> For the complete documentation index, see [llms.txt](https://docs.rigged.ai/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.rigged.ai/guide/the-3-strike-rule.md).

# The 3-Strike Rule

The 3-Strike Rule says that for SPY and QQQ, price will go to maximum of 3-strikes above or below the blue line.

Once you get to the third strike; price will typically reverse.

The basic strategy is:

* Hold trades to BL +/- 3
* Risk off on trades at BL +/- 3

This works in \~ 80% of sessions.

If volume is over 120% (full send mode) as indicated by blue background, then we want to hold trades beyond BL +/- 3 and re-enter trades in that area.

RIGGED AI charts make this easy to see and understand.

BL +/- 3 to 5: <mark style="color:yellow;">YELLOW WARNING ZONE</mark>

BL +/- 5: <mark style="color:red;">RED DANGER EXTREME RISK ZONE</mark>

QQQ 11/01/24 is a perfect example.

Every time price got into the red extreme bull risk zone, it pulled back into the yellow.

<figure><img src="/files/1SM92p09qeUiPX52Tqqu" alt=""><figcaption></figcaption></figure>

That's the RIGGED system at work.

***

### 3-Strike Reversals

Price action never goes straight up or straight down.

The 3-Strike Rule tells us that if price has moved to BL +/- 3 and it doesn't instantly continue to the next strike higher or lower, it's going to reverse the opposite way.

This is Wall Street killing retail traders late to the trade.

**3-STRIKE BOUNCE SPY on 10/21/24.**&#x20;

The Blue Line is 583.88 and when price moves down to 581 (\~ 3-strikes), you can see it bounce and completely reverse.

<figure><img src="/files/4LAmBjnn8jWLqmGlfZUd" alt=""><figcaption></figcaption></figure>

**3-STRIKE REVERSAL QQQ on 10/11/24**

Here we have the opposite. Price moves up 3-strikes at the open and then reverses lower.&#x20;

<figure><img src="/files/BEggIyFD7t04gD2yYNm3" alt=""><figcaption></figcaption></figure>

You can also see in the final hour price returns to 494 (3-strikes) and again pulls back.

{% hint style="info" %}
Exit to runners at 3-strikes, especially if price begins to stall out.

At the 3-strikes, price will typically bounce. If it doesn't nuke or pump through the third strike immediately, take your gains and run.
{% endhint %}

***

## 3-STRIKE MAGNET

Sometimes the third strike can act like a magnet attracting price.

Whenever price gets into the red, it likes to return to the yellow which is the 3-strike zone also commonly referred to as the "fk zone".

<figure><img src="/files/JaupmML71SALcnLaxLMZ" alt=""><figcaption></figcaption></figure>

Keep it simple...

If it says EXTREME BEAR RISK don't trade BEARS.

If it says EXTREME BULL RISK don't trade BULLS.

***

### FULL SEND - RE-ENTER TRADES IN THE YELLOW

RIGGED goes into full send mode when volume is over 120%. When option volume is that high, Wall Street is actively trading in the market and we want to copy them. This usually means it's a trend day.

Trend days we want to follow the price action and re-enter trades in the yellow zone.

[QQQ 10/15/24](https://app.rigged.ai/flow/QQQ?day=2024-10-15)

<figure><img src="/files/5n6tlYenjQyBtYMiuHoI" alt=""><figcaption></figcaption></figure>

[SPY 10/31/24](https://app.rigged.ai/flow/SPY?day=2024-10-31)

<figure><img src="/files/qhSLdXbX3CjoNaWmKYLX" alt=""><figcaption></figcaption></figure>

[QQQ 11/01/24](https://app.rigged.ai/flow/QQQ?day=2024-11-01)

<figure><img src="/files/qEPxHXxs9LBTcDT7ReC9" alt=""><figcaption></figcaption></figure>