The market moves in waves. Human psychology dictates that profit-taking or counter-trend attempts usually happen in two distinct waves (or legs). PATS looks to enter the market precisely when a counter-trend correction has completed its second leg, trapping counter-trend traders and fueling the resumption of the main trend. The Core PATS Trading Setups
Always use Stop Orders to enter. Buy 1 tick above the signal bar; sell 1 tick below. If price does not hit your stop on the next bar, the setup is often invalidated.
: While universal, the system is most commonly demonstrated on 2000-tick charts for the E-mini S&P 500 (ES) to capture clean intraday price action. Key Trade Setups Pats Price Action Trading Manualpdf
The Pats method doesn't draw exact trend lines; they draw "zones."
The next bar that breaks above the high of the previous bar forms the . If this happens at the 21 EMA with a strong bullish signal bar, it is a high-probability buy. Second Low (2CL) - Bearish Setup: The market is in a downtrend below the 21 EMA. The market moves in waves
The manual outlines specific, rule-based setups that recur daily in trending or range-bound markets: FAQs - Price Action Trading System
Mack strictly advocates for using buy stop or sell stop orders placed exactly one tick beyond the signal bar. This ensures that the market must actively move in your intended direction to fill your entry. This contrasts with variations popularized by other traders, such as Thomas Wade, who often utilize limit orders to get a more favorable entry price at the expense of occasionally missing the move entirely. The Core PATS Trading Setups Always use Stop
Look for this setup during an uptrend when the price begins to pull down toward the EMA.
The world of day trading is filled with thousands of technical indicators, from RSI and MACD to complex algorithmic overlays. However, a significant portion of consistently profitable retail traders eventually strip their charts clean, returning to the raw movement of price. Among the most popular and enduring frameworks in this minimalist discipline is the Price Action Trading System (PATS), developed by an experienced futures trader known simply as Mack. For years, aspiring market participants have searched for the definitive to unlock a structured, rule-based way to scalp the markets without indicator clutter.