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How to Time Expansions | Part 2; Continuations — Transcript

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0:02[music]
0:05Hello everyone and welcome back to my
0:06YouTube channel. Today we're going to be
0:08getting into the highly anticipated
0:10second part of this two-part master
0:12class on timing expansions. If you're
0:14coming here from the first video, you
0:16would have now learned how to accurately
0:18identify true reversals in the market or
0:20the smart money reversal of a market
0:22maker model. And now we're going to be
0:24talking today about how to frame
0:26continuations, candle 3, candle 4, etc.
0:29into our draws on liquidity once we've
0:31identified our true reversals. So, let's
0:34do a little bit of recap on the core
0:36logic. Similar to the first video we
0:38presented on true reversals, the core
0:40logic for continuations is quite
0:42similar. Expansion is going to require a
0:45swing formation. Swing formations are
0:47indeed market maker models and market
0:50models distribute liquidity from
0:52internal to external range liquidity in
0:54some variant which we learned as
0:56universal models. Last video you became
0:59an expert at identifying where true
1:01reversals or C2s form and how to
1:04identify their structure with Kraken
1:07correlation and confirm them with
1:09signatures such as changes day delivery
1:12Vshape etc. Today we're going to be
1:14honing in on trading away from these
1:17true reversals and looking at the
1:19continuation sequences that we can also
1:21frame. These are going to allow you to
1:23trade both the reversal phase of price
1:25and the reaccumulation or redistribution
1:28phases of price. Ultimately making you a
1:30master in trading market maker models
1:32and able to pioneer any phase of price
1:34that the market may give you.
1:37So let's get into it. Let's talk about
1:39the universal model, market maker model
1:41applications and understanding how
1:43continuations are framed in context of
1:45our market maker models. So let's take a
1:48look at generic at a generic example
1:50here. Okay, we're going to do a quick
1:52understanding check. As you understand
1:54from the previous lecture, when a higher
1:57time frame key level is engaged and we
2:00see our two-stage crack and correlation
2:02variant that I've taught you, you can
2:04frame reversals from key levels. This
2:07could be on a higher time frame chart
2:08like a daily, 4 hour, all the way down
2:10to something like a 50-minut. Then what
2:12we're going to be doing is zooming into
2:14that fractal of reversal where you will
2:16see that reversal candle which we
2:19defined as a candle 2. And then you're
2:21going to see continuation away from that
2:24reversal candle until the draw is met.
2:27So in the instance that the candle that
2:29reverses does not also expand to the
2:32opposing side of the range, we are going
2:34to be using the contents of this lecture
2:36to frame and and structure how we trade
2:39this candle three.
2:42Okay, so let's take a look at this from
2:44a higher level perspective, right? And
2:45zoom out even a bit more. If we're going
2:47to look at any universal fractal, a
2:50generic fractal that could be external
2:52or internal range of liquidity here is
2:55generally what we're going to see on the
2:56higher time frame and the lower time
2:58frame. Each universal fractal or
3:01universal model, like we said, is going
3:04to be a market maker model. And that's
3:06going to require a swing point formation
3:08at its reversal and then an expansion
3:11into the opposing side of the range,
3:14also defined as the original
3:16consolidation. So, just to make sure
3:18you're still with me and you're taking
3:20elements from the first video into your
3:22understanding, how would we determine if
3:25this candle 2 is a true reversal? Give
3:28yourself a minute and maybe write in the
3:29comments what criteria we need to
3:32justify this candle as a candle to true
3:35reversal. Right? That's where we bring
3:37in and we recall our two-stage cracking
3:40correlation and our divergence logic
3:42from the last lecture. Now, as you can
3:45see, once we have established a swing
3:47point, the market requires a swing point
3:50to reverse, we can now look to trade
3:52continuations, i.e. this third and
3:55potentially fourth candle in towards
3:58these draws on liquidity or short-term
4:01highs and external range highs or lows
4:04on the opposing side of the market.
4:06That's really what we're going to be
4:07focusing on today. Essentially looking
4:10at this candle three and the dynamics
4:12that exist in here. You've already
4:14learned how this candle 2 forms.
4:18Okay, let's recap. What defines a true
4:20reversal, guys? We have that two-stage
4:23kraken correlation. If you have not
4:25watched that video, I highly suggest you
4:27pause now. Go to this YouTube video,
4:29which is my last YouTube video, and
4:31watch that before returning here. We're
4:33going to be building on these ideas, and
4:36we're going to be using some of the
4:37knowledge and building on it to better
4:39understand how reversals and
4:40continuations are framed together,
4:43right? Because these are both unique
4:44phases of price in market delivery
4:47towards draws. Okay? So, watch that
4:49video. come back if you haven't done
4:51that. If you have, let's get right into
4:54uh a little bit of recap and then the
4:55universal sequences that we see for
4:57continuations. So, if you haven't
4:59watched that video, I'll quickly recap
5:01it for you. Here we have our two-stage
5:03variance for a true reversal. This could
5:06be a PSP confirming an SMT inside of a
5:11key level of our universal model
5:13followed by that V-shaped displacement
5:16and then ultimate continuation. Right?
5:19We can also have an SMT confirming a
5:21PSP. Right? This is where we get, you
5:24know, a second variant of that true
5:27reversal again confirmed by that
5:29V-shaped displacement in that candle
5:32too. And then finally, you guys also
5:34learned your two-stage variance, right?
5:37This is where we can trade into a key
5:39level, be it an external or internal
5:42range of liquidity, and frame a reversal
5:45off of that key level via a two-stage
5:48SMT inside of that key level. Right? So,
5:51a quick recap just so that we're all on
5:53the same page here. The first true
5:55reversal framework is going to be via
5:58PSP, confirming SMT. So this is when we
6:01get a crack in correlation of a key
6:04level with divergence and then we're
6:06confirming the swing via a PSP. We can
6:10also have the inverse where we have a
6:12key level and an SMT is going to confirm
6:15that a PSP right at that key level is
6:18going to hold. And then finally we have
6:21a two-stage SMT wherein we see a key
6:25level form that two-stage SMT and we get
6:28again that characteristic Vshape. These
6:31are going to be important for
6:32understanding true reversals and we're
6:34also going to be incorporating a bit of
6:35this logic into continuations as well.
6:38So I hope that is exceptionally clear at
6:41this point.
6:42So let's talk about swing invalidations
6:45before we get into sequences. What are
6:48the invalidations for this candle three
6:51continuation and where where would we
6:53say the candle 3 is unlikely to hold and
6:56where could it potentially fail? So what
6:59we're going to look at is a series of
7:01mechanical filters for continuation.
7:04When trading if you can utilize these
7:06filters you will be able to get on side
7:08with high probability expansion candles
7:11that form continuation. In the case that
7:13these invalidations are met, meaning
7:16that price does not support expansion,
7:18we are going to be able to use these
7:20mechanical filters to stay out of price
7:22when it's unlikely to form high
7:24probability continuations. So the first
7:27idea is going to be equilibrium of
7:29candle 2. If we have a generic reversal
7:33in a universal model that we framed
7:35here, meaning at this candle 2 low, we
7:37have a two-stage cracking correlation in
7:39a key level, we would expect that candle
7:423 will stay in respect of the upper half
7:45of candle 2. We're going to be taking a
7:48look at specifically what PD arrays
7:50inside of this upper half of candle 2 we
7:53expect to hold, but generically
7:55speaking, we use an equilibrium
7:57invalidation.
7:59That means that candle 3 should form a
8:02small opposing run in the upper half of
8:04candle 2 before expanding. If it were to
8:08form a large wick into a deep discount
8:11of candle 2, it is unlikely to be a high
8:15probability expansion candle for
8:17continuation.
8:19Right? So we can see that right here.
8:21When we have a deep retracement of
8:23candle 3 that extends far past the
8:26equilibrium of candle 2, we are going to
8:29extend this logic into the subsequent
8:32candle which is candle 4 and look for
8:34this candle to support expansion candle
8:374 with a small opposing run and then a
8:41V-shaped confirmation. So that means
8:44when we see a deep retracement of candle
8:463, we're not going to be looking to
8:48engage candle 3 as an expansion candle
8:51for continuation towards our draw.
8:54Instead, we are going to wait for the
8:56next candle to open, stay in respect of
8:59the equilibrium of candle 2, right from
9:02the low to the high, and then expand
9:05towards the draw. And we'll take a look
9:07at some examples. So quickly to sum up
9:10and for your notes, if we see deep
9:12retracements of candle three, right, as
9:15a continuation, we are going to
9:18invalidate the idea of expansion and
9:21therefore look to trade in the next
9:23higher time frame candles open with that
9:26smaller opposing run or wick. An ideal
9:30continuation is going to see this candle
9:33stay in respect of equilibrium.
9:37Okay, let's take a look at swing
9:39invalidations for a C3 reversal. So, in
9:43the instance that we get a candle 3
9:45closure, meaning C2 fails to reverse, as
9:49we talked about in the first part of
9:51this master class, we are going to be
9:53looking for that candle 3 to close above
9:57the opening price of candle 2. And then
10:00we're going to extend that continuation
10:02logic for the candle 4 staying in
10:06respect of C3's equilibrium forming that
10:09smaller opposing run into a key level
10:12and then expanding away towards that
10:15draw on liquidity for the universal
10:18model. So we also have a C3 reversal
10:21invalidation which is also going to be
10:24that smaller opposing run and
10:26equilibrium. Remember small wick support
10:29expansion and swing formations, right?
10:32That support expansion will see
10:34continuations not offering deep
10:36retracements.
10:39Okay. What about a swing invalidation
10:41which is a new phase of price? This is
10:44extremely important when we are
10:45considering the dynamics of a price move
10:48in the market. What do I mean by the
10:50dynamics of a price move? Let's say we
10:53have a universal model here you as you
10:55can see on the left where market is
10:58engaging a key internal range of
11:00liquidity and reversing to expand
11:02towards an external range draw. As we
11:06know the market exists in a fractal
11:08nature. That is to say that many times
11:11price will engage relevant swings in the
11:15market forming new phases of price
11:18before expanding once again. So when we
11:22see price in a universal fractal trade
11:25into a key opposing level, so say this
11:28was a daily chart and we see price
11:30trading into a key daily or 4hour for
11:34example high, we would not want to
11:37blindly pattern trade a continuation
11:40through that high without first
11:42confirming a new phase of price. oftent
11:46times as price engages key levels and
11:50we're going to now refer to these key
11:52levels as relevant swings and if you're
11:56in my uh discord you have I I've taught
11:58you a little bit about what relevant
12:00swings are and a great creator here on
12:02YouTube AM Trades has a video on
12:05relevant swings as well. So when the
12:07market trades into these relevant
12:09swings, we're going to confirm a
12:12continuation right through that high via
12:15understanding of phase of price. So
12:18these are going to be generic
12:20continuation signatures for a candle 3
12:23that does not reverse after engaging a
12:26relevant swing. So to recap, as we move
12:31from a key internal range of liquidity
12:34to external range liquidity, for
12:35example, or you can make be more generic
12:37and say from one higher time frame
12:40universal model level to another, we can
12:43expect new phases of price to form at
12:46intermediate swings before the draw and
12:49liquidity is met. These could look like
12:51consolidations or retracements, both of
12:54which support higher time frame
12:56continuation towards our ultimate draw
13:00on liquidity or opposing side of the
13:03range.
13:05So this is kind of summing up what a
13:08swing invalidation would look like from
13:10the uh standpoint of a lower time frame
13:13signature. If we are going to trade a
13:16reversal into expansion, right? So
13:18reversal followed by continuations
13:20higher. We want to be trading clean
13:22market movements that show displacement
13:25or institutional right involvement
13:28followed by continuation which is
13:30closure strong closure through opposing
13:32candles. If your CISD in a continuation
13:37or even a reversal for the matter of
13:38fact looks like this do not trade that
13:42fractal. We want to avoid trading
13:44consolidation, right? And we instead
13:47want to trade strong expansion
13:49signatures in the market. So if you see
13:53your candle three start to form a
13:56consolidation or retracement signature,
13:59you should first ask yourself, are we
14:01trading in to a key level in the market,
14:05a relevant swing? And if we are in this
14:09candle three, we do not want to be
14:12trading a consolidation change in state
14:15of delivery for continuation. Instead,
14:17we want to allow that new phase of
14:20price, right, to hold as a new
14:23invalidation and then trade a subsequent
14:26swing formation that gives us a strong
14:29reversal signature on the lower time
14:31frame. Remember the continuation as well
14:34is going to show us these reversal
14:37signatures, these changes in save
14:39delivery and displacements.
14:42Okay. So now that you understand where
14:45continuation lies within the spectrum of
14:47a market maker model from one key level
14:50to another, let's take a look at some of
14:52the variance and framework we can apply
14:55to trading these candle 3 and candle 4
14:58continuations.
15:01Okay. This here is a generic schematic
15:04of what our continuation now looks like
15:06with that superimposed market maker
15:09model idea on top. Right? So, we're
15:11going to have some universal fractal.
15:14We're going to call this a model within
15:16a model. We're trading from one IRL or
15:19ERL to the other side of the range,
15:21right? XRL to XRL where X is internal or
15:25external range liquidity. Now, in the
15:27context of a market maker model, as
15:29you've learned, that's going to see the
15:31opposing side of the range offer our
15:33original consolidation, drawing
15:35liquidity, and that candle 2 reversal
15:39forming at the wick extreme. Right? Then
15:42we're going to see continuations in the
15:46higher time frame, candle three and
15:47maybe candle 4 towards that draw. So
15:51every time we're looking to frame a
15:54lower time frame continuation, we are in
15:56fact trading a model within a model.
15:59We're trading away from a true reversal
16:01on the higher time frame and we're going
16:03to structure our um entry around a lower
16:08time frame universal model in the
16:10continuation candle. Okay? So if that
16:12doesn't make sense, we're going to go
16:13deep into that idea. But from this
16:15schematic, what I want you to gain is
16:17that the wick of this continuation
16:20candle or the reaccumulation of this
16:23continuation candle is going to be
16:25itself a universal model on some lower
16:29time frame and what we're going to look
16:31at as the two principal frameworks that
16:34can be. So what is the first type of
16:37model within a model i.e. Where are we
16:40going to be forming this wick that
16:42you're seeing for C3, right? In context
16:46of this market maker model. The first is
16:50a simple internal to external range
16:52liquidity variant of a continuation. I'm
16:56going to dub this a type one
16:58continuation and the highest probability
17:01continuation. Why is it high
17:03probability? because we are creating
17:05gaps away from the true reversal. Right?
17:09Look at this true reversal and we are
17:12opening into the context of a
17:14displacement of the previous candles
17:16range. So, if you go back in to part one
17:19of this series, you'll be able to define
17:22how we understand this true reversal to
17:24hold based on these two-stage cracking
17:27correlations and key levels. And then
17:29you can see C3 opens here. It trades
17:33with a wick that respects EQ of C2 into
17:37a key level in the upper half of candle
17:402. In this case, a fair value gap and it
17:43is itself is going to form an internal
17:46to external range model, right? With the
17:49higher time frame draw still being
17:52intact. This is ideal because we are
17:55generating a low resistance liquidity
17:58signature, a failure swing to our higher
18:01time frame objective from this lower
18:03time frame universal model. Right? We're
18:06trading internal to external on the
18:09lower time frame. While the higher time
18:11frame is also in an expansion towards an
18:14old high or an old low. It is a very
18:16high probability sequence in the market
18:19which you can get on side with. [cough]
18:23I'm just going to take a sip of water.
18:29The second sequence which we're going to
18:31call a type two continuation is similar
18:33to that of an internal to external range
18:36liquidity. However, it observes candle 3
18:39trading into a relevant low of candle 2.
18:44So in this case, after a true reversal
18:47is defined in the market from a key
18:49level, we see candle 2 expand and then
18:53consolidate forming this wick in here.
18:57The difference between this signature
18:59and that of the previous candle 2 is
19:02that candle 2 does not consolidate to
19:05close its higher time frame close but
19:07instead it is you know retracing forming
19:10this gap right in this case we get
19:13expansion into consolidation which again
19:16we said is a continuation signature. I
19:20want you to quickly recall this slide
19:23here. These are both continuation
19:26signatures. Right? either retracement
19:28into a gap or consolidation following
19:31expansion both support expans or
19:33continuation higher. So this second case
19:37will see us reverse then consolidate and
19:41if price is not going to expand away
19:44from this relevant swing it creates then
19:48we can now expect that price will engage
19:51that key level in the form of external
19:54range liquidity and expand away from it.
19:57So a good rule of thumb is that when
19:59price retraces into maybe a gap for
20:01example and does not expand away that
20:05low or high is going to become a key
20:07level of the market which price can
20:10reverse off of. This is known as
20:12engineering a swing to reverse off of
20:15because we are not going to come back
20:17into the true reversal low. So we
20:19engineer a swing, we order pair that
20:22range and we trade from external to
20:24external on the lower time frame which
20:27is again that model within a model as
20:30expansion towards that higher time frame
20:33objective.
20:35Okay, so here is your summary. This is a
20:37good you know slide and scheme to uh
20:41screenshot here. We are going to have a
20:43universal fractal on the higher time
20:45frame. This is a relevant level that we
20:48will frame a reversal off of whether it
20:50is an external low, an internal range of
20:52liquidity, right? And we are going to be
20:54trading from one relevant level towards
20:57the other side of the range which is
20:58known as our objective. In order to get
21:01to that objective, we will form a
21:03reversal candle. Right? True reversal
21:06logic that we're employing from our
21:08first uh lecture. And then in this
21:11context now of continuation, you are
21:13going to be looking to frame these
21:16sequences. Either candle 3 opens into a
21:19gap in the upper half of candle 2 or
21:22candle 3 opens into an order paired
21:25range or consolidation function of
21:28candle 2. Both of which are going to
21:31support continuation higher. Right? And
21:33those become the universal models of the
21:36lower time frame which we trade. So I've
21:38even given you your alignments here. If
21:41we have a higher time frame, say a daily
21:44candle 2 closure, we are going to look
21:46for this continuation sequence to form
21:49the low of the next day's candle on
21:51potentially the 4 hour. Likewise, you
21:53can extend this logic for the 4 hour and
21:55the 1 hour and it's all fractal. So you
21:57can go look at all of the time frame
21:59alignments I've given you. This is a
22:01generic structure. Candle 3 will open up
22:04generically regardless of the time frame
22:06and form a universal model, right, to
22:09continue as a sequence higher.
22:12So, let's take a look at how we're going
22:14to utilize our Kraken correlation logic,
22:17the same logic I've extensively taught
22:19you to frame the highest probability
22:21continuation sequences of the market.
22:26Okay, let's get into this. What we're
22:28going to do is qualify our swings with
22:31Kraken correlation variance within gaps.
22:34So this this could also apply to order
22:36paired ranges. However, as I previously
22:38mentioned, right, the highest
22:40probability continuation sequence is
22:41your type one IRL to ERL sequence
22:45because this shows you the market has
22:47displaced and created fair value gaps.
22:49In fact, this is the continuation
22:51sequence we're going to focus on for the
22:52rest of the video. So let's take a look
22:55at how we're going to qualify a
22:56continuation swing with a Kraken
22:58correlation. There are three types of
23:02sequences I'm going to teach you. The
23:04first is a Kraken correlation at a key
23:07level, meaning at a gap. So in this
23:10case, we have a true reversal of
23:13correlated assets. This could be the S&P
23:15and the NASDAQ and the Dow, for example,
23:17any triad pair. It could be um gold and
23:20silver. It could be crude oil, harbor
23:22oil and RB. Right? These are any
23:25correlated assets. As we expand away
23:28from a true reversal candle 2, we will
23:32be creating a gap that candle 3 will
23:35open into and form its low like we spoke
23:39about here. This wick is going to be
23:43formed via a Kraken correlation either
23:46at the gap where you can see we form an
23:48SMT to create a swing point. It could
23:51also be formed via a swing point
23:54closure. So if we are not going to
23:57diverge or give a Kraken correlation via
24:00SMT inside of this key level or at this
24:04key level, we may get a Kraken
24:06correlation in the key level itself
24:09where all assets trade into the key
24:11level, the gap and then we see a
24:14divergence in the closure of that swing,
24:17right? That candle to swing essentially
24:19in here. So this is would this would be
24:21where PSP confirms a swing in a gap and
24:25this example would be where SMT confirms
24:28a swing in a gap. We also have a type
24:31three variant where we get a Kraken
24:33correlation at a key level and in a key
24:37level in this case a gap. So we could
24:40see something like this. We have a true
24:42reversal candle 2. We see expansion.
24:46Candle three opens forming an SMT fill,
24:50right? So, an SMT with the gap and a PSP
24:54closure. This would be a twostage
24:57continuation signature. We also have a
25:01si a similar variant where price expands
25:04away from a true reversal and then we
25:06see some form of two-stage SMT in the
25:09gap. Perhaps we get a SMT with a swing
25:13and then we get a consecutive candle
25:15SMT. Again, you guys have learned what
25:18all of these two-stage cracks and
25:21correlation look like from the previous
25:23lecture. So to sum up, when qualifying a
25:27swing formation in candle three or
25:32candle four, we can utilize either one
25:36stage cracks and correlation in gaps or
25:39two-stage cracks and correlation in gaps
25:42to validate the low or the high of the
25:47continuation wick. That is critical. I
25:50need you to understand that in the logic
25:53of a continuation, it is not necessary
25:56to have a two-stage crack and
25:58correlation inside of your key level.
26:00Why is that the case? Because the market
26:03has already formed a swing formation on
26:05the higher time frame denoted by this
26:07true reversal. And the expansion away
26:11from the low confirms the universal
26:15model narrative that we are going from
26:17one relevant level reversing and trading
26:20towards another relevant level which is
26:22our objective. Oftent times we will only
26:26see a one-stage Kraken correlation
26:29either SMT fill or Kraken correlation at
26:32a gap PSP inside the gap and sometimes
26:38indeed we will see that two-stage
26:40signature. However, this is the only way
26:43a continuation is going to form in all
26:45cases. You can write this down, right?
26:47Take a screenshot of this. This is going
26:49to be your high probability sequence.
26:54Okay, so let's take a look at what this
26:56looks like on a higher time frame and
26:59lower time frame schematic. If we have a
27:02higher time frame universal model where
27:04we have a true reversal expansion away
27:08and then we're retracing in candle 3
27:11into a gap, we are going to look for
27:14these variants I just taught you in this
27:16gap. So, if this is the low of the
27:19candle 3 wick, you're going to be
27:20looking for an SMT fill with the gap, a
27:25PSP closure of a lower time frame candle
27:282 in the gap, or a two-stage Kraken
27:32correlation of that candle 2 in the gap.
27:36Okay, one more time. We're reversing on
27:39the higher time frame away from a key
27:41level. Then, candle three opens up into
27:44a fair value gap. So, if we're reversing
27:46maybe on the daily chart, we're opening
27:49up into a gap on the 4 hour or 1 hour.
27:52We're forming some sort of SMT or CIC
27:56signature.
27:58And then what does that look like? What
28:00does this reversal on the lower time
28:03frame look like? The same thing you
28:06learned, right, for reversal signatures,
28:09we're going to see that CISD, right?
28:11gaps being created, the creation of
28:14propulsion blocks, all of that good
28:16stuff. So the only core difference
28:19between trading a candle 2 and a candle
28:23three is the requirement of Kraken
28:26correlation. For a candle three, we are
28:29going to be using fair value gaps. And
28:32in these fair value gaps for candle
28:35three, that's where we're expecting to
28:37form the wicks of these continuation
28:40candles as a continuation sequence that
28:43can either look like type one, type two,
28:46or type three cracks in correlation. You
28:49now have a complete and structured logic
28:52to frame continuations of all universal
28:56models. So if you do not trade the
28:58reversal, you can now trade candle three
29:01towards the draw on liquidity as long as
29:03the draw is still open. This is very
29:06powerful stuff and utilizes the same
29:08logic I've taught you extensively in the
29:11past.
29:12Okay, so now let's jump into some more
29:15complex topics. We're going to be
29:17looking at asset synchronization for
29:19continuations using strength switching
29:21and understanding the highest
29:23probability sequence for asset
29:26synchronization sequences meaning where
29:27one asset trades into a higher low and
29:30another asset has yet to do that.
29:34Okay. So recall right from our first
29:37lecture right this sequence in here
29:40where we see a true reversal we see a
29:43leading asset expand into a key level
29:48and we see the middle asset and lagging
29:50assets in a triad right form divergence.
29:54Now because we are trading away from a
29:58true reversal, we can anticipate that
30:01when price reaches this key level on the
30:05leading asset and if it fails to
30:08reverse, remember those continuation
30:09signatures I taught you, right? It can
30:12consolidate, it can retrace into a gap.
30:15We expect that all assets are actually
30:17going to break that high, right? How do
30:19we get from this very shallow SMT
30:22towards this high? We're trading away
30:24from a true reversal. This asset is not
30:26reversing yet. So, we expect this asset
30:29to get to that high as well. We can look
30:33at some strength switch continuation
30:35signatures to get to this high. And this
30:38is going to be referred to as lagging
30:41asset distributions.
30:44Okay. So, let's put that on a page. We
30:48enter a new phase of price in a key
30:50level. We form this very very deep
30:53premium or discount SMT. And the
30:55question we have for ourselves is how do
30:58we get that middle asset into the high
31:01breaking that SMT? Perhaps we can see
31:03that the lagging asset is quite far away
31:06from the high. So it can form a relevant
31:08swing and reverse. But we need to see
31:11this this middle asset break the SMT. We
31:14can use a algorithm that I will teach
31:17you or it's a sequence that I will teach
31:19you. Okay? And this is going to be
31:22referred to as the ideal sequence. How
31:25do we go from a lagging asset with a
31:29very very shallow SMT to an SMT break?
31:33What does that look like?
31:36It's going to be the strength switch
31:38PSP, also known as the ideal sequence.
31:43So when the leading asset trades into a
31:46key level and we fail to reverse,
31:49remember we must see that failure to
31:52reverse. I don't want to see a V-shaped
31:54signature. I don't want to see
31:56displacement lower on all assets. I
31:59instead want to see this asset form a
32:02continuation or a holding signature,
32:05consolidation or retracement.
32:08This is going to be best captured then
32:11on the middle asset through the ideal
32:13sequence of a strength switch PSP and
32:17SMT fill. So imagine this here is the
32:20leading asset where my cursor is. We are
32:23expanding into the key level and we're
32:25forming that SMT. Then we see a new
32:29phase of price. This could be
32:30consolidation. It could be retracement.
32:33The key is that this leading asset is
32:37forming a down close candle. That is
32:40telling us that the asset which is most
32:43bullish is retracing or consolidating
32:46leaving a gap. Right? While the lagging
32:49asset is bullish trying to catch up to
32:52that high.
32:54Why is the gap here so important guys?
32:57The gap is very important for the ideal
33:00sequence because the gap shows
33:02institutional intentionality
33:04to bring price to that key level on all
33:07assets. So as price forms this strength
33:11switch PSP right first that's the first
33:15part of this sequence. We then wait for
33:18an SMT sequence inside of the gap to
33:22trade the lagging asset towards that
33:24same key level. Okay, so this is going
33:28to be a variant right of continuation
33:30that is two-stage. It's going to be
33:32first a strength switching PSP which I
33:35taught you in part one. The second is
33:38going to be confirming a continuation
33:41via a SMT fill. And this could see the
33:45the uplose candle form an SMT in the gap
33:48or the down close candle. That's not
33:50relevant. What is most relevant is
33:52seeing the leading asset, right, switch
33:55strengths momentarily to be weaker while
33:58the lagging asset catches up to break
34:01that SMT and trade into that key level.
34:04That is what we're going to refer to
34:06from now on as the ideal sequence, a
34:08strength switch PSP and an SMT fill.
34:12So, let's put this on a page and have
34:14something for you to take notes on that
34:16you can carry forward into your studies.
34:18Why is this the ideal sequence? A
34:20strength switch PSP tells us that we can
34:22expect a new phase of price and we're
34:24failing to manipulate from that key
34:27level. Recall that a PSP is a crack in
34:30the correlation between assets. Okay?
34:34It's a crack in the correlation of phase
34:36of price. So once we create the gap and
34:40we have this strength switch PSP, a fair
34:44value gap is indicating that price on
34:46the lagging asset wants to expand into
34:49the key level as well. Once we see SMT
34:52in that gap, we can now form a swing
34:55formation. Right? We're validating a
34:58swing formation for continuation via a
35:01Kraken correlation. We then trade that
35:04lower time frame universal model of
35:06internal to external. This was taught to
35:08you by Garrett GXT as the universal
35:11continuation sequence on his YouTube and
35:13it's a fantastic video to watch in
35:15parallel with this. So when we see this
35:18sequence, specifically when we see a
35:19leading asset fail to manipulate a key
35:21level, this is how I will often trade a
35:25lagging asset distribution into that
35:27same key level, also known as SMT
35:31breaking. Okay, very important concept,
35:34very simple once you can train your eye
35:36to see it and exceptionally uh powerful,
35:40right? When you are framing your
35:42continuations of lagging assets.
35:45Okay, let's utilize some ranges now to
35:48filter our gaps because what we've done
35:50so far is we've recognized that gaps are
35:52the ideal location to frame continuation
35:55sequences. So now let's talk about how
35:57we can utilize premium and discount to
36:00actually filter gaps in continuation.
36:04The first filter is going to be the
36:06current candles premium and discount
36:08range. What we're going to be doing is
36:10drawing a standard uh premium discount
36:13from the low of candle 3 to the high of
36:17candle 3, right? As it is created,
36:19right, as we are expanding. And we want
36:21to understand that our stop loss is
36:23going to be best positioned in a
36:26discount of this candle that is
36:28expanding. Okay, that is to say if we
36:32start forming continuation sequences up
36:35here in candle 3, maybe we get a gap
36:37fill sequence in the upper, you know,
36:40quarter of candle 3. We don't want to be
36:43putting our stop loss right in this
36:45premium market. It is instead better to
36:48enter and position ourselves in a
36:51discount of this candle before it
36:53expands because that is where a relevant
36:56swing will form.
36:58Likewise, we can also apply this logic
37:00to the higher time frame dealing range.
37:03If we have an area of smart money
37:05reversal and we have a terminus, which
37:08is the other side of the dealing range,
37:10we want to be trading with that higher
37:12time frame premium and discount in mind
37:14as well. That is to say, when we are in
37:18a discount of the higher time frame
37:20dealing range, that is a very good entry
37:22and location for our stop loss. If we
37:25are in a deep premium for this higher
37:27time frame dealing range and perhaps a
37:29deep premium of this candle three
37:32itself, that is where we have to be very
37:34picky and demand more swing
37:36confirmations. Perhaps a new dealing
37:39range in and of itself would be ideal.
37:42Okay, so I'm going to put this on the
37:44chart here, right on the screen, uh,
37:46with a schematic. When we are below EQ,
37:49right, of this higher time frame dealing
37:51range, the implied dealing range, these
37:53are going to be valid gaps. We're
37:55expecting that gaps that form
37:57intermediate term lows, right, relevant
38:00lows in continuation are going to hold.
38:03These lows are going to hold as we get
38:05higher and higher in the range. We might
38:07not see these swings created in gaps
38:11with the sequences I taught you hold.
38:13So, we need to be more picky when we get
38:15into deep premium or discount.
38:19Okay, here's how you can see that.
38:20Right, when we have a higher time frame
38:23dealing range that we're working on and
38:24we're in discount, we can take these
38:26gaps, right? Whether this gap is going
38:28to be in EQ or above EQ of the current
38:32expansion, this gap should hold if we
38:35are in a higher time frame expansion in
38:37candle 3. Right? If we are in premium of
38:42that higher time frame, we don't want to
38:45be longing gaps essentially near the
38:47high of the candle because the high of
38:49the candle, which is this range in here,
38:52while in an implied dealing range that
38:54is premium, right, that is not a
38:56relevant swing that's created. Instead,
38:59we will need to see price retrace into
39:02discount of that higher time frame
39:04candle. So what we're doing guys here is
39:07we're just blending the first two
39:09filters. When we are in right premium
39:12discount of this higher time frame
39:14candle and when we are in premium
39:16discount of this higher time frame range
39:17we have some conditions. If we are below
39:22uh equilibrium for the higher time frame
39:24range any gap is okay. We can take those
39:26gaps because generally speaking
39:27generally speaking of course you're
39:29always going to take losses and that's
39:30completely normal. These gaps should
39:32hold even in premium because the market
39:34is expanding away right from a reversal
39:37a true reversal candle two. As we get
39:40into premium of that higher time frame
39:42range, we want to be ensuring that the
39:44lower time frame right that current
39:46candles dealing range is supporting a
39:48swing formation with a valid gap. Again,
39:52small nuance there. Go back test it.
39:54It's very powerful. It'll stop you from
39:56longing or shorting high or low of
39:58expansion candles in many cases. and it
40:01will keep you on side far more often.
40:04Okay, I have the key takeaways here.
40:06When price is below 50%, it's in a
40:08discounted market. We don't necessarily
40:10need a discounted gap, although it's
40:12nice, right? We can form valid
40:14continuation sequences because we should
40:16be expanding away from a discounted
40:18market. When we are in a premium market
40:21of our implied dealing range, we really
40:23do want a swing to form in a discounted
40:26gap of the current candles range. Right?
40:30That is where we use this filter of the
40:33current candle to make sure that we are
40:35getting on side right in a valid
40:37continuation sequence that's not going
40:39to have an unprotected stop or a
40:41relevant swing.
40:44Okay, last concept we need to go through
40:46then before we get into a couple of
40:47examples is an advanced premium and
40:49discount sequence. Now, I have a
40:50complete lecture on this on my YouTube,
40:52but we're also going to be using APD
40:54sequences to qualify if SMTs will hold
40:57in continuation.
40:59So, let's take a look at what the
41:01leading asset, right, or the most
41:03bullish asset, for example, in a
41:06expansion for continuation looks like.
41:08We see we have a defined dealing range
41:11from the true reversal right to the high
41:14and we see price is retracing into a
41:17fair value gap. This is expansion
41:20retracement expansion. What we'll often
41:23see on the lagging asset is something
41:26quite uh opposite. We'll see that we
41:28created a high and the SMT that forms
41:31actually takes out the range low. That's
41:34how we qualify the SMT. So in this case
41:38for the lagging asset you're often going
41:39to see expansion met with expansion and
41:41order paired ranges. This on one chart
41:44looks like this. How can we qualify that
41:48a gap is going to hold when we have
41:50markets that you know form such uh
41:53drastic swing point uh variations where
41:55they form the swing. We use this
41:58sequence if we see the leading asset
42:02right trade into a gap in continuation.
42:04This is in candle three and that gap
42:07right is in the upper half or near EQ of
42:10the dealing range. we can trust that SMT
42:14right to hold meaning that's a very high
42:17probability SMT even if right the
42:20lagging asset takes out the range low
42:22and then order pairs it to reverse this
42:25premium and discount sequence is using
42:28fair value gaps near EQ to filter right
42:33SMT if this SMT forms far lower in the
42:39range down here for example without a
42:42fair value gap supporting price, I am
42:44less likely to trust that SMT. And I
42:47talk about that in depth in my APD
42:49lecture. But essentially, what we're
42:51going to be using as a continuation
42:53logic is the idea of gaps near EQ. Okay.
42:58So, that concludes kind of the lecture
43:00component of this um master class. Let's
43:03hop into some chart examples. And I'm
43:05only going to do a few because I don't
43:06want this to go too long. Um, I'm going
43:08to do a couple back testing sessions and
43:09whatnot, um, in my server and probably
43:11maybe on YouTube. So, I'll keep this
43:13rather short so you guys can digest this
43:15content in a reasonable period of time.
43:17Let's get right into some examples.
43:19Okay, so we're going to start here with
43:21an example on the daily. This is going
43:24to be a true reversal example looking at
43:26continuations off of a true reversal and
43:29also incorporating some lagging asset
43:31dynamics. So from this example, you're
43:33going to learn about one, how to
43:35identify the true reversal, two, how to
43:37trade continuations after that true
43:39reversal forms, and then three, how to
43:42incorporate that strength switch PSP
43:45plus SMT fill, which you learned as the
43:47ideal, right, sequence for um lagging
43:51asset distributions. So you're going to
43:52get a lot out of this example. Let's go
43:54through it. So let's start off by
43:56looking at this daily chart. And I've
43:57already annotated some things here just
43:59to make it a bit faster. As you can see
44:01here, we form a true reversal on this
44:04high. Why is this Wednesday high a true
44:07reversal? Well, for those of you who
44:09watched my last YouTube video, right,
44:11you can see that we're using a PSP
44:15to confirm an SMT. So, this candle
44:19closing as a precision swing point like
44:21this, right, is going to confirm that
44:26this high will hold in the market. What
44:29else can you notice, guys? As I just
44:30talked to you about it, we have an
44:32advanced premium and discount sequence.
44:34Look, we can confirm that this SMT is
44:38going to hold via a advanced premium and
44:42discount sequence. We see this asset
44:45NASDAQ trading into a fair value gap.
44:49Okay?
44:51Where we're getting that divergence is
44:53inside of this gap. Look, the S&P is
44:57diverging with NASDAQ in the gap. Okay,
45:00that's how we can trust that this high
45:02will hold. And then we see we have that
45:05PSP confirms SMT. That is going to be
45:09your true reversal. If this logic is not
45:12consistent for you, you have to go and
45:14watch my first lecture of this master
45:16class on identifying true reversals. So
45:18now that we've defined the true
45:20reversal, how are we going to qualify
45:22that this swing will hold? We want to
45:24see expansion away from it. So let's go
45:27down to our lower time frame model. And
45:28again the universal model we're trading
45:30here is external to external right
45:33external high to external low. That is
45:35our order paired range.
45:39So you can see we have the next day
45:42opening up right after the reversal is
45:44confirmed. So the reversal on Wednesday.
45:46Look at Thursday's open right here.
45:51Right here 1,800. What do we notice
45:53about Thursday's open guys? Well, what
45:56confirmed the reversal here? A gap.
45:59Notice how this leading asset to the
46:02downside, right? The weakest asset
46:04prints this fair value gap. Okay, very
46:08important. That's how we are going to
46:10confirm reversals have taken place is
46:13gaps guys. Right now look at YM. YM is
46:16yet to reverse. YM is still quite
46:18strong. Right? Again, I'm going to
46:20delete this PSP. The daily chart,
46:22remember, has that PSP closure on the
46:25previous day up here. So, how can we
46:28trade this? Well, we look for our
46:30continuation sequence on the daily.
46:32Look, so we have the asset reversing,
46:35printing a gap. What are we going to use
46:37for our invalidation? Let's go through
46:39this in order. We're going to use the
46:41upper half of this candle. Okay, look at
46:45this. We want to see a gap form near EQ.
46:48Well, look how beautiful that is.
46:50There's a gap right at EQ, right? Right.
46:52R right in that premium market. So, what
46:54do we see price do? We need to see that
46:57sort of SMT or Kraken correlation
47:00variant I taught you.
47:02Look at this right in here.
47:06Price comes into these highs, we form a
47:08swing, we sweep out that high right in
47:10here.
47:12Okay, we sweep out that high and we can
47:16drop down another time frame to see if
47:17there's any uh lower time frame crack
47:19and correlation in the gap.
47:22So, let me drop down to the hour
47:23potentially and see if I can frame any
47:26sort of crack in correlation.
47:29Now, in this case, what I can see
47:30clearly here is that this actually
47:32doesn't give me a great reversal from
47:34the gap. This is where I probably would
47:35sit out the session. Why? Because I
47:38don't actually see any cracking
47:40correlation. Look, the hourly here is
47:41not a PSP. There's no SMT. This is equal
47:45highs. So, you can see price is
47:47reversing from equal highs. So, I would
47:50not trade this 4hour candle. Instead, I
47:52would let this 4hour candle expand away
47:55from the gap, right? And look to trade
47:57some sort of continuation, right? The
47:58logic is fractal. So again, if I have a
48:00reversal inside this gap away from the
48:02daily true reversal, look at the next
48:05session which is going to open here at 6
48:07a.m.
48:11If I don't trust my high of day, right,
48:13if I don't trust the reversal, I just
48:14allow a gap to form. Remember, so the
48:17logic is quite simple. We're going to
48:19wait for a gap to form. So now 6 a.m.
48:21opens. Let's go to the previous 4hour
48:23candle and use our filter again, guys.
48:25Where do we want to see a gap form?
48:27This is going to be the reversal candle
48:29even though we don't trust it, right? We
48:31don't love this reversal equal highs.
48:36So, we won't trade it. I won't trade
48:38this 4hour candle. But because we've
48:40expanded away from this high, right? And
48:43we're in continuation on the daily time
48:45frame. I can now apply that same logic
48:48inside of this 6 a.m. candle and look
48:50for a gap. So, what's the lower time
48:52frame to the 4 hour? Let's look for a
48:5330-minute gap or an hourly gap.
48:57And let's look for our sequence.
48:59Okay, so 6 a.m. opens right in here.
49:04We're opening up into a discount, right?
49:07Or a premium market. Sorry, my
49:08apologies. And I do indeed see we have
49:11this very nice fair value gap on the
49:1330-minut chart. Maybe on the hourly it's
49:15even cleaner.
49:17Uh no, I actually see the fair value gap
49:19much cleaner on the 30-minut chart we're
49:21trading into. So look at this. Here is
49:23my key level
49:26in the upper half of the previous
49:27candle. Right now what am I looking for?
49:31Some sort of SMT or Kraken correlation.
49:34So all assets trade into the gap. So
49:36we're not going to get an SMT guys with
49:38the gap itself. If we do not get SMT
49:41with the gap, we are going to get SMT
49:44via a swing formation. That's going to
49:46be either a two-stage with swings in the
49:49gap or it's going to be a PSP. And as
49:52you can see right in here, what do we
49:54get?
49:57We have
49:59this divergence right in here,
50:04I believe.
50:08No, we actually don't. Okay, so we don't
50:10we don't see any divergence inside this
50:12gap. Sorry, my apologies. I thought
50:13there was a a PSP in here, but there
50:15isn't. This is actually a down close
50:16candle. So again, I wouldn't trade this
50:19gap in particular. There is no crack in
50:21correlation unless I can find an example
50:24uh on a different time frame that shows
50:25me that signature I will not trade it
50:27and you can see this is consolidating
50:29for the most part right
50:32let's see if we form nope we formed so
50:33we formed no uh cracking correlations at
50:35that gap so again I would let that print
50:37guys and again I would look to trade
50:38that same logic right away from that gap
50:40as we traded lower
50:43so let's go back
50:46okay so we're trading lower again I
50:47don't see any cracking correlation I
50:49like in here That's not a problem.
50:51Instead, I look to see if there's any
50:52continuation formed near the open. So,
50:54we're still in the 6-hour candle. Okay,
50:56I'm going to keep doing these
50:57invalidations for you to make it extra
50:59clear. We're in this 4hour candle.
51:04The wick that was formed in this 4hour
51:06candle, right, I didn't like. Why? I
51:10didn't see a continuation signature that
51:12I could get on side with. So, I wait for
51:15for a continuation signature to form
51:16that I do like.
51:19Okay, look at this one, guys. I like
51:21this one a lot. So, let's mark out our
51:23draw on liquidity. First of all, we want
51:25to trade into maybe this new week
51:29opening gap here.
51:32Okay, look what happens at 9:30. Here's
51:35a signature I can get behind. So as we
51:38are expanding right here for example, I
51:42want to look for a gap in the upper half
51:45of this 4hour candle to trade a
51:47continuation away from. Look, look at
51:49the 4 hour. We have a reversal up here
51:51and this is the candle three. So I need
51:54a gap.
51:56Well, what do I see in here into the
51:58open? We are printing this 30 minute
52:00fair value gap in EQ. Right? Keep that
52:03invalidation in your mind as you
52:05continue. right? Two, take these trades
52:08and at least structure this logic in
52:10your trading.
52:12Now look, look at what happens right at
52:14the open.
52:18We see YM right at 9:30 open into this
52:23refined key level. This gap there is
52:26your one stage SMT
52:30fill. Now, what I need to see is this
52:33asset give me a Vshape and I can trade
52:35it lower. So, as long as I see Vshapes,
52:38I don't need to see anything else. Look
52:39at this. Right on open. 9:30 manipulates
52:42into the high. I see NASDAQ changing
52:44delivery state here.
52:47Let's see if the fiveminute gives me a
52:48single candle. There we go. Boom. Right.
52:51That's a valid entry.
52:55Cover here and I can get at least two R
52:57to my low. Right. I don't mind taking
52:59this down down here if I can get two R.
53:02So, demand two RR and that's all I need
53:03to see, right? I'm waiting for a
53:05fiveminute closure or you can take it a
53:06bit earlier on the three-minute closure.
53:08It's up to you. You can take it here or
53:09on the five-minute closure. It's
53:10completely up to you. Again, the logic
53:12is that this swing has expanded away
53:15from this gap and continuation right in
53:17premium. It should now continue the 4our
53:20candle that we're trading, which is
53:22right here.
53:25This 4hour candle that you're trading,
53:27right? You can see it right here
53:30is an expansion guys, right? Look, it's
53:33an expansion. It's a continuation from
53:35this high. So that gap should hold and
53:38we should be able to see price deliver
53:40now to this draw, right? So you can see
53:42price expands into the low. Perfect. So
53:45it's a very clear example of how you can
53:47trade that continuation framework,
53:49right? Utilizing a one-stage CIC which
53:53is known as SMT fill. Now, let's take a
53:56look at another example, okay,
54:00from the same week. We're going to look
54:02at a couple other continuation examples
54:04and signatures.
54:07I'm doing this live last time because
54:08there's some feedback you guys gave me
54:09on the last lecture that's better if I
54:11work through a chart. So, I'm doing that
54:13as opposed to having the slides. Let me
54:15know if you guys enjoyed that or you
54:17guys prefer the slides. I'm very
54:18flexible. So this day we can see
54:23expands into this low. Okay, it expands
54:28into this low down here which is that
54:30weekly open. Now look at the next day.
54:32Okay, again we are now reaching a key
54:35level of the market. What is that key
54:37level? Well, you can see it's the weekly
54:40open. It was this fair value gap here on
54:44the Dow. So the next day we can see what
54:46happens.
54:48Look, NASDAQ expands all the way into
54:51the low. You can see that. And what do
54:52we form here? Hm. A precision swing
54:55point. Now, what did we talk about in
54:57the lecture slides, guys? If I went back
55:00to lecture slides right now and I pulled
55:02up this slide right here,
55:06the ideal sequence slide, right? How do
55:11we trade SMT break? We see a key level.
55:15We see a PSP and then we see an SMT
55:18fill. Well, look at this. We trade away
55:20from this reversal. ERL to ERL. Now
55:24price is forming this strength switch.
55:26Look at YM. YM's clearly weaker on this
55:29day. So now we print a new invalidation,
55:33right? Let's look at that invalidation,
55:35guys. We have that implied dealing
55:37range.
55:39Look at where this gap is forming near
55:41EQ, right? like we talked about. Now we
55:44have a chance to form an ideal sequence
55:47to continue lower. This is exactly
55:49what's going to happen. Look, the ES is
55:51leaving failure swings. Now, why don't
55:54we trust this SMT to hold? Why wouldn't
55:57the market reverse, right? What do we
55:59say in the advanced premium and
56:00discount? Look, ES if it was going to
56:03hold that low and not break it, would
56:05not form a divergence, guys, like this.
56:08It would form a divergence in this gap,
56:11right? This is way too deep in the range
56:13and we trade through the gap. So, we're
56:15now looking for SMT break logic. Why?
56:18NASDAQ still has failure swings as well.
56:21Right? Look, these are this is the
56:24relevant swing. These are relevant
56:25swings. Okay? So, look at the next day.
56:28Boom. Look at the logic, guys. We get
56:31that beautiful ideal sequence that I've
56:34taught you now. Okay? So, you're seeing
56:36this verbatim, right? the ideal sequence
56:39is how we get SMT breaks in the market.
56:42So this two-stage sequence, look at how
56:45it unfolds and look at how you can trade
56:47this day. So once we see that two-stage,
56:50right, it happens right in here.
56:52We form a reversal at 2 a.m. This is
56:55going to be in the let me get rid of
56:57this.
56:59This is going to be in the London
57:01session. I will do a future video, guys,
57:03on profiling, protraction profiling to
57:05be specific. Um, you'll see the vast
57:07majority of traders these days
57:08incorporate some sort of 4hour or
57:10protraction profiling logic in their
57:12trading. So, it's very powerful logic
57:13and I'll do a complete video on it in
57:15the future. You can see we form a
57:17reversal here. True reversal of the
57:20daily range at 2 a.m. Look at the daily
57:21candle. The wick in here is a true
57:24reversal inside of this gap which is a
57:27continuation on the daily. Now, what do
57:29I want to do? Trade towards this low,
57:32right? How am I going to qualify that
57:33this wick is going to hold? Well, we're
57:36going to see displacement, right?
57:39I'm not going to show you the exact
57:40entries. Look, you can see we expand
57:42away, right? It's a bit choppy this day.
57:45You can see we expand away. We have a
57:47clear invalidation, which is going to be
57:49a gap again. It's a little bit choppy.
57:53We have a gap in here, right? We have
57:56gaps in here on the S&P and we have gaps
57:59on NASDAQ. We're expanding away in all
58:02markets. Then you can see right at 9:00
58:05a.m. we get an SMT fill, right? We get
58:08that variant in here.
58:12Boom. And then of course it's a bit
58:14choppy, but that becomes a predicted
58:15high, right? We wait for a V-shaped
58:17signature and price expands away hitting
58:19that draw. The most important thing I
58:21want to emphasize for you is that this
58:23sequence in here is very high probable.
58:26This ideal sequence two-stage PSP. Okay.
58:30So this example here has taught you how
58:32to identify a reversal then filter your
58:35gaps right using premium discounts
58:38waiting for those sequences to form and
58:40then trading right gap continuations and
58:43you can see this is a fractal concept
58:45guys right look right here
58:49in here you can see what does price
58:51trade into in the afternoon session. So
58:52again, we expand away here, right? Look
58:55at this. We expand here at 12:30 at this
58:57new 90-minute open. Now, I missed the
59:00expansion. I missed the reversal up
59:02here. What do I have? I have a gap. So,
59:06what can I wait for a sequence? Look,
59:08I'm trying to get to the low. Look at my
59:10draw on liquidity. I'm going to make
59:11this really nice and big for us. I'm
59:14trying to get to this low. This is my
59:15lagging asset draw right in here. Say
59:18you don't get in right up here with this
59:20SMT fill. That's fine. You don't need
59:21to, right? How are you going to get
59:23involved? Look at this candle.
59:26This candle here reverses. Then we have
59:28this like this is C2. This C3 really
59:31just consolidates, right? So, how are we
59:33going to get involved in C4, right? How
59:35are we going to get involved to these
59:36lows? We're going to wait for a gap,
59:37guys. You're going to be able to see it.
59:39We're printing, right? A reversal up
59:42here.
59:44And you don't have to trade that
59:46reversal as this reversal forms, which
59:49by the way, you're going to be able to
59:50see is the same logic I taught you in
59:52the reversal vit lecture, right? PSP,
59:55SMT, this is a true reversal on the
59:59lower time frame up in here, right?
1:00:03You guys know it. You guys are experts
1:00:04at this logic by now. I'm going to
1:00:07convince you today. You don't need to
1:00:08trade this true reversal up in here,
1:00:10right? This SMT plus PSP. Wait for a
1:00:12gap.
1:00:14As long as the gap is supported via the
1:00:18range.
1:00:19Look at the range. Perfect. This gap is
1:00:21in discounts where you want your stop
1:00:22loss to go. Look at the implied dealing
1:00:24range. Here is the reversal. Here is
1:00:27your draw. We're our stop loss is very
1:00:29safe up here. Right now look, wait for a
1:00:32gap. Wait for the divergence in the gap
1:00:36which is right here. Wait for a change
1:00:38in the state of delivery.
1:00:45And as long as your entry gives you 2 R.
1:00:47Let's look at the fivem minute. Might be
1:00:48a better close here. Yeah, perfect. As
1:00:50long as your entry gives you 2 R, take
1:00:53it. Cover the high. That's the SMT fill
1:00:57on the 30 minute that we just talked
1:00:58about away from the reversal, right? And
1:01:01you can get all the way down to your
1:01:03draws. There really is no higher
1:01:05probability sequences, guys, than than
1:01:07the ones I'm showing you here. This is
1:01:09how you tread continuation, right? Like
1:01:11I I've traded a lot of reversals in my
1:01:13life and I like trading reversals and a
1:01:15lot of my students do. However,
1:01:17continuations are highest probability
1:01:19because you're confirming displacement
1:01:21via gaps and those gaps are just
1:01:23extremely um good formations of lower
1:01:26time frame relevant levels, right?
1:01:28You're going from a
1:01:30protected swing,
1:01:34right, which is going to be a true
1:01:35reversal and then you're forming a
1:01:37relevant swing,
1:01:40right? as in a gap and it's very high
1:01:42probability. Essentially, you're going
1:01:44from a universal model that looks like
1:01:46this,
1:01:49right? You're going from external
1:01:53to external
1:01:55and you're getting involved in this
1:01:57redistribution. You're allowing the true
1:02:00reversal to form and you're trading that
1:02:03redistribution. Right? If we go back to
1:02:05our lecture slides, you're going to see
1:02:06where you're positioning yourself in
1:02:08market maker models. You're positioning
1:02:10yourself inside of this redistribution
1:02:12away from the true reversal. Right?
1:02:14Remember, market maker models are swing
1:02:17points, right?
1:02:19Market maker models are swing points and
1:02:21swing point formations and we're
1:02:23distributing from internal ranges of
1:02:25liquidity or universal models, right?
1:02:28This is your model within a model. It's
1:02:30just very very high probability logic,
1:02:33right? The model within a model. It's
1:02:34this IRL to erl inside of the higher
1:02:37time frame. Okay, so that's example one.
1:02:40I have another example for you guys as
1:02:42well.
1:02:46Let's pull it up right here.
1:02:49Okay, this is going to be about a new
1:02:51phase of price. Specifically looking at
1:02:53when to anticipate new phases of price
1:02:56and not trade continuation. Okay, this
1:02:58one's a very important example that we
1:03:00talked about in the lecture slides as
1:03:01well. So look at this example here.
1:03:03Okay, invalidations in new phases of
1:03:05price. Look at this day.
1:03:09What are we doing? So, we come in,
1:03:13right? This is actually uh a couple days
1:03:14ago. This on Thursday. I traded this
1:03:16actually. I have a full recap on my
1:03:17Twitter. Right. We have this low down
1:03:18here on NASDAQ. And we also have these
1:03:21lows. Okay. These are all relevant
1:03:23swings in the market. Why are they
1:03:24relevant? We'll look at the space
1:03:26between these, right? This is a
1:03:29expansion away from a consolidation,
1:03:32right? Uh sorry, a consolidation away
1:03:34from an expansion. So price can order by
1:03:35this low and then expand, right? It
1:03:37doesn't need to come into here. It's a
1:03:38relevant swing. And I'll talk about I'll
1:03:40definitely teach you guys a bit more
1:03:41about that in a future lecture for sure.
1:03:44It's a lot to go over there. Um, but you
1:03:46can see on this day what happens? Well,
1:03:50look at the 4hour chart. Price trades
1:03:52into this key level right in here. And
1:03:56you might be asking yourself, right?
1:03:58Like, okay, well market wants to
1:03:59continue lower. There's more draws on
1:04:00NASDAQ. Maybe we want to come into these
1:04:02lows down here.
1:04:04Can I take a continuation? Right, let's
1:04:06first of all do the top down approach.
1:04:08Let's frame our true reversal. Look at
1:04:10the daily candle.
1:04:13Okay, what are we seeing? We're seeing
1:04:16this very very nice sequence of
1:04:18continuation, right? So, we have this um
1:04:21I think we have a PSP on the weekly
1:04:23here, but you can see this candle here
1:04:24opens
1:04:26at 1800 and clearly we're expanding away
1:04:29from the open. So, we're going to be
1:04:30looking for trade continuation right
1:04:31into the New York session which we
1:04:32traded,
1:04:36right? What makes this a true reversal
1:04:38at the high? Well, we have that very
1:04:40nice logic that we talked about, right?
1:04:42It's going to be that SMT, right? You
1:04:47can see that we have this SMT right in
1:04:48here with this previous uh high, right?
1:04:51So, right at this 4hour candle. Let's go
1:04:53to the hourly. Define that quickly.
1:04:59Very nice. Right. So price trades into
1:05:01the key level which is that 4hour high
1:05:03right here. We form a PSP. Again, this
1:05:06is the true reversal logic. Remember we
1:05:08talked about this in our last lecture.
1:05:09We need a two-stage. We form a PSP above
1:05:11that 4hour high and then we form a
1:05:13two-stage PSP. Okay. So this is your
1:05:16true reversal. Notice how NASDAQ forms
1:05:19the PSP and then it forms an SMT with
1:05:21that PSP. So we don't have right user
1:05:25that high. That's a true reversal. Now
1:05:26look, we expand all the way into this
1:05:29low. And the trade I took was actually a
1:05:31continuation, right? How do I trade
1:05:33continuation guys? Really simple, right?
1:05:36We have a true reversal identified. I
1:05:38have a draw on liquidity. Look at this.
1:05:40Look at this low that NASDAQ has taken
1:05:42out. Once I identify which assets my
1:05:45lagging asset, now I wait for a
1:05:46continuation signature, right?
1:05:50Oh, look at this. A very high
1:05:53probability continuation signature for
1:05:55the lagging asset is going to be the SMT
1:05:59fill. Right? Do you see this? Whoops.
1:06:01Sorry, I should make this imbalance.
1:06:04Okay, we have this SMT fill of this gap.
1:06:07So, this asset which is lowest in the
1:06:09range, right? Comes up forms SMT right
1:06:13at the open. Okay, right at the open.
1:06:15You can see that. And you can also see
1:06:18why is it even more high probability?
1:06:21It's a
1:06:23ideal sequence, right? This is a PSP
1:06:26which is a upclose candle. This is a PSP
1:06:30which is a downlo candle. Remember this
1:06:32asset comes into the key level forms the
1:06:34PSP here. It's a crack in the
1:06:37correlation of the phase of price. So
1:06:39this is going to be reaccumulating
1:06:42while this does what? Dist distributes
1:06:46specifically lagging asset distribute
1:06:49which is we know as our ideal sequence.
1:06:53I've taught it to you. It's SMT fill
1:06:55plus PSP that forms your two-stage PSP
1:06:59continuation. Right? It's really
1:07:01mechanical. It's going to happen all the
1:07:02time. It happens on the daily. Here it's
1:07:04happening on the 30-inut chart or the
1:07:05hourly, right? And then of course that
1:07:07was a trade I took. You can see price
1:07:09expands into the low. Very nice. Now,
1:07:12the next question I have for you is
1:07:15okay. Well, price expands into the low.
1:07:16What should we anticipate at this low?
1:07:19It's a new phase of price like I talked
1:07:21about in the lecture, right? Um, we need
1:07:23to expect a new phase of price here. So,
1:07:26we don't want to be shorting a
1:07:27continuation sequence in this candle.
1:07:30Look at premium discount.
1:07:33We're going to print a gap. Of course,
1:07:35we are. Look, we have a gap in here.
1:07:37Maybe we'll form some sort of SMT
1:07:39sequence in here, right?
1:07:42Let's let's look at let's look at the
1:07:4350-minute chart and see because I know a
1:07:45couple of my students actually took this
1:07:46trade and they asked me why did this
1:07:48fail. So, [snorts] look, we have a gap
1:07:51right in here. Where is it? Right in
1:07:53here.
1:07:55We have a gap and it's in right this
1:07:58premium which is what we expect to hold.
1:08:00So, we see okay, we trade into this gap,
1:08:03right? It's in premium. I'm just going
1:08:04to keep this off to the side like this
1:08:05guys. Why does this swing point fail?
1:08:10Why don't we continue lower? There's
1:08:12still more draws, right? NASDAQ has this
1:08:13draw. Well, look, price comes in to a
1:08:17significant level. We're anticipating a
1:08:20new phase of price. We don't want to
1:08:23trade this SMT fill sequence, right,
1:08:27which is right in here.
1:08:30We don't want to trade this SMT sequence
1:08:35here. That's a bad SMT sequence to
1:08:39trade. It's not bad, just lower
1:08:40probability. You can see price runs a
1:08:43low barely, but then it reverses because
1:08:45look, the 4hour candle is entering a new
1:08:49phase of price at a key level. So, this
1:08:51example here is really to validate why
1:08:53you need to be considering ranges and
1:08:56key levels in your analysis. Now, I
1:08:58agree that we should be trading lower.
1:09:00So, we wait for it. This 4hour candle is
1:09:03going to expand lower after a new phase
1:09:05of price. Wait for that new phase of
1:09:07price and then wait for what?
1:09:11Ding ding ding. A gap, right? Okay. So,
1:09:13I'm kind of beating it dead, but you're
1:09:14going to be able to see it here, guys.
1:09:15Right? Look, we form a new phase of
1:09:18price. We form a gap right in here.
1:09:21Right? Look, do you see? We come into
1:09:24the gap. We form lower time frame. You
1:09:27guys can go into your charts, look at
1:09:28the lower time from SMT sequence we
1:09:30forming on the 50-minute chart and then
1:09:32we deliver to the low. Okay, so again
1:09:34continuation away from a gap, new phase
1:09:36of price. Also, it's in support of what?
1:09:39This new 4hour candle right here,
1:09:44right? This new 4hour candle and this
1:09:46new six-hour candle here at 12, right?
1:09:48I'll talk I'll also teach you guys a lot
1:09:50more about quarterly theory. Um, I have
1:09:52a couple I have a couple ideas I want to
1:09:53share with you and a lecture I want to
1:09:54share. But you can see the six-hour
1:09:56candle after a new phase of price is
1:09:58opening up into a what a gap on the 90
1:10:00minute and boom, we get that sequence.
1:10:02Okay, so that's an example of new phase
1:10:04of price and using that as an
1:10:07invalidation for continuation.
1:10:10You don't want to short after a key
1:10:14level, for example. Okay.
1:10:17All right. I'm going to do one last
1:10:19example which is going to be an advanced
1:10:20premium discount sequence. Hopefully my
1:10:22laptop stays alive for this, right? If
1:10:24not, then I'll have to end the video and
1:10:26we'll have to do another video on this.
1:10:28But look very shortly, right? This is
1:10:30going to be about advanced premium
1:10:31discount and asset sync. Pay attention
1:10:33to this 6 a.m. candle. As you can see,
1:10:35this 6 a.m. candle is forming that logic
1:10:38I taught you in the first lecture. This
1:10:40is going to be foreseen distribution on
1:10:43ES to where this 4hour low. Okay, what
1:10:48is why I'm doing? It's inforeseen
1:10:50manipulation. Again, if these words are
1:10:52unclear to you, please go watch my last
1:10:54video, guys. Um, we can blend the logic
1:10:56now. Right. So, [snorts] now what we
1:10:57want to do is we want to qualify that
1:10:59this two-stage PSP that forms right here
1:11:03like this. Want to qualify that this
1:11:05two-stage PSP is going to hold, right?
1:11:08And we're actually going to be
1:11:09delivering. How do we know that this
1:11:10asset's manipulating, this asset's
1:11:11expanding, and this is the true
1:11:13direction? Well, we look for a gap,
1:11:15right?
1:11:17And we're going to use that advanced
1:11:18premium and discount sequence. So look
1:11:20at this wick which is in continuation on
1:11:22the S&P 500. You can see what are we
1:11:25doing? We're opening up into a gap.
1:11:30Okay, small still relevant. This is a
1:11:34gap, right? That's an advanced premium
1:11:36and discount sequence like this. Boom.
1:11:39That's how we know that this SMT is
1:11:41going to hold. Okay. And perhaps I could
1:11:43even go down one more time frame and
1:11:45show you something like this even
1:11:46better. Okay, we have this range. Okay,
1:11:49now look ES on open when we get that
1:11:53that um big difference right that move.
1:11:56You can see the S&P is opening up into
1:11:59this gap. This is a gap. You can look at
1:12:01the NASDAQ. It's going to be a gap.
1:12:03Ah, you see we're opening up and forming
1:12:06SMT fill in this gap. Okay, up here.
1:12:11That's how we know, right? Look how
1:12:14NASDAQ doesn't trade into that high, but
1:12:16the ES does.
1:12:20That's how we know, right? This up here.
1:12:24That's how we know that this is going to
1:12:26hold and then we're going to get that
1:12:28distribution lower. So now once we get
1:12:30that distribution lower, right, you can
1:12:32see boom, boom, boom, we melt all the
1:12:34way down to the low here.
1:12:37Okay, now I want to trade the lagging
1:12:40asset towards that same draw in
1:12:42liquidity. What are you noticing once we
1:12:45form that two-stage PSP? Look at the
1:12:484hour chart. Okay, really interesting
1:12:50stuff, guys. Look, this is the two-stage
1:12:51PSP forming at six. Now, we want to see
1:12:54that ideal sequence, right? Look at 10
1:12:56a.m.'s open. You're going to see the
1:12:58ideal sequence I taught you for asset
1:13:00synchronization. Look at the 30-inut
1:13:02chart. We trade into the high. We form
1:13:05that two-stage PSP. Now look at 10.
1:13:08Putting in an inside bar here on YM. And
1:13:10then look at 10:30. Look, down close
1:13:13candle. Down close candle here.
1:13:18Up close candle. Oh, and look at what
1:13:21we're creating here. There's a gap.
1:13:26Interesting. Okay,
1:13:28mark this as an imbalance.
1:13:32Okay, we're creating that gap.
1:13:34Now you can see price ends up delivering
1:13:37away right
1:13:39from this and you're going to say well
1:13:41it didn't give me that SMT fill I only
1:13:43got that PSP go down a time frame if you
1:13:46don't see that higher time frame gap
1:13:48remember in here right look at the 4hour
1:13:52candle look at the dealing range the low
1:13:54the draw in liquidity is this low
1:13:58we are still in a very very deep premium
1:14:02market price only Let me bring this
1:14:05over.
1:14:07Price only needs to trade into what?
1:14:09This 15 minutes right in here for value
1:14:13gap. And look, you're going to see that
1:14:16SMT fill sequence in that 15-minute gap.
1:14:19Look, let me get rid of this PSP. Okay,
1:14:21we'll see on the 15-minute chart, too.
1:14:23Look right here.
1:14:27Okay, price trades into the gap here,
1:14:30forming what?
1:14:32SMT fill with the YM. Okay, just like
1:14:37this. Okay, there you go. There's your
1:14:39SMT fill sequence. ES is retracing into
1:14:42a gap. YM is now weaker. Look, we're
1:14:45strength switching on this 30-inut
1:14:47candle.
1:14:48And boom, what happens after? We sell
1:14:50off and we're going to reach this draw.
1:14:52So then again, you can even take a
1:14:5415minute entry. There's no reason to be
1:14:56ultra refined. Again, the logic is so
1:14:58much more important here than the
1:14:59entries.
1:15:04And boom, we're going to get that
1:15:05lagging asset distributing into that
1:15:07low. Okay, you're going to see that. And
1:15:10again, there's going to be a couple
1:15:11other continuation sequences in here on
1:15:14the way down. Okay, so you're going to
1:15:15be able to see this logic repeats time
1:15:17and time again. And um that's bit about
1:15:19it for my computer battery at 5%. So I'm
1:15:22going to close up the video there.
1:15:23Please let me know if you have any
1:15:24questions. I try and read all of the
1:15:26comments. I really appreciate the
1:15:27support of my YouTube channel, guys. I'm
1:15:28trying to grow it. Um, I'm trying to
1:15:30teach you guys as much as I absolutely
1:15:31can. And I appreciate any of the
1:15:33feedback you guys have about my teaching
1:15:34style, what works for you guys, what
1:15:36doesn't. And yeah, run it up. Give me
1:15:38give me a like, give me a comment, tell
1:15:39me what you want to see next. And uh, I
1:15:41hope to see you guys back here in the
1:15:42near future for another video. Take it
1:15:44easy. Peace.

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