WY-06-28 / 05
Hypothesis Invalidation, Discretionary Exit, and Protective Stops
Decisions, Execution & Validation
Lesson / WY-06-28
Ultimate structural invalidation tests the larger analytical model; individual trade invalidation tests a narrower participation rationale. A possible accumulation exiting downward, sustaining trading outside, making new lows, and encountering blocked rallies progressively excludes a Spring or temporary breach. One upward swing failing to reach the opposite side shows only that the rally missed its expected area, not that the entire accumulation model is disproven. Conversely, a long based on an LPS holding local support loses its entry condition as soon as that support breaks validly. A larger range that may later become accumulation does not justify unlimited expansion of this local risk.
Course content is for learning and research only. It is not investment advice.
Read the Chapter ↗Timestamps
10 lessons · Chapter contents
01Analytical Bias, Trading Opportunity, and Entry Trigger↗02Tests, LPS/LPSY, Breakout Retests, and Trend Continuation↗03Early, Confirmed, and Retest Participation↗04Price Advantage, Information, and Potential Risk↗05Hypothesis Invalidation, Discretionary Exit, and Protective Stops↗06Market, Limit, and Stop Orders↗07Risk Budget, Unit Risk, and Position Sizing↗08Multipliers, Minimum Ticks, Currencies, Costs, and Nonlinear Products↗09Portfolio Correlation, Concentration, and Abnormal-Market Contingencies↗10A Complete Trading Plan↗Observe the market: start with context and place price within its structure.
Understand structure: compare supply and demand, and let evidence support or revise your hypothesis.
Form a view: define risk limits and know when to reassess.
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Relative Strength and Opportunity Screening
Point-and-Figure Charts and Price Target Estimation
