Major reversals Short
Parabolic wedge top
Accelerating rally into a climax. Momentum is extreme; exhaustion still needs confirmation.
Read the sequence.
01 / OBSERVE → DECIDE
- ContextAccelerating rally into a climax
- PressureMomentum is extreme; exhaustion still needs confirmation
- SetupAccelerating rally into a climax. Require rejection or acceptance at the marked structure.
- DecisionBear reversal, failed bull resumption, and follow-through
The decision map
02 / QUICK REFERENCE- Location
- Accelerating rally into a climax.
- Evidence
- Momentum is extreme; exhaustion still needs confirmation.
- Trigger
- Bear reversal, failed bull resumption, and follow-through.
- Invalidation
- Break above the climax high.
- First objective
- First support in a potential two-legged correction.
- Pass when
- Selling an accelerating rally before buyers fail.
03 / THE FULL ARGUMENT
Thesis & participant logic
Supplied study draft · adapted Brooks-style prose, not a quotation from Al Brooks
The bull trend is accelerating through increasingly steep pushes. The move is climactic and vulnerable to profit-taking, but I will not sell solely because price appears too high. I require a bear reversal, failed bull resumption and follow-through. My thesis is wrong above the climax high. I will target a two-legged correction toward the EMA.
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
First support in a potential two-legged correction. 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.