Context → Setup → Trigger
Professionals decompose a trade into three layers. Context is your read of the market — its state, structure, and the imbalance of buying vs. selling pressure. Context produces a directional bias (which way to lean). A setup is the strategic condition you've decided to trade; a trigger / entry is the tactical signal that executes it. Grimes' point: if you read the context right, almost any reasonable trigger works — so most of the edge is in the first two layers, not the entry.
“Aren't context and bias the same thing?”
Closely related, but not the same. Your bias is the directional conclusion — bullish, bearish, or neutral. Context is the broader read that produces it, and it also answers a question bias can't: whether this is even a place to trade. As one source puts it, “market bias is contextual, not merely directional” — professionals treat directional bias as one tool inside the larger context assessment. That's why this page folds bias into context rather than listing it separately.
What is the market actually doing?
Grimes: edge comes from an imbalance of buying and selling pressure — and most price action is near-random, so half the job is knowing when not to trade.
Two market states: trend or range
Adam Grimes divides all market action into two states — trending and range-bound. Trends carry a directional imbalance of buying or selling pressure (the source of edge); ranges are mostly random.
UseDecide which state you're in first — with-trend tools work in trends, mean-reversion tools in ranges.
Price action vs. market structure
Grimes' core distinction: market structure is the static line left behind (swing highs/lows, levels); price action is the live movement that draws it.
UseRead structure for the map, price action for what's happening right now on the right edge of the chart.
Imbalance of buying / selling pressure
Grimes: “every edge we have, as technical traders, comes from an imbalance of buying and selling pressure.” We trade the imbalance, not the pattern.
UseAsk what the pattern implies about who is in control — not just what it looks like.
Multi-timeframe alignment
The higher timeframe sets the strategic direction; lower timeframes time the trade. Grimes notes a pullback's failure rate rises sharply when the trading timeframe disagrees with the big-picture trend.
UseTrade lower-timeframe setups only when the higher timeframe agrees.
Location & levels (with a caveat)
Support/resistance marks where price has reacted before — but Grimes shows much of it is no more meaningful than a random level. You need a reason to expect non-random action there.
UseUse levels as reference, never as a standalone reason; require evidence of imbalance at the level.
Conditions NOT to trade
Because most price action is near-random, Grimes argues identifying when to stand aside is as important as finding setups. “Not trading” is part of the job.
UseFilter out random, equilibrium conditions before looking for an entry.
The strategic condition you're trading
Grimes shows that every technical trade falls into one of four categories. Knowing which one you're in tells you its probability, its reward/risk, and how it fails.
Trend continuation
Find a trend (new or established) and position in its direction — most often via pullbacks, but also with-trend breakouts and early-trend entries. Aligned with the momentum edge, so typically higher-probability.
UseHigh probability; the hard part is defining a close-enough risk point to keep reward/risk attractive.
Trend termination
Fade the end of a trend. Note the precise expectation: a win is the trend stopping — a true reversal is a rare bonus. Lower win rate, but good examples offer outsized reward vs. risk.
UseCounter-trend — demands iron discipline; never add to a losing fade.
Support / resistance holding
Buy support / short resistance expecting the level to hold. Usually the lowest reward/risk group because the market is near equilibrium — except one high-probability subset: failed breakouts (trapped traders).
UseLowest reward/risk in general; the failed-breakout subset is the exception.
Support / resistance breaking / failing
The classic breakout — the level fails and the market trends. Often defines the end of accumulation/distribution. But most breakouts fail, in high-volatility, low-liquidity conditions where execution matters most.
UseOutstanding R when right, but most fail — and realized losses can exceed intended risk.
The tactical signal that gets you in
Once context and setup are set, a trigger executes the trade — in the direction of your bias. The same trigger can serve many setups.
Lower-timeframe breakout (Grimes' default)
Let price prove the move: enter when a pattern breaks in the expected direction — e.g., a break of the previous bar's high (long) or low (short) on a lower timeframe.
UseGrimes' preferred trigger — you don't anticipate, you react to confirmation.
Confirmation entry
Wait for price to break the trigger candle's high/low, or for a reversal candle to complete, before entering.
UseSacrifice a little price for a higher win rate; you join only after the turn is proven.
Anticipatory / limit entry
Place a limit at a level, predicting the reaction. Better price, but you risk price slicing straight through.
UseUse only at high-conviction levels with a real reason for non-random action.
Pullback-to-level entry
Enter as price pulls back to a moving average, prior breakout level, or value area and holds.
UseThe execution for a trend-continuation setup; stop just beyond the level.
VWAP reclaim / reject
Enter as price reclaims VWAP (long) or rejects it from below (short).
UseIntraday trigger tied to the institutional benchmark.
Failed-breakout / stop-run
Enter as a breakout fails and snaps back into the range (a trapped-trader reversal).
UseThe trigger for the high-probability S/R-holding subset; tight stop beyond the failed extreme.
Opening-range break
Enter on a break of the first N minutes' range.
UseAn intraday execution of a breakout setup.
Order types as execution
Market (now), stop (on confirmation/breakout), or limit (at a level) — the mechanism behind every trigger above.
UseChoose by whether you react (stop) or predict (limit).
How it comes together
A full strategy playbook is one context read + one setup category + one trigger, packaged with risk rules. The Stage-2 breakout, for example, is a trending context, a support/resistance-breaking setup, and a breakout trigger. A trend-continuation pullback — like the Grimes Pullback — is a trending context, a trend-continuation setup, and a lower-timeframe-breakout trigger. Learn the blocks here; see them assembled in the playbooks. Many terms also have a plain-language entry in the glossary.
Sources (free / verified)
Adam Grimes — “Thinking in categories” (the four setup types) · Grimes' approach — Topstep summary · Grimes — “Setups, Entries and Triggers” (Interactive Brokers) · Market bias vs. context · Top-down analysis — NinjaTrader · Break & retest — Capital.com · Moving averages — OANDA.
Framework adapted from Adam Grimes, The Art and Science of Technical Analysis (Wiley, 2012). Entry definitions corroborated by the broker/education sources above. Nothing here is invented; where sources differ, we follow Grimes' published categories.