MariaEduard replies to: The Logic Behind the Pitchfork


Following the reasoning of CrucialPoint, you have to deal with extra ‘dimensions’ (to name them according to him). No matter how you name them or figure them, you have to deal with multiple scenarios, this is a fact. That is why I do not trust in pre-heated trading systems based on if A occurs then B, because the whole sentence should be a decision-tree.
if A occurs then B if otherwise C then, provided C had occurred D if otherwise E or F. This makes more sense to me.

I’m glad you understood , let me borrow your term “decision tree”.

Example of my trading decision tree (that is somewhat pre-heated, but unlike your typical trading system you find all over the internet):

First Pullback or ABC/123 formation
1. Is the pullback with the trend or against?
…with trend > continue to analyze setup
…against trend >discard setup

2. Is the setup at the beginning phase, middle phase or ending phase of a trend?
…beginning phase > good opportunity
…middle phase > neither good or bad
…ending phase > be very cautious (Further decisions tree are set for this type of trades)

2. Does the setup have enough quantitative force behind it (no matter what phase) ?
…Yes > enter
…No > discard

3. Stop loss at 10 pips (This is due to me being a selective scalper trader. I’ve researched my trading system’s fulcrum regarding quantitative measures, 10 pips is not a random number for my trading system. Any other scalper should not take a 10 pip stop loss without understanding their position.)

4. What is the balance of price after entry, did price hit 5 pips or -5pips?
…5pips > proceed
…-5pips > decision tree >
was it a sharp move or a slow gradual move to -5pips?
…sharp move > Exit trade at -5pips
…gradual move > move stop loss at 7.5pips

5. Has price hit 10pips?
…Yes > move SL to 1pip
…No > proceed

6. Has price hit 50pips in under 7minutes (7min is not any random number for my trading system)
…Yes > Exit
…No > proceed

My cross-roads decision tree is implemented at this stage

Exit is determined either which parameter occurs first
* price retracement at a certain level
* quantitative force has depleted to a certain level

7. Has Price retraced to a certain % or is the quantitative force at a depleted level?
…Yes > Exit
…No > Proceed

8. Has price hit 200pips in under 1.5hrs?
…Yes > Exit
…No > calculate where is price according to my 4th dimension

9. Is price within/outside range of my 4th dimension?
…Within > Continue to implement Cross-roads decision tree
… Outside > Move stop loss to the 4th dimension level
Continue to trail price while outside the 4th dimension level until it goes within and then refer back to the Cross-roads.

10. The joker dimension will show up at any unforeseeable time.
…Continue with decision tree as long as price is outside the 4th dimension
…Exit when the second Joker occur, even if price is outside the 4th dimension

11. Is my trade going to run through a news release?
(Further decision tree are set for this scenarios)

12. End of trading session?
…Yes > Exit
…No > continue to trade

Well there you go ladies and gents, now you get a glimpse of a real professional trading system: the main crucial point is the quantitative force, a dynamic entry and the second crucial point is the dynamic exit. Notice that I have at least 12 dynamic exit strategy set in place apply it to your pitchforks

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