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Triadic Logic
Psychology • Structure • Energy Flow — a framework to trade from imbalance to balance.
The Three Pillars
Algorithms
Fast, mechanical systems that execute with precision and exploit micro-inefficiencies. When they’re in control, price respects structure.
Gamblers
Impulsive participation (fear/greed) that stretches price into extremes—creating the liquidity professional flow feeds on.
Strategic Trader
Waits, observes imbalance, then engages only when odds align with structure, tempo, and session dynamics.
Market Temperature — RSI as the Thermostat
- RSI > 70 → Hot: greed & overextension. Expect cool-off or structured continuation only with confirmation.
- RSI < 30 → Cold: fear & panic exits. Watch for balance return before entries.
- RSI ≈ 50 → Balance: algos regain control; this is where high-probability setups emerge.
Read RSI like temperature. When it cools from hot or warms from cold — and structure contains price — execution becomes repeatable.
Dominance Detection — Algos vs. Gamblers
When gamblers are dominant, price breaks hard beyond the 2-deviation Bollinger Band (on the 50 MA) with surging volume, RSI over-extension, and erratic, spiky candles.
That is emotional flow, not smart flow. We don’t chase this stretch, we mark it and wait for the unwind.
When algos are dominant, price reverts logically off key pivot points (VWAP, 10/20/50/200 MAs), slides back inside Bollinger Bands, and volatility compresses.
Volume normalizes, wicks get cleaner, and rotations respect structure. That’s where timing entries with tighter risk makes sense.
Where We Hunt
Primary focus: Nasdaq (NQ) during the New York session where volume, velocity, and psychology peak.
As energy normalizes, price returns toward structure:
- 10 period EMA — micro-trend direction and early momentum cue
- 20 period Moving Average — trigger line for momentum shifts/rejections
- 50 period Moving Average — core equilibrium/pullback zone
- VWAP — real-time fair value benchmark used by institutions
- 200 period Moving Average — institutional magnet/major imbalance
We don’t chase gambler breakouts.
We wait for the ones who bought the top or sold the bottom to get
squeezed out as imbalance snaps back toward balance — and
we strike in the direction of the dominant trend once control returns.
From Balance to Extremes
Markets move in a cycle: balance → imbalance → gambler extremes → algorithmic logic. Balance begins when price trades in structure. Imbalance occurs when emotional traders chase price into overextension. Extremes form at the edges — fear-driven collapses or greed-driven spikes. Finally, algorithms step back in to restore order.
Strategic traders hold the key. They recognize this cycle, avoid chasing extremes, and align with structure when the energy shifts. By waiting for balance to return, strategy traders execute where risk is defined and probability is highest.
Risk Disclosure: Trading involves substantial risk. Past performance is not indicative of future results.