Major reversals Long
Wedge bottom
Third push down reaching support. New lows have weakening follow-through or greater overlap.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextThird push down reaching support
- PressureNew lows have weakening follow-through or greater overlap
- SetupThird push down reaching support. Require rejection or acceptance at the marked structure.
- DecisionBull reversal or break of the bear micro-channel
The decision map
02 / QUICK REFERENCE- Location
- Third push down reaching support.
- Evidence
- New lows have weakening follow-through or greater overlap.
- Trigger
- Bull reversal or break of the bear micro-channel.
- Invalidation
- Break below the wedge extreme.
- First objective
- Prior lower high or origin of the final leg.
- Pass when
- All three pushes remain powerful and closes remain bearish.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
The bear trend has made three pushes down, with each push producing less sustained selling or increasing overlap. The third push reaches support and fails to continue. I will buy only after a bull reversal signal or strong break above the bear micro-channel. My thesis is wrong below the wedge low. I will target the EMA, prior lower high or beginning of the final leg down.
The wedge creates potential because:
- Late bears may be exhausted.
- Early bears take profits.
- Countertrend bulls enter.
- A failed third push traps sellers.
Three pushes alone are insufficient if every push remains powerful.
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 lower high or origin of the final leg. 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.