Trading knowledge › Price Action Basics › 4/7 · 1 min read
Four conditions before using a signal
Key idea: use it only with all 4 boxes — at a level · same direction · triggered · ratio ≥ 1.5.
Four boxes
- At a level — the pattern's extreme sits near a level.
- Same direction — with the trend / main scenario.
- Triggered — within 3 candles, one CLOSES past the trigger.
- Ratio ≥ 1.5 — the next level is ≥ 1.5 × the distance to invalidation.
Real case
GBPUSD: 189 pips to the next level, 97 pips to invalidation ⇒ ratio 1.93 ✓ — reached after 3 sessions.
With a 1.5 ratio, how often must you be right to break even?
Just over 40% (1 ÷ 2.5), before costs.
Log in · create a free account to save your progress.
Educational content, not investment advice. Leveraged trading can lose more than your initial capital. Examples are built on real PricePlaybook historical candles and scored by rules written in advance — past results do not guarantee future results.