What is narrative? That's not bias, for when prices are behaving a specific way, not necessarily running in one direction. Okay, narrative many times is going in a direction for the purposes of creating an event. Then a real move takes place. That's narrative. It's kind of like a game plan. Think about how a football coach have several strategies to overcome their opponents.
When we're looking at a narrative you have to anticipate the likely scenarios. It's not a single scenario all the time. There are sometimes where I would be willing to expect or anticipate price behaving a specific way for this function to unfold in price, run up to go into the buy side. Why? Why would it want to go up the buy side? To take those participants out of the marketplace that were short or trick them into going long for the very explicit purposes of going lower, to take that liquidity, use it as a counterparty to handshake with it and go lower. And do what? Buy at a lower price below an old low where sell stops are resting, and you have willing participants to sell to you at a low price. That's narrative.
<aside> ⚠️ What makes the differentiation between bias and narrative? Narrative is an ebb and flow, a rhyming reason. Bias is a one-directional premise. It's going up or it's going down, that's it. Now, narrative is the first thing that's required. Then, once it gets to that event-driven price and time, then you have a bias. The bias is now bearish; the bias is now bullish. But prior to bias, there has to be a narrative that's understood by you.
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If it's bearish, and we anticipate price going up into that level to take out the buy stops, how far can it go past that? How far can we reasonably expect it to go so that way we can place a stop loss where we can sleep at night, knowing that we’re doing things with a systematic approach that's not random? It's based on sound logic; it's not guesswork.
You have to consider the fact that we could trade above C.E.. It can do that. So if you're going to go short in here, you have to allow for your stop to be just above that, plus another handle. So one and a half handles, two handles above C.E.. If you're going to sell short here, your stop has to be at least two handles minimum above that level. If the risk is too much use micro contracts.
This is PO3 based all around the element of that event at 10 o'clock. PO3 is not limited to the daily range; you can look at it on a fractal basis. So everything that you look at in terms of price, every range, can be utilized as Power 3. There is an accumulation phase, a manipulation phase, a profit realization portion, or the biggest portion of the run, whether it be higher or lower, and then the close where it comes off that extreme.
We want to see this 15m FVG stay open partially, why? Because that would act as a breakaway gap. It means it's going to indicate that it's really heavy, and that term means it's bearish. It's likely to not want to go higher in any attempt to try to go up will be limited.
