The 5H PRICE ACTION TRADING STRATEGY

Learn the basic knowledge required to interpret the 5 Hand (5H) Price Action Trading System Strategy Commentary posted in the Market Timing Section of the Flea Circus Trader Program.  However, the specifics on how the 5H Trading Strategy Price Action Setup works are not revealed in this article, since it is a propietary system only available for subscribers or for purchase in an in-depth limited edition dossier.  For more information please write us a comment below or contact us at mastertrader@fleacircustrader.com.

MAGIC 5H –  The 5H Price Action Trading Strategy will dynamically empower your mind to be in perfect harmony with the markets by opening a secret back door into an amazingly objective, practical and visionary trading trance.

5H SYSTEM MARKET THEORY

Its critical to understand that the Major Market Trend is composed of what is commonly known as Bull Markets and Bear Markets.  The Major Trend is subdivided into General, Swing and Short Term Trends, which battle back and forth along the current trend over time to finally create Major Bull Market Tops and Bear Market Bottoms in a slow grinding process.  Bull Market Tops take time to develop as the General, Swing and Short Term Uptrends and Downtrend attempt to become the final one that kills the Bull Market Major Trend.   Bear Market Bottoms occur in a more dramatic and quick fashion, but go through the same process.   The 5H Price Action Trading System provides the insights to know when to ride the current Major Market Trend and ascertain which General, Swing and Short Term Trend becomes the one that finally triggers a change in the Major Market Trend providing the keen intuition to know when Major Bull Market Tops or Bear Market Bottoms are about to occur.

The Market is continuously moving forward following the current General Long Term Uptrend or Downtrend. The current general trend is composed of Medium term sequential upswing trend moves with the objective to confirm a Swing Top and downswing trend moves with the objective to create a Swing Bottom.  In the medium term trend Swing Tops are always followed by a Swing Bottom, which are then followed by a Swing Top.  The interaction between the current Swing Top and the previous Swing Bottom or between the current Swing Bottom and the previous Swing Top that determines if the current general trend continuous or changes direction. In the Short term trend moves each new bar battles to maintain or change the current swing trend.  General trends may last days, weeks or months and can be composed of 1 to dozens Top and Bottom Swing trends.  Swing trends may last 3 to 14 bars or longer and can be composed of 1 to dozens of short term trends.  Short term trends may last 2 to a dozen bars or more.

 

5H PRICE ACTION PATTERN THEORY

The 5 Hand Pattern (5HP) is a General Trend Price Action Medium Term Swing Top and Swing Bottom picking system based on Short Term interbar interaction that clearly defines the trend, the duration of the trend and trend changes, while providing an accurate database of the ranges and the duration of General Trends and Swing Top-to-Bottom/Bottom-to-Top market moves.  

The 5HP requires a specific 4 Bar Setup Pattern (4BSP) consisting of two initial trend Continuation Bars (C1 & C2),  a third Swing Bar that can be a Top-Bar (T3) for Swing Tops or a Bottom-Bar (B3) for Swing Bottoms and a fourth Setup Bar (S4).  Once the 4BSP is in place a fifth or later Confirmation Bar (CB) is required to confirm the formation of a new Swing Top or Swing Bottom.  The 4BSP is active and awaiting confirmation, as long as, the Top-Bar high is not violated in the case of a pending Swing Top confirmation or the Bottom-Bar low is not violated in the case of a pending Swing Bottom confirmation.  If the 4BSP Top-Bar high or the Bottom-Bar low are violated the current 4BSP would be deactivated and the whole process of creating a 4BSP would start all over again.  The 5HP Swing Top Pattern is a vertical mirror image of the Swing Bottom Pattern.  The 5HP is able to confirm the continuation of the General Trend or a General Trend change two bars or more after the Swing Bar by confirming a Swing Top or Swing Bottom accurately, consistently and methodically.   The 5H works for any index, security or commodity and for any chart timeframe. 

5H PRICE ACTION PATTERN COMPONENTS - TABLE 1
5H PRICE ACTION PATTERN COMPONENTS - TABLE 1
5H PRICE ACTION PATTERN COMPONENTS - TABLE 1
5H PRICE ACTION PATTERN COMPONENTS - TABLE 1
PATTERN
SUB PATTERN
Bar #
Bar Name

5HP

5 Bar
Pattern

4BPS

4 Bar
Setup
Pattern

1 (C1)
Continuation 1

5HP

5 Bar
Pattern

4BPS

4 Bar
Setup
Pattern

2 (C2)
Continuation 2

5HP

5 Bar
Pattern

4BPS

4 Bar
Setup
Pattern

3
(T3)
(B3)
Swing Bar:
Top Bar or
Bottom Bar

5HP

5 Bar
Pattern

4BPS

4 Bar
Setup
Pattern

4 (S4)
Setup

5HP

5 Bar
Pattern

CB

Confirmation
Bar

5 or more
(CB)
Confirmation:
Standard or
Violation

Furthermore, Confirmation Bars can confirm Swing Tops or Swing Bottoms in two ways; Standard 5H Price Action Pattern Confirmations (5HPSC) or Violation 5H Price Action Pattern Confirmations (5HPVC).

  • (5HPSC) Standard 5H Price Action Pattern Confirmations confirm the active 4BSP without violating the previous or last Swing Top High or Swing Bottom Low. 5HPSC are composed of a minimum of 5 bars (C1, C2, T3 or B3, S4 and CB) or more when consolidating bars (use other name and add to table above) the market is between the Setup-Bar (S4) and the Confirmation-Bar (CB).
  • (5HPVC) Violation 5H Price Action Pattern Confirmations automatically confirm the active 4BSP by violating the previous or last Swing Top High or Swing Bottom Low without the need of a standard Confirmation-Bar (CB).   In Violation Confirmations the Violation-Bar becomes the Confirmation-Bar.  5HPVC are composed of a minimum of 1 bars or more since confirmation can occur at any time during the construction of the 4BSP (C1, C2, T3 or B3, and S4) or after the 4SBP is built and and while the inactive consolidation bars inbetween the Setup-Bar (S4) and the Confirmation-Bar (CB).

The basic 5HP theory provided above will be greatly expanded and explained in this 5H article, which specifically reviews the 5H Market Timing Sample Table 2 (below) for the 4 USA Indexes Commentary, Dow-30, SP-500, Nasdaq and RUSSELL-2000, published Daily in the Market Timing Section of the Flea Circus Master Trader Mentorship Program.  Each one of the 10 columns in Table 2; 5H GWS, 5H CWS, CT DATE, CT BARS, 5H T/B, DATE T/B, CONF T/B, W BARS, SETUPS and NEXT T/B are explained in detail in this article in order to help technical traders understand and get familiarized with the nomenclature, be in tune with market Price Action and be able to use the information to make educated and accionable trading or investments decisions.

You are about to start a journey that may seem complex, confusing and difficult to follow for the amateur trader, but you are encouraged to study and learn, because it will open your eyes and train your brain to think and act like the big dogs that move the markets as you jump on them like a flea for the ride and take a bite out of their success.

USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM SAMPLE

TABLE  2

FOR ANY COMMENTARY DATE

5H GWS
5H CWS
DATE CT
CT BARS
5H T/B
DATE T/B
CONF T/B
W BARS
SETUPS
NEXT T/B
DOW 30
DWDW=
CUHTLB+2
14-12-21
100-100
LTOP33
14-12-21
19-5-21
11
12 UOFF
22 DBOT
SP 500
DWUP-
CUHTLB+2
14-12-21
52-65
LBOT33
14-12-21
18-5-21
5
11 DON
22 DBOT/+1 UBOT
NASDAQ
UPUP+
CUHTLB+2
14-12-21
89-92
HTOP13
14-12-21
14-5-21
7
25 DOFF
12 DTOP/+2 UTOP
RUS 2000
UPDW=
CUHTLB+2
14-12-21
111-887
HTOP43
14-12-21
14-5-21
9
33 DON
12 DTOP/+2 UTOP
COLUMN
1
2
3
4
5
6
7
8
9
10

See real daily article MT0016 USA Indexes Marekt Commentary May 24 2021 for reference or learn more

5H PRICE ACTION MARKET TREND SYSTEM GUIDELINES

The 5H Price Action Trend System applied to the Markets or Indexes is based on the premise that the General Market, or any security, can be either in a Current Trend or in a Change Trend status.

CURRENT TREND – The Current Trend is the general direction of the market, which can be in an Uptrend, following a Higher Swing Tops and Higher Swing Bottoms sequence, or in a Downtrend, following a Lower Swing Tops and Lower Swing Bottoms sequence.

CHANGE TREND – The Change Trend depicts the market transitional Swing Tops or Swing Bottoms that trigger Current General Trend changes from a  Current Uptrend to a Current Downtrend or from a Current Downtrend to a Current Uptrend.  All Change Trend events initiate the new General Current Market Trend; Uptrend or Downtrend.

The 5H Price Action Market Trend System provides the methodical Price Action insights on a short term bar per bar basis and the  objective critical medium term support and resistance levels to ascertain the probability of confirming the continuation or the reversal, a Change Trend event, of the Current General Market Trend.   

All the dynamics of the 10 parameters involved presented in the 10 columns in Table #1 USA INDEXES 5H MARKET TIMING above are summarized in Table 2 below followed by a detailed presentation and interpretation of the theory and mechanics of each parameter and how they apply to the 5H PRICE ACTION MARKET TREND SYSTEM providing interesting insights on how past, present and future unequivocally Price Action shape the General Market Trend. 

5H PRICE ACTION MARKET TREND SYSTEM TIMING PARAMETERS - TABLE 2
COLUMN
1
2
3
4
5
6
7
8
9
10
5H PRICE ACTION MARKET TREND SYSTEM TIMING PARAMETERS - TABLE 2
TITLE
5H GWS
5H CWS
CT DATE
CT BARS
5H T/B
DATE T/B
CONF T/B
W BARS
SETUPS
NEXT T/B
5H PRICE ACTION MARKET TREND SYSTEM TIMING PARAMETERS - TABLE 2
DESCRIPTION
The Current General (G), Swing (W) and Short (S) Term direction of the market
How the last Change (C), Swing (W) and Short (S) Trend event occurred
The date of the last Change Trend event (dd-mm-yy)
The numbers of trading bars since the last Change Trend event.
The General Current Trend direction and current sequential Swing Top or Swing Bottom number
The date of the last Confirmed Swing Top or Swing Bottom (dd-mm-yy)
THe date in which the last Swing Top or Swing Bottom was confirmed (dd-mm-yy)
The number of bars that compose the current Unconfirmed Swing Top or Swing Bottom
The number of Setups attempts to confirm a Swing Top or Swing Bottom and if ON or OFF
The next potential Swing Top or Swing Bottom to be confirmed
A

COLUMN 1 –  5H GWS – CURRENT TREND

 

The 5H GWS code in column #1 of Table 1 USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM displays the 5H Price Action Market System Current Trend which is composed of 3 types of subtrends,  the General Trend (G), the Swing Trend (W) and the Short Trend (S) that define the General-Swing-Short (GWS) status code of any Current Market Trend.  There are a total of 12 GWS status codes, 6 for Uptrends and 6 for Downtrends as explained below and summarized in Table 3.

CURRENT GENERAL TREND (G) Is the longer term market trend, which can be in an Uptrend or a Downtrend.  An Uptrend is composed of consecutive sequencial Higher Swing Tops and Higher Swing Bottoms (HTHB), while a Downtrend is composed of consecutive sequenticial Lower Swing Tops and Lower Swing Bottoms (LTLB).  Uptrends and Downtrends may last days, weeks or months in a daily chart.  The General Trend provides the first two letter of the 5H GWS status code; either UP for Uptrends or DW for Downtrends.

CURRENT SWING TREND (W) Is the medium term market Swing Trend direction within the Current General Trend.  A Current General trend will have multiple sequential Up and Down Swing trends as the different Swing Tops and Swing Bottoms are confirmed within the Current General Trend.  Swing Trends can be in a Confirmed or Unconfirmed Status and Confirmation depends on Short Term Price Action behaviour.  In Genereal Uptrends Bottom-to-Top Swing Trends are larger and last longer than Top-to-Bottom Swing Trends as each new Swing Top is confirmed above the previous Top and each new Swing Bottom is confirmed above the previous Bottom.  In General Downtrends Top-to-Bottom Swing Trends are larger and last longer than Bottom-to-Top Swing Trends as each new Swing Bottom is confirmed below the previous Bottom and each new Swing Top is confirmed below the previous Top.  Any Swing Trend is Up after a Swing Bottom is confirmed and Down after a Swing Top is confirmed indepent of the direction of the General Trend.  Swing trends can last days to a few weeks or longer in daily charts.  The Swing Trend provides the third and fourth letters of the GWS status code, either UP after a confirmed Swing Bottom or DW after a confirmed Swing Top.

CURRENT SHORT TREND (S) Is the measure of the strength of the current Swing Trend direction on a bar per bar or interbar basis providing clues on the possibility of changing the Confirmed Swing Trend until finally confirming a new Swing Bottom after a confirmed Swing Top or confirming a new Swing Top after a confirmed Swing Bottom.  The 5H Short Term Trend requires a High Top Bar for Swing Tops or a Low Bottom Bar for Swing Bottoms, followed by a Setup Bar and then followed by a Confirmation Bar Price Acion Pattern to confirm a new Swing Top or Swing Bottom.  The Short Term Trend usually last only days in daily charts, since it monitors the interbar interaction between the last few bars in a daily chart as they form the 5HP Price Action Setup Patterns that could lead or lead to a new Confirmed Swing Top or Confirmed Swing Bottom.   The Short Trend provides 3 trend strength measures to the 5H GWS status code; a plus sign “+”,  an equal sign “=” or a minus “-“.  The 3 signs have opposite meanings for Swing Tops and Swing Bottoms relating to interbar price action behaviour as described below,

After a Swing Top is confirmed and while a new downtrenging Swing Bottom is unconfirmed

  • “-” A minus sign denotes downtrend strenght after a Confirmed Top.  It means that the current bar made a new downtrending Swing Trend low that could become the next Swing Bottom Bar.  Unconfirmed Swing Bottoms always start with a “-” and are either followed by an “=” if followed by a setup bar or by another “-” if followed by a new lower Bottom Bar low within the current Unconfirmed Swing Bottom downtrend.  
  • “=” An equal sign denotes consolidating Price Action that could be resolved in either direction.  It means a Setup Bar is in place and ready for the current Unconfirmed Swing Bottom to be confirmed by a Confirmation Bar depending on Price Action of future bars.  An Unconfirmed Swing Bottom “=” is followed by a “+” as long as a new lower Bottom Bar low is not made and as long as a Confirmation Bar does not confirm the current Unconfirmed Swing Bottom, which could take 1 to several bars.  If a new lower Bottom Bar low is made in the current Unconfirmed Swing Bottom downtrend the whole process starts again with a “-“. 
  • “+” A plus sign denotes downtrend weakness after a Confirmed Top. means the market is trending sideways or consolitdating after the current Unconfirmed Swing Trend Bottom Bar low “-” and a Setup Bar “=” are in place to possibly confirm the current Unconfirmed Swing Bottom.  An Unconfirmed Swing Bottom “+” is either followed by a Confirmation Bar that converts the current Unconfirmed Swing Bottom into a Confirmed Swing Bottom or by a new lower Bottom Bar low that would start the whole process again with a “-“. 

After a Swing Bottom is confirmed and while a new uptrending Swing Top is unconfirmed

  • “+” A plus sign denotes uptrend strength after a Confirmed Bottom.  It means that the current bar made a new uptrending Swing Trend high that could become the next Swing Top Bar.  Unconfirmed Swing Tops always start with a “+” and are either followed by an “=” if followed by a setup bar or by another “+” if followed by a new higher Top Bar high within the current unconfirmd Swing Top uptrend.   
  • “=” An equal sign denotes consolidating Price Action that could be resolved in either direction.  It means a Setup Bar is in place and ready for the current Unconfirmed Swing Top to be confirmed by a Confirmation Bar depending on Price Action of future bars.   An Unconfirmed Swing Top “=” is followed by a “-” as long as a new higher Top Bar high is not made and as long as a Confirmation Bar does not confirm the current Unconfirmed Swing Top, which could take 1 to several bars.  If a new higher Top Bar is made in the current Unconfirmed Swing Top uptrend the whole process starts again with a “+”. 
  • “-” A minus sign denotes uptrend weakness after a Confirmed Bottom.  It means the market is trending sideways or consolitdating after the current Unconfirmed Swing Trend high was reached and a Setup Bar is in place to possibly confirm the current Unconfirmed Swing Top.  An Unconfirmed Swing Top “+” is either followed by a Confirmation Bar that converts the current Unconfirmed Swing Top into a Confirmed Swing Top or by a new higher Top Bar high that would start the whole process again with a “+”. 
5H GWS CURRENT TREND - TABLE 3
5H GWS CURRENT TREND - TABLE 3
5H GWS CURRENT TREND - TABLE 3
5H GWS CURRENT TREND - TABLE 3
5H GWS CURRENT TREND - TABLE 3
GENERAL (G)
SWING (W)
SHORT (S)
5H GWS
(S) Status

UP

Higher
Tops
Higher
Bottoms

UP

After
Confirmed
Bottom

+
UPUP+
New High

UP

Higher
Tops
Higher
Bottoms

UP

After
Confirmed
Bottom

=
UPUP=
Setup Bar

UP

Higher
Tops
Higher
Bottoms

UP

After
Confirmed
Bottom

-
UPUP-
Consolidation

UP

Higher
Tops
Higher
Bottoms

DOWN

After
Confirmed
Top

+
UPDW+
Consolidation

UP

Higher
Tops
Higher
Bottoms

DOWN

After
Confirmed
Top

=
UPDW=
Setup Bar

UP

Higher
Tops
Higher
Bottoms

DOWN

After
Confirmed
Top

-
UPDW-
New Low

DOWN

Lower
Tops
Lower
Bottoms

UP

After
Confirmed
Bottom

+
DWUP+
New High

DOWN

Lower
Tops
Lower
Bottoms

UP

After
Confirmed
Bottom

=
DWUP=
Setup Bar

DOWN

Lower
Tops
Lower
Bottoms

UP

After
Confirmed
Bottom

-
DWUP-
Consolidation

DOWN

Lower
Tops
Lower
Bottoms

DOWN

After
Confirmed
Top

+
DWDW+
Consolidation

DOWN

Lower
Tops
Lower
Bottoms

DOWN

After
Confirmed
Top

=
DWDW=
Setup Bar

DOWN

Lower
Tops
Lower
Bottoms

DOWN

After
Confirmed
Top

-
DWDW-
New Low
A

COLUMN 2 –  5H CWS – CHANGE TREND GUIDELINES

 

The 5H CWS code in column #2 of Table 1 USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM displays the 5H Price Action Market System Change Trend which is composed of 3 types of trends,  the Change Trend (C), the Swing Trend (W) and the  Short Trend (S) that define the Change-Swing-Short (CWS) status code of any Change Market Trend.  There are a total of 8 CWS Change Trade Codes – 4 for Uptrends Changes and 4 for Downtrend Changes as explained below and Table 4.

CHANGE GENERAL TREND (C) The Current General Trend can change from Uptrend to Downtrend or from Downtrend to Uptrend.  Current General Trend Changes can only be triggered by disruptions in the sequence of higher Swing Tops and higher Swing Bottoms (HTHB) for Uptrends, and changes in the sequence of lower Swing Tops and lower Swing Bottoms (LTLB) for Downtrends.  General Trend Changes can happen rather quickly or take their time lasting weeks.  The General Change Trend provides the first two letters of the 5H CWS status code, either CU for Uptrend Changes or CD for Downtrend Changes as noted in Table 4 below.

CHANGE SWING TREND (W) General Change Trends are triggered by disruptions in the next expected sequencial higher (HTHB) or lower (LTLB) Swing Top and Swing Bottom following the Current General Trend.   HTHB and LTLB sequences act as support and resistance levels or channels for the Current General Trend that once broken trigger a Change General Trend event.  A Swing Change Trend can change the General Current General Trend in 4 ways, 2 for Current General Uptrends and 2 for Current General Downtrends.

  • A Current General Uptrend can change to a Downtrend either by confirming a Swing Top (referred to as a -1 Swing Top) lower than the previous Swing Top or by confirming a Swing Bottom (referred to as a -2 Swing Bottom) lower than the previous Swing Bottom.
  • A Current General Downtrend can change to an Uptrend either by confirming a Swing Top (referred to as a +2 Swing Top) higher than the previous Swing Top or by confirming a Swing Bottom (refered to as a +1 Swing Bottom) higher than the previous Swing Bottom. 

There are 8 cases of  Swing Change Trends, 4 for Swing Uptrend Changes and 4 for Swing Downtrend Change and they are as follows and as summarized in Table 4 below:

For Swing Uptrend Changes

  • LTHB+1 Bottom:  From the last Confirmed Lower Swing Top (LT) to a Confirmed +1 Higher Swing Bottom (HB) above the previous  Confirmed Lower Swing Bottom when a Lower Swing Bottom was expected following the Lower Swing Top and Lower Swing Bottom (LTLB) sequence of the Current General Downtrend.
  • LTVB+1 Bottom:  From the last Confirmed Lower Swing Top (LT) to a Confirmed +1 Higher Bottom (VB) by Violation above of the last  Confirmed Swing Top following a Violation Confirmation.
  • LBHT+2 Top:  From a Confirmed Lower Bottom (LB) to a Confirmed +2 Higher Top (HT) by Violation above of the Previous Confirmed Top following a Standard Confirmation.
  • LBVT+2 Top:  From an Unconfirmed Lower Bottom (LB) to a Confirmed +2 Higher Top (VT) by Violation above the Previous Confirmed Top following a Violation Confirmation.

For Swing Downtrend Changes

  • HBLT-1 Top:  From a the last Confirmed Higher Swing Bottom (HB) to a Confirmed -1 Lower Swing Top (LT) below the previous Confirmed Higher Swing Top when a Higher Swing Top was expected following the Higher Swing Top and Higher Swing Bottom  (HTHB) sequence of the Current General Uptrend.
  • HBVT-1 Top:  From a Confirmed Higher Bottom (HB) to a Confirmed -1 Lower Top (VT) by Violation below the Previous Confirmed Bottom following a Violation Confirmation.
  • HTLB-2 Bottom: From a Confirmed Higher Top (HT) to a Confirmed -2 Lower Bottom (LB) by violation of the Previous Confirmed Bottom following a Standard Confirmation.
  • HTVB-2 Bottom:  From an Unconfirmed Higher Top (HT) to a Confirmed -2 Lower Bottom (VB) by Violation of the Previous Confrimed Bottom following a Violation Confirmation.

ONLY a Swing Change Trend event can change the Current General Trend to the opposite direction either by confirming Higher Bottoms (+1) or Higher Tops (+2) in changes to a General Uptrend from a General Downtrend or by confirming Lower Bottoms (-1) or Lower Tops (-2) in changes to a General Downtrend from a General Uptrend.

CHANGE SHORT TREND (S) The battles between mantaining the Current General Trend and confirming a new Change General Trend are fought in the Short Change Trend a bar at a time as Standard Confirmation Top Bars, Bottom Bars, Setup Bars and Confirmation Bars or Violation Confirmations create the Price Action Patterns that will define the next Swing Trend and the future General Trend.  There is no real difference between the Current Short Trend and the Change Short Trend, but it is the Short Term Trend Price Action that defines how the next Confirmed Swing Top or Confirmed Swing Bottom will affect the Current General Trend.

The frequency and strength of each of the 8 possible Swing/Short Change Trend cases are summarized in Table 4 below.

5H GWS TREND CHANGE - TABLE 4
5H GWS TREND CHANGE - TABLE 4
5H GWS TREND CHANGE - TABLE 4
5H GWS TREND CHANGE - TABLE 4
5H GWS TREND CHANGE - TABLE 4
5H GWS TREND CHANGE - TABLE 4
5H GWS TREND CHANGE - TABLE 4
GENERAL (G)
SWING (W)
SHORT (S)
5H GWS
Status
Frequency
STRENGTH

CU

Trend
Change
Up

LTHB
+1
CULTHB+1
Higher Bottom
Common
Weak

CU

Trend
Change
Up

LTVB
+1
CULTVB+1
Higher Bottom
Average
Weak

CU

Trend
Change
Up

LBHT
+2
CULBHT+2
Higher Top
Common
Strong

CU

Trend
Change
Up

LBVT
+2
CULBVT+2
HIgher Top
Rare
Strong

CD

Trend
Change
Down

HBLT
-1
CDHBLT-1
Lower Top
Common
Weak

CD

Trend
Change
Down

HBVT
-1
CDHBVT-1
Lower Top
Average
Weak

CD

Trend
Change
Down

HTLB
-2
CDHTLB-2
Lower Bottom
Common
Strong

CD

Trend
Change
Down

HTVB
-2
CDHTVB-2
Lower Bottom
Rare
Strong
A

COLUMN 3 –  CT DATE – CHANGE TRADE DATE

 

The CT DATE code in column #3 of Table 1 USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM displays the date, and therefore the bar, in which the Change Trend was Confirmed.  The actual Swing Top Top-Bar or Swing Bottom Bottom-Bar date would be before the DATE CT date, since confirmation occurs after the Top Bar or Bottom Bar and the following Setup Bar is in place.

The date of the CT DATE is an important date, since it points to the date in which market Price Action triggered a General countertrend move of potential significance that altered the expectations of investors and algorithm based computer models initiating a new Change Trend.   The future significance of the Change Trend will be battled in the next General, Swing and Short Trend moves and could evetually reverse back to continue  with the previous Major Trend or confirm that the Major Trend has changed. 

A

COLUMN 4 –  CT BARS – BARS SINCE LAST CHANGE TRADE DATE

 

The CT BARS code in column #4 of Table 1 USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM displays 2 numbers;

  •  The first number of the CT BARS column starts counting from the Swing Top Top-Bar or Swing Bottom Bottom-Bar that initiated the Change Trend.
  • The second number of the CT BARS column stars counting from the Confirmation Date of the Change Trend noted in the CT DATE column.

The difference between the 2 numbers is the number of bars between the Swing Top Top-Bar or the Swing Bottom Bottom-Bar date and the date in which the respective Swing Top or the Swing Bottom was Confirmed.

The number of CT BARS will increase as long as the sequential Higher Tops and Higher Bottoms (HTHB) for Uptrend and Lower Tops and Lower Bottoms (LTLB) stays intact following the Current General Trend after the Change Trend that Initiated it.  As soon as a new Change Trend event ocurs the CT BARS counter is set back to zero.

A

COLUMN 5 –  5H T/B – CURRENT 5H TREND TOP OR BOTTOM STATUS CODE

 

The 5H T/B code in column #5 of Table 1 USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM displays the Current General Trend direction and current sequential Swing Top or Swing Bottom number.  A General Trend is formed of several consecutive sequential Confirmed Swing Tops and Confirmed Swing Bottoms.  Uptrends are composed of Higher Confirmend Swing Tops and Higher Confirmed Swing Bottoms (HTHB), while Downtrends are composed of Lower Confirmed Swing Tops and Lower Confirmed Swing Bottoms (LTLB) as the trend develops over time.  Each Swing Top and Swing Bottom in a General Curent Trend is numbered consecutevely with ascendig numbers starting with the numbers +1 or -2 for the initial Change Swing Bottoms or -1 or +2 for the initial Change Swing Tops that started the Trend Change followed by the number 1 and higher for each sequential Swing Tops and Swing Bottoms as they progress along the Current General Trend until a new Change Trend event occurs that reverses the Current General Trend starting the whole process again in the opposite Current General Trend direction.

 

MULTIPLE SEQUENTIAL CHANGE SWING EVENTS – Although most commonly Change Swing Trend events establish a new Current General Trend followed by Current Swing Trend Tops and Bottoms sometimes consecutive Change Swing Trend events can occur in sequence, but always a Change Swing Top followed by a Change Swing Bottom or a Change Swing Bottom followed by a Change Swing Top.  Two sequential Change Trend events in a row are unsual and three in a row are very unsual, but they are the result of a market battle between bulls and bears fighting to establish a new Current General Trend.  In Table 5 below we summarize the possible sequences of Change Swing Tops and Change Swing Bottoms.

5H T/B POSSIBLE SEQUENTIAL CHANGE SWING TRENDS - TABLE 5
CHANGE SWING TREND
-1 Change Swing Top
-2 Change Swing Bottom
+1 Change Swing Bottom
+2 Change Swing Top
5H T/B POSSIBLE SEQUENTIAL CHANGE SWING TRENDS - TABLE 5
NEXT CHANGE SWING TREND
+1 Change Swing Bottom
+2 Change Swing Top
-1 Change Swing Top
-2 Change Swing Bottom
5H T/B POSSIBLE SEQUENTIAL CHANGE SWING TRENDS - TABLE 5
Swing Chart Pattern
Compression Swing Wedge
Expansion Swing Wedge
Compression Swing Wedge
Expansion Swing Wedge

 

 

THE 5H T/B NUMBERING SYSTEMThere are four ways to intiate a General Change Trend event, two for General Change Uptrends (CU) that can start with a +1 Bottom or a +2 Top, and two for General Change Downtreds (CD) that can start with a -1 Top or -2 Bottom.  The sequential numbering system for the Swing Tops and Swing Bottoms after a new General Change Trend is started is the following:

5H T/B Numbering System for Uptrends (initiated with +1 Swing Bottoms and +2 Swing Tops)

In Current General Uptrends built on sequential Higher Tops and Higher Bottoms (HTHB) the numbering sequence starts with the number “0” for the +1 Swing Bottom or the +2 Swing Top of the Change Uptrend event, but instead of a “0” the +1 or +2 is used to number the corresponding Swing Bottom or Swing Top to initiate the 5H Uptrend in the charts.

  • The next Upswing after a +1 Change Trend Swing Bottom within a General Uptrend will be Swing Top number 1,  the next Swing Bottom number 2, the next Swing Top number 3, etc.  On the other hand, the next Downswing after a +2 Change Trend Swing Top within a General Uptrend will be Swing Bottom number 1,  the next Swing Top number 2, the next Swing Bottom number 3, etc.
  • +1 Swing Bottom initiated Change Uptrends will have odd numbered Swing Tops and even numbered Swing Bottoms, while +2 Swing Top initiated Change Uptrends will have even numbered Swing Tops and odd numbered Swing Bottoms.  See the summary in Table 6 below.

5H T/B Numbering System for Downtrends (initiated with -1 Swing Tops and -2 Swing Bottoms)

In Current General Downtrends built on sequential Lower Tops and Lower Bottoms (LTLB) the numbering sequence starts with the number “0” for the -1 Swing Top or the -2 Swing Bottom of the Change Uptrend event, but instead of a “0” the -1 or -2 is used to number the corresponding Swing Top or Swing Bottom to initiate the 5H Downtrend in the charts.

  • The next Downswing after a -1 Change Trend Swing Top within a General Downtrend will be Swing Bottom number 1,  the next Swing Top number 2, the next Swing Bottom number 3, etc.  On the other hand, the next Downswing after a -2 Change Trend Swing Bottom within a General Dowtrend will be Swing Top number 1,  the next Swing Bottom number 2, the next Swing Top number 3, etc.
  • -1 Swing Top initiated Change Downtrends will have even numbered Swing Tops and odd numbered Swing Bottoms, while -2 initiated Change Downtrenhds will have odd numbered Swing Tops and even numbered Swing Bottoms.  See the summary in Table 6 below.

THE 5H T/B STATUS CODE –  The 5H T/B code has 4 components (for Column 5 in Table 1):

  • The first letter can be an H for Higher Swing Tops and HIgher Swin Bottoms (HTHB) sequences (+1 and +2 initiated) of a Current General Uptrend or an L for Lower Swing Tops  and Lower Swing Bottoms (LTLB) sequences (-1 and -2 initiated) of a Current General Downtrend.
  • The next 3 letters, TOP for Tops and BOT for Bottoms, indicate if the current and last Confirmed Swing move is a TOP or BOT.
  • The last number of the 5H T/B code is the current Swing Top or Swing Bottom  number in the Current General Trend sequence as noted in the 5 T/B Numbering System section above.

See Table 6 below for examples of the 4 possible Top/Bottom sequences lasting 4 (as an example) Swing sequences after a Trend Change.  The numbering of the Swing Top and Swing Bottom sequences would increase as long as a new Change Trend does not occur.

CURRENT 5H TREND TOP & BOTTOM STATUS - TABLE 6
CURRENT 5H TREND TOP & BOTTOM STATUS - TABLE 6
CURRENT 5H TREND TOP & BOTTOM STATUS - TABLE 6
CURRENT 5H TREND TOP & BOTTOM STATUS - TABLE 6
CURRENT 5H TREND TOP & BOTTOM STATUS - TABLE 6
CURRENT 5H TREND TOP & BOTTOM STATUS - TABLE 6
TREND CHANGE T/B TYPE
T/B TYPE START
1st T/B SWING
2ND T/B SWING
3rd T/B SWING
4th T/B SWING

CU +1

(HTHB)
5H T/B +1 CODE

HIgher Bottom 0
Higher Top 1
Higher Bottom 2
Higher Top 3
Higher Bottom 4

CU +1

(HTHB)
5H T/B +1 CODE

HBOT+1(0)
HTOP1
HBOT2
HTOP3
HBOT4

CU +2

(HTHB)
5H T/B +2 CODE

Higher Top 0
Higher Bottom 1
Higher Top 2
HIgher Bottom 3
Higher Top 4

CU +2

(HTHB)
5H T/B +2 CODE

HTOP+2(0)
HBOT1
HTOP2
HBOT3
HTOP4

CU -1

(LTLB)
5H T/B -1 CODE

Lower Top 0
Lower Bottom 1
Lower Top 2
Lower Bottom 3
Lower Top 4

CU -1

(LTLB)
5H T/B -1 CODE

LTOP-1(0)
LBOT1
LTOP2
LBOT3
LTOP4

CU -2

(LTLB)
5H T/B -2 CODE

Lower Bottom 0
Lower Top 1
Lower Bottom 2
Lower Top 3
Lower Bottom 4

CU -2

(LTLB)
5H T/B -2 CODE

LBOT-2(0)
LTOP1
LBOT2
LTOP3
LBOT4
A

COLUMN 6 –  DATE T/B – DATE OF LAST CONFIRMED SWING TOP OR BOTTOM

 

The DATE T/B code in column #6 of Table 1 USA INDEXES 5H PRICE ACTION MARKET TIMING SYSTEM displays the date of the last Confirmed Swing Top Top-Bar or Swing Bottom Bottom-Bar.  The definitive confirmation date of a 5H Swing Top or Swing Bottom occurs the third day/bar or later after a potential High Top-Bar or Low Bottom-Bar is identified. 

Only in very rare situations or in intraday charts, due to extreme volatility, do two unsual rare cases occur without the need of a 5H Confirmation-Bar Price Action Pattern (see Violation Swing Tops and Violation Swing Bottoms in presentation for column #2 and in Table 4)

  • The current Unconfirmed Swing Top Top-Bar violates the previous Swing Bottom Low referred to as a TbVB Swing Top (Top-Bar Violation -Bottom) or the current Unconfirmed Swing Bottom Bottom-Bar violates previous Swing Top High referred to as a BbVT Swing Botttom (Top-Bar Violation-Bottom), creating an unsual bar that functions both as a Swing Top and a Swing Bottom referred to as BBVT (Bottom-Bar Violation-Top)
  • Another unsual situation is the possibility of the Setup Bar violating a Previous Swing Top or Swing Bottom creating a new violation Swing Top or Swing Bottom on the second day or bar.

Therefore, the date of a Swing Top or Swing Bottom can only be known in the future Confirmation Bar Date as Short Term Interbar Price Action confirms the Top or the Bottom.  The important point is that while awaiting for confirmation the Low (L) of a potential Seing Bottom or the High (H) of a potential Swing Top should not be violated, which if it were to occur the whole process of a new Higher Swing Top Bar or new Lower Swing Bottom Bar and the subsequent Setup Bar would follow starting the whole proces all over again until a Confirmation Bar creates the expected Swing Top or Swing Bottom.

A

COLUMN 7 –  CONF T/B – CONFIRMATION DATE OF CURRENT TOP OR BOTTOM

 

The Confirmation date is the date in which the actual Swing Top or Swing Bottom of Column 3 Table 1 were confirmed.  The further appart the Swing Top or Swing Bottom dates are from the Confirmation Dates the longer the market consolidated sideways without breaking the high of the potential Swing Top or the low of a potential Swing Bottom prior to Confirmation. 

 The Confirmation Time is calculated by substracting the Confirmation Date (time for intraday charts) from the Swing Date (time for intraday charts) excluding the holidays and weekdends.

It is the date in which the Confirmation Bar validated the Setup bar, a process that usually takes 3 or more days or even weeks.  Only in etremely rare occassions does confirmation occur on the same day or the next day after Top or Bottom Swing Bar is in place.  The confirmation date is of extreme significance, since it changes the direction of the Swing Trend from Top to Bottom or Bottom to Top or the Current General Trend from Uptrends to Downtrend or from Downtrend to Uptrend. 

A

COLUMN 8 –  W BARS – NUMBER OF BARS SINCE LAST TOP OR BOTTOM

 

Is the count of the number of bars since the formation of the currently active Confirmed Top or Confirmed Bottom.  The highest Confirmed Top Bar or the Lowest Confirmed Bottom Bar is bar number “1” of the Swing Trend move.  This number is important since Top to Bottom and Bottom to Top moves tend to last an average number of bars helping us predict the area where a potential change in the Swing Trend has higher probabilities of occuring.

Usually the lowest number of bars is 3, except in extremely rare cases of extreme volatility where the previous Tops and Bottoms are violated in the same Top or Bottom bar number 1 or in the Setup Bar number 2 as noted in other sections of this article.  These extreme situations are more common in intraday smaller minute timeframes.  As the Unconfirmed Top or Unconfirmed Bottom progesses the number of bars increases as will be noted in Column 5 of Table 1.

It is extremely important to note that the final number of bars that compose a Swing Top or Swing Bottom move gets reduced by at least 2 bars or more once the next Swing Top or Swing Bottom is confirmed for the same reason that there is a difference between the Confirmation Date in Column 4 of Table 1 and the Swing Top or Swing Bottom Date in Column 3 of Table 1.

A

COLUMN 9 –  SETUPS – THE NUMBER OF SETUPS SINCE LAST TOP OR BOTTOM

 

A Setup Bar Pattern provides the possibility to confirm a new Swing Top or a Swing Bottom in the next bar or bars.  A Setup Bar Pattern is composed of 2 bars.  

  • In the case of an Unconfirmed Swing Top being formed coming from a Confirmed Bottom it is composed of the highest bar in the Swing Uptrend and a second bar that does not violate the previous bar high.
  • In the case of an Unconfirmed Swing Bottom being formed coming from a Confirmed Top it is composed of the lowest bar in the Swing Downtrend and a second bar that does not violate the previous bar low.

As soon as a new Swing Top or Swing Bottom is confirmed and a new unconfirmed  Swing Top or unconfirmed Swing Bottom starts trending the number of Setup Patterns will be 0 until the first Setup Bar is in place.  

If the Setup Bar Pattern fails by violating the lowest low in the current downswing coming from a Confirmed Top or by violating the highest high in the current upswing coming from a Confirmed Bottom a new Setup Bar Pattern will have to develop again in order to be able to confirm the currently developing Swing Top or Swing Bottom.

As the market trends Setup Bar Patterns will keep on forming until one of them confirms the next Swing Top or Swing Bottom with a Confirmation Bar.  Therefore, unconfirmed uptend or downtrend moves can have 1 or several Setup Bar Patterns, if any of them fail to be confirmed, and they might be ON if they are awaiting on a potential Confirmation Bar or OFF once they fail and the Upswing or Downswing is awaiting the formation of a new Setup Bar Pattern.

The Setups Code in column 7 of Table 1 provides the following information on its 3 components;

  • Number of Setups.  Can be 0 or a higher number.  The first number is the number of Setup Patterns that occurred in the current Uptrend from a Confirmed Swing  Bottom or the number of Setup Patterns in a Downtrend from a Confirmed Swing Top, which could range from 0 to start with to dozens in outlier situations.  Any Uptrend or Downtrend move would have 1 to several Setup Bars Patterns before the trend revereses, except in the 2 rare cases mentioned before which would lack Setup Bar Patterns before the Swing Top or Swing Bottom confirmation in which case the Setups Code woud be only “0”. 
  • Current Swing Trend.  Can be”U” for up or “D” for down.  The letter “U” means the Setup Pattern is part of an Upswing Move working on creating a Swing Top and the letter “D” which means the Setup Pattern is part of a Downswing Move working on creating a Swing Bottom.  Its unrelated to the Current General Trend and simply refers to the current direction of the Swing Trend.  Current General Uptrends and Downtrends have both Uptrend Swing while attempting to form a Swing Top and Downtrend Swing Trends when attempting to form a Swing Bottom.
  • Status of the Setup Pattern.  Can be ON or OFF.  The word “ON” denotes that there is a current Setup Pattern active and a potential Swing Trend change could be confirmed by a Confirmation Bar in the next bars.  The word “OFF” denotes that all the previous Setup Patern failed and the current trend continues until a new Setup Bar Pattern is formed.
A

COLUMN 10 –  NEXT T/B – NEXT EXPECTED TOP OR BOTTOM SEQUENCE

 

Once a Swing Top is confirmed the market will start the process of creating a new Swing Dowtrend in search of confirming a new Swing Bottom, and once a Swing Bottom is confirmed the market will start the process of confirming a new Swing Top independent of the Current General Trend.  In order to accomplish this, the market can trade within 3 clearly defined 5H Zones that will determince the future continuation or change of the Current General Trend during the next Swing Top or Swing Bottom confirmation process;

  • The 5H Neutral Zone or 5HN-Zone within trading zone of the last confirmed Swing Top and Swing Bottom.
  • The 5H Trend Zone or 5HT-Zone in the direction of the Current General Trend, above the previous Confirmed Swing Top for General Uptrend and below the last Confirmed Swing Bottom for General Downtrends.
  • The 5H Reversal Zone or 5HR-Zone in the opposite direction of the Current General Trend, below the previous Confirmend Swing Bottom for General Uptrends and above the previous Swing Top for General Downtrends.

For General Uptrends the 5HT-Zone is above the 5HN-Zone and the 5HR-Zone is below the 5HN-Zone.  For General Downtrends the 5HT-Zone is below the 5HN-Zone and the 5HR-Zone is above the 5HN-Zone.Furthermore, there are 4 types of 5H-Swing-Areas or 5HSA, as presented in the “Last Swing Move” row in Table 5 below,

  • 2 during General Uptrends; Bottom-to-Top Trend Swing or 5HSA-UBT (Case 1 in Table 5) and Top-to-Bottom Trend Swing or 5HSA-UTB (Case 2 Table 5).
  • 2 during General Downtrends; Bottom-to-Top Trend Swing o 5HSA-DBT (Case 3 in Table 5) and Top-to-Bottom Trend Swing or 5HSA-DTB (Case 4 in Table 5).

The 5H Neutral Zone or 5HN-Zone.  Is the trading range between the last Confirmed Swing Top and the last Confirmed Swing Bottom for any General Trend, Current or Change trends.  Once a new Swing Bottom or a new Swing Top is confirmed ALL trading starts within the 5HN-Zone providing an opportunity to maintain the Current General Trend or to Trend Change in the opposite direction in all 4 each 5H-Swing-Areas as noted in Table 5 below.  Therefore, while trading occurs in the 5HN-Zone, Column 7 will first show the next possible Swing Top or Swing Bottom mantaining the Current General Trend followed the next possible Change Trend Top or Bottom against the Current Trend.

The Trend Zone or 5HT-Zone.  Is the trading zone outside of the range of the 5HN-Zone in the direction of the Current General Trend.  In Current General Uptrends the 5HT-Zone will be above the previous Confirmed Top, while in Current General Downtrends the 5HT-Zone will be below the last Confirmed Bottom.  Once the 5HT-Zone is entered a Change Trend is no longer possible within the current Swing Trend.  Only 5H-Swing-Areas 5HSA-UTB and 5HSA-DBT can enter the 5HT-Zone.  Change Swings Tops (-1 or +2) or Change Swing Bottoms (+1 or -2) are no longer possible once trading enters the 5HT-Zone.  Therefore, if trading occurs within the 5HT-Zone, Column 7 will show only the next possible Swing Top or Swing Bottom awaiting confirming within the Current General Trend.

The Reversal Zone or 5HR-Zone.  Is the trading zone outside of the range of 5HN-Zone in the opposite direction of the Current General Trend.  In Current General Uptrends the 5HR-Zone will be below the previous Confirmed Swing Bottom, while in Current General Downtrends the 5HR-Zone will be above the last Confirmed Swing Top.  Only 5H-Swing-Areas 5HSA-UBT, with a -2 Bottom, and 5HSA-DTB, with a +2 Top, can enter the 5HR-Zone.  Therefore, if trading occurs within the 5HR-Zone, Column 7 will show only the next possible +2 Swing Top or -2 Swing Bottom awaiting confirming of a Trend Change.

NEXT T/B SEQUENCE OF NEXT EXPECTED TOP OR BOTTOM - TABLE 6
NEXT T/B SEQUENCE OF NEXT EXPECTED TOP OR BOTTOM - TABLE 6
NEXT T/B SEQUENCE OF NEXT EXPECTED TOP OR BOTTOM - TABLE 6
NEXT T/B SEQUENCE OF NEXT EXPECTED TOP OR BOTTOM - TABLE 6
GENERAL UPTREND
GENERAL UPTREND
GENERAL DOWNTREND
GENERAL DOWNTREND
SWING SEQUENCE
Higher Tops & Higher Bottoms
Higher Tops & Higher Bottoms
Lower Tops & Lower Bottoms
Lower Tops & Lower Bottoms
Last SWING MOVE
BOTTOM to TOP
5HSA-UBT
TOP to BOTTOM
5HSA-UTB
BOTTOM to TOP
5HSA-DBT
TOP to BOTTOM
5HSA-DTB
TO BE CONFIRMED
BOTTOM
TOP
BOTTOM
TOP
5H REVERSAL ZONE 5HR-ZONE
Lower -2 BOTTOM
Only Possible
Does Not Apply
Does Not Apply
Higher +2 TOP
Only Possible
5HR-ZONE LOCATION
Below Previous Confirmed BOTTOM
Does Not Apply
Does Not Apply
Above Previous Confirmed TOP
5H NEUTRAL ZONE 5HN-ZONE
Higher Trend or -2 5HR BOTTOM Possible
Higher Trend or -1 5HT TOP Possible
Lower Trend or +1 5HT BOTTOM Possible
Lower Trend or +2 5HR
TOP Possible
5HN-ZONE LOCATION
Between Confirmed TOP & BOTTOM
Between Confirmed TOP & BOTTOM
Between Confirmed TOP & BOTTOM
Between Confirmed TOP & BOTTOM
5H TREND ZONE
5HT-ZONE
Does Not Apply
Higher Trend TOP
Only Possible
Lower Trend BOTTOM Only Possible
Does Not Apply
5HT-ZONE LOCATION
Does Not Apply
Above Previous Confirmed TOP
Below Previous Confirmed BOTTOM
Does Not Apply
CASE
1
2
3
4

Once a new Swing Top or Swing Bottom is confirmed Column 7 of Table 1 will present the next current Swing Trend options as trading starts within the 5H-Zone depending on which 5H-Swing-Area is developing prior to the confirmation of the next expected Swing Top or Swing Bottom.  Each one of the 4 each 5H-Swing-Area Cases is discussed below as they apply to each of the 3 each 5H-Zones.  There a total of 8 each 5H-Zone/5HSA combinations since the 5HR-Zone and the 5HT-Zone only apply to 2 of 4 of the 5HSA each, while the 5HN-Zone applies in all 4 each of the 5HN-Zone cases.  See “Does Not Apply” in Table 5 for the impossible 5H-Zone/5HSA combination cases.

5HSA-UBT. CASE 1 – TABLE 5For Current General Uptrends that just confirmed a higher sequential Swing Top after a higher Confirmed Swing Bottom the 5HN-Zone Bottom to Top range is defined within them.  Price Action within the 5HN-Zone has to either:

  1. Confirm a new Swing Bottom within the 5HN-Zone above the previous Confirmed Swing Bottom to continue with the higher sequential Swing Tops and higher Swing Bottoms of the Current General Uptrend or
  2. Violate the previous Swing Bottom and enter the 5HR-Zone below to confirm a -2 Swing Bottom Downtrend Change.

As long as the new Swing Bottom is not confirmed and Price Action is withn the 5HN-Zone a sequential higher Swing Bottom or a -2 Swing Bottom are possible and both outcomes will be shown in column 7 of Table 1.  If a higher Swing Bottom following the Current General Uptrend is not confirmed within the 5HN-Zone and If the previous Confirmed Swing Bottom is violated entering the 5HR-Zone below the 5HN-Zone  only a  Downtrend Change -2 Swing Bottom is possible and it will be reflected as  the only possibility in column 7 of the table 1.

5HSA-UTB. CASE 2 – TABLE 5For Current General Uptrends that just confirmed a higher sequential Swing Bottom after a higher Confirmed Swing Top the 5HN-Zone Top to Bottom range is defined within them.  Price Action within the 5HN-Zone has to either:

  1. Trade higher above the previous confirmed Swing Top and move into the 5HT-Zone to confirm a sequential higher Swing Top following the Current General Uptrend of higher Swing Tops and higher Swing Bottoms or
  2. Confirm a new lower -1 Swing Top below the previous confirmed Swing Top within the 5HN-Zone to confirm a Trend Change to the downside. 

As long as the new Swing Top is not confirmed and Price Action is within the 5HN-Zone a -1 Swing Top within the 5HN-Zone or a new higher sequential Swing Top in the 5HT-Zone above the previous Confirmed Swing Top are possible and both outcomes will be shown in column 7 of Table 1.  As soon as the previous Swing Top is violated only a sequential higher Swing Top following the Current General Uptrend is possible and it will be reflected as  the only possibility in column 7 of the table. 

5HSA-DBT. CASE 3 – TABLE 5For Current General Downtrends that just confirmed a lower sequential Swing Top after a lower Confirmed Swing Bottom the 5HN-Zone Bottom to Top range is defined within them.  Price Action within the 5HN-Zone has to either:

  1. Trade lower below the previous confirmed Swing Bottom and move into the 5HT-Zone to confirm a sequential lower Swing Bottom following the Current General Downtrend of lower Swing Tops and lower Swing Bottoms or
  2. Confirm a new higher +1 Swing Bottom above the previous confirmed Swing Bottom within the 5HN-Zone to confirm a Trend Change to the upside. 

As long as the new Swing Bottom is not confirmed and Price Action is within the 5HN-Zone a +1 Swing Bottom in the 5HN-Zone or a new lower sequential Swing Bottom in the 5HT-Zone below the previous Confirmed Swing Bottom are possible and both outcomes will be shown in column 7 of Table 1.  If a +1 Swing Bottom is not confirmed and as soon as the previous Swing Bottom is violated only a sequential lower Swing Bottom following the Current General Downtrend is possible and it will be reflected as  the only possibility in column 7 of the table.

5HSA-DTB. CASE 4 – TABLE 5For Current General Downtrends that just confirmed a lower sequential Swing Bottom after a lower Confirmed Swing Top the 5HN-Zone Top to Bottom range is defined within them.  Price Action within the 5HN-Zone has to either:

  1. Confirm a new Swing Top below the previous Confirmed Swing Top to continue with the sequential lower Swing Tops and lower Swing Bottoms of the Current General Downtrend or
  2. Violate the previous Swing Top and enter the 5HR-Zone above to confirm a +2 Swing Top Uptrend Change.

As long as the new Swing Top is not confirmed and Price Action is withn the 5HN-Zone a sequential lower Swing Top or a +2 Swing Top are possible and both outcomes will be shown in column 7 of Table 1.  If a lower Swing Top is not confirmed in the 5HN-Zone and the previous Confirmed Swing Top is violated entering the 5HR-Zone above the 5HN-Zone only an Uptrend Change +2 Swing Top is possible and it will be reflected as  the only possibility in column 7 of the table 1.

CONCLUSION

The 5H PRICE ACTION TRADING STRATEGY

The 5H Price Action Trading Pattern is an extremely powerful tool to understand and predict market behaviour.  The theory presented in this article may seem complex without knowing the precise price action rules and guidelines that define the setups, triggers and interpretation of how market behaviour builds the General, Swing and Short Term Trends.   We encourage you to invest in your education and acquiring our propietary 5H Master Flea Learning Program.  For more information please write us a comment below or contact us at mastertrader@fleacircustrader.com.

5H PRICE ACTION MARKET TREND SYSTEM TIMING PARAMETERS - TABLE 2
COLUMN
1
2
3
4
5
6
7
8
9
10
5H PRICE ACTION MARKET TREND SYSTEM TIMING PARAMETERS - TABLE 2
TITLE
5H GWS
5H CWS
CT DATE
CT BARS
5H T/B
DATE T/B
CONF T/B
W BARS
SETUPS
NEXT T/B
5H PRICE ACTION MARKET TREND SYSTEM TIMING PARAMETERS - TABLE 2
DESCRIPTION
The Current General (G), Swing (W) and Short (S) Term direction of the market
How the last Change (C), Swing (W) and Short (S) Trend event occurred
The date of the last Change Trend event (dd-mm-yy)
The numbers of trading bars since the last Change Trend event.
The General Current Trend direction and current sequential Swing Top or Swing Bottom number
The date of the last Confirmed Swing Top or Swing Bottom (dd-mm-yy)
THe date in which the last Swing Top or Swing Bottom was confirmed (dd-mm-yy)
The number of bars that compose the current Unconfirmed Swing Top or Swing Bottom
The number of Setups attempts to confirm a Swing Top or Swing Bottom and if ON or OFF
The next potential Swing Top or Swing Bottom to be confirmed

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