The setup is confirmed when price breaks below the most recent swing low (the "Low" of the pullback). This confirms that the trend has shifted from bullish to bearish.
Once the rules of the top are met within your trading zone, execution must be mechanical.
The (sometimes referred to as a "W" bottom, but in the context of reversing a "top" of a market cycle) is a high-probability reversal setup. It is a specific pattern that occurs after a long uptrend (or the final leg of an uptrend), marking the "3rd level" peak. Anatomy of a RUL Top Setup
Recognizing "Level III" in the three-day cycle is critical, as this is where market makers return for profit-taking and further movement. Key Rules for Trading the Zone btmm steve mauro part05 trading zone and rul top
The Trading Zone relies heavily on time. Steve Mauro emphasizes that setups are only valid when price action aligns with specific market sessions.
Do not mistake a Level 1 or Level 2 retracement for a Rule of Top pattern. Selling too early results in getting run over by the next leg of the true trend.
Mark the Asian session high and low before the London open. The setup is confirmed when price breaks below
The first peak is formed, followed by a sharp drop (the reaction).
Price at the top should be far from the 50 EMA or 200 EMA . A high-probability reversal often occurs when the 13 EMA crosses below the price or another moving average.
According to Steve Mauro, the Rul Top is a sign of exhaustion and a potential reversal. It occurs when the market makers and smart money traders are buying aggressively, but the retail traders are selling. This leads to a sharp price movement, followed by a reversal as the retail traders are stopped out. The (sometimes referred to as a "W" bottom,
This is often the consolidation phase where the Market Maker induces retail traders to take positions in the wrong direction before a sudden move (Stop Hunt) .
The magic of Part 05 is the synergy between these two concepts.
Steve Mauro dedicates a significant portion of Part 05 to correcting errors. Avoid these at all costs:
By aligning the parameters of the trading zone with the strict requirements of the rules of the top, you remove emotion from your charts and begin tracking institutional footprints with precision. If you want to dive deeper into this setup, tell me: Do you prefer trading the or New York session?