Major reversals Short
Wedge top
Third push up reaching resistance. New highs have weakening follow-through or greater overlap.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextThird push up reaching resistance
- PressureNew highs have weakening follow-through or greater overlap
- SetupThird push up reaching resistance. Require rejection or acceptance at the marked structure.
- DecisionBear reversal or break of the bull micro-channel
The decision map
02 / QUICK REFERENCE- Location
- Third push up reaching resistance.
- Evidence
- New highs have weakening follow-through or greater overlap.
- Trigger
- Bear reversal or break of the bull micro-channel.
- Invalidation
- Break above the wedge extreme.
- First objective
- Prior higher low or origin of the final leg.
- Pass when
- All three pushes remain powerful and closes remain bullish.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
The bull trend has produced three pushes higher, but follow-through is deteriorating and the third push reaches resistance or overshoots the channel. I will sell only after a bear reversal signal or clear break below the bull micro-channel. My thesis is wrong above the wedge high. I will target the EMA, prior higher low or beginning of the final leg up.
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 higher low 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.