When an idea is cancelled, in plain words — one condition

The plan first, built on three questions. The direction is rising on the daily, the weekly and the monthly scale. Price sits below the middle of the range, that is, in discount. The way runs from the end of the correction to the upper boundary of the range. Three answers in place.

What price interacted with. A monthly imbalance sits here — the trace of a fast higher-timeframe move, left on the first of September 2020: from 1785.65 to 1862.49. The correction went through it, dropped below and came back inside.

Point A is set right there — the end of the correction. Not every low on the way down will do, but the lowest one: the one below which a correction stops being a correction. Here it is the thirtieth of November 2020, 21.43 below the lower edge of the imbalance. Confirmation came two days later: on the second of December price closed above the break line of the hourly scale, at 1830.44 — already inside the imbalance.

The cancellation is one condition, and a wick is enough for it

After that price went up and covered almost two thirds of the way to the target: the plan worked exactly as intended. Then, on the nineteenth of February 2021, price went four points below point A and closed back above.

That is enough. Point A claimed: the correction ended here. Price went deeper — the claim is false, and a wick is enough for that. The hypothesis did not play out.

There is no point waiting for a close. Here it came a week later, on the twenty-sixth of February, and it said nothing new: the idea had ended a week earlier. A close is the condition for a break of structure; for the claim about the end of the correction to stop being true, it is enough that price was there at all.

The markup stayed the same

It is worth noticing what exactly stopped being true. The boundaries of the range are where they were, the middle is computed from them, the monthly imbalance has not gone anywhere. One claim turned out to be false — the one about the end of the correction.

An idea is cancelled before the direction is

The direction is intact: on the daily, the weekly and the monthly scale it is still growth. The idea was cancelled, not the direction. That is the whole difference: the direction is cancelled by a break of a structural extreme, an idea by a break of point A — and the second happens before the first: the markup is still fine while this particular plan is already dead.

How it ended. Price went lower still, and the target was not approached at all — price went the other way, and the direction did not change. Hence the conclusion: after a cancellation what is needed is not a new argument for the old plan, but a new plan.

Cancelling an idea is not a judgement but a check of one level. The FocusProfit Trade Model indicator labels confirmed extremes, builds the range out of them and shows the direction on three scales at once. So you see not only that the condition is met, but also that it is the idea that was cancelled: the markup and the direction stayed where they were.

The topic is covered in more depth in the Learn section, and the causality in full is in the methodology.