Price Action & Setups

Build the analysis in a fixed order: describe structure, mark the nearest relevant zone, define the price reaction you need, and identify invalidation. Only then calculate the trade. This avoids choosing an attractive target first and working backwards to justify an entry.

Include opposing evidence. Rising structure can meet a strong overhead reference; a clean reclaim can occur just before a scheduled event. The job is not to accumulate reasons to press the button. It is to determine whether this particular plan is complete and testable.

Before advancing replay, write what will make you wait, pass or cancel a pending idea. If the price runs without offering the required entry, record the missed opportunity rather than inventing a fill. Later review should distinguish a rule-following pass from hesitation after a valid trigger.

Worked example

A hypothetical chart has rising structure and a support area at 100–101. Your rule waits for a reclaim and retest. An entry at 102 with invalidation at 99 creates 3 points of risk. The next opposing reference is 105, only 3 points away. If your tested plan requires 2R of available room, this example fails that condition even though the chart looks constructive.

Try it in replay

Annotate one historical chart and write a five-line plan: context, location, trigger, invalidation, and size/exit. Add the strongest reason to pass. Save the chart before and after.

Check your reasoning

The plan is complete only if another reader could apply its rules without knowing the outcome. Continue with Confluence Masterclass to organize several kinds of evidence without counting the same idea twice.