Trend continuation Both
Trend resumption after a two-legged correction
Second corrective leg into trend support. Both countertrend legs fail to produce a change of control.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextSecond corrective leg into trend support
- PressureBoth countertrend legs fail to produce a change of control
- SetupSecond corrective leg into trend support. Require rejection or acceptance at the marked structure.
- DecisionReversal after the second leg and renewed trend pressure
The decision map
02 / QUICK REFERENCE- Location
- Second corrective leg into trend support.
- Evidence
- Both countertrend legs fail to produce a change of control.
- Trigger
- Reversal after the second leg and renewed trend pressure.
- Invalidation
- Failure of the correction extreme.
- First objective
- Prior trend extreme.
- Pass when
- The second leg is accelerating rather than losing pressure.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
The market remains Always In Long, but it has entered a two-legged correction. Both legs down failed to produce a strong bear breakout, and the second leg reached support with declining selling pressure. I will buy after the second leg forms a credible reversal or failed breakout. My thesis is wrong below the correction low. I will target the prior high.
Mirror-short:
The market remains Always In Short. A two-legged rally reached resistance, but bulls failed to create a strong breakout. I will sell after the second leg turns down, with invalidation above the correction high and a target at the prior low.
04 / FROM IDEA TO A PLAN
Manage the thesis, not the need to be right.
Before entry
Write the structural invalidation and first realistic objective. Size to the loss you have already accepted, including costs and possible slippage. If the stop is unaffordable, reduce size or pass.
After entry
Reassess follow-through against the evidence above. Do not widen the stop or add because price “has gone too far.” A bounce to your average entry is not a market thesis.
At the objective
Prior trend extreme. Decide ahead of time whether to exit or retain a defined remainder. Continue only while structure and follow-through support the trade.
During review
Record the entry-time chart, planned risk, maximum adverse excursion, actual exit, and whether the thesis was invalidated. Judge the decision separately from the outcome.