Why Two Legs?
The most common mistake in manual trading is entering a full position at the first sign of a reversal. Markets frequently retest, probe lower, and induce impatient traders to sell before reversing upward. QARI's two-leg entry system is designed to exploit this rather than be hurt by it.
The first leg enters when the initial setup criteria are met: the signal layers are confluent and all pre-entry checks pass. The second leg waits. It only enters after the market provides a structural confirmation that the setup direction is valid. This confirmation is called a Change of Character (CHoCH).
The key benefit of two-leg scaling
If the trade immediately fails and hits stop-loss, only Leg 1 was committed. The Leg 2 capital is returned to your available balance. You lose half what you would have lost on a full-size entry.
Leg 1 Execution
Leg 1 enters when a setup clears all 16 pre-entry checks. QARI places a limit order at the calculated entry level. A limit order fills at or better than the specified price. QARI uses limit orders rather than market orders to avoid unfavourable fills and minimise slippage.
- 1
Limit order placed
QARI places a limit buy at the calculated entry level. This order will fill if price reaches that level while the order is active.
- 2
Order monitoring
QARI monitors the open limit order. If market conditions deteriorate before the order fills (e.g., BTC drops sharply, regime changes), the order is cancelled.
- 3
Fill confirmation
Once Leg 1 fills, a Telegram alert is sent. The stop-loss is immediately active from the moment of fill. The position is now live.
- 4
Leg 2 reservation
The moment Leg 1 fills, the Leg 2 capital amount is reserved (deducted from available balance). This ensures Leg 2 can fill when the CHoCH occurs.
The CHoCH Confirmation
CHoCH stands for Change of Character. It is a structural signal that the market has shifted from one phase to another. In the context of QARI's entry system, a bullish CHoCH confirms that the downtrend (that created the setup) is losing momentum and the buyers are taking control.
Specifically, QARI looks for the following after Leg 1 fills on a long setup:
Break of recent structure
Price must break above the most recent lower high since Leg 1 filled. This is the first sign that sellers are no longer able to establish new highs.
Candle close confirmation
The break must be confirmed by a candle close above the structure, not just a wick. Fake breakouts are filtered by requiring a full-body close.
Minimum displacement
The move breaking the structure must have meaningful volume and price displacement. A small-bodied drift through the level does not qualify.
Still within trade zone
Price must still be above the stop-loss level when the CHoCH occurs. If price has moved close to stop-loss, the trade is considered compromised.
Leg 2 Execution
When the CHoCH is confirmed, QARI immediately places the Leg 2 order. Leg 2 enters at the current market price (slightly above the CHoCH level) rather than a limit order, because the confirmation signal indicates the window is open now, not at a specific future price.
After Leg 2 fills, the position is now fully sized. The combined position has:
A second Telegram alert is sent when Leg 2 fills, showing the combined position size and the updated risk/reward parameters.
What Happens If CHoCH Never Occurs
Not every Leg 1 entry results in a CHoCH. Three outcomes are possible.
Stop-loss hits before CHoCH
The trade closes at Leg 1 only. You lose the Leg 1 risk amount (-1R on Leg 1). The Leg 2 reserved capital is returned to your available balance.
PT1 is reached before CHoCH
Price moves to PT1 without making the CHoCH structure. 40% of Leg 1 closes at PT1. The stop is moved to breakeven. Leg 2 is cancelled since the entry window has passed.
Trade timeout
If neither stop nor PT1 is hit and a CHoCH does not occur within the defined lookback window, QARI cancels the Leg 2 reservation and may close Leg 1 at market if conditions have deteriorated.
Capital Reservation for Leg 2
When Leg 1 fills, QARI immediately reserves an equal amount of capital for Leg 2. This reserved capital is deducted from your available balance but has not yet been used in a trade.
This reservation system exists to guarantee that when a CHoCH occurs, QARI always has enough capital to execute Leg 2. Without reservation, a volatile period could simultaneously open multiple Leg 1 trades and drain available capital before Leg 2 opportunities arise.
Capital state during a live trade
The practical implication: with a $2,000 capital allocation and $100 per-trade allocation, each active setup ties up $200 in total. You can run a maximum of 10 simultaneous setups before all capital is committed.