Step 1: Define the Structure
Every pattern begins with a definition. The definition must specify the reference point, the condition being observed, and the threshold that determines whether the condition is met.
Step 2: Identify the Event
Once defined, the pattern becomes an event. The question is no longer whether something "looks like" a setup, but whether the defined condition actually occurred.
Step 3: Measure the Outcome
After the event is identified, the next step is to measure what happens next. This could include directional behavior, continuation, or reversal.
Step 4: Apply Conditions
Behavior is rarely uniform. Conditions such as time, distance, or speed can alter outcomes. These conditions must be tested separately.
Step 5: Evaluate Results
The results determine whether the pattern has consistent behavior. This is where probabilities are established.
Step 6: Refine or Reject
Patterns are not assumed to work. They are either refined based on evidence or rejected entirely.