The missing part of every named shape
The first four chapters taught you to identify what a candle or sequence records. A hammer reached lower and finished away from that low. A marubozu kept nearly all the session's move. A tweezer visited about the same price twice. Those statements are observations; each can be checked against the boards.
But none says whether the move is young or old, whether a price has mattered before, how much was traded, or what was happening outside this one market. Those facts live around the candle. Remove them and the named pattern has lost the part that could make it useful.
That is the rule of this chapter: a shape without a location is noise for a decision. It is still a real shape. It simply has no honest directional interpretation on its own.
Three names with the chart folded over
Open each old board. The shape stays true; the question you need to ask lives outside it.
Each board preserves its geometry. The missing information is not a secret in the candle; it is elsewhere on the chart.
Location is more than 'uptrend' or 'downtrend'
The hammer and hanging man first taught location as the move before the candle. That remains the first question. But a long decline ending at a price never seen before and a long decline testing an old low are not the same situation. A previous high or low is a level: a price area worth checking because earlier trading turned or paused there. Part 06 teaches how to judge levels; for now, mark the relevant earlier price before you admire the new shape.
Timeframe matters too. A five-minute candle at a daily level is a different question from a daily candle in the middle of a year's range. Choose the timeframe and compare like periods, as Part 03 taught. Do not zoom in until a shape looks convincing and then call the zoomed picture evidence.
The point is not that a level, trend, or candle guarantees a result. They make the claim specific enough to examine. Without them, 'this is a hammer' is vocabulary, not analysis.
Name the shape. Then locate it. Only then ask what it might mean — and keep 'might' in the sentence.
Rahul finds a textbook hammer shape but has covered the candles before it. What can he conclude?
The limit of the rule
A location is a condition, not a promise. A hammer after a fall at an old low can still be followed by another fall. A marubozu after a quiet range can still reverse. The word context must not become a polite way to smuggle in certainty.
There is also a trap in hindsight. If you call a wide candle 'exhaustion' only after the following week falls, you have used tomorrow to name yesterday. 04.02.05 exposed that trick. At the close, say only what is already known: where this board stands relative to the past and what extra evidence is present.
The next lesson turns 'look at the context' into four written questions. A question you can answer before seeing the future is more useful than an impressive name applied afterwards.