GXT NEW COURSE _ Lesson 5 Candle Confirmation — Transcript

Full transcript

1. 0:04Hello everybody. Welcome to the anomaly
2. 0:06course core content lesson five swing
3. 0:09confirmations. So what we are going to
4. 0:11be doing is still trading from swing
5. 0:13formations. We're going to be adding an
6. 0:15extra layer of confirmation to those
7. 0:18swing points and that is going to be SMT
8. 0:21divergences. There is a few variants. So
9. 0:24let's go ahead and cover them now.
10. 0:26So the first variation is going to be
11. 0:29SMT between candle one and candle two
12. 0:32where this asset is creating a C2 with
13. 0:35SMT while this asset is not the
14. 0:38correlated market. In the next variation
15. 0:41will be between candle two and candle
16. 0:43three. That is where both assets pretty
17. 0:45much put in a C2. This asset takes out
18. 0:48the C2 and creates basically a new C2 on
19. 0:51this asset while this asset creates a
20. 0:53C3.
21. 0:55Now that we know every SMT variant, now
22. 0:58we're going to apply those SMT variants
23. 1:00and candle confirmations
24. 1:03to universal models. So you're going to
25. 1:05see that we're going to be blending
26. 1:06universal models, swing points and SMT.
27. 1:10So first let's go over the first stage
28. 1:12crack and correlation when applying it
29. 1:14to IRL to ERL.
30. 1:16So here we have a one stage confirmation
31. 1:19where you simply have one asset failing
32. 1:22to trade into a gap.
33. 1:23This gap is created at 11:30 over here.
34. 1:2711:30's candle gets taken out. As you
35. 1:30can see, both assets don't have a gap.
36. 1:32Both assets do not need a gap. Only one
37. 1:34asset needs a gap. And you can see we
38. 1:37have that one stage crack and
39. 1:38correlation and that can be your
40. 1:40confirmation when you get that candle
41. 1:42two closure. You can target the close
42. 1:44proximity ERL. Now let's go over the
43. 1:47next variation of SMT and that is going
44. 1:50to be with the candle closure itself
45. 1:53which is called a PSP or precision swing
46. 1:56point. And that is essentially when one
47. 1:59asset closes bullish while the
48. 2:00correlated market closes bearish.
49. 2:03This is a form of crack in correlation
50. 2:06because they should both be closing in
51. 2:08the same direction, right? They should
52. 2:10be closing both bullish just like
53. 2:12markets should be creating the same
54. 2:14highs and lows, but when they do not,
55. 2:16that is your crack in correlation and
56. 2:18the first hint at a reversal.
57. 2:20So now let's go over the second
58. 2:22variation of a one-stage crack in
59. 2:23correlation. And that is where both
60. 2:25assets hit the key level. So you have no
61. 2:27SMT to the key level. So you have to
62. 2:29wait for a candle closure and the candle
63. 2:31closure itself is a precision swing
64. 2:33point, which is a crack in correlation.
65. 2:37And as you can see here,
66. 2:39this candle that hits this previous
67. 2:41stage low, which is a gap high, on the
68. 2:4411th
69. 2:45is a bearish candle. And this asset also
70. 2:48hits the 11th low. So there's no SMT or
71. 2:50anything like that. Um but this candle
72. 2:53closes bullish. So that is your
73. 2:54confirmation and you can assume that
74. 2:57candle three can expand to the ERL. So
75. 3:00simply I rule, E rule.
76. 3:03So now let's go over a two-stage PSP.
77. 3:06This is where we have SMT between the
78. 3:08swing formation and a PSP confirming. So
79. 3:11as you can see here, you have SMT
80. 3:13between candle one and candle two.
81. 3:15Candle one, candle two. And the close
82. 3:17itself of candle two is bearish on this
83. 3:20asset and bullish on this asset. That's
84. 3:22your PSP, which is the second stage
85. 3:25crack in correlation, right? Here's your
86. 3:26first stage SMT, candle one and candle
87. 3:29two, confirmed by the PSP closure itself
88. 3:32for the second stage. Now let's cover
89. 3:34two-stage PSP where you have SMT between
90. 3:37candle two and candle three.
91. 3:38So this is where you get a PSP closure
92. 3:41first confirmed by SMT, right? So now
93. 3:45this is a lot easier to read rather than
94. 3:47not having a PSP here, right? You've
95. 3:50really had that C2 closure like I said
96. 3:52uh in the previous slides. You're going
97. 3:54to get the C2 closure first. One asset's
98. 3:57going to sweep it. One asset is not. And
99. 3:59that's pretty much how you tell, right?
100. 4:01First stage SMT is the candle closure
101. 4:03itself or the PSP. The second stage is
102. 4:06essentially an SMT with the PSP high
103. 4:08itself or candle two and candle three.
104. 4:11Now, let's go over a continuation PSP.
105. 4:13This is pretty simple. You want to be
106. 4:15using this in a continuation, right?
107. 4:17Following a reversal with an open draw.
108. 4:20So, the first step is to create a PSP,
109. 4:22as you can see here. And one asset is
110. 4:26going to sweep the PSP high while the
111. 4:28other one does not. Essentially, one
112. 4:30asset is creating a C2 while the other
113. 4:32one is just continuing. And this is what
114. 4:35we call a continuation PSP, which is a
115. 4:37form of two stage SMT.
116. 4:40Now, let's go over my personal favorite
117. 4:42two stage cracking correlation, and
118. 4:44that's where you have an SMT with your
119. 4:45key level. You can see this asset is
120. 4:47trading through the gap. This is the
121. 4:49strongest asset here. It's actually
122. 4:50trading above the high. And this asset
123. 4:52over here, ES, is not trading through
124. 4:53the gap.
125. 4:54So, kind of like key level SMT with ES
126. 4:57and NQ over here.
127. 4:58Um and then the second stage SMT is
128. 5:00confirmed by a PSP. So, you're pretty
129. 5:03much waiting for key level SMT and then
130. 5:04a candle two closure, but the candle two
131. 5:06closure is a PSP, right? It's just a
132. 5:09super easy um way to trade, in my
133. 5:11opinion, cuz you know, you have the key
134. 5:13level, you have the SMT at the key
135. 5:15level, you have your candle two closure,
136. 5:17and the candle two closure PSP. It's
137. 5:19super mechanical, super easy. Um and you
138. 5:21can see this candle is bullish. This
139. 5:23candle's bearish. That's your second
140. 5:24stage cracking correlation, going from
141. 5:26IROL to EROL.
142. 5:28Now, let's go ahead and cover the next
143. 5:30two stage variant, and that is when you
144. 5:31have a two stage PSP out of a key level.
145. 5:34So, you can see this asset over here is
146. 5:36in a gap. This previous candle here is a
147. 5:40PSP, as you can see this one's bullish.
148. 5:42This one's bearish. And you can see that
149. 5:45we have that cracking correlation
150. 5:46between consecutive candles here.
151. 5:49So as soon as we run this high into the
152. 5:51gap, right? You have that two-stage
153. 5:53cracking correlation. You're pretty much
154. 5:54good to go from IRL to down here,
155. 5:59which is ERL.
156. 6:01So now let's go over the first variant
157. 6:02of two-stage SMT.
158. 6:04So this is where you get your first
159. 6:05stage cracking correlation with the gap.
160. 6:07As you can see this asset on the left,
161. 6:09the weaker asset, does not trade into
162. 6:11that gap, but this asset over here does
163. 6:13trade into the gap. So that's your first
164. 6:14stage SMT. It's just SMT with key level.
165. 6:17And then your second stage is swing SMT.
166. 6:20As you can see here, takes out that
167. 6:22previous high. This asset is not kind of
168. 6:25printing that roof SMT that we want to
169. 6:26see. It's a form of a strength switch,
170. 6:28and this is a very strong confirmation
171. 6:31for confirming your universal model.
172. 6:34Now let's go over another variant of
173. 6:37two-stage SMT.
174. 6:38And this is where both assets hit the
175. 6:40key level, and you have a two-stage SMT
176. 6:43via swing point. So if SMT between
177. 6:45candle one and candle two, as you can
178. 6:47see here,
179. 6:48right? And then SMT between candle two
180. 6:50and candle three, right? So creating
181. 6:53consecutive candle SMT
182. 6:56in a form of a two-stage cracking
183. 6:58correlation.
184. 6:59So this can also be used to confirm your
185. 7:01universal model. As you can see, this
186. 7:03asset's in a gap, IRL, ERL.
187. 7:07Now let's go over one of my favorite
188. 7:08continuation sequences,
189. 7:10and this is using a continuation PSP.
190. 7:13Remember continuation PSP is an
191. 7:14expansion. So after price expands away
192. 7:17from a reversal,
193. 7:18it's going to create a precision swing
194. 7:20points. As you can see this one's
195. 7:21bullish. This one's bearish.
196. 7:24As long as there's a draw on liquidity
197. 7:25open, we are expecting an SMT between
198. 7:27that PSP high,
199. 7:29where one asset creates a reversal to
200. 7:30expansion candle, another asset just
201. 7:33expands away.
202. 7:35Right? But what you want is that PSP
203. 7:38high
204. 7:39to be a gap low in a bearish scenario.
205. 7:41So notice how this is a you know, a
206. 7:43three candle formation to create a gap.
207. 7:44Candle one, candle two, candle three.
208. 7:46These wicks do not meet. This candle's
209. 7:48wick does not meet this candle's wick.
210. 7:50That creates the gap.
211. 7:51So, when you run out to that PSP's high
212. 7:54creating that two-stage PSP
213. 7:56um for continuation, it's also
214. 7:58simultaneously an SMT fill. Um
215. 8:01but it is a two-stage cracking
216. 8:03correlation, right? Cuz you have SMT
217. 8:05with the PSP high.
218. 8:06But also SMT
219. 8:08um with the key level. So, you know,
220. 8:10PSP's are cracking correlation itself.
221. 8:12The key level is a second cracking
222. 8:13correlation. Um
223. 8:15or the candle's high is a second
224. 8:17cracking correlation. However you do it,
225. 8:18it's a two-stage cracking correlation,
226. 8:20right? And it's a very powerful tool to
227. 8:22go from IRO
228. 8:24to ERO targeting the previous candle's
229. 8:26range and beyond.
230. 8:28Now, let's go ahead and apply our swing
231. 8:30confirmations to universal models.
232. 8:33This is what we do, right? We always
233. 8:35apply swing confirmations to universal
234. 8:37models. We also apply SMT to our
235. 8:41universal models {slash} key levels. So,
236. 8:43let's go over every single variant that
237. 8:45we use and put it all together. So,
238. 8:48firstly, here's just SMT with our key
239. 8:51level, right? SMT with the IRO
240. 8:54looking to target the ERO for a
241. 8:56one-stage cracking correlation. Here is
242. 8:58another form of one-stage cracking
243. 9:00correlation where both assets hit the
244. 9:02gap, but the candle close confirming the
245. 9:05gap is a PSP, right? On the quarterly
246. 9:08market, this would be bearish. On this
247. 9:10market here, it's bullish. That is the
248. 9:12cracking correlation, which is a form of
249. 9:14SMT. Now, here is the first variant of
250. 9:17two-stage SMT. It's where you have SMT
251. 9:19with the key level, then you have that
252. 9:21candle two to candle three SMT. Here is
253. 9:23the next form of two-stage SMT. It's
254. 9:26where you have your first-stage SMT
255. 9:27between candle one and candle two
256. 9:30and then candle two and candle three,
257. 9:32right? Confirming this gap here. Here is
258. 9:34the next form of two-stage SMT. That is
259. 9:36where your first stage SMT is with the
260. 9:38key level itself and confirmed by a PSP
261. 9:41closure. And for this example, we have a
262. 9:43two stage PSP, right? No SMT at the key
263. 9:45level, but you have a PSP and an SMT
264. 9:49with that PSP low, which is your two
265. 9:51stage SMT to confirm that key level.
266. 9:54Now, let's go over SMT with ERL and IRL.
267. 9:58So, here's your first stage SMT.
268. 10:00It's simply just SMT with the ERL key
269. 10:02level itself. This is an example where
270. 10:05all assets might reach that that ERL
271. 10:07objective,
272. 10:08but the swing formation confirming it on
273. 10:11the close creates a PSP, and that will
274. 10:13be your one stage cracking correlation.
275. 10:15Here is the first two stage SMT variant
276. 10:18where you have SMT with your key level
277. 10:19followed by candle two and candle three
278. 10:21SMT second stage confirmation. Here is
279. 10:24the next two stage confirmation. We
280. 10:26engage with the key level on all assets.
281. 10:28You have SMT between candle one and
282. 10:29candle two,
283. 10:30and then candle two and candle three.
284. 10:32Here's the next two stage variant. You
285. 10:34have SMT with the key level followed by
286. 10:36a PSP for your second stage
287. 10:38confirmation. And here is the last two
288. 10:41stage confirmation
289. 10:43where PSP's your first stage and SMT
290. 10:46with the PSP's high is your second stage
291. 10:49confirmation.
292. 10:50Now, let's go ahead and apply our SMT
293. 10:52variants to ERL to IRL. So, here is an
294. 10:55example of a first stage SMT or a one
295. 10:59stage SMT. We have SMT with an external
296. 11:01range of liquidity, right? Once that
297. 11:03candle closes, you're going to expect
298. 11:05price to expand away
299. 11:07back into IRL, right? Going from IRL to
300. 11:10ERL using SMT as our confirmation.
301. 11:13Now, here is an example of maybe you
302. 11:16don't hit ERL, but you have a reason to
303. 11:20go back into the range to target IRL.
304. 11:22So, what is the reason here? Well, the
305. 11:23daily open is right here. Let me mark it
306. 11:25out.
307. 11:27You have the previous sessions expanding
308. 11:30all in one direction. So, it's highly
309. 11:33likely that this day is going to be
310. 11:34capped off at some point. You cannot
311. 11:36expand forever. Not every session is
312. 11:37going to expand.
313. 11:39So, you're essentially just waiting for
314. 11:40a crack in correlation to form. And
315. 11:41that's where you get your one stage
316. 11:43crack in correlation. There's no key
317. 11:44level to the left. Um or even if there
318. 11:47was a key level to the left, maybe both
319. 11:48assets hit it. Right? This is where you
320. 11:50have no SMT to key level. You just have
321. 11:52a PSP. And that PSP will be used to
322. 11:55expand back into the range and target
323. 11:58IRL. Here's an example of using two
324. 12:01stage SMT. We have a first stage SMT
325. 12:03with a swing high followed by the second
326. 12:06stage crack in correlation with your um
327. 12:09swing point formation.
328. 12:10And this is a great example of how
329. 12:14how typically ERL to IRL is going to be
330. 12:16counter trend, especially when you have
331. 12:18SMT
332. 12:19as your first stage with like not
333. 12:21relevant highs. You see how this is not
334. 12:23relevant high?
335. 12:24This is the relevant high.
336. 12:25Right?
337. 12:26This is the relevant high. And we're
338. 12:28very high in premium of that range. This
339. 12:30is likely the overall draw on liquidity.
340. 12:32So, any internal level where you have
341. 12:34two stage SMT, it's probably used as a
342. 12:36retracement. All right? Um and you can
343. 12:39see that this two stage SMT is probably
344. 12:42going to be short-lived. Where we're
345. 12:43going to cap off that
346. 12:45uh retracement at is IRL, right? This
347. 12:48little small fair value gap. You can
348. 12:49expect the next day to at least hit that
349. 12:51fair value gap. Um and as you can see,
350. 12:53we have a um PSP here. Right? Confirming
351. 12:58the gap. And now you know that this two
352. 13:00stage SMT is probably um done its job,
353. 13:03right? We're probably back on side with
354. 13:05the expansion to target that high up
355. 13:07there. Now, here's an example of using
356. 13:09two stage SMT to confirm our ERL to IRL
357. 13:13where we have our first stage SMT with
358. 13:15the key level itself, which is just
359. 13:16going to be an external high or low. The
360. 13:18second stage SMT is going to be with a
361. 13:20PSP as you guys can see. Bearish,
362. 13:23bullish. This is a strength switch PSP.
363. 13:26Um so, a lot of times where you have
364. 13:29this actually reversing the whole range,
365. 13:32your first target is something going to
366. 13:34be I R L, right? And then you're going
367. 13:36to see how price reacts to this level,
368. 13:39right? If this is an an actual relevant
369. 13:41high, we can totally reverse the whole
370. 13:42range just like so. If you play price
371. 13:45forward,
372. 13:46you can actually target this whole
373. 13:47range, which it ends up turning into
374. 13:49manipulation ranges, right? Manipulation
375. 13:51of the high, target the lows, right? If
376. 13:54especially if, you know, the low of this
377. 13:56range is filled or swings like this, or
378. 13:58the high of the range being manipulated
379. 14:00is relevant, then that adds to the
380. 14:02probability that we're probably going to
381. 14:03go all the way down here.
382. 14:05But this can be your first target is
383. 14:07back into the range, um, targeting the I
384. 14:09R L.
385. 14:11Now, here is going to be our last
386. 14:12example using two-stage SMT where both
387. 14:14assets hit the key level. Here's the
388. 14:16swing low. Here's the swing low on this
389. 14:17asset. Um, and then you have no SMT with
390. 14:20that swing low or key level. So, you're
391. 14:22going to wait for a PSP,
392. 14:24and then you get that two-stage PSP,
393. 14:26right? Where the weaker asset runs out
394. 14:27the PSP low, the stronger asset does
395. 14:29not, and that can be your two-stage
396. 14:31confirmation to target back into the
397. 14:33range into this fair value gap.
398. 14:36Now, let's go over manipulation ranges.
399. 14:38Here we have a one-stage cracking
400. 14:39correlation SMT with your key level.
401. 14:42Here is no SMT with the key level, but
402. 14:44you get your PSP confirmation as your
403. 14:47first stage. Now, here's going to be
404. 14:48your first variant for two-stage SMT.
405. 14:51SMT with your key level followed by an
406. 14:53SMT between candle two and candle three.
407. 14:56Here is the next one where we have no
408. 14:57SMT with the key level, but SMT between
409. 14:59candle one and candle two, and candle
410. 15:01two and candle three.
411. 15:02Here's our next two-stage variant, SMT
412. 15:04with the key level confirmed by a PSP
413. 15:06candle closure for your second stage SMT
414. 15:09confirmation.
415. 15:10And lastly, no SMT with the key level,
416. 15:12first stage SMT with a PSP, second stage
417. 15:15SMT confirmation between candle two and
418. 15:17candle three.
419. 15:19So, here's an example of a one-stage
420. 15:20cracking correlation where you simply
421. 15:22have SMT with your key level. Key level
422. 15:24will be the range high. So, SMT with the
423. 15:27range high, this asset is not taken out.
424. 15:29This asset does.
425. 15:31So, once we get that candle two closure,
426. 15:33or just reversal signatures in general,
427. 15:35we can go ahead and confirm the reversal
428. 15:38and target the opposing side of the
429. 15:39range.
430. 15:40So, here's the second variation of a
431. 15:42one-stage cracking correlation. This is
432. 15:44where both assets trade to the key
433. 15:45level, key level being the range high,
434. 15:47the range high. This asset trades way
435. 15:49through it, but when this asset
436. 15:52um breaks that SMT that we once had, um
437. 15:55is when we get our confirmation, right?
438. 15:57So, no key level SMT.
439. 16:00So, what do we wait for? A candle two
440. 16:02closure in the form of a cracking
441. 16:04correlation, which is a precision swing
442. 16:06point. As you can see, this candle is
443. 16:07bearish, this one's bullish. We're going
444. 16:09to trade that weaker asset into the
445. 16:11range low.
446. 16:12Here is an example of using our first
447. 16:15variation of two-stage SMT, where we
448. 16:18have one asset rating the range high,
449. 16:21one asset doesn't, and then it's
450. 16:23confirmed by swing SMT, ideally in the
451. 16:25form of a strength switch like this,
452. 16:27uh and then once that is confirmed, we
453. 16:29can go ahead and target opposing lows.
454. 16:32Here is an example where both assets hit
455. 16:34the key level,
456. 16:36but our two-stage SMT comes in the form
457. 16:38of a swing formation. We have
458. 16:40first-stage cracking correlation between
459. 16:42candle one and candle two, second-stage
460. 16:44cracking correlation between candle two
461. 16:45and candle three.
462. 16:46As you can see, this candle expands
463. 16:48away. Once this candle closes to confirm
464. 16:51the two-stage SMT on that lagging asset,
465. 16:54because it has such a large wick,
466. 16:56you know, it has to wait for 10:00
467. 16:58essentially, and then that asset catches
468. 17:00up and starts to also target these
469. 17:02opposing lows.
470. 17:03Here is, again, my personal favorite
471. 17:06two-stage SMT. That's where you have SMT
472. 17:09with the key level,
473. 17:11confirmed by a C2 candle. That C2 candle
474. 17:13is a PSP. That's your second-stage
475. 17:15cracking correlation.
476. 17:16In this case, it's a string switch PSP,
477. 17:18again, which is my favorite.
478. 17:21And as you can see, price puts in that
479. 17:23reversal, and then you can expect to
480. 17:24expand into the opposing side of the
481. 17:26range, completing your universal model.
482. 17:29And here is the last two-stage variants
483. 17:32where both assets hit the key level, and
484. 17:35then it's confirmed by a two-stage PSP.
485. 17:37So, firstly, it's going to print a PSP,
486. 17:40and you're going to see that PSP's high
487. 17:42get ran out on one asset, which is the
488. 17:43stronger asset. If the weaker asset does
489. 17:45not run that low out, then that confirms
490. 17:48candle three's high, and then you can
491. 17:50target the opposing side of the range.