The Anomaly Mentorship - Advance course - Lesson 8 - Quaterly theory — Transcript
Full transcript
- 0:04Hello everybody. Welcome back to the
- 0:05anomaly advanced course core content
- 0:08lesson eight. Here we're going to be
- 0:10covering a few things. Quarterly opens
- 0:14and how to blend our regular alignment
- 0:18time frames with quarterly opens. And
- 0:21how to trade reversal candles. You're
- 0:23going to see how they tie and blend in
- 0:25together. So first let's talk about the
- 0:28timing of quarterly period why we use
- 0:30it. So here's going to be covering the
- 0:336-hour candle and what they represent.
- 0:36So as you can see we have four
- 0:396-hour candles in a daily candle. And
- 0:42each candle is going to represent a
- 0:44session. So So the first 6-hour candle
- 0:46that time window is going to represent
- 0:49Asia session and it of course opens up
- 0:51at 1800. So with the second 6-hour
- 0:53candle is going to represent London
- 0:55session and that time spans from
- 0:58midnight to 6:00 a.m. Now of course
- 1:01we're still going to use the relevant
- 1:02timings of London session which is going
- 1:05to run from 2:00 to 5:00 a.m. right? So
- 1:10here we have Q3 that opens up at 6:00
- 1:13a.m. is going to represent the New York
- 1:15a.m. session and lastly we have Q4 that
- 1:19opens up at 12:00 p.m. and that is going
- 1:21to represent the New York p.m. session.
- 1:23Now within each 6-hour candle
- 1:26we're going to have four 90-minute
- 1:28candles. Right? So you see how it's very
- 1:30fractal. Within a daily candle we have
- 1:32four 6-hour candles. Within each 6-hour
- 1:35candle we have four 90-minute candles.
- 1:38Here is London session and its timings.
- 1:40So here's Q3 representing the New York
- 1:42a.m. session and the four quarters
- 1:44within that and the timings. Now this is
- 1:46the most relevant one because of the
- 1:49drivers and how we can use if-then
- 1:51statements, right? So we're going to
- 1:52avoid Q1. That's typically an irrelevant
- 1:55time because of course 6:00 a.m. to 7:30
- 1:58is not kill zone to be used for indices
- 2:00or any markets. Q2 gets interesting
- 2:02because if Q2 forms a low of day which
- 2:04runs from 7:30 to 9:00, then we can
- 2:08expect Q3 and Q4 to continue. Now, if
- 2:11neither Q1 or Q2 reverse, then we'd
- 2:14expect Q3 to reverse creating a New York
- 2:16reversal pairing that with a driver,
- 2:18right? Because 9:30 resides in this
- 2:21candle. Same reason why we can expect a
- 2:23Q2 reversal cuz a 30 red folder resides
- 2:26in this candle. If Q3 reverses, they're
- 2:29going to expect a Q4 continuation, which
- 2:31is essentially a 6:00 a.m. 4-hour
- 2:34reversal, 10:00 a.m. 4-hour continuation
- 2:37because the 4-hour candle opens up
- 2:39before Q4 opens up at 10:00, right? Now,
- 2:43if neither Q1, Q2, Q3 reverse, then
- 2:46you'd be essentially expecting a Q4
- 2:49reversal or in other words, a 4-hour
- 2:5310:00 a.m. New York reversal. And here's
- 2:55Q4 in the timings within it, right? The
- 2:58most important times are going to be
- 3:0012:00, especially 12:00 for lagging
- 3:02assets. We already know New York PM
- 3:05session typically is going to be
- 3:06continuation. You always want that draw
- 3:08on liquidity. For lagging assets
- 3:10specifically, 12:00 is going to be your
- 3:13bread and butter time window.
- 3:15And of course, Q2 as well because the
- 3:17timing between 1:30 and 3:00 is the 2:00
- 3:22p.m. open or the 1400 open, which is a
- 3:24new 4-hour candle. So, you see how these
- 3:26candles all overlap? We're going to use
- 3:29our regular time frame alignments. We're
- 3:30going to time it and align price with
- 3:33these quarterly opens. And here we can
- 3:35see the fractal nature of price. We have
- 3:37one daily candle. Within that daily
- 3:39candle, we have four 6-hour candles.
- 3:42Within each 6-hour candle, we have four
- 3:4590-minute candles.
- 3:46So, let's talk about fading a large
- 3:48wick. Specifically here, we're going to
- 3:50be going over the daily candle. So,
- 3:53there's two things that you need. The
- 3:55first step is a daily key level when
- 3:58trading a daily reversal candle and the
- 4:00profile, right? We need this candle for
- 4:02trading a bullish reversal candle. We
- 4:04need the candle to open low first,
- 4:06right? Then we're going to be trading
- 4:08four-hour expansion candles essentially
- 4:10back internal to the daily range or back
- 4:13to the daily open as your final TP. Now,
- 4:16if you do not have a daily key level,
- 4:18then you need a four-hour key level.
- 4:20Meaning, if price is expanding, let's
- 4:23say three consecutive expansion candles,
- 4:25maybe the previous day is a very, very
- 4:27large expansion day. This is when you
- 4:30can expect a potential new piece of
- 4:32price. So, if you don't have a daily key
- 4:33level that price has traded into, you
- 4:35need a four-hour key level to frame the
- 4:38high and low of that reversal candle.
- 4:40So, the two things required
- 4:41is a key level
- 4:43and the profile to support trading this
- 4:46reversal candle on the daily time frame.
- 4:48Now, when trading a daily reversal
- 4:50candle, there are going to be a couple
- 4:52targets that we can look for.
- 4:55So, the first one is going to be
- 4:57back within the daily range.
- 4:59Marking it from the opening price to the
- 5:02current low of day. We can target these
- 5:04little internal objectives. The next
- 5:06draw on liquidity is going to be the
- 5:08daily open.
- 5:10And the final TP is going to be levels
- 5:13just beyond the daily open as your final
- 5:15TP.
- 5:16At this point, once you reach these
- 5:17levels like the daily open or these
- 5:20levels just above the daily open,
- 5:22there's simply not enough time in the
- 5:24day for price to continue. This is
- 5:26typically where price caps off its daily
- 5:28range because this wick does not support
- 5:30expansion. Now, let's talk about how to
- 5:32trade a four-hour reversal candle. This
- 5:34is going to be the candle that forms the
- 5:36high and low of the day. So, what are
- 5:38some things you need? Is a key level on
- 5:41the hourly and above. Now, we know that
- 5:43if we're going to be using a gap as the
- 5:45key level to form the high and low of
- 5:47day. It has to be on the 4-hour,
- 5:49mechanically, right? The next step is
- 5:51your confirmations, right? What do we
- 5:53need to confirm the high and low of day?
- 5:55Is two-stage SMT, right? So, here's SMT
- 5:57at the key level. Second-stage SMT is
- 6:00going to be a PSP in this case, and
- 6:03you're going to be trading a 1-hour /
- 6:0530-minute expansion candle back towards
- 6:07the open. Just like we did on the daily
- 6:09time frame, except on the daily
- 6:12we traded a 4-hour expansion candle back
- 6:13to the open. Now, the other confirmation
- 6:16is going to be we have SMT at the key
- 6:18level, and you're using a driver. So,
- 6:20you're actually trading this reversal
- 6:22into expansion candle back towards the
- 6:24open, and you're using a driver as your
- 6:27confluence. So, now we're going to be
- 6:29talking about how to enter within a
- 6:31reversal candle, specifically your stop
- 6:34loss placement. So, you're going to be
- 6:36using a premium discount tool, and
- 6:37here's how you draw it. It's from the
- 6:39opening of that 4-hour candle, mark it
- 6:41all the way down to the wick. Here
- 6:43you're going to get your range
- 6:45And where we need to put our stop loss
- 6:47is in the discount end of that reversal
- 6:51candle. In this case, it's a bullish
- 6:52reversal candle, right? So, why do we do
- 6:54this exactly? It's because we have no
- 6:55idea where this reversal candle is going
- 6:59to close, right?
- 7:00We don't know if it's going to expand
- 7:02beyond the open, because again, it's a
- 7:03reversal candle. It It's going to be
- 7:05very hard to expand beyond the open. We
- 7:07don't know if it's going to close, you
- 7:09know,
- 7:10above you know, just up here, up here,
- 7:12down here. We don't really know. So, a
- 7:14safe bet is putting our stop loss in the
- 7:16discount end of that range, right?
- 7:19Because this gives us the most
- 7:22likelihood of staying in the trade for
- 7:24when that next candle opens up and
- 7:25expands, right? Cuz that's what we're
- 7:27really doing.
- 7:28Is we're positioning yourself in a
- 7:29reversal candle, assuming that's going
- 7:31to close a reversal candle because it
- 7:32meets the criteria. It hits the key
- 7:34level. It has two-stage SMT. So, that's
- 7:37where reversals happen. So, that's where
- 7:38we're going to anticipate reversal
- 7:39candles to be forming at. Then we're
- 7:41really expecting the the true expansion
- 7:44to happen on the next candles opening
- 7:46price, right? So, we're getting in
- 7:48early, but we need to have our stop loss
- 7:50in a protected area, right?
- 7:52So, of course, we're going to confirm
- 7:53the low of this reversal candle
- 7:56with a C2 closure on the 30-minute or
- 7:59the hourly, unless you're trading the C2
- 8:01candle with a driver, remember? That is
- 8:03one thing we can do.
- 8:06And if you are trading a driver C2
- 8:08reversal expansion candle,
- 8:10then you're going to be entering the
- 8:11first CSD. And of course, your stop loss
- 8:13would be at the very low, which is of
- 8:15course in discount. That is the most
- 8:16discounted area. If you're trading
- 8:18continuation C3,
- 8:20your stop needs to be in discount. It's
- 8:22as simple as that. Now, let's talk about
- 8:25how to time intraday reversals using the
- 8:286-hour and the 4-hour time frame. We're
- 8:30going to be using these quarterly opens
- 8:32to our advantage to time trades. So, one
- 8:35of the negative conditions that we never
- 8:37really want to do
- 8:38is be in a trade or look for a reversal
- 8:42when the current 6-hour candle and the
- 8:43current 4-hour candle do not support
- 8:45expansion. We at least need one of these
- 8:47candles to support expansion to be
- 8:49within a trade. So, first, let's talk
- 8:51about how to trade a 6-hour reversal.
- 8:54This is where price engaged with a
- 8:56relevant key level to form low of day,
- 8:58but when you look within the current
- 9:006-hour candle, it does not support
- 9:01expansion. So, what are you going to
- 9:02wait for?
- 9:04A 4-hour candle to support expansion.
- 9:06So, essentially, you're going to be
- 9:07trading a 4-hour reversal to expansion
- 9:09candle back to the 6-hour open. Now,
- 9:12when both of these candles are aligned,
- 9:14this is where you really get that
- 9:16alignment for true expansion.
- 9:18So, now let's put it all together.
- 9:20Here, we have a reversal candle on the
- 9:216-hour, right? Very large wick. So, what
- 9:24do we do?
- 9:25We have to have that 4-hour candle
- 9:26supporting expansion in order to confirm
- 9:28this reversal to expansion candle.
- 9:30Pretty simple, right? What do you need?
- 9:32A 1-hour 30-minute swing formation, but
- 9:34also two status MT, of course. And once
- 9:37that is all in line, you can trade this
- 9:394-hour first expansion candle away from
- 9:42the low of day.
- 9:43Remember, we're going to be assuming
- 9:45that the 6-hour candle is going to close
- 9:47a reversal candle
- 9:48and the true alignment or the expansion
- 9:50will follow when the H6 and the H4
- 9:54align.
- 9:55Now, let's talk about how to trade a
- 9:564-hour reversal, and that's aligning the
- 9:586-hour.
- 10:00As you can see,
- 10:01this 6-hour candle supports expansion.
- 10:04So, as we see on the 4-hour chart, we
- 10:06hit a key level to potentially form low
- 10:07of day. The current 4-hour candle that
- 10:09we're trading does not support
- 10:11expansion. So, what do we need? The
- 10:136-hour to support expansion. It's really
- 10:15as simple as that. Once this candle
- 10:17closes, you have two time frames
- 10:19aligned, and that's where we're going to
- 10:20get that really nice expansion.
- 10:23So, now let's put it all together.
- 10:25So, we have our key level formed the low
- 10:27of day. You're going to have your two
- 10:29stages SMT.
- 10:30You're going to have that large wick on
- 10:32the 4-hour time frame.
- 10:34You're going to wait for that new 6-hour
- 10:36open to align.
- 10:39Once that's aligned, you're essentially
- 10:40just confirming the high and low of day,
- 10:42of course, with their 1-hour and slash
- 10:4330-minute swing point, which will happen
- 10:47on the new quarter open, which is 12:00
- 10:49in this case.
- 10:50So, once you have that confirmation,
- 10:52that C2 candle, that is confirming the
- 10:54low of the 6-hour candle, but also the
- 10:564-hour candle. Remember,
- 10:58you're going to be trading a 1-hour and
- 11:00slash 30-minute expansion candle back
- 11:02towards the opening price of this 4-hour
- 11:04candle. Your stop loss is going to be
- 11:06below
- 11:07this discount end of the wick, of
- 11:10course.
- 11:11And once you have that 6-hour and 4-hour
- 11:13alignment, that's when the true
- 11:14expansion occurs.
- 11:16Now, we're going to be covering a 4-hour
- 11:18reversal.
- 11:19This is where we're going to be using
- 11:20the 90-minute alignment.
- 11:22Now, specifically when we're going to be
- 11:24using this is when the current 4-hour
- 11:26candle actually does support expansion.
- 11:29But when you drop the 90-minute, it does
- 11:31not support expansion. So, what you're
- 11:32going to simply wait for is the opening
- 11:34price of a new 90-minute candle, and
- 11:36that is when price is going to expand
- 11:38typically on the 4-hour.
- 11:40So, now let's go ahead and put it all
- 11:41together. Now, here we're using the
- 11:43timing of 10:30 90-minute candle because
- 11:46this is really specifically only for
- 11:48this candle. I wouldn't say only, but
- 11:51most times it is. So, let's kind of go
- 11:53over why.
- 11:55So, this 9:00 90-minute candle
- 11:58resides in the time window of both
- 12:02the 6:00 a.m. 4-hour candle
- 12:04and the 10:00 a.m. 4-hour candle, right?
- 12:06Because this candle opens up at 10:30,
- 12:09right? So, this candle here, 9:00 a.m.
- 12:11candle, runs from 9:00
- 12:13to 10:30.
- 12:14So, you see obviously it's
- 12:17obviously within the time window of the
- 12:18new 10:00 a.m. open.
- 12:20So, essentially, if this candle is not
- 12:22ready set for reversal,
- 12:24then the first 30 minutes of the 10:00
- 12:27a.m. 4-hour candle is not going to
- 12:29reverse, right? It's going to wait for
- 12:30what? 10:30, right? Because then you
- 12:32have the opening price of Q4 aligned
- 12:35within the 4-hour candle of 10:00 a.m.
- 12:38if that makes sense. Now, when does this
- 12:40typically happen?
- 12:42Is during
- 12:43um a lagging asset. So, for example,
- 12:47the 6:00 a.m. 4-hour candle, maybe at
- 12:489:30 or whatnot, will actually reverse
- 12:51and expand towards the draw
- 12:53where the lagging asset maybe doesn't,
- 12:54maybe it creates a PSP or doesn't
- 12:56reverse, maybe it creates an expansion
- 12:58candle.
- 12:59So, the trigger for a decoupled market
- 13:02or maybe assets resync is an SMT, right?
- 13:05Um in this case, it's a maybe a
- 13:06two-stage PSP, right? Where it has a
- 13:08sweep out the previous candle's higher
- 13:10low. It's going to have to sweep out
- 13:116:00 a.m. candle's low.
- 13:14And you're going to think that that's
- 13:15the trigger, which it is, but you got to
- 13:17time it, right? Because remember, if
- 13:19this 9:00 a.m. candle is not set to
- 13:21reverse, then what is going to wait for?
- 13:2310:30, right? So, that's why we use
- 13:26this, of course,
- 13:28um
- 13:29And as you can see, this is a really
- 13:30good depiction of that, where 10:00 a.m.
- 13:32opens, right? Um
- 13:35And this is the first 30 minutes of
- 13:3710:00 a.m., right? So you're technically
- 13:39within this 9:00 a.m. candle still. It
- 13:41doesn't It's not set reversal.
- 13:43But 10:30 opens, that's now aligned,
- 13:46right? Now you have that quarterly
- 13:47alignment that we talk about. Um
- 13:50And now price is set for expansion,
- 13:52right? Quarterly aligned or quarterly
- 13:54alignment with the 10:00 a.m. candle and
- 13:56the 9:00 a.m. candle, that's when that
- 13:58uh 10:00 a.m. 4-hour candle will
- 14:00actually reverse and expand.
- 14:02So now let's go ahead and get into some
- 14:04examples. First, we're going to be
- 14:06covering how to trade a daily reversal
- 14:08candle. As you can see, very, very large
- 14:10wick here. So what is step one? We need
- 14:13a key level on the daily or the 4-hour
- 14:15time frame. Here we clearly have a daily
- 14:17fair value gap, so that's uh good there.
- 14:20What is the second thing we need? It's a
- 14:22profile. So let's go ahead and drop down
- 14:24to the 4-hour time frame to look at this
- 14:26profile. So here we are on the 4-hour
- 14:28time frame, and how does this candle
- 14:30form? What do we need it to form like,
- 14:32right? For a bullish candle, it needs to
- 14:34open low first, exactly what it does,
- 14:37ideally leaving 1800 as the high of day,
- 14:39that's perfect. And when we have a daily
- 14:41reversal candle,
- 14:43what are the targets we're going to be
- 14:44choosing? Is back to the daily range as
- 14:47TP1.
- 14:48TP2 is going to be the daily open, and
- 14:51TP3 is going to be levels just beyond
- 14:55the daily open in close proximity. And
- 14:57the farther and farther away you go, and
- 15:00the closer to the daily open you go,
- 15:02is less likely for price to reach these
- 15:05targets, right? Because
- 15:07it can't expand beyond daily open. It's
- 15:09going to have a hard time. So it's
- 15:10really hard to know. So obviously, this
- 15:13level here is farthest away from daily
- 15:15open, so it's going to be the easiest,
- 15:16right? It's less for for you to
- 15:19anticipate, right? It's closest um to
- 15:22current price down here at the reversal.
- 15:24So, it's going to be the the most likely
- 15:26to get hit, right? The daily open is
- 15:27going to be second
- 15:29uh, likely to get hit. Or maybe the
- 15:31current high of day. These are more of
- 15:32the same thing, right? Um, and this
- 15:35level here is going to be the least
- 15:36likely to get hit. Doesn't mean it's
- 15:37impossible, but the larger and larger
- 15:38that wick is,
- 15:40uh, the least likely it's going to
- 15:41happen, right? And we're going to be
- 15:42trading 4-hour expansion candles back
- 15:46towards the daily open.
- 15:48Now, let's go ahead and talk about how
- 15:49to trade a 4-hour reversal candle.
- 15:51As you can see this wick is very, very
- 15:53large. So, what are some things that we
- 15:55need to have in play here? Is a key
- 15:58level to form low of day on the hourly
- 16:00above.
- 16:01That's exactly what we have here. And of
- 16:03course, we always need a framework.
- 16:04Let's go ahead and show you that
- 16:05framework now.
- 16:07So, here you have a low here.
- 16:09SMT with that low.
- 16:11Price expands away.
- 16:13Creates a relevant low here. So, as you
- 16:15can see, we're really high in this
- 16:17range. Price is actually already hit
- 16:19this high here on YM. Let's go ahead and
- 16:21show you that
- 16:23real quick.
- 16:24If I show you that high here,
- 16:27it's already been hit
- 16:28at 2:00 a.m., right? So, price does
- 16:31what? Creates a strength switch
- 16:34for NQ.
- 16:36Let's go ahead and
- 16:37to go ahead and catch up, right?
- 16:39So, that is one thing that we need is
- 16:41SMT with our key level.
- 16:43But, we need a second say SMT or a
- 16:44driver to confirm this wick. So, let's
- 16:47go ahead and drop down to lower time
- 16:49frames to see what we got.
- 16:51So, here we are on the lower time
- 16:54frames. So, if you didn't know this,
- 16:56guys,
- 16:57if you have a strength switch SMT on the
- 16:59higher time frame to have an SMT break,
- 17:01you do not need a secondary, uh,
- 17:04SMT. This is the highest form of a, um,
- 17:07continuation signature or reversal
- 17:09signature that you can have. It's
- 17:11technically continuation as we're
- 17:13actually breaking the SMT.
- 17:15It's also a I guess, to continue, right?
- 17:17But it is the highest probable
- 17:19confirmation have, so you actually don't
- 17:21need a second SMT. But even if this
- 17:23wasn't a strength this guys, we have
- 17:259:30 confirming this, right? So, when we
- 17:27have a 4-hour large wick, we're going to
- 17:30be trading 30-minute and hourly
- 17:32expansion candles back towards the
- 17:34opening price, right?
- 17:36And when you guys are trading a large
- 17:38wick on the 4-hour, it is ideal that it
- 17:40is the 6:00 a.m. 4-hour candle
- 17:42specifically. That is because of what we
- 17:45have within that time window. There's
- 17:46going to be 8:30 red folder news, 9:30
- 17:49every single day on indices. You're
- 17:51going to have that volatility injection,
- 17:53which allows you
- 17:55the most likelihood of an expansion
- 17:58beyond the open
- 17:59just because of that volatility. So, as
- 18:02you can see here, we have that 9:30
- 18:04volatility injection. We have our SMT.
- 18:07Let's drop to lower time frame
- 18:08to look for our entry and our stop
- 18:10placement. So, here we have our V-shaped
- 18:13CSD. That is a reversal confirmation.
- 18:15So, you're actually good to just enter
- 18:17off of that right there.
- 18:19Your stop loss needs to be where? In the
- 18:21discount end of that reversal candle,
- 18:24marking it from the opening price to the
- 18:26reversal low. As you can see, my stop
- 18:28loss is basically at the very low end of
- 18:30that, at least 2R to the high. You're
- 18:32good there. If you want to trade
- 18:34continuation, again, your stop loss
- 18:36would be here.
- 18:39Right? In the discount end. You're good
- 18:41as long as it's not in premium end of
- 18:44that reversal candle. It is ideal that
- 18:47your entry is at EQ or below, but it
- 18:49doesn't actually matter as long as your
- 18:50stop loss is uh below here. You're
- 18:53pretty much good. So, as you can see,
- 18:55this checks all the boxes for trading a
- 18:58reversal candle um mechanically, which
- 19:00is very important.
- 19:02So, now let's go ahead and talk about
- 19:03how to trade a 6-hour reversal candle.
- 19:06Remember, we're going to be aligning the
- 19:084-hour. So, as you can see here, we have
- 19:10our key level, check one. That large
- 19:13wick, of course. Now you see to confirm
- 19:16this with a secondary stage SMT.
- 19:19And it we're going to be timing it
- 19:21with a 4-hour open. Let's go ahead and
- 19:23drop down to the 4-hour time frame.
- 19:25So, as you can see, this is actually a
- 19:26daily reversal candle. Let's go to mark
- 19:28out the opening price. As you can see,
- 19:31we pretty much open low first, pretty
- 19:32much a one-sided move lower. So, seeing
- 19:34a new phase of price makes a lot of
- 19:36sense, right? Candle one, candle two,
- 19:37candle three, all expanding the same
- 19:39direction into a key level. So, seeing
- 19:41this candle actually trade back to the
- 19:43range makes sense, right? Let's go to
- 19:45the daily chart really quick.
- 19:47Right? This large wick makes sense. Why?
- 19:50Because it has SMT to the key level, a
- 19:51relevant key level. The space between
- 19:53these lows makes it a relevant low. So,
- 19:55it makes sense to actually maybe
- 19:57form like a reversal candle, right?
- 19:59Pretty much opens low first. Um so,
- 20:01seeing Q4 or PM session kind of create
- 20:04that wick makes a lot of sense, right?
- 20:07But, we need to time it. We need to have
- 20:08our confirmations, right? Two SMT in the
- 20:10form of a strength switch, that's
- 20:12perfect. If you guys ever want to trade
- 20:13a reversal or a reversal candle
- 20:15specifically,
- 20:16strength switch forms the high and low
- 20:17of that reversal candle,
- 20:18you're pretty much good, dude.
- 20:20Cuz remember, strength switch is the
- 20:21highest probable reversal confirmation
- 20:24that there is. But, notice how right
- 20:26when 1400 opens,
- 20:28that's when we expand back towards the
- 20:30opening price
- 20:32um
- 20:32of that um 6-hour candle, right? And
- 20:35since we have a daily reversal candle,
- 20:38very, very large wick, there's not a lot
- 20:40of time left in this day.
- 20:41You're just going to target
- 20:43uh back to the daily range, which is
- 20:45which is this gap, right? So, your your
- 20:47reversal model here,
- 20:48external,
- 20:50internal. Very simple.
- 20:52Now, we're going to be talking about how
- 20:54to trade a 4-hour reversal candle or a
- 20:574-hour candle with a very, very large
- 20:59wick.
- 21:00And as you can see here, this is
- 21:01extremely large wick on the 4-hour. So,
- 21:03what do you need?
- 21:04You You a key level here on the hourly
- 21:06above to form the high day.
- 21:08So here we actually have a
- 21:10um strength switch with an hourly high.
- 21:13Let's go ahead and drop down to lower
- 21:14time frame.
- 21:15So here on the hourly time frame
- 21:17what do we have here? So first off, the
- 21:19day puts on a high here and expands away
- 21:22from it creating SMT here. But it's like
- 21:25close proximity SMT, right? Which is not
- 21:27high probable, we know that.
- 21:28Let's go to YM and look at that really
- 21:30quick.
- 21:32That's going to be actually here.
- 21:34Which obviously fails to manipulate it.
- 21:35So we already know that this is probably
- 21:37an SMT that's going to break, right? Cuz
- 21:39this asset's expanding through it.
- 21:41Here is a strength switch
- 21:45for this asset to catch up and break
- 21:47that SMT, right?
- 21:49Mechanical taught an asset organization
- 21:51inside of the course, right? But
- 21:53as you can see
- 21:55to create the SMT, the 10-minute opens
- 21:56up here. It opens up, creates the
- 21:58strength switch, but it's a very, very
- 22:00large open high
- 22:02um in that candle, right? So what are
- 22:04you going to wait for? To align is the
- 22:066-hour. Let's go to 6-hour.
- 22:09So boom here, the 6-hour opens up.
- 22:11That's when you get that expansion,
- 22:13right? So you're trading a essentially a
- 22:164-hour reversal candle
- 22:17but you're lining a 6-hour expansion
- 22:20candle. And if you actually look here
- 22:22you have a gap here.
- 22:24We have a
- 22:25bearish candle
- 22:26over here it's bullish, right?
- 22:28Which is a strength switch PSP
- 22:31to go ahead and break that SMT.
- 22:34So here we're going to go over how to
- 22:36time a 4-hour reversal to expansion
- 22:39candle with a 90-minute open.
- 22:41But first let's do a top-down here.
- 22:43So here you have your first stage SMT
- 22:45followed by second stage SMT, which is a
- 22:47strength switch. Price expands away on
- 22:49the weekly time frame
- 22:51forming an SMT here actually, which is
- 22:54in the terms of advanced premium
- 22:56discount.
- 22:57This asset's taking out these range
- 22:59lows,
- 23:00um but we created a gap, right? So, this
- 23:03asset
- 23:04ended up retracing back towards this
- 23:06two-stage high,
- 23:08which is really just a retracement here.
- 23:10So, this SMT caused a retracement. If
- 23:12we're If this is going to be a
- 23:13retracement, right? This gap needs to
- 23:14hold, right? So, as you can see, we're
- 23:16pretty much trading a reversal expansion
- 23:18candle
- 23:19here
- 23:20um, on all these assets. Let's drop down
- 23:22to the daily.
- 23:23So, a reason why we would be bearish
- 23:25this specific day here
- 23:28is because, of course, how we expand
- 23:30away from that weekly gap in the C2
- 23:32closure.
- 23:33This here is obviously not a
- 23:36continuation signature, right? This is a
- 23:38V-shape signature, and we're getting
- 23:39really close to this low. So, this is
- 23:41why we'd be bearish this day
- 23:42specifically. Let's drop down to the
- 23:45lower time frames.
- 23:47So, here we are on the 6-hour time
- 23:49frame. And as you can see, this phase of
- 23:50price, after you expand, guys, is pretty
- 23:53much consolidation, as you can see.
- 23:56When you look back in the previous day's
- 23:57range,
- 23:58we have a gap
- 24:00here
- 24:02and here.
- 24:04Right?
- 24:06And we have a SMT with this gap, of
- 24:07course. So, we have a SMT fill with our
- 24:10gap. Now, you need a two-stage SMT, but
- 24:12look at this 6-hour candle, guys, how
- 24:14large it is. So,
- 24:16what would you guys need to have? A
- 24:174-hour
- 24:19open, of course, right? So, let's wait
- 24:20for that 4-hour open. Let's drop down to
- 24:21the 4-hour time frame.
- 24:23So, here we are on the 4-hour time
- 24:25frame. Now, as you guys can see,
- 24:27we have that 10:00 a.m. reversal
- 24:30into expansion candle.
- 24:32But when you actually look at when this
- 24:34candle opens up at 10:00 a.m., you're
- 24:36going to see that the 9:00 a.m.
- 24:3890-minute candle is actually not
- 24:39aligned. So, let's go ahead and look at
- 24:40that.
- 24:42So, here we are on the 90-minute chart.
- 24:44This is exactly what I'm talking about.
- 24:46The 10:00 a.m. candle opens up within
- 24:48this 90-minute 9:00 a.m. candle, which
- 24:51is not set for
- 24:52It's not set for reversal, right?
- 24:54So, when is it actually going to
- 24:56reverse, guys?
- 24:57It's actually when the 10:30 opens,
- 25:00which is right here, right?
- 25:0310:30 is right here.
- 25:04That's when price is now aligned
- 25:07with the quarterly open for the 10:00
- 25:09a.m. candle to actually set uh the
- 25:12reversal and expand away. Once that
- 25:13happens,
- 25:15now you're truly aligned
- 25:17uh the 4-hour expansion candle with a
- 25:196-hour reversal candle, if that makes
- 25:21sense, right? And you can begin to
- 25:22target these opposing lows.
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