Invalidation
Technical analysisThe specific condition that would prove a trade idea wrong.
In plain terms
Write it before entering. Without it, every exit becomes an argument with yourself.
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 3 terms
The specific condition that would prove a trade idea wrong.
Write it before entering. Without it, every exit becomes an argument with yourself.
A written specification of trigger, stop, size, invalidation and event risk before entry.
Written at the weekend so it can be executed mechanically during the week.
Price breaking a channel rail and then returning to it from the other side, so that old support acts as resistance.
Often the cleanest short entry a channel offers, because the invalidation sits just beyond the rail rather than far away.