Turn the map into an entry plan
You already know that RH has bullish long-term structure. You checked its momentum and marked nearby AOIs. Now you need to answer a practical question: what must price do before you enter?
Eden uses two transition levels to help answer that question. P-Trans is short for positive transition. N-Trans is short for negative transition.
Know which momentum you are reading
Realized price momentum
The Structure tab uses price history to describe whether momentum on the monthly, weekly, or daily time frame is bullish or bearish and strengthening or weakening.
Options-market transition
P-Trans and N-Trans use options-premium dynamics to mark where the options market shifts toward a bullish or bearish bias.
The two views answer different questions. Use the Quote widget for the larger trend, then use the transition levels to help plan the entry.
Find the triggers in the Quote widget
Open the Summary tab in the Quote widget and find Trigger Levels. Eden lists the bearish trigger on the left and the bullish trigger on the right.
- N-Trans
- $108 Below this level, the options-market bias is bearish in this example.
- P-Trans
- $121 Above this level, the options-market bias is bullish in this example.
Find the same levels in Key Levels
Find the first positive bar. The next three strikes to its right must also have positive bars.
Find the first negative bar. The next three strikes to its left must also have negative bars.
The Quote widget gives you the answer quickly. Learning the bar sequence helps you understand where those trigger levels come from.
Wait for the time frame to confirm
For a long trade, price holding above P-Trans can support a bullish bias. A higher-time-frame close gives stronger confirmation than a quick move above the level.
An hourly hold may help an active trader. For a swing trade that may last weeks or months, a daily close above P-Trans gives the entry more confirmation.
Add P-Trans and N-Trans to the chart
Draw a horizontal line at $121 and label it P-Trans. Draw another at $108 and label it N-Trans. Keep the AOIs you marked in the previous lesson.
Respect the drunken sailor zone
Price may move back and forth when it is between P-Trans and N-Trans. Eden calls this the drunken sailor zone because the ticker has not made a clear directional decision.
In this captured RH example, the long-entry trigger is a hold above $121. If price falls below $108, the options-market bias is bearish, which works against the long idea.