An Edge for an Edge (System Development)

actually here is the 123 at end of down trend wait for it to break then take pullback at point 3 where demand formed its better to buy low and sell high

yes, it is there but in the rules i posted you open trades only if the signal was generated in current trading sesion.
same rule can be aplied for money managemnt, for example:
assuming that your trading system/strategy has a pyramiding concept incorporated (adding position per turtle trading rules using atr) the problem with this mm plan is that it can open 3 or 5 positions in the same day and also it can close all of them in the same day at loss.
so beter entry only one trade per day

santa clasu rally - not an edge, just a market behaviour that repeated itself for many decades (i;m sure that someone that has realy a passion for trading can develope an edge for him) in fact some trading systems/strategies are using seasonal pattern to generate trading signals
a santa claus rally is a surge in the price of stocks that often occurs in the last week of december through the first two trading days in january.

just look at coffe prices every time they hit 100usd or wher close to 100usd with a margin of 1-2% in 2013, 2009,2006,2000,1996,1994.
yes round number have some impact on traders psychology but the impact its a little bit bigger on numbers like 100 and 1000.
so try to build an approach to entry sell/buy possition when markets are trading at 98-102 usd or 980-1020 usd that lets profit runs and cutting losses fast. (nice concept because you don't have to many instruments that aare hitting this numbers in same time)
you realy need to do your own research for this concept

just a trick
buy after an congestion period if price breaks to the upside.
if second day after the breakout from congestion price is doing a higher high and next day is an inside bar then buy again tomorrow when price breaks to the highest high made by the bar before the inside day.

another trick
make sure that the bars before the inside days have made higher highs (the high should be atleas the highest high in 5 days) for buy /reverse for sell
and also make sure tjat the pattern is like in the pic the higs and the inside days are succesive
trade only daily charts

buy if the asset is in an uptrend if (reverse for sell): the close of day 1 was in the lower quarter of the bar, the close of the second day was in th upper quarter, go long tomorrow when price breaks yesterday high.

a friend of mine showed me this setup, she told me that she start first with looking if adx14 is above 30 and after that she start looking to define if the trend is up or down using only a sma.
if trend is up she is looking for buy and if id down for sell.
in an upptrend if last 3 days where lower lows days, buy next day at the break of yesterday low

p.s. i think i've seen this pattern in a book some time ago and i asked her if is true or not, no response from her just a smile
p.s.2 i never traded using this setup, but i thinks is decent at least.

it's not only about the pattern but about what market you trade/instrument when and whay and last but most important risk, trade management and pyramiding.
hint: going long on weekly and or monthly pinbars after an yearly low in comodities can be hard but the reward can be huge.
in curencies is better to make bets on very bad countries like usd/ron or others or usd/sar when that peg will explode will be big.
this aproach to market works better on soft comodities.

In the past 20 years the Dow Jones daily monday to wednesday gains add up to 200%, which is not just 200% because they are "compounded" daily (it goes from 2000 to 11000). Yet on thursday and friday, they add up to -7%. same for sp500 monday is more bullish than others day.

or what about this one?

in comodities after a long downtrend, price is doing a 20 day low (if is a 40 or 60 day low better), next day is an inside day. now price can breake the low of the inside day, the high or nother of them doing more inside days, an congestion zone.

you can play the breakout to downside (like trend trading) or if price reverts in same day you go long. or you play the tourtle soup method but you only whait for this particular pattern.
most people are betting like in pic 1

some profesionals like in pic 2 (they close and evers the position)

and other pro like in pic 3.

Retail traders, professional speculators, money managers, hedgefunds and so from time to time they place the STOP at yesterday's high or low. (not saying this is stupid). this is because some of the systems/approches to the market are just designed like that.

Today's Price will break yesterday's low, high or both .Today's Price will not break yesterday high or low. (sometime because just noise/random action or really some sh*t it's happening just don't think to much about it)

This trick it's not the holy grail but it's very close to a very, very small edge

Define the long term trend on daily and trade only in the direction of the percived trend
For long reverse for short
Next day after an inside day go to intraday chart
Your reference point is the first 1h candle of the curent day
After the first hour of the day price breaks below the low of the reference point (dosen't matter if this happens after 2 hours from open or after 6,7 or so)
Buy when price reverse and breaks the highes high in the current sesion (sometimes is the high of the first 1h candle sometimes price climbed higher)
Don't open a position if all of this happens in the first 4 to 6 hours it's best to open position after half of the trading sesion passed.

STOP at 2x the distance from the entry and low of the day
Pyramid 2 more times only when price climbs half of distance made from low to entry. Stops on pyramid should have same rule 2x from entry (use the turtle rules to pyramiding but don't add 4 times like they used to do)

This is not a common pattern but don't bet the farm on this concept it still fails a lot of time.
Attached Image (click to enlarge)
https://www.forexfactory.com/attachm...1&d=1615063290

P.S. even with the rules above i play this setup with different % risk allocated depending on the intrument traded. if i trade currencies i use certaint percentage of risk but if i play commodities i use a higher percentage (yes it's wrong but i know it). As Soros says you need to know when to break the rules.
Bearish markets in commodities are defined by price breaking fast and with huge moves, bullish markets go up slowly with small variations. Agricultural commodities act different from metals and oil a little bit, don't forget about seasonality patterns, gaps and limit up days. This is the reason behind different risk % allocated.
P.S.S. this is are just my beliefs

This phenomenon was discussed over there, starting with this post ---> https://www.forexfactory.com/thread/...4#post13362694

Watch the excellent video here --->

Basically, the theory is, traders want to be buying (or selling) in the area of the Weekly WICK, and this method strives to identify that region with Price Action.

PS - Your memory failed you; the EXACT quote is "For every action, there is an equal and opposite reaction." The statement means that in every interaction, there is a pair of forces acting on the two interacting objects. The size of the forces on the first object equals the size of the force on the second object. The direction of the force on the first object is opposite to the direction of the force on the second object. Forces always come in pairs - equal and opposite action-reaction force pairs.

Attached Image (click to enlarge)

The question is all about CONSISTENT EDGE.

WHAT ALWAYS REPEAT IN INFINITY in the market.

Is there any ?
If we willing to believe ?
Or
Is my mind corrupted without i am aware ?

Before our system' or strategy building, i think we must change our view about the market.

The question for CONSISTENT profit is first :

1. THE EGO MUST GO
2. DISCRETION AT ALL TIMES
3. NEVER HAVE A BIAS
4. TRADING IS ABOUT THE PAST

then shut my mouth here.

greetings! am a fun of reading your posts especially when it comes to bar formations. about this post you'd shared, im just curious of the body size of an inside bar and the bar before inside bar, what is the body size of each bar? is it less or equal to 25%? or less than that.

hope to hear from you. thank you.

a good example based on m3rlin's trick candle formation
for crypto
trend: up trend
pair: btc
tf: daily
order to be executed: BUY

lets assumed that the market is about to close 5 to 10 minutes, we are on BUY.
what you are about to see on the image is the reversal/continuation set ups in magenta and goldenrod, with gaps in maroon and blue colors on daily chart with previous and current weekly high/low broken lines and with current weekly open in solid line white.
as price moves crossed over the weekly open line and rejected with the mother bar, an inside bar is about to form. this will give us the signal based on merlin's trick.

m3rlin will only trade this set up if both bodies , the mother bar and the inside bar is small or less. or should we say less than 25%
on the image sample is a continuation set up for an up trend.