Session relevance

In our last post we spoke of relationships through relative weakness/relative strength and found some insights on how to exploit certain instrument behaviors in favor for lower risk plays.

Other examples would be trading beta derivatives for leverage or looking for relative strength plays within sectors and alike.

In the world of principles we luckily can also think outside the box since principles are transferable and i wanted to point out one more such relation being able to take advantage of.

With bitcoin now being a mainstream item of traders the NY sessions, and other exchange openings and closes have gained a much more significant influence towards bitcoin and as such widened the filed of possible probability exploitation in these market behavior extremes

Here an example of how edges for entry and low risk market participation can be stacked

With yesterdays price bouncing more than 30% of the daily candles range(February 25 2025)

and an overall extended first bear move on daily:

we anticipated a probable retest of yesterdays lows in today's session

with volatility expected and an overshoot of price likely further edges are necessary to stack ones probability and time ones lower time frame fine tuning entry edges:

one such way is the relationship between price movement and the exchange opening-in this case the NY session

in the following 15 min chart you can see an exuberant price move downward prior to the Session open (the session is market by a red background)

If you bought the open, expecting a much higher likelihood of a price reversal versus continuation you would have bought bitcoin at a price near $85,831 with just a very small risk to the downside and would have been able to finance this trade all the way to a $88,470 price mark

This represents a 3% gain opportunity in less than 45 minutes and moreover a risk reward ratio of this play towards its financing point of up to 1:10.

The focus here is the clear mark for entry timing and the risk reduction aspect.

Should you be interested in back and forward testing these edge relationships of session relevance the indicator that colors your background and visually as such marks your session is called "Sessions" in your tradingview charting platform:

here some further example how through the weeding process by having originally chosen multiple relative strength instruments on can end up with a truly strong one like in our case CETUS

while the market prints again lower lows your prime weeded out relative strength candidate can not only survive the original runner but provide for continued reload entries on strength

versus:

in short one can through various applications of relative strength/relative weakness techniques paired with the quad exit and its reload strategy compound edges and as such maximize risk reduction and maximize hit rates

from a pure scanning process this is also a simplified version of one way to cut prismatically through turning points and as such find the idea (most risk averse) entry points for larger time frames allowing extremely small stop sizes for higher time frame plays