Reaction Probability

What is Reaction Probability?

Reaction Probability is the historically measured frequency with which price held a published MPM Zone after it was reached during a trading session.

Unlike Reach Probability, which measures how often price historically reached a published MPM Zone, Reaction Probability measures what historically happened after that reach occurred. It is measured once per session: each session a zone is reached, its first interaction before market close is recorded as one of two mutually exclusive outcomes. Subsequent interactions with the same zone in the same session are not re-classified.

When price reached the zone and held on that first interaction, it is classified as Acceptance (Hold). When price reached the zone and instead moved through it, it is classified as a Break.

Reaction Probability is the historical frequency of Acceptance (Hold) across all first-interaction outcomes where price reached the zone.

Why Reaction Probability Matters

Not every statistically derived price area behaves the same once reached. Some MPM Zones historically held a large majority of the time; others broke more often. Reaction Probability describes those historical differences objectively.

Rather than assuming every zone should behave identically, MPM measures how comparable zones actually behaved across historical market data and publishes those measured frequencies for interpretation. The published value describes historical behaviour — not future certainty.

Relationship to Reach Probability

Reach Probability and Reaction Probability measure two different parts of the same historical process.

• Reach Probability asks: how often did price historically reach this type of MPM Zone?
• Reaction Probability asks: once price reached the published MPM Zone, how often did that zone historically hold on its first interaction during the trading session?

Reaction Probability is therefore conditional on Reach. If price never reached a zone, no reaction could occur — that case belongs to the Reach measurement (Not Reached), not to Reaction.

Both measurements count once per zone per session. Reach records whether price reached the zone during the session; Reaction records, for the sessions where it did, how the zone behaved on that first interaction before market close. A zone may be touched again later in the session, but only the first interaction is classified — this keeps each session contributing a single, comparable outcome.

How MPM Measures Reaction Probability

The published measurement follows a consistent research process:

The proprietary methodology used to generate MPM Zones, and the rules used to classify each interaction, are intentionally not published. This page explains the measurement framework — not the underlying implementation.

Acceptance (Hold) and Break

Each session that price reaches a published MPM Zone, the first interaction before market close is classified into one of two mutually exclusive outcomes.

Acceptance (Hold)

An interaction is classified as Acceptance (Hold) when price reached the published MPM Zone and satisfied MPM's definition of a Hold on its first interaction during that trading session.

Break

An interaction is classified as a Break when price reached the published MPM Zone but failed to hold it on its first interaction and instead moved through it.

A Break does not imply the market behaved incorrectly. It simply records that the zone did not hold on that interaction. Both outcomes are recorded and published; the historical record is not filtered to favour holds.

Published Evidence

Reaction Probability is derived from MPM's historical research dataset and is continuously monitored through calibration. Each figure below counts one interaction per zone per session — the first interaction before market close — across all sessions where price reached a published MPM Zone.

The Acceptance (Hold) rate is the share of the 5,617 first-interaction outcomes that held (3,441); the remaining first-interaction outcomes were classified as Break. These figures describe historical observations and do not guarantee future market behaviour.

How to Interpret Reaction Probability

When reading a published Reaction Probability:

1. Confirm which MPM Zone and market the measurement refers to.
2. Remember that Reaction Probability is conditional on Reach — it describes only the interactions where price reached the zone.
3. Understand that the published percentage describes the historical Acceptance (Hold) rate, not certainty.
4. Read it alongside the published calibration figure, which shows how closely stated probabilities have matched actual outcomes.
5. Treat the published probability as one piece of evidence, not a trading instruction.

Interpretation example (illustrative)

The figures below are illustrative, not measured values. Suppose a published MPM Zone had a Reach Probability of 73% and a Reaction Probability of 62%.

Historically, comparable sessions reached that type of zone 73% of the time. Among the interactions where price reached the zone, 62% held and were classified as Acceptance (Hold). It does not mean the next interaction has a 62% guaranteed chance of holding.

What Reaction Probability Is Not

Reaction Probability is not:

• a prediction of the next market move,
• a buy or sell signal,
• a guarantee that price will hold,
• evidence that every statistically derived zone behaves the same,
• or a substitute for independent judgement and risk management.

It is a historical measurement describing how comparable zones behaved in the past.

Limitations

Reaction Probability is a historical statistic and should be interpreted accordingly. Its usefulness depends on the historical dataset studied, the market being analysed, the timeframe, the classification methodology, and changing market conditions.

Historical frequencies may change as additional observations are incorporated into the research dataset. Reaction Probability measures whether the zone historically held, not the size, duration, or profitability of the resulting move. Past behaviour does not guarantee future outcomes.

How This Fits Into MPM

Reaction Probability is used throughout the MPM research framework. You'll encounter it in:

• Daily Analysis — Public publication of the current session's statistically derived MPM Zones, each with its Reach Probability and Reaction Probability for the session, together with supporting context.
• Reaction Library — Member-only library documenting thousands of historical price interactions around published MPM Zones for structured educational study.
• Research Papers — Public research publishing historical studies, methodology, findings, and limitations — including null and negative results.
• Alerts — Member-only service delivering the published Daily Analysis before the trading session.
• Intelligence Circle — Member-only research environment containing advanced market research, historical investigations, and trading strategies developed using the MPM research framework.