PriceMap R LEVEL


The PriceMap defines the price structure of the market state by identifying the sentiment bias for the trade period. It is the specific price point where shifts in state occur and where increased levels of liquidity can be anticipated to offer the most consistency.

The R LEVEL represents the equilibrium level within the PriceMap structure. It is the “Over-Under” number for the day and identifies the session’s trend bias.


Trading above the R LEVEL signals a positive buy break bias and trading below the R LEVEL signals a negative sell rally bias. It is this inflection point where sentiment shifts from positive to negative and vice versa.

The R LEVEL is the most significant price level on the PriceMap as it defines the session bias and is the best starting point when using the service. Traders should be aware of price activity in relation to the R LEVEL and note if the current action is with or against the R LEVEL bias.

Signals with the trend should be expected to be smoother, with follow through potential, and signals against the R LEVEL bias to be more laborious.

Because the R LEVEL is so significant price action around this level can be rotational as equilibrium balances its self out.

R LEVEL Overview

The R LEVEL can be used as a criteria filter for signal acceptance as well as a size and position management tool. If a signal is accepted that is counter to the R LEVEL bias, lower size is recommended along with a more aggressive position management with the target objective for the trade being the R LEVEL itself.



Note: the R LEVEL represents the optimal risk / reward entry level for any directional opportunity.

In situations where the current Price is significantly above or below the R LEVEL, any trades initiated in the direction of the R bias are ultimately at risk to and through the R LEVEL. A position is not “wrong” until the R-LEVEL is taken out. Trading action early in the session in the direction of the R LEVEL bias but significantly away from the R LEVEL is vulnerable to a “corrective” move later in the session. The market has a lot of room to “play” as counter session trend moves will not mean much as long as the R LEVEL is not violated.

Practical Application

The FTSE MIB over the past few sessions has provided corrective, directional and rotational examples of the R LEVEL behavior.


JULY 28 2015 – FTSE MIB

On the OPEN the MIB broke structure producing a positive “corrective” rally targeting the R LEVEL. This type of corrective action is typically and a difficult trade. The market produces a trade against the R LEVEL bias which takes all session to play out. These types of opportunities typically happen after a negative signal the session prior with the R LEVEL significantly above the market . The “tell” being a break in structure at the DIR (Directional).




JULY 29 2015 – FTSE MIB

On the 29th the MIB was in a NEUTRAL DIGESTION market state identifying NON TREND condition. In NON TREND market state conditions we have a sideways expectation for price action. On the OPEN the MIB gaps higher against the R LEVEL bias and immediately turns in the direction of the R LEVEL bias. This example is interesting as the price action could not reach the R LEVEL and exhausted in front of the top of the CRITICAL RANGE at the UP (UPSIDE PIVOT). The market does not always give us what we want but it does tell us what it wants to do.

The price action around the 23380 * (CR+ = Critical Range + Minor Level) signaled a break in the OPEN positive momentum and the alignment with the R LEVEL bias. This signal, although a lower size opportunity, forecasts a “play” for the bottom of the CRITICAL RANGE at the 23055 DP (DOWNSIDE PIVOT). NON TREND market states have a sideways expectation to “digest” and the CRITICAL RANGE identifies the digestive extremes. After a “test” of resistance at 23505 UP and a break in structure at 23380 * in agreement with the R LEVEL bias, a lower forecast should be anticipated. The opposite would be true had the R LEVEL been below the market with  a positive break in structure.



JULY 30 2015 – FTSE MIB

On the 30th the index remained in a NEUTRAL DIGESTION market state but the equilibrium R LEVEL was balanced in the middle of the CRITICAL RANGE.


The R LEVEL equal to the DIR (Directional) is in a classic pivot point position, as the sentiment bias is basically “on the fence”. The market is indecisive or is preparing to make a move. Any Market State with the R=DIR should respect the pivotal nature of sentiment. Typically when the R LEVEL is in this position it will either just breakout and “go” producing a linear move or a difficult rotational trade will consume the market for the trade period. The price action in this session is an example of the later.


Note: When the R LEVEL = the DIRECTIONAL there is a higher probability that a rotational trade will occur, especially if there is a break in structure early in the session. This happened in the above example, after the OPEN above the DIR R LEVEL and then followed by a failure below. This “fact” and the bottoming out at the 23195 (CR- minor level) is a tell for a rise up to the 23425 (CR+ minor level). In a typical “coil” the rotational price action will be contained within the 2 minor levels (CR +/-) on either side of the DIR. In the above example the summer sideways trading condition provided a head fake to the upside but stayed true to form of the no follow through expectation of the NON TREND market state.

Market State Transition


A market STATE condition as a definition does not change and is the same from day to day or from market to market regardless of asset class. A BULL TREND STATE will always be classified as a trending market that has positive higher move high higher move low structure. That is the definition of what a BULL TREND “is”. If the market is not maintaining positive structure then the definition is no longer true and signals that the market is transitioning into a different STATE. In a general sense markets that are performing to their STATE expectation are easier to anticipate verses markets that are not performing to expectation and are transitioning into a new market STATE.

We do not know when a market will transition to a new market STATE but we do know where it will make a decision to do so or not. It is at the market STRUCTURE points that define the price alignment the STATE that the market will make a decision for the current STATE to persist by holding structure or break structure and transition to a new MARKET STATE.



Hold Structure


Break Structure

If price action holds STRUCTURE, it is a sign that the attributes of the market STATE will dominate price action. A break in STRUCTURE is a signal that the market is in transition to a new STATE. Markets that hold STRUCTURE are easier to predict as the context of the trading condition is known. Markets in transition that break STRUCTURE are more difficult to predict as the characteristics of the condition are fluid and not defined.

Market Strategy Insight


When you look at a chart at the end of the day the price action seems self-evident even though at the moment it was anything but. The reason is that the trade vision at the moment is clouded with bias and opinion hiding what the market is “telling” you what is wants to do.

When we view the market with a fact focus, though a MARKET STATE lens, the “tells” are revealed in real time by the price action within the MARKET STRUCTURE, identifying the STRATEGY THEMES that are dominating the session so opportunities can be anticipated and trading tactics aligned.

Market State Awareness

The EDGE in discretionary trading comes in your ability to make intuitive decisions. It is the fluid execution of a trade plan with no hesitation or 2nd thought. The ability to trade “in the zone” comes from awareness of the current market state condition and getting “in sync” with its attributes and nuances. Awareness increases with a granular definition of the technical facts that make up the current market state. Understanding and knowing these facts improve awareness and provides “real time” CLARITY. It is in these moments of CLARITY that the decision process shifts from “reacting” to events to anticipating them. As a trader you are no longer “trying” and thinking about what to do but rather you know what to do and are doing it.

JSServices provides market clarity and gives you the edge by providing a structured approach to trading.