Confirmation
Confirmation
Lesson 3 : Invalidation Points
Lesson 3 : Invalidation Points
Lesson 3 : Invalidation Points
Beginner
Beginner
Beginner
5 min
5 min
5 min
Previous Day Invalidation Point
Previous Day Invalidation Point
Previous Day Invalidation Point
Once price engages a relevant swing and closes, a bias is established for the following day. The first step beyond that is to set an invalidation point within the previous daily candle. An invalidation point is the level in the market that, if traded through, invalidates the previously established bias. There are only two methods for setting an invalidation point.
Once price engages a relevant swing and closes, a bias is established for the following day. The first step beyond that is to set an invalidation point within the previous daily candle. An invalidation point is the level in the market that, if traded through, invalidates the previously established bias. There are only two methods for setting an invalidation point.
Once price engages a relevant swing and closes, a bias is established for the following day. The first step beyond that is to set an invalidation point within the previous daily candle. An invalidation point is the level in the market that, if traded through, invalidates the previously established bias. There are only two methods for setting an invalidation point.
Majority Body
Majority Body
Majority Body
The first method applies when the previous day forms a larger candle body with small wicks on both sides. In this case, the invalidation point is set at the equilibrium of the previous day’s range.
The first method applies when the previous day forms a larger candle body with small wicks on both sides. In this case, the invalidation point is set at the equilibrium of the previous day’s range.
The first method applies when the previous day forms a larger candle body with small wicks on both sides. In this case, the invalidation point is set at the equilibrium of the previous day’s range.
When bullish, price must establish the low of day above this level.
When bullish, price must establish the low of day above this level.
When bullish, price must establish the low of day above this level.
When bearish, price must establish the high of day below this level.
When bearish, price must establish the high of day below this level.
When bearish, price must establish the high of day below this level.
Majority Wick
Majority Wick
Majority Wick
The second method applies when the previous day forms a larger opposing wick at a point of reversal. In this case, the invalidation point is set at the equilibrium of the opposing wick, measured from the daily opening price to either the high or the low of day.
The second method applies when the previous day forms a larger opposing wick at a point of reversal. In this case, the invalidation point is set at the equilibrium of the opposing wick, measured from the daily opening price to either the high or the low of day.
The second method applies when the previous day forms a larger opposing wick at a point of reversal. In this case, the invalidation point is set at the equilibrium of the opposing wick, measured from the daily opening price to either the high or the low of day.
When bullish, price must establish the low of day above this level.
When bullish, price must establish the low of day above this level.
When bullish, price must establish the low of day above this level.
When bearish, price must establish the high of day below this level.
When bearish, price must establish the high of day below this level.
When bearish, price must establish the high of day below this level.
Understanding the Logic
Understanding the Logic
Understanding the Logic
This rule is a mechanical way of demanding small wicks on the daily candle, which are known to support expansion. If price trades through the invalidation point before establishing a high or low of day, it signals that a large opposing run from the daily open has occurred. In this case, the previously established bias is no longer valid and must be disregarded.
This rule is a mechanical way of demanding small wicks on the daily candle, which are known to support expansion. If price trades through the invalidation point before establishing a high or low of day, it signals that a large opposing run from the daily open has occurred. In this case, the previously established bias is no longer valid and must be disregarded.
This rule is a mechanical way of demanding small wicks on the daily candle, which are known to support expansion. If price trades through the invalidation point before establishing a high or low of day, it signals that a large opposing run from the daily open has occurred. In this case, the previously established bias is no longer valid and must be disregarded.
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2025 The Market Lens - All Rights Reserved
The standard for trading education and guidance
2025 The Market Lens - All Rights Reserved
The standard for trading education and guidance