Al Brooks Price Action Concepts: Bar Counting, H1/H2, Wedges and Measured Moves
Lesson 8 of 10 · Advanced
Reading bar by bar in the Al Brooks style
The Al Brooks approach is one of the most granular forms of price action. The central idea is that nearly every bar carries information about the balance between buyers and sellers, and the trader keeps asking: if I had to take a trade right now, which direction is more probable, and is the reward-to-risk reasonable? The method is usually taught on a 5-minute chart with a 20-period exponential moving average, but its concepts apply on other timeframes as well.
A few basic terms:
- Trend bar: a bar with a relatively large body, showing one side in control. A doji is a bar with a small body, showing balance.
- Signal bar: the bar that completes the setup. Entry bar: the next bar in which the entry takes place, usually with a stop order one tick above the signal bar's high to buy, or one tick below its low to sell.
- The trader's equation: a trade makes sense when probability times reward is greater than the opposing probability times risk. The idea is simple, but estimating probabilities is always approximate and takes experience and testing.
Bar counting: H1, H2, L1 and L2
Bar counting is a way of bringing order to pullbacks. In an uptrend, when price pulls back:
- H1 (High 1): the first bar during the pullback whose high exceeds the high of the previous bar. It is the buyers' first attempt to resume the trend.
- H2 (High 2): if that first attempt fails and the pullback continues, the second time a bar's high exceeds the previous bar's high is H2. It is also called the "second entry".
- L1 and L2 are the mirror images in a downtrend: the first and second times, during a bounce, that a bar's low falls below the previous bar's low.
Why does the second entry matter? The logic of this style is that pullbacks often have two legs. When the first attempt to resume the trend (H1) fails, sellers become hopeful; if their second attempt to push lower also fails and an H2 forms, they have failed twice, and in this approach the odds of the trend resuming are seen as higher. This is not a fixed statistical law: its behaviour varies across markets and periods and should be checked on your own data.
An important detail: an H2 in a strong trend near the 20-period moving average, with a good signal bar (a bull bar closing near its high), is generally considered a higher-quality setup than an H2 in the middle of a crowded range. And if the H2 fails too, the pullback may extend to an H3 or even H4; an H3 often takes the shape of a small wedge bull flag.
Always In: the question to keep asking
The Always In concept is simple and powerful: if you had to be in the market at all times, would you be long or short right now? The answer sets the market's "default" direction in this style.
- The market usually turns Always In Long when a strong upside breakout occurs, with several consecutive bull trend bars and follow-through, so that most traders accept the direction has changed.
- Until a strong opposing breakout occurs, the Always In trader prefers to enter only in the current direction and sees pullbacks as entry opportunities rather than signs of a reversal.
- In a tight trading range, where bars overlap heavily and long wicks appear on both sides, the Always In direction is unclear. The style considers such conditions hard to trade, and the usual advice is caution or standing aside.
Always In prevents one of the costliest habits: trading against the trend on every small sign of reversal.
Wedges: three pushes and exhaustion
In the Al Brooks style, a wedge is any three-push pattern: three successive higher highs (or three successive lower lows) where the movement between them typically becomes slower and more overlapping. The lines do not have to converge exactly; what matters is three attempts and a loss of momentum.
- Reversal wedge: after a long trend, three pushes with decreasing momentum can signal exhaustion. A reversal from a wedge often has at least two legs, and a common target is the start of the wedge, but sometimes only a small correction results.
- Wedge as a flag: if three pushes occur in the direction of a pullback (for example three lower lows in a correction of an uptrend), the pattern is a "wedge flag" and its end can mark a resumption of the main trend. This is the H3.
Teaching example with hypothetical numbers: in a one-hour rally, gold makes highs at 4210, 4222 and 4228; each push is shorter than the one before, with smaller bars and more upper wicks. That is a possible wedge. Rather than selling the third high, a trader in this style waits for a good bear signal bar and enters with a stop order below it, keeping in mind that the reversal may only reach the last low of the wedge (say 4205). If price moves above 4228 with large bars, the wedge is invalidated.
The measured move
The measured move is a tool for estimating targets, not a certain forecast. It comes in two common forms:
- Leg 2 equals leg 1: if a 40-dollar up-leg resumes after a pullback, one common target is a second leg of about 40 dollars, similar to the AB=CD idea in other styles.
- Range height: when price leaves a range, the height of the range projected from the breakout point is used as an approximate target. For example, an upside breakout from a 4140 to 4180 range (height 40 dollars) suggests a rough target near 4220.
In practice these targets are often missed by a few dollars and sometimes not reached at all; markets sometimes go far beyond them and sometimes reverse early. The real value of the measured move is that it helps you estimate reward-to-risk before entering and choose a logical point to take partial profit.
When do these concepts work poorly? Bar counting and Always In are most useful in clear trends. In tight ranges, on news days and in thin gold hours, counts keep getting disrupted. Much of this style also relies on judgement, so practising with bar replay and logging your setups carefully is essential. This lesson only reviews the core ideas in our own words and is no substitute for studying the method in depth.
Common mistakes
- Counting H1 and H2 in tight ranges where counts carry little meaning
- Entering an H2 without a decent signal bar or a clear trend
- Selling the third high of a wedge without waiting for a signal bar and a stop-order entry
- Treating a measured move as a certain target
- Trading against the Always In direction on every small sign of reversal
- Using the terminology without fixed, written definitions
What does volume say here?
The Al Brooks style deliberately relies only on bars and a moving average, which shows how much information price itself contains. Even so, volume and order flow can refine some of its setups. In a reversal wedge, if the third push is made with weaker delta than the first and second (delta divergence), or heavy aggressive buying is absorbed at the third high without price advancing, the sign of exhaustion is stronger. In an H2, falling volume in the second leg of the pullback and delta turning positive on the signal bar can suggest that sellers have genuinely stepped back.
In breakouts that make the market Always In, high volume and delta in the same direction are usually a sign of genuine participation, and climactic volume at the end of a long trend can warn that the next leg is more likely a correction. The volume profile of ranges also helps locate the edges and the middle of the range. The combination is fair to both: bars build the structure of the decision and volume tests its quality. For gold, prefer data from COMEX futures (GC); CFD volume is only tick volume.
📊 See real gold futures volume behind these ideas: free order flow course · today's gold volume map
Frequently asked questions
What is the difference between H1 and H2?
In an uptrend pullback, H1 is the first bar whose high exceeds the previous bar's high, and H2 is the second time. In the Al Brooks style, the H2, or second entry, is generally seen as a more credible attempt to resume the trend, but that should be tested on your own data.
What does Always In mean?
It means: if you had to be in the market at all times, which direction would you be in now? It defines the market's default direction and usually changes after a strong breakout with follow-through.
How does a wedge in this style differ from a classic wedge?
In this style any three-push pattern with decreasing momentum counts as a wedge, even if its lines do not converge exactly. A wedge can be a reversal pattern or, in the direction of a pullback, a continuation flag.
Education only, not a recommendation to buy or sell; we never give signals. Price examples are illustrative. Test any method on a demo account first, with strict risk management.