Framework 1: Trend-following
Trade in the direction of the prevailing higher-timeframe structure (higher highs and higher lows, or the reverse).
- Context: clear trend on a higher timeframe
- Trigger: pullback into a prior zone followed by a rejection candle
- Invalidation: structure break against the trend
- Weakness: fails in sideways, choppy conditions
Framework 2: Range trading
When price oscillates between support and resistance, some traders look for rejections at the edges.
- Context: at least two touches on each side of a range
- Trigger: rejection wick and close back inside the range
- Invalidation: decisive close outside the range
- Weakness: breakouts can be sudden and fast
Framework 3: Breakout and retest
Wait for a decisive close beyond a well-defined zone, then a retest of that zone from the other side.
- Context: compression before the breakout
- Trigger: retest holds
- Invalidation: price returns deep into the old range
- Weakness: many breakouts fail, especially in thin liquidity
How to judge any strategy
Expectancy = (Win rate × Average win) − (Loss rate × Average loss)
With fixed payouts below 100%, a strategy can win more than half the time and still lose money. Read our full guide on how to evaluate a trading strategy.
