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<abbr>''The 1st pullback after the reversal attempt from a wedge bottom.''</abbr> | |||
== General == | == General == | ||
[[File:Wedges 6.png|thumb|602x602px]]<abbr>'' | [[File:Wedges 6.png|thumb|602x602px]]<abbr>''Among many different variations of MTR, especially [[HLMTR]] and [[LHMTR]], there are certain type of setups that have higher chance of success, based on various factors. [https://www.priceactionindicators.com/about/ Thomas Deutschmann] had a post [https://www.priceactionindicators.com/2020/07/29/trade-the-1st-pullback-after-a-wedge-the-w1p/ Trade the 1st Pullback after a Wedge – the W1P!] that explained a concept called W1P that was originally brought up by [https://ninetrans.blogspot.com/2011/02/wedge-reversals-and-w1p.html cadaver]. W1P is actually a special case of HLMTR/LHMTRs that cadaver narrowed it down with some specific criterias so that '''trader can use them to find the best MTR set up, and avoid less-good set ups'''.''</abbr> <abbr>''More example chart can be found here:''</abbr> ''https://www.priceactionindicators.com/2020/07/29/trade-the-1st-pullback-after-a-wedge-the-w1p/. (Credit to Thomas Deutschmann)'' | ||
[[File:20221108pa.png|thumb|602x602px|Figure 1 - [[20221108]]]] | [[File:20221108pa.png|thumb|602x602px|Figure 1 - [[20221108]]]] | ||
'' | == Wedge reversal == | ||
''A Wedge reversal (three or four pushes each with a new extreme) forming at the top or bottom of a trend is probably the most successful setup for a swing trade.'' | |||
=== The most crucial prerequisite === | |||
# '''''a clear trend <abbr>channel</abbr> line overshoot and in particular a second overshoot, which essentially makes it a typical [[PW]].''''' | |||
# ''Strong reversal bar (with an average size), that isn’t | === Other strengtheners === | ||
# ''Strong entry bar (closed around its high), preferably larger than the reversal bar, for e.g. bar 62 in figure 1.'' | # '''''Strong reversal bar''' (with an average size), that isn’t overlapping with prior swing low, i.e. the 3rd or 4th push created a clear gap below the prior low, see the gap below 57L and 61H in figure 1.'' | ||
# '''''Strong entry bar''' (closed around its high), preferably larger than the reversal bar, for e.g. bar 62 in figure 1.'' | |||
# ''The <abbr>pullback (if any) after the entry bar</abbr> '''should not take out the <abbr>entry bar</abbr> by more than''' '''one tick'''.'' | |||
# ''One push move off the wedge <abbr>signal bar</abbr>, that takes out a prior swing point, indicating bulls ability to close the gap quickly, hence strong [[BP]].'' | # ''One push move off the wedge <abbr>signal bar</abbr>, that takes out a prior swing point, indicating bulls ability to close the gap quickly, hence strong [[BP]].'' | ||
# ''Breakout test of the entry price of the reversal bar during the <abbr>[[W1P]](1st pullback after the Wedge).</abbr> | # ''Breakout test of the entry price of the reversal bar during the <abbr>[[W1P]](1st pullback after the Wedge).</abbr> In figure 1, the W1P happened at bar 67 but was bought quickly and never get close to bar 62 the entry bar.'' | ||
'' | == ''Stop order entry'' == | ||
* ''buy above the W1P bar using.'' | |||
* ''or buy above the bull reversal bar, higher RR but lower probability.'' | |||
== ''Stop Placement'' == | == ''Stop Placement'' == |