Worked market scenarios
Compare a favourable outcome, a failed breakout and a no-trade decision.
01
One framework, three outcomes
The following price paths are invented teaching examples—not BTC prices, live signals or a historical track record. The common paper plan studies a daily close above a £98–£102 resistance zone, followed by a retest that holds. Assume an entry at £103 only after that sequence, stop execution at £98 and a hypothetical target at £113. Choose a £10 planned price-loss budget, giving 2 units and £206 exposure. A real target would need independent chart justification.
02
Scenario A: the plan works in the example
Price closes at £104, retests £102 and recovers; assume the predefined confirmation permits a £103 fill. The target later fills at £113. Two units gain £20 gross. With £1 total costs the result is £19, or +1.9R. This shows how to record an outcome; it does not establish a probability of success or validate the strategy.
03
Scenario B: confirmation still fails
The same entry conditions occur and the simulated £103 order fills. Price then breaks down and the stop exits at £97 rather than the assumed £98. The price loss is 2 × £6 = £12; with £1 costs, net loss is £13 or −1.3R. Confirmation did not prevent the loss and the stop did not cap it at £10. Do not move the invalidation after the event to turn this into a winning case study.
04
Scenario C: no valid trigger
Price briefly trades above £102 but the daily candle closes at £100. The required close outside the zone never happens, so there is no entry in this plan. Record “no trade: close condition absent”. If price rallies later, that does not retroactively make an untriggered entry compliant. Keep the skipped idea outside the executed-trade win rate.
05
What can these cases teach?
They demonstrate how conditional rules, position size and costs affect a record. They cannot tell us which path was likely. For historical practice, hide future candles and record decisions before revealing the next period. Note the data source and include every selected example under a rule fixed in advance. Replay still differs from live fills and is not proof of future performance.
Practice exercise
Use worksheet C to classify each scenario as favourable, failed or untriggered. Show the net result for A and B, explain why C has no executed-trade result, and identify the assumption that made B lose more than 1R.
Download practice workbook (.txt)Knowledge check
Why should Scenario C not count as a winning trade even if price rises later?
The plan never triggered and no simulated position was opened. There is no realised trading return to count. Scenario A is +1.9R and B is −1.3R after the stated costs; B includes adverse slippage.
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Educational information, not personalised financial advice. Examples do not establish future performance. Trading can result in substantial losses.