Context of a trade

CONTEXT is the backdrop that makes a trade desirable. Context of trade is NOT just "how much meat on the bone is there?". Many things factor into it and the more confluence the better. Confluences can be the recent levels to the left, can be today's extension, or can the fact that it is day 2 of a big run, not day 1, stacked pivots, then of course also ATR traded and meat on the bone. Other things we consider when thinking about context are relative strength/weakness, sector strength/weakness, where the broader market is in its trend on all timeframes, etc

Let's look at a few examples of context to get a better idea

$META - Context --> trigger --> target.

$QQQ - Context --> trigger --> target.

How to validate it

$SPY Context: Reversal - Higher timeframe extension

$BTU - Using context to know why this makes it undesirable

COULD $BTU flush lower because technically there was a trigger? Sure. SHOULD it? meh, hard to say. IMO this could have just as easily traded sideways until the 5min20 caught up. The more extreme something gets extended, the more the context can be looked at as when it triggers, the probability is much higher that price will attack the target vs letting the target catch up.