Core idea
A trader may mark the final opposing candle or small consolidation before a strong displacement that breaks structure. The zone is then watched for a future reaction.
Quality checklist
- Did displacement clearly expand?
- Did the move break meaningful structure?
- Is the zone fresh or repeatedly tested?
- Is the zone aligned with the higher timeframe?
- Is liquidity nearby?
Mitigation and retests
When price returns, traders often look for evidence that the zone is being respected, partially filled, or invalidated. A touch alone is not proof of a valid setup.
Invalidation
If price trades decisively through the zone and accepts beyond it, the original thesis may be invalid. Predefined invalidation is more useful than moving the definition after the fact.