Expansion phase

It comes third. Price ranges sideways while positions get built, then a push past an obvious level clears out the stops resting there, and then the real move runs. Expansion is where the money is, and it is the only phase with a clear direction. Higher timeframes cycle slowly, lower ones quickly.

The mistake is entering at the top of a leg because the candle looks strong. Inside an uptrend price makes a high, pulls back, then makes a higher high. Your entry belongs in that pullback, near the last higher low, so your stop sits just under it. Buying the strong candle puts your stop far away and the ratio stops working.

Naming the phase tells you whether to be in the market at all. Trading a sideways range on a short-dated option pays time decay while nothing happens. Waiting for expansion means fewer trades and better ones. It also stops you reading an ordinary pullback inside a trend as a reversal, which is one of the most expensive mix-ups there is.