Decision Tree

This decision tree was compressed from trading_study_notes_integrated.md.

Design principles:

1. Any Layer 0 hit means abandon immediately; do not continue down the tree.
2. All Layer 1 hard gates must pass before a trade is allowed. Scoring decides position size only; it does not decide whether a trade exists.
3. Items marked ⚠️ currently have only subjective definitions. They need written standards plus positive and negative chart examples before they are executable.
4. From the original notes, only two exception paths are retained: Branch R item 3 and the G3 note. All other exceptions are removed.

Runtime flow

Layer 0 (kill switches) → Layer 1 (hard gates G1-G6) → Layer 2 (routing: Reversal / Continuation / Failure Swing) → Layer 3 (quality score) → Layer 4 (execution and management).

Layer 0: Kill switches (any hit = no trade)

K1: C4+ candle

Condition: the current candle is C4+.

Action: wait for a new sequence.

K2: DoL already reached

Condition: the DoL has already been reached.

Action: wait for a new DoL to form.

K3: Retraced beyond EQ

Condition: price has retraced beyond EQ.

Action: the reversal narrative is invalidated.

K4: Double sweep

Condition: double sweep.

Action: abandon. Do not take a low-probability exception.

K5: Large wick on the current MTF candle

Condition: the current MTF candle has a large wick.

Action: H4 large wick means wait for a new H6 open; H6 means wait for H4; H1 means wait for 90m; 90m means wait for H1.

K6: Close to a driver

Condition: price is very close to a driver.

Action: wait for the driver itself to give structure.

K7: Around London 9:00

Condition: price is around London 9:00.

Action: wait for price action to settle.

K8: Daily logic conflicts with 4H/6H profiling

Condition: daily logic disagrees with the 4H/6H profile.

Action: stand aside.

K9: High-resistance draw

Condition: the draw is high-resistance, meaning a protected swing.

Action: do not trade towards a protected swing.

K10: Extreme overnight or pre-10am expansion

Condition: very large overnight expansion has already occurred, or an extreme range formed before 10am and the DoL has already been taken.

Action: do not force the 10am continuation.

Layer 1: Hard gates (all six must be yes)

G1: Clear DoL

Standard: the target belongs to the predefined list: Daily/Weekly H/L, previous-week EQ, Daily EQ, NWOG/NDOG, HTF gap, range edge, internal level; and it is low-resistance, failure-swing-type liquidity.

Status: ⚠️ low resistance needs a written definition.

G2: Key level hit

Standard: price has reached a predefined key level: 4H+ gap, 1H+ swing H/L, 1H order-pairing range, NWOG/NDOG, Daily/Weekly H/L.

Status: can be objectified ✅.

G3: CiC at the key level

Standard: SMT / SSMT / PSP appears at the G2 key level. The only retained exception: failure swing + SMT may replace a classic key level, but it must use Branch F.

Status: ⚠️ “roughly the same time” needs a definition. Suggested start: within the same LTF candle.

G4: LTF reversal signature

Standard: at least one of displacement / gap / CISD is present, with CiC first and the signature after it. The sequence cannot be reversed.

Status: can be objectified ✅.

G5: Clean 30m/1H price action

Standard: written standard still needs to be added. Suggested start: no double sweep in the most recent N candles, no continuous overlapping range, no unfilled two-way gap.

Status: ⚠️ must be defined first.

G6: RR meets the threshold

Standard: RR to the nearest draw is ≥ 2.0. This is a placeholder value to revise using Monte Carlo results. SL is calculated from SMT invalidation.

Status: can be objectified ✅.

Layer 2: Routing

2.0 Asset routing (choose asset first, then branch)

Which asset is closest to DoL and still has acceptable RR? -> trade that asset (leading)
Has the leading asset already taken the draw?               -> switch to lagging (with several assets, prefer middle; do not use the weakest)
Has SS just occurred?                                      -> trade only the new leading asset; old leading/lagging logic is invalid
Asset decoupled and no SS?                                -> no trade; wait for SS or 2-stage PSP
                                                            (6:00 H4 close for PSP, 10:00 H4 for re-sync,
                                                            if that fails, then 10:30 / new 90m)
ES is leading?                                             -> downgrade treatment (original notes: usually not ideal)

Branch R: Reversal

All conditions must be met before entry:

1. G1-G6 have passed, and the DoL has been reached or price is at an HTF key level.
2. 2-stage SMT or SMT + PSP is present. This is the highest-probability structure.
3. SS appears. If there is no SS, then all relevant assets must be V-shaped at the same time; otherwise abandon.
4. Displacement / gap confirms the move.
5. Entry: the second CISD. The only early-entry condition is that the first CISD is V-shaped and strongly displaced.
6. A 15m gap may only be used for early reversal in discount. A 15m gap in premium is never a reversal basis.
7. When HTF 4H+ SMT+PSP is valid, no extra LTF SMT is required.

Branch C: Continuation

All conditions must be met before entry:

1. Trend is clear, daily high/low has formed, and price is inside the intraday range.
2. Consolidation appears, one side has been swept, and the opposite internal level has not been manipulated.
3. Gap / FVG forms. Recent gap: 1-stage SMT is enough. Old gap: 2-stage required.
4. Entry: gap retest, the first CISD.
5. Timeframe rule: early session uses 15m+; late continuation uses 30m+.
6. If C2 has already expanded, do not trade C3.
7. Target: original DoL / range edge.

Branch F: Failure Swing (the only retained exception channel)

All three elements are required: Failure Swing + SS + Gap Away.

Only when the ideal CISD is too far away may a failure-swing CISD be used as the trigger.

If any one element is missing, return to “no trade”.

Branch D: Driver judgement (overlay on R/C, not an independent entry reason)

State before the driver	Expectation
Reversal has formed before the driver	Driver continuation
Reversal has not formed	Driver reversal
Driver fails to reverse	Reversal invalidated, then look for continuation
Retracement into gap fails to reverse	Expand from the driver; driver = expansion timing reference
Driver candle forms PSP	Time-based CiC, score +2

Layer 3: Quality score

SS appears

Points: +2. Highest-priority confluence.

Driver candle forms PSP

Points: +2. Time-based CiC.

Entry close to a new opening

Points: +1. Entry is close to a new 90m / 4H / 6H open.

CISD with gap

Points: +1. Best CISD.

Bulky-bodied CISD

Points: +1. ⚠️ Needs definition. Suggested start: body ≥ 70% of the full range.

SMT high/low in the same LTF candle

Points: +1.

2-stage PSP

Points: +1.

AMD with small wick

Points: +1. Daily profile is AMD + small wick.

Gap after expansion

Points: +1. Continuation quality.

Correct P/D position

Points: +1. Longs in discount / shorts in premium; scored only during retracement PoP.

Position-size tiers (risk amount follows the account-management module, starting point $300/trade):

Total	Tier
≥ 7	A: Standard risk
4-6	B: Half risk
≤ 3	C: Abandon, even if all gates passed

Layer 4: Execution and management

1. SL: outside SMT invalidation / outside the reversal-candle extreme.
2. Move to BE according to plan after entry. Early entry is preferred because protecting cost is easier.
3. Each reversal has at most two chances: first, direct expansion from the swing point; second, reversal after C2 swing is manipulated. If both fail, the reversal is invalidated. Then look only for continuation/invalidation entry, using the nearest internal level inside the overall DoL as the invalidation point.
4. Trail stop: use only under a universal sequence. After expansion, use the wick inside the discount/premium of the first CISD EQ as the trailed SL.
5. Scale in: consider adding at the second CISD only when the first position entered at the first CISD.
6. DD/evaluation account: exit at 2R when necessary, then re-enter if price action allows. Live account: after BE, wait for full TP or BE.
7. Hesitation = no entry.

Appendix A: Pending-definition terms (blocking items)

Term	Suggested definition direction
Clean 30m/1H price action	No double sweep in the most recent N candles, no more than X overlapping candles, no two-way unfilled gap
Bulky-bodied CISD	Body is ≥ 70% of the full range
Low-resistance vs protected swing	Failure swing = a swing that fails to take out the prior extreme; protected = a swing already confirmed by displacement (needs chart examples)
Relevant swing	Limited to swings that appear at the predefined key-level list
Roughly the same time (SMT)	Within the same 15m (or lower) candle
RR threshold	Placeholder 2.0, revise using backtest data

Appendix B: Items removed or downgraded during compression

• After deduplicating the 25 no-trade conditions: items repeated by G1-G6 were merged into the gates, and the rest went into Layer 0.
• The “SS not required” exception (leading has a close-proximity continuation draw) was removed. The unified requirement is to use asset routing 2.0.
• Double sweep “valid but low probability” was upgraded to kill switch K4.
• Seek-and-Destroy extremes were not retained as an independent branch. In S&D conditions, stand aside by default because the sample is insufficient; verify first, then add it back.
• All “usually / may often” time claims, such as daily high/low before 10:30 and YM often being foreseen distribution, do not enter the decision tree. They are listed as hypotheses pending backtesting and should receive points only after validation.

v1.0 — 2026-07-04. Next step: complete Appendix A definitions → tag 50-100 trades → trim the scoring table by conditional expectancy.