Bullish
The latest high is above the high before it, and the latest low is above the low before it. Buyers are in control on this chart. This answer votes Buy.
How to understand market direction
Step 2 does not ask you to click Buy or Sell. You read the trend on the three charts from step 1. Bullish adds to Buy, Bearish adds to Sell, and the higher chart counts the most. The checklist opens the entry and risk checks only when one side is clear.
The four answers
Mark the last two swing highs and the last two swing lows on the chart before you answer. Judge the staircase of those swings. One candle is not a trend.
Bearish
The latest high is below the high before it, and the latest low is below the low before it. Sellers are in control on this chart. This answer votes Sell.
Ranging
Price keeps returning to the same high and the same low. The swings overlap, so there is no staircase. This answer is split between Buy and Sell. A range on the higher chart is a weak trend, even when the lower charts look directional.
Uncertain
The swings are messy, a break just happened, or you have not marked them yet. This also splits the vote. Use it when you cannot tell. It keeps a guess from looking like a strong trend, and an uncertain higher chart blocks the trade.
Read the three charts in order
Start with the higher chart and keep that answer while you look at the other two. A bullish entry chart inside a bearish higher chart is a bounce, so the higher answer stays Bearish.
| Chart | On an Intraday setup | What you decide | Weight |
|---|---|---|---|
| Higher | 1H | Which way is the trade allowed to face? | 50 |
| Middle | 15M | Is that trend still running, or is a pullback still in progress? | 30 |
| Entry | 3M | Has price turned back in the direction of the higher chart? | 20 |
- Middle chart. In a higher-chart uptrend, Bullish means the pullback has finished and price is rising with the trend again. Bearish means the pullback is still falling. Wait for it to finish.
- Entry chart. Bullish means price has turned up, for example by breaking the last lower high of the pullback. A single green candle is not the turn. The same idea, flipped, is Bearish.
The change of character guide shows that turn, and the multi-timeframe guide walks through the top-down order.
What the percentage is saying
Each chart has a weight: Higher 50, Middle 30, Entry 20. Next to a question you may see a note such as "1H counts 90%". That share of the chart’s weight goes to the side you picked. The rest is shared between Buy and Sell, because a short chart changes its mind more often. Ranging and Uncertain share the whole weight.
| Chart length | How much of a Bullish or Bearish answer counts for that side |
|---|---|
| 1D and longer | 100% |
| 4H up to 1D | 95% |
| 1H and 2H | 90% |
| 15M and 30M | 85% |
| Under 15M | 80% |
A bullish daily chart therefore moves the result more than a bullish 1-minute chart. Answer all three questions. One side then has to reach 60%.
- Under 60%. The charts disagree, or too many answers are Ranging or Uncertain. The result is wait. Leave the stop and the target for later.
- 60% or more, and the trend agrees. The headline names the side. Entry, stop loss and reward-to-risk checks open.
- 60% or more, but the trend is not aligned. The higher chart is the opposite of the leading side, the higher chart is uncertain, or the entry chart has not confirmed. The checklist still says wait. A tight stop does not repair that.
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Two Intraday examples
Both use 1H / 15M / 3M, the Intraday button in step 1.
The three charts agree
1H is making higher highs and higher lows. 15M has finished a pullback and is rising again. 3M has broken its last lower high. Every answer is Bullish.
Buy 93% · Sell 7%
Buy is above 60%, and the higher chart matches it. This is a direction you can take into the rest of the checklist.
The lower charts fight the higher chart
1H is Bearish: lower highs and lower lows. 15M and 3M have turned up, so they look Bullish. That rise is a pullback inside the 1H downtrend.
Buy 48% · Sell 52%
Neither side reaches 60%. The lower charts are not enough to overturn the higher chart. Wait for the 1H trend to change, or for the bounce to fail and the entry chart to turn Bearish with it.
A reading order you can repeat
- Set the three timeframes in step 1 and keep them for the session. Changing them to find a chart that agrees with the trade changes the direction after the fact.
- On the higher chart, mark two highs and two lows. Choose Bullish, Bearish, Ranging or Uncertain from those swings.
- On the middle chart, decide whether the move with that trend has resumed. A pullback that is still running gets the opposite answer.
- On the entry chart, wait for the turn back toward the higher chart before you call it Bullish or Bearish.
- Read the percentage. Under 60%, stop. At 60% or more, continue only when the higher chart and the entry chart agree with the leading side.
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Use it on the checklist
The timeframes you pick in step 1 change how much each answer counts. How to decide which strategy compares Scalp, Intraday and Swing before you choose them.
Back to the checklistThis page explains how to read a chart and how this checklist turns those readings into a probability. It is not a forecast and it is not financial advice.