Can the original ratio be reused after the worse fill?
Reveal the worked answer
No; it falls to 0.25.
Use actual proposed entry, not the chart's attractive historical price.
Technical Analysis · TA-13 · Core
A conditional technical thesis
How do you combine evidence without manufacturing certainty?
What you will learn and prerequisites
- Explain the mechanism in the lesson question.
- Reproduce the worked comparison and recognize its failure case.
Read first: Market structure comes first
A checklist should produce a conditional thesis, not a compulsory trade. Write state, location, trigger, invalidation, target and missing evidence. Separate facts from inferred intent.
Understand the mechanism
Higher highs, a rising average and bullish momentum can all describe the same price sequence. Counting them as independent votes exaggerates confidence. Dealer estimates require their own source and timestamp rather than becoming another unquestioned line.
Walk through the process
State one favorable branch and one failure branch, then choose an instrument that fits the horizon and volatility view. Recompute risk from the actual available entry. Review process separately from outcome after the event.
Pause before deciding
Describe what the example actually establishes and what remains unknown. A technical observation supplies context, not an automatic options entry. Contract cost, horizon, liquidity and the consequence of failure still need to match the thesis. Record the contrary branch so a named pattern cannot become an excuse to ignore new evidence.
A worked example
A fictional entry at 102.20 targets 104 with invalidation 101.50: planned reward/risk is 1.80/0.70≈2.57. If entry worsens to 103.50, unchanged levels produce 0.50/2.00=0.25. The old chart ratio no longer describes the trade.
A conditional technical thesis—worked comparison
Vertical: Planned reward/risk ratio
Horizontal: Entry case
1. Fictional example
Read the graph as a data table
| Entry case | Fictional example |
|---|---|
| 1 | 2.57143 |
| 2 | 0.25 |
What would invalidate the reading?
Correlated indicators and idealized fills can manufacture an apparent edge. A stop price is a plan, not a guaranteed execution.
Check your understanding
Try the question before revealing its answer. These are reading checks, not trading certification or a site completion record.
What is the critical failure to avoid?
Reveal the worked answer
Correlated indicators and idealized fills can manufacture an apparent edge. A stop price is a plan, not a guaranteed execution.
Explain this risk before treating the example as a decision rule. A correct calculation does not guarantee a favorable market outcome.
Return to the question: How do you combine evidence without manufacturing certainty? State the observed facts, the assumptions and the failure condition separately.
Sources, assumptions and downloadable script
External references support definitions and conventions. Worked scenarios and prose are original. No current quotes or dealer inventory are claimed.
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