Price is always moving according to the newest probabilistic set

Jul 10

Think about that. Nobody knows for sure what is happening right now. The best we can do is to find patterns, take statistics, and use probabilities in our favor to frame different probabilistic scenarios and build sensible risk-to-reward ratios. But what happens if we take a context from 3 weeks ago, right now, on a 5-minute chart? Certainly that’s not what’s happening right now, the current context is going to escape us and we are going to fail. Only the current, latest, or newest “probabilistic set” carries the information that we want.

Every single time the market makes a new pivot, the probabilistic set varies. For example, if I am a supply/demand zones trader, and the market makes a low going higher, I HAVE TO take notice of that low and look for a demand zone; and if I am a trader that focuses on highs and lows for liquidity, it is the same, because now I have a new low in the market and the context has changed, and that is happening for every single high/low the market creates.

For example, this is, right now, my latest probabilistic set for gold intraday, detected by the system

This is telling me that I must project the whole structure further down because support is not holding.
I’m projecting that it is going to reach this area.

In the whole process, I have to take no decisions at all since I’m working with the outputs of the system.

If prices can’t reach the projected parallel and they break up, I simply keep track of the movements, taking notice of the new low the market created.


Yeah, it looks like Frankenstein, but do we want to have pretty charts or make money?

Now price is way more bullish, maybe I can enter on a pullback at the lows, right?



The point is, markets are always changing the environment. The only way to be on top of the world is to track the current context dynamically. Just wait patiently and at some point they are going to hand you the edge on a silver platter. That’s the edge for retail traders, to simply wait for the time when everything is in our favor while market makers HAVE TO trade to support the liquidity of the markets. We don’t have to trade every single price, but we have to understand what is happening and trade when everything aligns, evolving dynamically.

For example, take what Path_Of_Hanzo is doing here on Tradingview, the guy/group is considering every single signal in real time, dynamically, even if they are opposite, like in this case.

Or take how I’m following “my” system, The Action and Reaction System. I’m not making up stuff on the fly according to what seems right, but I’m actually taking the calls from the market itself because I coded pure structure.

Next time you sit in front of a chart, ask yourself if you know the current probabilistic scenario, and only then, if you want, look for something else, like more context from the past, more information, or whatever, because this is a general principle: the latest/current probabilistic scenario is always going to carry more weight and offer the best trade, while if we take a call that contradicts that, coming from old data, most likely that approach is going to fail in the long term. The next step is to actually code (with the help of AI) the rules for your method so you don’t even have to move a finger and can simply keep track of the markets until they give you your setup in your hands.

Jul 10

Note

After I made the post, the market gave a perfect example of how it serves setups on a silver platter without you having to lift a finger.

The probabilistic setup I identified first:



I could have traded there, bought, and lost, yes, sure.

But if I note that prices moved upward and made a high, the second probabilistic setup, the final one, is this:



And right there, the trade appears, selling at the upper parallel, in 'premium' territory, let's say. I grab my 3R. Goodbye, thank you.

That's how trading works. I'm not saying this from a place of superiority, but from the common ground of learning from my own mistakes, because it took me a long time to properly understand where to trade and to have a system that doesn't introduce any subjective or arbitrary rules to the markets, following dinamycally.