Triggers Flashcards
Each trigger is an ______ point in which bears or bulls take control over the price action
Emotional
1 minute trigger, not as _______
Meaningful
What triggers are meaningful?
5min, hourly
1 minute trigger has the smallest ______
Line
5 minute trigger has a _______ line
Staggered
1 minute trigger line moves every
1 minute
5 minute trigger moves every
5 minutes
Hourly trigger shifts every
Hour
5 minute trigger is an ______ battle ground
Emotional
What does a “Trigger” represent in trading?
A trigger represents an emotional point in which bears or bulls take control over price action.
What does “Velocity” teach in terms of price movement?
Velocity teaches that “price cannot REMAIN moving in a certain direction if velocity does NOT support it.”
What is the significance of a “Bear-plane”?
A bear-plane occurs when there’s trigger rejection
Describe the importance of the “5-minute” trigger timeframe.
It shifts every 5 minutes and is considered an EMOTIONAL BATTLEGROUND, where prices cross above or below.
How often does the “Hourly” trigger shift?
The hourly trigger shifts every hour.
How would you describe the trading strategy based on risk to reward?
It is extremely minimal risk to reward.
If you’re going long, when is it recommended NOT to remain long? As a trigger
Once the price closes below a trigger.
If you’re shorting, when should you consider exiting your position? Triggers
Once the price closes above the 5-minute trigger.
Why is it important to wait for candle closes in trading?
To avoid FAKE OUTS to the upside or downside.
Give an example of what you should do if you’re long and the price closes below the 5-minute trigger.
You should consider exiting your long position to minimize risk.
If you’re short and witness a FAKE OUT to the upside, what might’ve prevented you from making a hasty decision?
Waiting for the candle to close would help in determining if it’s a genuine movement or a fake out.
What emotion does the “5-minute” trigger timeframe evoke in trading?
It’s an emotional battleground, indicating high tension and decision-making moments.
Provide an example strategy based on the velocity teaching.
If a stock is rising rapidly but the velocity doesn’t support its movement, it might be wise to anticipate a reversal or slowdown in the upward trend.
According to the provided text, how does velocity influence the price direction?
For the price to continue in a certain direction, velocity must make new highs (or new lows) corresponding with each new price high (or low).
How is velocity simplified in terms of a price moving HIGHER?
For the price to keep moving HIGHER, velocity HAS to keep making new HIGHS.
How is velocity simplified concerning a price moving LOWER?
For the price to keep moving LOWER, velocity HAS to keep making new LOWS.
What can be deduced if the price is moving higher but velocity isn’t?
The move is FALSE and is likely running on fumes, indicating it might not sustain.
Use the car analogy to explain the relationship between price and velocity.
Imagine driving a car and taking your foot off the gas. Even though the car continues moving, it will eventually stop if you don’t press the gas again. Similarly, if bulls don’t increase velocity, a rally will inevitably end.
In the context of the analogy, what does “putting the foot on the gas” symbolize?
It symbolizes increasing velocity.
What action should you take based on the “move extreme print”?
You should look for THREE new highs after velocity makes its highest high.
If velocity does not support the direction of the price movement, what can it indicate about the market trend?
The trend may be deceptive and could potentially reverse or stall soon.
What happens to a rally if bulls never increase velocity?
The rally will inevitably come to an end.
Why is it significant to watch velocity in relation to price highs and lows?
Because it indicates the strength and sustainability of a price move.
How does velocity help in determining genuine price moves versus false ones?
If price moves in a direction (higher or lower) without the corresponding change in velocity (new highs or lows), then the price move can be considered false.
What’s the consequence of a rally running on “fumes”?
The rally will not sustain and will eventually come to an end.
How does the car analogy relate to the concept of momentum in trading?
Just as a car needs continuous gas (momentum) to move forward, a price trend needs consistent velocity (momentum) to sustain its direction.
If you observe the velocity making its highest high, what should be your next step in the strategy?
Look for three subsequent new highs in the price.
Why is it important for traders to understand the relationship between price and velocity?
Understanding this relationship helps traders validate the strength of price movements and potentially avoid false signals.
What is meant by “bearish divergence” in the context provided?
When the price makes THREE new highs without velocity breaking above the most extreme print (red line).
How many bearish divergences are required to anticipate a price reversal?
Three bearish divergences.
How does the price typically behave after the third bearish divergence?
It usually makes a reversal.
How does the relationship between price making new highs and velocity not making new highs affect the rally?
This relationship indicates that the rally might be deceptive or weak, and one should be suspicious of it.
How does the behavior of the price contrast with the behavior of the velocity during a bearish divergence?
Price keeps making new highs, whereas velocity does not exceed its most extreme print, and might even trend downward.
If you notice in a real-time trading scenario that the price is consistently making new highs but velocity is not following suit, how would you interpret this behavior?
This would be interpreted as a potential bearish divergence, indicating the rally might be losing steam and a reversal could be imminent.
imagine you’re analyzing a stock’s chart, and you spot two bearish divergences in a row. What should you anticipate if a third bearish divergence appears?
If a third bearish divergence appears, one should anticipate a potential price reversal.
In a trading scenario, if you observe a bearish divergence, what might be a practical action to consider?
One might consider preparing to exit a long position or even initiating a short position, anticipating a potential price drop.
How does the price usually react after a bearish divergence on the 5-minute velocity chart?
The price will typically re-visit the 5-minute trigger.
If the price drifts sideways after the third bearish divergence and then collides with the 5-minute trigger, what usually happens?
99% of the time, the price will bounce and continue higher.
If you’re in a long position and notice that while the price is consistently making new highs, the velocity is showing a downward trend, what might you anticipate?
This is indicative of a bearish divergence, suggesting that the upward movement might lose momentum soon.
In a real trading situation, if you see that the price is making new highs but the velocity never exceeds its most extreme print, what strategy might you adopt?
One might consider this as a sign that the rally is losing steam and might prepare for a potential reversal in the price.
How does the behavior of velocity during a bearish divergence compare to the car analogy?
just as taking the foot off the gas in a car results in it eventually slowing down, a decreasing velocity while the price rises indicates that the rally is losing momentum.
If the price revisits the 5-minute trigger after a bearish divergence, but just drifts sideways and collides with the 5-minute trigger, what’s the typical outcome?
The price will usually bounce and continue moving higher.
In the context of the provided data, what does it signify when the velocity is trending DOWN while the price is going UP?
It signifies that the move or rally is losing steam or momentum.
What does the positive hourly velocity indicate about the hourly trigger?
When the hourly velocity is positive, it indicates that we can expect the hourly trigger to provide support.
Define the term “emotional capitulation level” in relation to the Hourly Trigger.
The Hourly Trigger acts as an emotional capitulation level, meaning there’s always one level that needs to hold for bulls to continue.
How many velocity signals do you need to confirm a bearish trend in the given example?
One, specifically the 1-minute velocity making a new extreme low.
What is the behavior of price in relation to the hourly trigger when the hourly velocity isn’t strong?
The price will bounce off the hourly trigger.
How does the price behave when 1-minute velocity doesn’t make a new low after it hits its most extreme low?
This is inherently bullish.
How do the price and the 5-minute velocity relate when the price is trading closer to the hourly trigger?
As the price is pushing lower, the 5-minute velocity is pushing up (repairing), diverging bullishly.
When price makes lower lows and is heading toward the hourly trigger, what contrast is observed with the 5-minute velocity?
The 5-minute velocity is increasing while the price is making lower lows.
In a live trading scenario, if you observe the price dipping below the hourly trigger, what strategy would you consider?
One strategy would be to scale into longs when the price dips below the hourly trigger. Another strategy would be to go long after the first one-minute candle closes back above the hourly trigger.
If the 1-minute trigger approaches the 5-minute trigger but doesn’t cross it, what potential market behavior might you expect?
This is referred to as a “bear-plane”, indicating that bears are defending the level, and the price might reject off the 5-minute trigger.
When considering going long after the price moves over the 5-minute trigger, what other factor should you ensure before making the decision?
Ensure that the 1-minute trigger is also crossing over.
What is meant by a “Bear-plane” in the provided context?
It’s when the 1-minute trigger approaches the 5-minute trigger but doesn’t cross it, indicating bears are defending the level.
If the price breaks over the 5-minute trigger, why is it advised not to rush into longs?
Because if the 1-minute trigger does not cross over the 5-minute trigger, it can bear-plane off the 5-minute trigger, and bears might bring the price right back down.
In the context of “Perfect Bullish Trigger Orientation”, how should the triggers be aligned?
1-minute trigger over the 5-minute trigger which is over the Hourly trigger.
You entered a trade on a trigger cross. If you’re trading 0dte, what might be your next step?
Trim or take profits on the first significant move up or down.
What could be a potential stop-loss strategy after entering a trade on the trigger cross?
Setting a stop-loss when a candle closes below the 5-minute trigger.
How does the 5-minute velocity behave when the price makes higher highs?
The 5-minute velocity also makes higher highs.
How do the dips in price relate to the 5-minute velocity’s behavior?
When the price dips, if the 5-minute velocity is repairing (increasing), it indicates the dips are being bought.
How might you interpret a situation where the price is making lower lows but the 5-minute velocity is increasing?
This would suggest that while bears are pushing the price down, bulls are stepping in and buying the dips.
Compare the behavior of the price and the 5-minute velocity when bears are truly in control.
If bears were truly in control, as the price goes down, the 5-minute velocity would also be getting worse and might follow the red line down.
What does it indicate when the 5-minute velocity never exceeds its most extreme print?
It indicates a bullish scenario.
Given a scenario where the price is nearing the hourly trigger, if the 5-minute velocity is seen to be repairing or increasing, how might you interpret this behavior?
Bulls are likely buying the dips as the price approaches the hourly trigger.
In practical terms, what does it mean when the price revisits the hourly trigger and the 5-minute velocity is diverging bullishly or increasing?
It means that the dips in price are being bought, indicating bullish momentum.
When price makes higher highs, what concurrent behavior should you expect from the 5-minute velocity?
The 5-minute velocity should also make higher highs.
If you observe a bear plane event, where the 1-minute trigger approaches the 5-minute trigger but doesn’t cross, how should you adjust your trading strategy?
It would be advisable to remain cautious and not rush into long positions, as the bear plane indicates bearish resistance.
If you missed the first opportunity to go long, under what circumstances should you avoid rushing into the trade?
If the price just goes over the 5-minute trigger, you should ensure that the 1-minute trigger is also crossing before making a decision.
How might you interpret the situation where the price dips below the hourly trigger but the 1-minute candle doesn’t close back above it?
It suggests that the hourly trigger did not provide the expected support and caution is needed before taking a long position.
How does the behavior of the 1-minute velocity relate to the price when it makes its most extreme low?
If the price makes a new low but the 1-minute velocity does not make a new low, this is seen as inherently bullish.
Given that you entered a trade on a trigger cross and are trading 0dte, under what circumstances might you consider taking profits?
Consider taking profits on the first significant move up or down.
Compare the price behavior and the 1-minute trigger behavior in the context of a bear plane.
During a bear plane, the price might break over the 5-minute trigger, but the 1-minute trigger does not cross over the 5-minute trigger, indicating a potential bearish reversal.
If you observe that the price made higher highs, but the 5-minute velocity did not make corresponding higher highs, how might you interpret this scenario?
This could indicate bearish divergence, suggesting potential weakness in the upward price movement and caution might be needed.
When the velocity appears healthy and there’s a dip below the hourly trigger, how might this scenario be interpreted?
This would be seen as a FALSE breakdown and might present a buy-the-dip opportunity for an “airplane” setup.
Define the “Airplane Set Up” in the given context.
The “Airplane Set Up” refers to the 1-minute trigger coming down to the 5-minute trigger and then bouncing off, reminiscent of a trampoline effect.
Which trigger alignment is indicated as the “Most Bullish Trigger Setup”?
The 1-minute trigger above the 5-minute trigger, which is above the Hourly trigger.
Given the information on various trigger setups, how might you interpret the bullishness of an alignment where the Hourly trigger is above the Daily trigger, which is above the Weekly trigger?
It would be seen as a Bullish Trigger Setup, indicating strong bullish momentum across multiple time frames.
How does the “Airplane Set Up” relate to the concept of a trampoline in the given context?
Just like a trampoline provides a bounce when pressure is applied, the “Airplane Set Up” sees the 1-minute trigger approaching the 5-minute trigger and then bouncing off, signaling a potential bullish reversal.
In the event of a healthy velocity and a dip below the hourly trigger, what trading opportunity might present itself?
An “airplane” setup or a buy-the-dip opportunity might present itself.
Why is it crucial for traders to develop a strategy that is in alignment with their individual trading parameters, such as style, risk tolerance, and risk management?
Because markets and trading scenarios are diverse, and what works for one trader might not work for another. Tailoring strategies ensures consistency, comfort, and a higher probability of success.
How might you determine if a breakdown below a trigger is false or genuine in a live trading scenario?
By assessing the health of the velocity. If the velocity looks healthy, it’s likely a FALSE breakdown.
When you observe the 1-minute trigger approaching but not crossing the 5-minute trigger and then bouncing off, what specific setup might you be witnessing?
You would be witnessing the “Airplane Set Up”.
If you want to capitalize on a bullish momentum, which trigger orientation should you be looking for across longer time frames?
You should look for the Hourly trigger above the Daily trigger, which should be above the Weekly trigger.
If the 1-minute trigger, 5-minute trigger, and Hourly trigger are all aligned in a bullish orientation, but the price experiences a sharp dip, what might be a likely trading strategy based on the given information?
Given a healthy velocity, traders might look for a buy-the-dip opportunity, anticipating an “airplane” setup.
In terms of bullishness, how does the “Most Bullish Trigger Setup” compare to the Bullish Trigger Setup involving the Hourly, Daily, and Weekly triggers?
Both setups indicate strong bullish momentum, but the latter gives a broader, longer-term perspective, encompassing weekly data.
In the given context, what does it mean when a breakdown is termed as “FALSE”?
A “FALSE” breakdown means that despite the price dipping below a certain trigger, the overall trend remains bullish, especially if the velocity is healthy, indicating potential for a reversal or bounce-back.
Question: What is the significance of the “velocity” indicator in the trading strategy described?
Answer: The “velocity” indicator measures market volatility or momentum and provides guidance on when to buy or sell based on the prevailing market conditions.
