidelines:

• Minimum Risk:Reward = 1:1 on all trades

• If probability is lower or context uncertain, aim for 1:2 or better

• Stop-loss is placed beyond the previous major swing — it may be wide, but serves mainly as a safety net

• If the trade premise is no longer valid, I will exit early and scratch the trade

• Never adjust a trade out of emotion — only a clear change in context can justify exits or modifications

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Finding balance is key:
Let a valid trade play out if the premise remains intact,
but exit quickly if context changes or the setup clearly fails.

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🚨 Most Important Rule!
DON’T GET GREEDY.

I stick to the plan. I follow the rules.
Discipline > Everything.