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The Anomaly Mentorship - Advance course - Lesson 8 - Quaterly theory — Transcript

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  1. 0:04Hello everybody. Welcome back to the
  2. 0:05anomaly advanced course core content
  3. 0:08lesson eight. Here we're going to be
  4. 0:10covering a few things. Quarterly opens
  5. 0:14and how to blend our regular alignment
  6. 0:18time frames with quarterly opens. And
  7. 0:21how to trade reversal candles. You're
  8. 0:23going to see how they tie and blend in
  9. 0:25together. So first let's talk about the
  10. 0:28timing of quarterly period why we use
  11. 0:30it. So here's going to be covering the
  12. 0:336-hour candle and what they represent.
  13. 0:36So as you can see we have four
  14. 0:396-hour candles in a daily candle. And
  15. 0:42each candle is going to represent a
  16. 0:44session. So So the first 6-hour candle
  17. 0:46that time window is going to represent
  18. 0:49Asia session and it of course opens up
  19. 0:51at 1800. So with the second 6-hour
  20. 0:53candle is going to represent London
  21. 0:55session and that time spans from
  22. 0:58midnight to 6:00 a.m. Now of course
  23. 1:01we're still going to use the relevant
  24. 1:02timings of London session which is going
  25. 1:05to run from 2:00 to 5:00 a.m. right? So
  26. 1:10here we have Q3 that opens up at 6:00
  27. 1:13a.m. is going to represent the New York
  28. 1:15a.m. session and lastly we have Q4 that
  29. 1:19opens up at 12:00 p.m. and that is going
  30. 1:21to represent the New York p.m. session.
  31. 1:23Now within each 6-hour candle
  32. 1:26we're going to have four 90-minute
  33. 1:28candles. Right? So you see how it's very
  34. 1:30fractal. Within a daily candle we have
  35. 1:32four 6-hour candles. Within each 6-hour
  36. 1:35candle we have four 90-minute candles.
  37. 1:38Here is London session and its timings.
  38. 1:40So here's Q3 representing the New York
  39. 1:42a.m. session and the four quarters
  40. 1:44within that and the timings. Now this is
  41. 1:46the most relevant one because of the
  42. 1:49drivers and how we can use if-then
  43. 1:51statements, right? So we're going to
  44. 1:52avoid Q1. That's typically an irrelevant
  45. 1:55time because of course 6:00 a.m. to 7:30
  46. 1:58is not kill zone to be used for indices
  47. 2:00or any markets. Q2 gets interesting
  48. 2:02because if Q2 forms a low of day which
  49. 2:04runs from 7:30 to 9:00, then we can
  50. 2:08expect Q3 and Q4 to continue. Now, if
  51. 2:11neither Q1 or Q2 reverse, then we'd
  52. 2:14expect Q3 to reverse creating a New York
  53. 2:16reversal pairing that with a driver,
  54. 2:18right? Because 9:30 resides in this
  55. 2:21candle. Same reason why we can expect a
  56. 2:23Q2 reversal cuz a 30 red folder resides
  57. 2:26in this candle. If Q3 reverses, they're
  58. 2:29going to expect a Q4 continuation, which
  59. 2:31is essentially a 6:00 a.m. 4-hour
  60. 2:34reversal, 10:00 a.m. 4-hour continuation
  61. 2:37because the 4-hour candle opens up
  62. 2:39before Q4 opens up at 10:00, right? Now,
  63. 2:43if neither Q1, Q2, Q3 reverse, then
  64. 2:46you'd be essentially expecting a Q4
  65. 2:49reversal or in other words, a 4-hour
  66. 2:5310:00 a.m. New York reversal. And here's
  67. 2:55Q4 in the timings within it, right? The
  68. 2:58most important times are going to be
  69. 3:0012:00, especially 12:00 for lagging
  70. 3:02assets. We already know New York PM
  71. 3:05session typically is going to be
  72. 3:06continuation. You always want that draw
  73. 3:08on liquidity. For lagging assets
  74. 3:10specifically, 12:00 is going to be your
  75. 3:13bread and butter time window.
  76. 3:15And of course, Q2 as well because the
  77. 3:17timing between 1:30 and 3:00 is the 2:00
  78. 3:22p.m. open or the 1400 open, which is a
  79. 3:24new 4-hour candle. So, you see how these
  80. 3:26candles all overlap? We're going to use
  81. 3:29our regular time frame alignments. We're
  82. 3:30going to time it and align price with
  83. 3:33these quarterly opens. And here we can
  84. 3:35see the fractal nature of price. We have
  85. 3:37one daily candle. Within that daily
  86. 3:39candle, we have four 6-hour candles.
  87. 3:42Within each 6-hour candle, we have four
  88. 3:4590-minute candles.
  89. 3:46So, let's talk about fading a large
  90. 3:48wick. Specifically here, we're going to
  91. 3:50be going over the daily candle. So,
  92. 3:53there's two things that you need. The
  93. 3:55first step is a daily key level when
  94. 3:58trading a daily reversal candle and the
  95. 4:00profile, right? We need this candle for
  96. 4:02trading a bullish reversal candle. We
  97. 4:04need the candle to open low first,
  98. 4:06right? Then we're going to be trading
  99. 4:08four-hour expansion candles essentially
  100. 4:10back internal to the daily range or back
  101. 4:13to the daily open as your final TP. Now,
  102. 4:16if you do not have a daily key level,
  103. 4:18then you need a four-hour key level.
  104. 4:20Meaning, if price is expanding, let's
  105. 4:23say three consecutive expansion candles,
  106. 4:25maybe the previous day is a very, very
  107. 4:27large expansion day. This is when you
  108. 4:30can expect a potential new piece of
  109. 4:32price. So, if you don't have a daily key
  110. 4:33level that price has traded into, you
  111. 4:35need a four-hour key level to frame the
  112. 4:38high and low of that reversal candle.
  113. 4:40So, the two things required
  114. 4:41is a key level
  115. 4:43and the profile to support trading this
  116. 4:46reversal candle on the daily time frame.
  117. 4:48Now, when trading a daily reversal
  118. 4:50candle, there are going to be a couple
  119. 4:52targets that we can look for.
  120. 4:55So, the first one is going to be
  121. 4:57back within the daily range.
  122. 4:59Marking it from the opening price to the
  123. 5:02current low of day. We can target these
  124. 5:04little internal objectives. The next
  125. 5:06draw on liquidity is going to be the
  126. 5:08daily open.
  127. 5:10And the final TP is going to be levels
  128. 5:13just beyond the daily open as your final
  129. 5:15TP.
  130. 5:16At this point, once you reach these
  131. 5:17levels like the daily open or these
  132. 5:20levels just above the daily open,
  133. 5:22there's simply not enough time in the
  134. 5:24day for price to continue. This is
  135. 5:26typically where price caps off its daily
  136. 5:28range because this wick does not support
  137. 5:30expansion. Now, let's talk about how to
  138. 5:32trade a four-hour reversal candle. This
  139. 5:34is going to be the candle that forms the
  140. 5:36high and low of the day. So, what are
  141. 5:38some things you need? Is a key level on
  142. 5:41the hourly and above. Now, we know that
  143. 5:43if we're going to be using a gap as the
  144. 5:45key level to form the high and low of
  145. 5:47day. It has to be on the 4-hour,
  146. 5:49mechanically, right? The next step is
  147. 5:51your confirmations, right? What do we
  148. 5:53need to confirm the high and low of day?
  149. 5:55Is two-stage SMT, right? So, here's SMT
  150. 5:57at the key level. Second-stage SMT is
  151. 6:00going to be a PSP in this case, and
  152. 6:03you're going to be trading a 1-hour /
  153. 6:0530-minute expansion candle back towards
  154. 6:07the open. Just like we did on the daily
  155. 6:09time frame, except on the daily
  156. 6:12we traded a 4-hour expansion candle back
  157. 6:13to the open. Now, the other confirmation
  158. 6:16is going to be we have SMT at the key
  159. 6:18level, and you're using a driver. So,
  160. 6:20you're actually trading this reversal
  161. 6:22into expansion candle back towards the
  162. 6:24open, and you're using a driver as your
  163. 6:27confluence. So, now we're going to be
  164. 6:29talking about how to enter within a
  165. 6:31reversal candle, specifically your stop
  166. 6:34loss placement. So, you're going to be
  167. 6:36using a premium discount tool, and
  168. 6:37here's how you draw it. It's from the
  169. 6:39opening of that 4-hour candle, mark it
  170. 6:41all the way down to the wick. Here
  171. 6:43you're going to get your range
  172. 6:45And where we need to put our stop loss
  173. 6:47is in the discount end of that reversal
  174. 6:51candle. In this case, it's a bullish
  175. 6:52reversal candle, right? So, why do we do
  176. 6:54this exactly? It's because we have no
  177. 6:55idea where this reversal candle is going
  178. 6:59to close, right?
  179. 7:00We don't know if it's going to expand
  180. 7:02beyond the open, because again, it's a
  181. 7:03reversal candle. It It's going to be
  182. 7:05very hard to expand beyond the open. We
  183. 7:07don't know if it's going to close, you
  184. 7:09know,
  185. 7:10above you know, just up here, up here,
  186. 7:12down here. We don't really know. So, a
  187. 7:14safe bet is putting our stop loss in the
  188. 7:16discount end of that range, right?
  189. 7:19Because this gives us the most
  190. 7:22likelihood of staying in the trade for
  191. 7:24when that next candle opens up and
  192. 7:25expands, right? Cuz that's what we're
  193. 7:27really doing.
  194. 7:28Is we're positioning yourself in a
  195. 7:29reversal candle, assuming that's going
  196. 7:31to close a reversal candle because it
  197. 7:32meets the criteria. It hits the key
  198. 7:34level. It has two-stage SMT. So, that's
  199. 7:37where reversals happen. So, that's where
  200. 7:38we're going to anticipate reversal
  201. 7:39candles to be forming at. Then we're
  202. 7:41really expecting the the true expansion
  203. 7:44to happen on the next candles opening
  204. 7:46price, right? So, we're getting in
  205. 7:48early, but we need to have our stop loss
  206. 7:50in a protected area, right?
  207. 7:52So, of course, we're going to confirm
  208. 7:53the low of this reversal candle
  209. 7:56with a C2 closure on the 30-minute or
  210. 7:59the hourly, unless you're trading the C2
  211. 8:01candle with a driver, remember? That is
  212. 8:03one thing we can do.
  213. 8:06And if you are trading a driver C2
  214. 8:08reversal expansion candle,
  215. 8:10then you're going to be entering the
  216. 8:11first CSD. And of course, your stop loss
  217. 8:13would be at the very low, which is of
  218. 8:15course in discount. That is the most
  219. 8:16discounted area. If you're trading
  220. 8:18continuation C3,
  221. 8:20your stop needs to be in discount. It's
  222. 8:22as simple as that. Now, let's talk about
  223. 8:25how to time intraday reversals using the
  224. 8:286-hour and the 4-hour time frame. We're
  225. 8:30going to be using these quarterly opens
  226. 8:32to our advantage to time trades. So, one
  227. 8:35of the negative conditions that we never
  228. 8:37really want to do
  229. 8:38is be in a trade or look for a reversal
  230. 8:42when the current 6-hour candle and the
  231. 8:43current 4-hour candle do not support
  232. 8:45expansion. We at least need one of these
  233. 8:47candles to support expansion to be
  234. 8:49within a trade. So, first, let's talk
  235. 8:51about how to trade a 6-hour reversal.
  236. 8:54This is where price engaged with a
  237. 8:56relevant key level to form low of day,
  238. 8:58but when you look within the current
  239. 9:006-hour candle, it does not support
  240. 9:01expansion. So, what are you going to
  241. 9:02wait for?
  242. 9:04A 4-hour candle to support expansion.
  243. 9:06So, essentially, you're going to be
  244. 9:07trading a 4-hour reversal to expansion
  245. 9:09candle back to the 6-hour open. Now,
  246. 9:12when both of these candles are aligned,
  247. 9:14this is where you really get that
  248. 9:16alignment for true expansion.
  249. 9:18So, now let's put it all together.
  250. 9:20Here, we have a reversal candle on the
  251. 9:216-hour, right? Very large wick. So, what
  252. 9:24do we do?
  253. 9:25We have to have that 4-hour candle
  254. 9:26supporting expansion in order to confirm
  255. 9:28this reversal to expansion candle.
  256. 9:30Pretty simple, right? What do you need?
  257. 9:32A 1-hour 30-minute swing formation, but
  258. 9:34also two status MT, of course. And once
  259. 9:37that is all in line, you can trade this
  260. 9:394-hour first expansion candle away from
  261. 9:42the low of day.
  262. 9:43Remember, we're going to be assuming
  263. 9:45that the 6-hour candle is going to close
  264. 9:47a reversal candle
  265. 9:48and the true alignment or the expansion
  266. 9:50will follow when the H6 and the H4
  267. 9:54align.
  268. 9:55Now, let's talk about how to trade a
  269. 9:564-hour reversal, and that's aligning the
  270. 9:586-hour.
  271. 10:00As you can see,
  272. 10:01this 6-hour candle supports expansion.
  273. 10:04So, as we see on the 4-hour chart, we
  274. 10:06hit a key level to potentially form low
  275. 10:07of day. The current 4-hour candle that
  276. 10:09we're trading does not support
  277. 10:11expansion. So, what do we need? The
  278. 10:136-hour to support expansion. It's really
  279. 10:15as simple as that. Once this candle
  280. 10:17closes, you have two time frames
  281. 10:19aligned, and that's where we're going to
  282. 10:20get that really nice expansion.
  283. 10:23So, now let's put it all together.
  284. 10:25So, we have our key level formed the low
  285. 10:27of day. You're going to have your two
  286. 10:29stages SMT.
  287. 10:30You're going to have that large wick on
  288. 10:32the 4-hour time frame.
  289. 10:34You're going to wait for that new 6-hour
  290. 10:36open to align.
  291. 10:39Once that's aligned, you're essentially
  292. 10:40just confirming the high and low of day,
  293. 10:42of course, with their 1-hour and slash
  294. 10:4330-minute swing point, which will happen
  295. 10:47on the new quarter open, which is 12:00
  296. 10:49in this case.
  297. 10:50So, once you have that confirmation,
  298. 10:52that C2 candle, that is confirming the
  299. 10:54low of the 6-hour candle, but also the
  300. 10:564-hour candle. Remember,
  301. 10:58you're going to be trading a 1-hour and
  302. 11:00slash 30-minute expansion candle back
  303. 11:02towards the opening price of this 4-hour
  304. 11:04candle. Your stop loss is going to be
  305. 11:06below
  306. 11:07this discount end of the wick, of
  307. 11:10course.
  308. 11:11And once you have that 6-hour and 4-hour
  309. 11:13alignment, that's when the true
  310. 11:14expansion occurs.
  311. 11:16Now, we're going to be covering a 4-hour
  312. 11:18reversal.
  313. 11:19This is where we're going to be using
  314. 11:20the 90-minute alignment.
  315. 11:22Now, specifically when we're going to be
  316. 11:24using this is when the current 4-hour
  317. 11:26candle actually does support expansion.
  318. 11:29But when you drop the 90-minute, it does
  319. 11:31not support expansion. So, what you're
  320. 11:32going to simply wait for is the opening
  321. 11:34price of a new 90-minute candle, and
  322. 11:36that is when price is going to expand
  323. 11:38typically on the 4-hour.
  324. 11:40So, now let's go ahead and put it all
  325. 11:41together. Now, here we're using the
  326. 11:43timing of 10:30 90-minute candle because
  327. 11:46this is really specifically only for
  328. 11:48this candle. I wouldn't say only, but
  329. 11:51most times it is. So, let's kind of go
  330. 11:53over why.
  331. 11:55So, this 9:00 90-minute candle
  332. 11:58resides in the time window of both
  333. 12:02the 6:00 a.m. 4-hour candle
  334. 12:04and the 10:00 a.m. 4-hour candle, right?
  335. 12:06Because this candle opens up at 10:30,
  336. 12:09right? So, this candle here, 9:00 a.m.
  337. 12:11candle, runs from 9:00
  338. 12:13to 10:30.
  339. 12:14So, you see obviously it's
  340. 12:17obviously within the time window of the
  341. 12:18new 10:00 a.m. open.
  342. 12:20So, essentially, if this candle is not
  343. 12:22ready set for reversal,
  344. 12:24then the first 30 minutes of the 10:00
  345. 12:27a.m. 4-hour candle is not going to
  346. 12:29reverse, right? It's going to wait for
  347. 12:30what? 10:30, right? Because then you
  348. 12:32have the opening price of Q4 aligned
  349. 12:35within the 4-hour candle of 10:00 a.m.
  350. 12:38if that makes sense. Now, when does this
  351. 12:40typically happen?
  352. 12:42Is during
  353. 12:43um a lagging asset. So, for example,
  354. 12:47the 6:00 a.m. 4-hour candle, maybe at
  355. 12:489:30 or whatnot, will actually reverse
  356. 12:51and expand towards the draw
  357. 12:53where the lagging asset maybe doesn't,
  358. 12:54maybe it creates a PSP or doesn't
  359. 12:56reverse, maybe it creates an expansion
  360. 12:58candle.
  361. 12:59So, the trigger for a decoupled market
  362. 13:02or maybe assets resync is an SMT, right?
  363. 13:05Um in this case, it's a maybe a
  364. 13:06two-stage PSP, right? Where it has a
  365. 13:08sweep out the previous candle's higher
  366. 13:10low. It's going to have to sweep out
  367. 13:116:00 a.m. candle's low.
  368. 13:14And you're going to think that that's
  369. 13:15the trigger, which it is, but you got to
  370. 13:17time it, right? Because remember, if
  371. 13:19this 9:00 a.m. candle is not set to
  372. 13:21reverse, then what is going to wait for?
  373. 13:2310:30, right? So, that's why we use
  374. 13:26this, of course,
  375. 13:28um
  376. 13:29And as you can see, this is a really
  377. 13:30good depiction of that, where 10:00 a.m.
  378. 13:32opens, right? Um
  379. 13:35And this is the first 30 minutes of
  380. 13:3710:00 a.m., right? So you're technically
  381. 13:39within this 9:00 a.m. candle still. It
  382. 13:41doesn't It's not set reversal.
  383. 13:43But 10:30 opens, that's now aligned,
  384. 13:46right? Now you have that quarterly
  385. 13:47alignment that we talk about. Um
  386. 13:50And now price is set for expansion,
  387. 13:52right? Quarterly aligned or quarterly
  388. 13:54alignment with the 10:00 a.m. candle and
  389. 13:56the 9:00 a.m. candle, that's when that
  390. 13:58uh 10:00 a.m. 4-hour candle will
  391. 14:00actually reverse and expand.
  392. 14:02So now let's go ahead and get into some
  393. 14:04examples. First, we're going to be
  394. 14:06covering how to trade a daily reversal
  395. 14:08candle. As you can see, very, very large
  396. 14:10wick here. So what is step one? We need
  397. 14:13a key level on the daily or the 4-hour
  398. 14:15time frame. Here we clearly have a daily
  399. 14:17fair value gap, so that's uh good there.
  400. 14:20What is the second thing we need? It's a
  401. 14:22profile. So let's go ahead and drop down
  402. 14:24to the 4-hour time frame to look at this
  403. 14:26profile. So here we are on the 4-hour
  404. 14:28time frame, and how does this candle
  405. 14:30form? What do we need it to form like,
  406. 14:32right? For a bullish candle, it needs to
  407. 14:34open low first, exactly what it does,
  408. 14:37ideally leaving 1800 as the high of day,
  409. 14:39that's perfect. And when we have a daily
  410. 14:41reversal candle,
  411. 14:43what are the targets we're going to be
  412. 14:44choosing? Is back to the daily range as
  413. 14:47TP1.
  414. 14:48TP2 is going to be the daily open, and
  415. 14:51TP3 is going to be levels just beyond
  416. 14:55the daily open in close proximity. And
  417. 14:57the farther and farther away you go, and
  418. 15:00the closer to the daily open you go,
  419. 15:02is less likely for price to reach these
  420. 15:05targets, right? Because
  421. 15:07it can't expand beyond daily open. It's
  422. 15:09going to have a hard time. So it's
  423. 15:10really hard to know. So obviously, this
  424. 15:13level here is farthest away from daily
  425. 15:15open, so it's going to be the easiest,
  426. 15:16right? It's less for for you to
  427. 15:19anticipate, right? It's closest um to
  428. 15:22current price down here at the reversal.
  429. 15:24So, it's going to be the the most likely
  430. 15:26to get hit, right? The daily open is
  431. 15:27going to be second
  432. 15:29uh, likely to get hit. Or maybe the
  433. 15:31current high of day. These are more of
  434. 15:32the same thing, right? Um, and this
  435. 15:35level here is going to be the least
  436. 15:36likely to get hit. Doesn't mean it's
  437. 15:37impossible, but the larger and larger
  438. 15:38that wick is,
  439. 15:40uh, the least likely it's going to
  440. 15:41happen, right? And we're going to be
  441. 15:42trading 4-hour expansion candles back
  442. 15:46towards the daily open.
  443. 15:48Now, let's go ahead and talk about how
  444. 15:49to trade a 4-hour reversal candle.
  445. 15:51As you can see this wick is very, very
  446. 15:53large. So, what are some things that we
  447. 15:55need to have in play here? Is a key
  448. 15:58level to form low of day on the hourly
  449. 16:00above.
  450. 16:01That's exactly what we have here. And of
  451. 16:03course, we always need a framework.
  452. 16:04Let's go ahead and show you that
  453. 16:05framework now.
  454. 16:07So, here you have a low here.
  455. 16:09SMT with that low.
  456. 16:11Price expands away.
  457. 16:13Creates a relevant low here. So, as you
  458. 16:15can see, we're really high in this
  459. 16:17range. Price is actually already hit
  460. 16:19this high here on YM. Let's go ahead and
  461. 16:21show you that
  462. 16:23real quick.
  463. 16:24If I show you that high here,
  464. 16:27it's already been hit
  465. 16:28at 2:00 a.m., right? So, price does
  466. 16:31what? Creates a strength switch
  467. 16:34for NQ.
  468. 16:36Let's go ahead and
  469. 16:37to go ahead and catch up, right?
  470. 16:39So, that is one thing that we need is
  471. 16:41SMT with our key level.
  472. 16:43But, we need a second say SMT or a
  473. 16:44driver to confirm this wick. So, let's
  474. 16:47go ahead and drop down to lower time
  475. 16:49frames to see what we got.
  476. 16:51So, here we are on the lower time
  477. 16:54frames. So, if you didn't know this,
  478. 16:56guys,
  479. 16:57if you have a strength switch SMT on the
  480. 16:59higher time frame to have an SMT break,
  481. 17:01you do not need a secondary, uh,
  482. 17:04SMT. This is the highest form of a, um,
  483. 17:07continuation signature or reversal
  484. 17:09signature that you can have. It's
  485. 17:11technically continuation as we're
  486. 17:13actually breaking the SMT.
  487. 17:15It's also a I guess, to continue, right?
  488. 17:17But it is the highest probable
  489. 17:19confirmation have, so you actually don't
  490. 17:21need a second SMT. But even if this
  491. 17:23wasn't a strength this guys, we have
  492. 17:259:30 confirming this, right? So, when we
  493. 17:27have a 4-hour large wick, we're going to
  494. 17:30be trading 30-minute and hourly
  495. 17:32expansion candles back towards the
  496. 17:34opening price, right?
  497. 17:36And when you guys are trading a large
  498. 17:38wick on the 4-hour, it is ideal that it
  499. 17:40is the 6:00 a.m. 4-hour candle
  500. 17:42specifically. That is because of what we
  501. 17:45have within that time window. There's
  502. 17:46going to be 8:30 red folder news, 9:30
  503. 17:49every single day on indices. You're
  504. 17:51going to have that volatility injection,
  505. 17:53which allows you
  506. 17:55the most likelihood of an expansion
  507. 17:58beyond the open
  508. 17:59just because of that volatility. So, as
  509. 18:02you can see here, we have that 9:30
  510. 18:04volatility injection. We have our SMT.
  511. 18:07Let's drop to lower time frame
  512. 18:08to look for our entry and our stop
  513. 18:10placement. So, here we have our V-shaped
  514. 18:13CSD. That is a reversal confirmation.
  515. 18:15So, you're actually good to just enter
  516. 18:17off of that right there.
  517. 18:19Your stop loss needs to be where? In the
  518. 18:21discount end of that reversal candle,
  519. 18:24marking it from the opening price to the
  520. 18:26reversal low. As you can see, my stop
  521. 18:28loss is basically at the very low end of
  522. 18:30that, at least 2R to the high. You're
  523. 18:32good there. If you want to trade
  524. 18:34continuation, again, your stop loss
  525. 18:36would be here.
  526. 18:39Right? In the discount end. You're good
  527. 18:41as long as it's not in premium end of
  528. 18:44that reversal candle. It is ideal that
  529. 18:47your entry is at EQ or below, but it
  530. 18:49doesn't actually matter as long as your
  531. 18:50stop loss is uh below here. You're
  532. 18:53pretty much good. So, as you can see,
  533. 18:55this checks all the boxes for trading a
  534. 18:58reversal candle um mechanically, which
  535. 19:00is very important.
  536. 19:02So, now let's go ahead and talk about
  537. 19:03how to trade a 6-hour reversal candle.
  538. 19:06Remember, we're going to be aligning the
  539. 19:084-hour. So, as you can see here, we have
  540. 19:10our key level, check one. That large
  541. 19:13wick, of course. Now you see to confirm
  542. 19:16this with a secondary stage SMT.
  543. 19:19And it we're going to be timing it
  544. 19:21with a 4-hour open. Let's go ahead and
  545. 19:23drop down to the 4-hour time frame.
  546. 19:25So, as you can see, this is actually a
  547. 19:26daily reversal candle. Let's go to mark
  548. 19:28out the opening price. As you can see,
  549. 19:31we pretty much open low first, pretty
  550. 19:32much a one-sided move lower. So, seeing
  551. 19:34a new phase of price makes a lot of
  552. 19:36sense, right? Candle one, candle two,
  553. 19:37candle three, all expanding the same
  554. 19:39direction into a key level. So, seeing
  555. 19:41this candle actually trade back to the
  556. 19:43range makes sense, right? Let's go to
  557. 19:45the daily chart really quick.
  558. 19:47Right? This large wick makes sense. Why?
  559. 19:50Because it has SMT to the key level, a
  560. 19:51relevant key level. The space between
  561. 19:53these lows makes it a relevant low. So,
  562. 19:55it makes sense to actually maybe
  563. 19:57form like a reversal candle, right?
  564. 19:59Pretty much opens low first. Um so,
  565. 20:01seeing Q4 or PM session kind of create
  566. 20:04that wick makes a lot of sense, right?
  567. 20:07But, we need to time it. We need to have
  568. 20:08our confirmations, right? Two SMT in the
  569. 20:10form of a strength switch, that's
  570. 20:12perfect. If you guys ever want to trade
  571. 20:13a reversal or a reversal candle
  572. 20:15specifically,
  573. 20:16strength switch forms the high and low
  574. 20:17of that reversal candle,
  575. 20:18you're pretty much good, dude.
  576. 20:20Cuz remember, strength switch is the
  577. 20:21highest probable reversal confirmation
  578. 20:24that there is. But, notice how right
  579. 20:26when 1400 opens,
  580. 20:28that's when we expand back towards the
  581. 20:30opening price
  582. 20:32um
  583. 20:32of that um 6-hour candle, right? And
  584. 20:35since we have a daily reversal candle,
  585. 20:38very, very large wick, there's not a lot
  586. 20:40of time left in this day.
  587. 20:41You're just going to target
  588. 20:43uh back to the daily range, which is
  589. 20:45which is this gap, right? So, your your
  590. 20:47reversal model here,
  591. 20:48external,
  592. 20:50internal. Very simple.
  593. 20:52Now, we're going to be talking about how
  594. 20:54to trade a 4-hour reversal candle or a
  595. 20:574-hour candle with a very, very large
  596. 20:59wick.
  597. 21:00And as you can see here, this is
  598. 21:01extremely large wick on the 4-hour. So,
  599. 21:03what do you need?
  600. 21:04You You a key level here on the hourly
  601. 21:06above to form the high day.
  602. 21:08So here we actually have a
  603. 21:10um strength switch with an hourly high.
  604. 21:13Let's go ahead and drop down to lower
  605. 21:14time frame.
  606. 21:15So here on the hourly time frame
  607. 21:17what do we have here? So first off, the
  608. 21:19day puts on a high here and expands away
  609. 21:22from it creating SMT here. But it's like
  610. 21:25close proximity SMT, right? Which is not
  611. 21:27high probable, we know that.
  612. 21:28Let's go to YM and look at that really
  613. 21:30quick.
  614. 21:32That's going to be actually here.
  615. 21:34Which obviously fails to manipulate it.
  616. 21:35So we already know that this is probably
  617. 21:37an SMT that's going to break, right? Cuz
  618. 21:39this asset's expanding through it.
  619. 21:41Here is a strength switch
  620. 21:45for this asset to catch up and break
  621. 21:47that SMT, right?
  622. 21:49Mechanical taught an asset organization
  623. 21:51inside of the course, right? But
  624. 21:53as you can see
  625. 21:55to create the SMT, the 10-minute opens
  626. 21:56up here. It opens up, creates the
  627. 21:58strength switch, but it's a very, very
  628. 22:00large open high
  629. 22:02um in that candle, right? So what are
  630. 22:04you going to wait for? To align is the
  631. 22:066-hour. Let's go to 6-hour.
  632. 22:09So boom here, the 6-hour opens up.
  633. 22:11That's when you get that expansion,
  634. 22:13right? So you're trading a essentially a
  635. 22:164-hour reversal candle
  636. 22:17but you're lining a 6-hour expansion
  637. 22:20candle. And if you actually look here
  638. 22:22you have a gap here.
  639. 22:24We have a
  640. 22:25bearish candle
  641. 22:26over here it's bullish, right?
  642. 22:28Which is a strength switch PSP
  643. 22:31to go ahead and break that SMT.
  644. 22:34So here we're going to go over how to
  645. 22:36time a 4-hour reversal to expansion
  646. 22:39candle with a 90-minute open.
  647. 22:41But first let's do a top-down here.
  648. 22:43So here you have your first stage SMT
  649. 22:45followed by second stage SMT, which is a
  650. 22:47strength switch. Price expands away on
  651. 22:49the weekly time frame
  652. 22:51forming an SMT here actually, which is
  653. 22:54in the terms of advanced premium
  654. 22:56discount.
  655. 22:57This asset's taking out these range
  656. 22:59lows,
  657. 23:00um but we created a gap, right? So, this
  658. 23:03asset
  659. 23:04ended up retracing back towards this
  660. 23:06two-stage high,
  661. 23:08which is really just a retracement here.
  662. 23:10So, this SMT caused a retracement. If
  663. 23:12we're If this is going to be a
  664. 23:13retracement, right? This gap needs to
  665. 23:14hold, right? So, as you can see, we're
  666. 23:16pretty much trading a reversal expansion
  667. 23:18candle
  668. 23:19here
  669. 23:20um, on all these assets. Let's drop down
  670. 23:22to the daily.
  671. 23:23So, a reason why we would be bearish
  672. 23:25this specific day here
  673. 23:28is because, of course, how we expand
  674. 23:30away from that weekly gap in the C2
  675. 23:32closure.
  676. 23:33This here is obviously not a
  677. 23:36continuation signature, right? This is a
  678. 23:38V-shape signature, and we're getting
  679. 23:39really close to this low. So, this is
  680. 23:41why we'd be bearish this day
  681. 23:42specifically. Let's drop down to the
  682. 23:45lower time frames.
  683. 23:47So, here we are on the 6-hour time
  684. 23:49frame. And as you can see, this phase of
  685. 23:50price, after you expand, guys, is pretty
  686. 23:53much consolidation, as you can see.
  687. 23:56When you look back in the previous day's
  688. 23:57range,
  689. 23:58we have a gap
  690. 24:00here
  691. 24:02and here.
  692. 24:04Right?
  693. 24:06And we have a SMT with this gap, of
  694. 24:07course. So, we have a SMT fill with our
  695. 24:10gap. Now, you need a two-stage SMT, but
  696. 24:12look at this 6-hour candle, guys, how
  697. 24:14large it is. So,
  698. 24:16what would you guys need to have? A
  699. 24:174-hour
  700. 24:19open, of course, right? So, let's wait
  701. 24:20for that 4-hour open. Let's drop down to
  702. 24:21the 4-hour time frame.
  703. 24:23So, here we are on the 4-hour time
  704. 24:25frame. Now, as you guys can see,
  705. 24:27we have that 10:00 a.m. reversal
  706. 24:30into expansion candle.
  707. 24:32But when you actually look at when this
  708. 24:34candle opens up at 10:00 a.m., you're
  709. 24:36going to see that the 9:00 a.m.
  710. 24:3890-minute candle is actually not
  711. 24:39aligned. So, let's go ahead and look at
  712. 24:40that.
  713. 24:42So, here we are on the 90-minute chart.
  714. 24:44This is exactly what I'm talking about.
  715. 24:46The 10:00 a.m. candle opens up within
  716. 24:48this 90-minute 9:00 a.m. candle, which
  717. 24:51is not set for
  718. 24:52It's not set for reversal, right?
  719. 24:54So, when is it actually going to
  720. 24:56reverse, guys?
  721. 24:57It's actually when the 10:30 opens,
  722. 25:00which is right here, right?
  723. 25:0310:30 is right here.
  724. 25:04That's when price is now aligned
  725. 25:07with the quarterly open for the 10:00
  726. 25:09a.m. candle to actually set uh the
  727. 25:12reversal and expand away. Once that
  728. 25:13happens,
  729. 25:15now you're truly aligned
  730. 25:17uh the 4-hour expansion candle with a
  731. 25:196-hour reversal candle, if that makes
  732. 25:21sense, right? And you can begin to
  733. 25:22target these opposing lows.

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