Fade and retest rules - trading a failure at a level
The TRIGGER group trades a failure at a level. The classic short fades a failed break of the high, and the long side can buy a failed breakdown. Failed breakdown fade is long only: the mirror of the short fade.
In this video
The 30-second version
The same topic in thirty seconds, made for a phone screen.
Both videos use the desk in paper mode with made-up symbols and prices.
Read the transcript
Trading a failure
The TRIGGER group trades a failure at a level. The classic short fades a failed break of the high, and the long side can buy a failed breakdown. Failed breakdown fade is long only: the mirror of the short fade.
When has it failed?
Breaks is how many failed pushes at the level before this side trades the failure. Reject percent is how far price must reject off the extreme to count as failed, and Within seconds is how soon after the last push the rejection must come.
Caps
Cap gain skips the trade if the stock has already moved too far the trade's way, Cap gain counts in the trade's direction, so for a short it caps the drop. and Cap RVOL skips it if relative volume is above a ceiling. Zero switches either one off.
Retest mode
Retest long, or Retest short, is the structural mode: track the level, wait for touches, quiet and a rejection, then enter with a hard stop just beyond the level. Touch percent sets how close counts as a touch, and the stop box sets the hard stop. The stop sits this far beyond the level, under the low or over the high. Retest long and Retest short each apply to their own side.
Chase, quiet and climax
Chase tracks a new extreme, instead of waiting for the classic retest. Quiet seconds: the last new extreme must be at least this old. A stock still printing highs is not a top. Climax, or capitulation, percent: the move into the level must be at least this big, and Max pop, or Max drop, only enters while price is still close to the level. Zero switches Max pop or Max drop off.