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The Anomaly Mentorship - Advance course - Lesson 9 - Gap Selection — Transcript

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0:00Hello everybody. Welcome to the anomaly
0:02course, core content lesson two. Here
0:04we're going to be going over gap
0:05selection. We're going to be talking
0:07about how to trade breakaway gaps, how
0:09to anticipate breakaway gaps.
0:11We're going to be talking about the
0:12universal sequence and just high
0:14probable gaps in general. Which is an
0:17extension to what we have in the course
0:19covering gap filtering. So, let's go
0:21ahead and start here. So, here is going
0:24to be talking about which gaps you want
0:25to be using. If we have a
0:28expansion leg in price after reversal,
0:30we want to see continuation to this high
0:32for example. And maybe on the 30-minute
0:34you see that we have multiple gaps in
0:36this leg of price, in this expansion
0:38leg. We want to filter it out into one
0:41gap ideally. You're going to jump up one
0:42time frame, right? So, what's the
0:44highest or what's one time frame above
0:4630-minute? It's going to be hourly,
0:48right? And here you see one large gap.
0:50That's what we want to see. It's ideally
0:52one gap in price. So, let's say this is
0:54the hourly time frame right here on the
0:56left. We have two gaps in the hourly
0:58time frame. I'm going to jump up to
0:5990-minute.
1:00And I'm going to look for a 90-minute
1:01gap there. Just one gap, okay? When I
1:04jump to the 90-minute, what if there's
1:06two gaps? I'm going to jump to the
1:084-hour. Right, what if this is the
1:094-hour here?
1:10I'm going to jump to 6-hour and see one
1:12gap. So on and so forth.
1:16So, now let's talk about the highest
1:18probability gaps.
1:19And that is essentially where the high
1:21of a higher time frame gap is a relevant
1:24low on the lower time frame. So, you
1:26guys see right here, this is the high of
1:28this gap, which is a relevant low on the
1:30lower time frame, these spaced out lows.
1:33That is actually the highest probable
1:35gap in price.
1:40So, when we drop to lower time frame, we
1:41can really treat this with the relevant
1:44swings logic, right?
1:46So, when we drop to lower time frame,
1:47this is what it will look like, right?
1:50The high of this gap is a relevant swing
1:53on lower time frame, which is what
1:55you're going to have SMT with, right?
1:56Because this is the gap high. You'll
1:58have SMT like that. And ideally, you
2:00want this to turn into a protected
2:01swing.
2:02You want that shallow manipulation of
2:05this relevant swing, so we're not
2:06creating failure swings.
2:11Now, here's an example where if we run
2:14through and have a deep manipulation
2:17in this gap, that is not ideal, right?
2:19So, what do we see here? Inside of this
2:21gap, what do we have? A relevant swing.
2:24That is another thing. Sometimes,
2:27when you look at a high or a low of a
2:29gap, in this case the high, sometimes
2:31it's not a relevant swing. It's like
2:33nothing, basically. It's not nothing
2:35relevant at all. But inside of that gap,
2:38you actually might have a relevant
2:39level.
2:40So, what price will wait for
2:42is
2:43it will wait for price to engage with
2:45this relevant swing. For example, you
2:46might have SMT with that gap high or low
2:48that's not a relevant level, but as soon
2:50as it takes out the relevant swing that
2:52is positioned inside of the highest of
2:54gap, is when price reverses, right?
2:56You're going to see this quite a bit,
2:58right? And it's very important because a
3:00lot of times you're going to be waiting
3:02for the SMT of the gap,
3:04it's not going to do anything because
3:05it's not actually a relevant level at
3:07all. It's just going to wait for the
3:09price to take out the relevant low,
3:10okay? And mainly, we only care about
3:12this
3:13on like the hourly and above for the
3:16most part, right? The alignment will be
3:18something like this, right? This is a
3:194-hour gap, an hourly swing low. If this
3:21is an hourly gap, you know, 15-minute,
3:2230-minute swing low. That's pretty much
3:24how you're going to go with it, right?
3:25So, right here you as you see,
3:27um this scenario is a bit different,
3:28right? Where
3:30in this case, it is a relevant low,
3:32right? The gap high.
3:34And we create SMT with it, but we're
3:36creating failure swings, right? So,
3:38ideally, you want to wait for price to
3:40manipulate this um relevant swing here
3:43to create a protected swing, which we'll
3:44see in the next slide.
3:47So, as you guys can see,
3:48this is what we would be waiting for,
3:50right? Is this to be taken out? Now
3:53there is no
3:55relevant swings in this whole leg,
3:56right? They're all taken out. There's no
3:58reason to go lower. We take them all
4:00out, which creates a protective swing in
4:02price. There's no reason lower. Then we
4:04can expand, right? So it's simply yes,
4:06it's an SMT fill,
4:08but we're incorporating these relevant
4:10swings within it, which is very
4:11important.
4:13So now let's go ahead and cover
4:14breakaway gaps. Here in this slide we're
4:16going to be covering how to anticipate
4:18them. So that is going to be the first
4:21gap at reversal. Ideally low in a range,
4:25right? If this is the reversal down
4:26here, this is drawing liquidity,
4:29the discount end, right? Specifically
4:31ideally very deep in discount, right?
4:34Um because if we just reversed, we
4:36should just expand, right? A gap is a
4:39retracement phase of price where price
4:41retraces into a gap. Um that should only
4:43occur after we expanded, right? Into EQ
4:46or hit maybe
4:48a relevant level that's internal to the
4:49range, etc., right? So here when we
4:51actually start to retrace, candle one,
4:53candle two, candle three, right? Three
4:55candles of expansion, this gap gets
4:56traded into. Um so you're going to see
4:59it's the gap
5:00that forms between candle one and candle
5:02two's range is typically
5:04where the breakaway gap forms, right?
5:07It's always within it that first swing
5:09point that price reverses from is where
5:12the breakaway gap occurs. So that gap is
5:14actually where we get the most
5:15opportunity and the highest probable
5:17opportunity for continuations, but it's
5:19also where we see the most breakaway
5:20gaps. So it's important to actually
5:22understand how to trade them. Now this
5:24is not something you can get 100% of the
5:26time. It's not something you can always
5:27anticipate to be left open, but it's
5:30something that we will act on.
5:33Uh and we have a mechanical process to
5:35do so. So let's go ahead and move on.
5:37So now the second way we can anticipate
5:40um a gap to be left open, a breakaway
5:42gap, is the candle three closure that
5:45creates the gap, right? So here's the
5:47candle that is creating the gap, right?
5:49Candle one and candle three's wicks here
5:51do not meet.
5:52So, as you can see, these two candles
5:54are closing differently, right? What's
5:56the difference here? This candle here is
5:58closing more of an expansion candle,
6:00right? Where it closes um above candle
6:03two's high, right? Aggressively.
6:05And this candle here is not, right? It's
6:08like a reversal candle, right? If candle
6:10three closes like this, it is much more
6:13likely to trade into the gap the very
6:15next candle, right? Whereas this one
6:17over here is not, right?
6:20It's in that expansion phase of price,
6:21which we want. That's what breakaway
6:23gaps
6:24um are basically. It's expansion.
6:26They're actually good things to see in
6:27price
6:29uh early in a reversal because that's
6:31indication of violent price action or
6:34volatile price action, which is what we
6:36want. You know, one-sided expansion um
6:38after a reversal. So, it's actually
6:39something that's is actually good to
6:41see.
6:43So, this is going to be
6:45important to understand
6:47when we understand how to actually trade
6:49a breakaway gap, right? Because the
6:50candle three closure
6:52is something that's very important,
6:53which we're going to be covering in the
6:55next slide here.
6:58So, here is actually how to trade a
7:00future higher itself gap. So,
7:02essentially you're trading candle three
7:04right here, right? And we understand and
7:06we know when this candle three opens
7:09that it's probably going to create a
7:10future gap. Why? Because the wicks here
7:14are not meeting. You see they're not
7:15meeting? So, we know when this candle
7:16closes it's going to form a future gap,
7:19right? So, what's going to end up
7:20happening is that you're going to get a
7:23gap on the lower time frame that forms
7:25before this candle closes, right? This
7:28candle here and candle two
7:30is going to create the gap. Or maybe the
7:32first 30-minute candle in this hourly
7:35candle creates the gap, right? Doesn't
7:36matter.
7:37All we know is that there's a gap that's
7:39forming before the hourly gap. So, it's
7:41like how do we know which one to wait
7:44for? Can we trade this 30-minute one? Do
7:45we have to wait for the hourly? Right?
7:47So, you can do it. We we can trade this
7:50gap, but it's important like where are
7:52we going to do it though? Right? Early
7:54inversions only, right? That's
7:56important. So, that's one thing you
7:57need. So, assuming we have that, we're
7:59putting that initial swing point forming
8:01after reversal, we can do this, but it's
8:03very important which asset we trade.
8:06We're always going to be trading this
8:08asset here, which is the leading asset,
8:10and you will understand why here.
8:12That is because just in case we do
8:16actually trade
8:17into this gap, right? Which asset is
8:21most likely to trade to the gap?
8:23The lagging one, the weaker one, right?
8:25Because it's weaker, so it's most likely
8:27to trade to the gap. So, you have a
8:28chance of staying alive with this asset
8:32trading to the gap and this asset not
8:33creating an SMT fill, um which would
8:36save your stop loss, right? So, you're
8:37always going to be trading the leading
8:39asset. That is super important, guys. Um
8:42and this is where the candle closure
8:44comes into play. So, assuming we took
8:48this future gap here, assuming that we
8:49did,
8:51this is where we're going to watch to
8:52see this close because it's very
8:54important. So, here on the next slide,
8:56assuming that we took candle three, that
8:59is the future breakaway gap, if candle
9:01three closes like this, right? Here's
9:04the lagging asset close like this, so
9:05that we know that the lagging asset is
9:07highly likely to trade in this gap,
9:10right? And we're hoping that it creates
9:12an SMT fill
9:14if you're in this trade here. If you're
9:16in this trade, remember, you should be
9:17trading this
9:19uh leading asset because it is more
9:21likely to leave this gap open, right?
9:23Because if we're going to continue from
9:24a gap,
9:25more times than not, it's going to
9:26create an SMT fill, right? So, we're
9:28just basically assuming and hoping that
9:30you know, if this if this candle here
9:32closes badly that the hourly gap holds,
9:35the gap the hourly gap SMT holds, right?
9:37And your stop loss would be at this
9:39candle's low,
9:40wherever this candle's
9:42low is, right?
9:43Or I I it would be right here, my bad,
9:45right? It was the SMT fill on the
9:4630-minute. So, you basically would be
9:48saved by the SMT, right? Now, if you're
9:52in the leading assets trade here, and it
9:55closes like this as well,
9:56let's say this candle three did not
9:58close above, but it closes like a
9:59reversal candle. Get out of the trade.
10:01This is why I think it's really
10:02important. If you're trading the lagging
10:04assets especially if it closes like
10:05this, get out of the trade because you
10:07know that it's going to run your stop
10:08loss, right? You see this gap SMT here,
10:11it's going to break.
10:12Because this 30-minute gap SMT fill,
10:16this low right here,
10:18it is the gap high on the hourly. So,
10:21it's going to be traded into. Does that
10:23going to make sense?
10:24So, it's very important to pay attention
10:26to these candle closes, right? If they
10:27both close bullish expansion candle,
10:29you're probably good to go. You don't
10:30really have to worry, probably.
10:33But again, it's never a guarantee.
10:34But these are some things to look out
10:35for. We're looking for the candle
10:37closures, right? We're always going to
10:38be trading that leading assets just in
10:41case
10:42um of price running into that
10:45um future gap and not leaving a break of
10:47the gap, right?
10:50So, here is an example of that occurring
10:53where you might try to trade this future
10:56gap, right?
10:58We have the SMT fill,
11:00as you guys can see.
11:02Your stop loss is on the future SMT
11:04fill, but how did we close this candle
11:05three?
11:06It's a reversal candle, right? So, your
11:09stop loss that is on this two-stage SMT
11:11fill, right here, or one-stage SMT,
11:14whatever, it doesn't matter.
11:16It's on a future gap, right? And the
11:18candle three is closed like that, you're
11:19cooked, right? It's going to stop you
11:21out.
11:22That's no bueno, right? What do you guys
11:23also notice about this formation of
11:26candles here
11:27is that it is not within a swing
11:29formation, right? The best breakaway
11:31gaps are within a higher time frame
11:33information, guys. Where the gap low,
11:35for example, is candle three.
11:37That is the best type of breakaway gap.
11:40Right? Because on that time frame, it's
11:42just going to go. Right? It's just going
11:44to expand. Because candle two reverse,
11:45candle three expands. This is the best
11:47type of breakaway gaps. Right? It's not
11:49always the case where
11:51you know, you can't trade this. If it's
11:53really, really low in range, it's cool.
11:55But if it's really high in range, this
11:57is not It's even less likely that it's
11:59going to form breakaway gap, okay?
12:04Now, in my opinion, this is the most
12:06ideal sequence for a breakaway gap. Is
12:09when you are within, again, a swing
12:11formation after reversal,
12:13but candle two
12:15it reverses, expands, and also retraces.
12:20Retraces specifically
12:22into EQ of the range. Right? So, it's
12:24going to look like this, where candle
12:25two has like this large wick is usually
12:26what it's going to look like. Or candle
12:28three has like um
12:31a decent wick, right?
12:33And what this is, essentially, is price
12:36already had the retracement phase of
12:37price. Right? Look at this. Expansion,
12:39retracements. You need a deep enough
12:42retracement to trust, though. If it's
12:43into the EQ of the range, why we don't
12:46need to retrace anymore. Right? So, what
12:48comes after retracement, it should just
12:50expand. Right? So, this is especially
12:53when breakaway gaps should um
12:56be left open right here. This is the
12:57most ideal sequence, right? And again,
13:00how do we trade a breakaway gap?
13:01Is just a um
13:04early gap, right? That forms and gets
13:07traded into before this gap is even
13:09created. Right? So, as you can see, SMT
13:11fill.
13:12The SMT fill, the low of that is the low
13:15of this candle three, which is the high
13:16of the future gap.
13:18And that's what you'll be um and that's
13:20what you're going to be trading.
13:24Now, Now, go over the GXT universal
13:27sequence.
13:28This is just putting it all together.
13:30Like, when do we expect gaps to form?
13:33The most um high probable gaps and the
13:36sequence that is required to anticipate
13:38gaps even forming, right? So,
13:41what are gaps used for? Continuation.
13:44Okay? What are we going to be continuing
13:46away from? Key levels, right?
13:49So, boom, you have a key level being
13:50hit, but what do we confirm key levels
13:52with? Two-stage SMT, right? So, ideally,
13:55you have SMT with your key level
13:57followed by a precision swing points
14:00or consecutive candle SMT as your
14:02two-stage SMT. Now, if it's a
14:04consecutive candle two-stage SMT,
14:06ideally, it's in the form of a strength
14:07switch. Okay? So, in this case
14:09So, in this case, we have SMT
14:11and a PSP. So, what are we expecting
14:13price to do after it's
14:16forms this reversal signature, right? Or
14:18any reversal, the C2 candle, right? We
14:21expect it to expand away. In the
14:23expansion away
14:24from the hour reversal,
14:27it's going to be creating gaps. These
14:29are the most high probable gaps in price
14:31because what price is doing and showing
14:33us is that it is expanding away from the
14:35reversal. That's what happens after
14:36price reverses. It expands, right? And
14:39these gaps are going to be used for
14:41continuation. So, here's our first step.
14:44SMT with the key level
14:45followed by a PSP. This confirms our
14:48universal model. We're going to be going
14:50from down here to up here, simply,
14:52right? We're going to be using gaps
14:55and we're going to use gaps for
14:56continuation to get to these draws.
15:01So, here is the next step and that is
15:02the gap creation. As you guys can see,
15:04reversal,
15:06price creates that swing formation,
15:07price expands away from the swing
15:09formation or the reversal, creates the
15:11gap. This is the gap that we're going to
15:13be using for continuation. And again,
15:16ideally, it's just one gap, right?
15:17That's what we're going to be using. So,
15:19the first gap, the The recent gap,
15:21ideally, is what we want to be using.
15:24So, next is the gap confirmation, which
15:27is always going to be an SMT fill in the
15:30gap, or maybe both assets trade into the
15:32gap and you get a PSP, either or. We
15:35confirm the gap for continuation to
15:37trade towards our draw on liquidity.
15:41Now, we're going to be going over a
15:44ideal framework. It's the same thing,
15:46but this is
15:48just the most ideal and highest quality
15:52trades that you will find in price. And
15:54that is when
15:55we have valid framework, we're within a
15:57universal model, we have our two stage
15:59SMT confirming reversal, right?
16:01And
16:02we expand away from that
16:05and fall short of a draw on liquidity.
16:07In this case, it's an internal draw on
16:09liquidity.
16:10And then And then we re- retrace into
16:12the gap, right? So, why is this so high
16:15probability?
16:16It's because we have an is an
16:18established reversal down here,
16:19expansion away.
16:21And then we start the retracement phase
16:22of price before we even hit anything.
16:25So, we know that this higher here
16:28is created from nothing. It didn't even
16:30hit a key level. It didn't even hit or
16:33it didn't create SMT.
16:35So, when it does that,
16:37there's highly likelihood that this is
16:39not a reversal. It adds the probability.
16:41Now, you have a line draws right here.
16:43You have like failure swings, right? It
16:45like adds to the probability of this gap
16:47actually holding. Right? Because you
16:48have an established reversal here. No
16:50established reversal up here. Close
16:52draws. It's always great to have a close
16:53draw, guys. It's always good to have a
16:55close draw. That's the most ideal thing.
16:57You want these close draws
16:59in in in price. You do not want to be
17:00trading
17:02um
17:03like say consecutive candle
17:06uh gap SMT.
17:09For example, let's say this gap right
17:10here. Let's say there's SMT fill right
17:11here.
17:12But the draw on liquidity is way up
17:13here.
17:14You don't want to be trading that. You
17:15want a close draw on price. So,
17:18consecutive candle SMT, guys, is mainly
17:20used
17:21uh
17:23pretty much early in reversals, right?
17:25Or when you're close to draws, just so
17:26you know.
17:27But, here this is not consecutive candle
17:29SMT, but we do have that close draw,
17:30which is very ideal, right?
17:33And this is an a a case where
17:35And when we look over here, it's the
17:37same thing, right? We have our reversal
17:39at the lows. We expand away, but we fall
17:42short of the overall draw on liquidity,
17:45right? Price doesn't even hit it. It
17:46starts to retrace. What does that
17:47create? Failure swings and close
17:50proximity draws.
17:51And this gap is going to be very high
17:53probability to get towards this draw,
17:55right? You're going to see this all the
17:57time where price it almost like traps
17:59people. It gets people to start selling
18:02before we reach the overall draw, traps
18:04a lot of people, and they buy those
18:06positions into the highs. Very, very
18:08good framework. Absolutely love this. I
18:11mean, you can use this even alone by
18:13itself, to be honest. Where
18:16we don't even come off of a reversal.
18:18We're just close to a draw on liquidity,
18:20right? That can be your bias, and you
18:21just have like the most recent gap to
18:23get to that draw on liquidity. But, I'd
18:25only do that when you have very, very
18:27close draws on liquidity. But, it's
18:28ideal that it's in this sequence, right?
18:31Um you're actually coming off of
18:32something relevant, right? You can also
18:34do this
18:36even if we aren't really necessarily
18:38within a universal model. You just have
18:39a clear and obvious draw on liquidity.
18:41It's something you can do, but it's just
18:43less probability.
18:45So, here we are with the example of gap
18:47selection. So, as you guys can see, we
18:50have an SMT here.
18:53Right? Price expands away.
18:56We have multi- We have so many gaps on
18:58the hourly, right? Gap here. Gap here.
19:02Gap here.
19:04So on and so forth. Gap right here.
19:05Like, which one do you pick?
19:07Too many gaps. So, what do you do? You
19:08jump up a time frame. Go to the
19:0990-minute.
19:11I want to see one gap. Nope, same thing.
19:12I see like three gaps right here. Okay?
19:15What about um the 4-hour? Okay, boom.
19:18You see one gap. This is the gap
19:21that you're going to be using. It's as
19:22simple as that.
19:24Now, moving on to relevant swings and
19:26gaps, let's first go over the narrative
19:28here. You have gold on the left. You
19:30have gold um pound to the right. We're
19:33also going to be looking at silver as
19:35well to the right side of the screen in
19:36a bit.
19:37But, as you guys can see, you have SMT
19:39with this daily low
19:41followed by a PSP, which is a strength
19:43switch PSP. So, there's your two-stage
19:46confirmation. Now, let's drop to lower
19:48time frame. We're going to be going to
19:49the 4-hour time frame.
19:50So, here we are on the 4-hour time
19:51frame.
19:53What do we see here, guys? The universal
19:54sequence. Why? Because we have SMT with
19:57our key level.
19:59We have two-stage SMT, and then price
20:01expands away. The first gap that's
20:03created
20:04we're going to be using for
20:06continuation, right?
20:08So, here we are on the 4-hour time
20:10frame.
20:11What do you notice specifically about
20:12this, though?
20:13What do you notice specifically about
20:16this, though?
20:17Is that the asset on the right of screen
20:18has already traded into the current high
20:20of week,
20:22which is this high right here,
20:24and then it trades into the gap with
20:26this asset doesn't. So, what is this?
20:28It is a strength switch, right? To catch
20:30up with this is asset synchronization,
20:31guys.
20:33So, what do you catch up and
20:36SMT break this high.
20:40Right? So, there's the GXT universal
20:42sequence,
20:43but any form of a strength switch. So,
20:45very high probability. But, what makes
20:47this gap even higher probability
20:50is what this gap high is on the lower
20:53time frame. So, let's go ahead and drop
20:54down to the lower time frame to see
20:56this. So, here we are on the hourly time
20:58frame, guys.
20:59And what do we see here?
21:01This low
21:03on the hourly is the gap high on the
21:054-hour. And what is it on the hourly? It
21:08is a relevant swing. Look at the space
21:09between this low and this low slash this
21:11low. It's very very spaced out, right?
21:14The gap high is not just some little,
21:18you know, nothing. Like it's basically
21:19it's actually something basically,
21:20right? Sometimes you're going to see the
21:22gaps are really nothing. Like they're
21:24just the the lowest point of the highest
21:27super candle and then that's it. Like
21:29it's just a sometimes a little little
21:31retracement that doesn't actually mean
21:32much. When it's actually a relevant
21:34swing, this is the highest probable gap
21:37that you will find, right? So, that's
21:38what we have here. It is a filter two
21:40gaps. So, sometimes if if gaps are just
21:42nothing, they're not really a anything.
21:44Like for example, like
21:46this gap right here
21:48is probably nothing to be honest.
21:50Probably nothing relevance um on the
21:52lower time frame. I can show you what it
21:54is not.
21:55Yeah, it's just nothing. Um so, that's
21:57not going to be the highest probable
21:58gap. Of course, they're going to hold,
21:59right?
22:00In case they're going to hold, but um
22:02these are going to be the the best gaps.
22:04Like if you just want to trade gaps like
22:05this, you don't mechanically filter them
22:07out,
22:08then you can absolutely do that and
22:09they're way better. Like I can promise
22:11you they are way better than just using
22:13any and every gap, right? There's tons
22:14of gaps, right? They can't all work.
22:16These are way better, okay? So, that's
22:18what we have here in a very high
22:19probable sequence. I actually traded
22:21this day as well. Um it was super super
22:23nice. You're going to see within this
22:25swing formation,
22:27you guys are going to see
22:28we have
22:32the first gap right here.
22:33What is it being left open as, right? A
22:36gap. Go to lower time frame.
22:38You're going to see that we have a
22:41lower time frame SMT fill
22:43right here.
22:45Right? And which asset do you think I
22:47traded?
22:48I traded gold.
22:50Right? Even though
22:51none of the assets trade into it.
22:53Why? Because look at the closure. Look
22:55at the candle closure, guys. Candle
22:57three that creates the gap. It closes an
22:59expansion candle. So, I'm safe. I know
23:01that it's probably going to be left
23:02open. Right? But I can only do this,
23:05right? Because of the sequence, right?
23:08If I mark out
23:10the drawing liquidity
23:11to the slowest is technically 4-hour I
23:13roll E roll. Of course, we're not just
23:15going to target here. We're going to
23:16look for this target, but
23:18where is it positioned? Very low in the
23:20range in C3. You guys see that? You see
23:23how mechanical this is? Like, it's
23:24crazy, bro. Um and you can go look at my
23:27trade.
23:28Um I took this exact trade. This is on
23:304th of August.
23:32And then look uh
23:34go ahead and check this out as well.
23:37Let's look at this gap. Look, why is
23:38this a a good gap to use right here?
23:41Well, for one, what did we just do?
23:46What did we just do on this asset here?
23:49We fell short of a drawing liquidity.
23:50So, whenever you see like close
23:52proximity SMT as well, that's also a
23:54good thing. Remember what I told you
23:55guys about when price expands way fall
23:57short of draw?
23:58Even if a
24:00like a there's SMT here, that's fine,
24:02right? Because we know
24:03if you watched my
24:05um course on asset synchronization,
24:08even when we create SMT like this, it's
24:09low probability when it comes from a
24:12specific sequence, right?
24:14When the opposing side is actually
24:17relevant reversal, right?
24:19Because what that means is that both
24:20assets expanded, right? Away from it.
24:23Um it just so happened that the leading
24:25asset got here first, right? And if you
24:27actually mark out this high,
24:30what did it this asset do? It failed to
24:31manipulate it very clearly. So, we know
24:34this SMT is fake. It's not real.
24:36It's it's just using it as a
24:38retracement, right? So, this to me is
24:40close proximity
24:42SMT.
24:45Now, I opted to trade this asset here
24:48because it had draws here.
24:50And you're going to see that it um
24:53this asset here, when I took this I
24:54think I took like a break even like
24:56maybe a half loss.
24:57Um but this asset did end up going up
24:59here, so it's kind of weird how that
25:00ended up happening, but it's not really
25:02the point. The point is that this gap
25:04right here is high probability. So, why
25:06is that? Why would we assume that's high
25:07probability?
25:09It's because the low of this gap on the
25:1015-minute is an actual relevant swing.
25:14You guys see this relevant swing here?
25:16So, you create this SMT here,
25:19ends up holding very nicely.
25:21And I think I just missed the strength
25:22switch. I probably should have just took
25:24gold, to be honest, man.
25:26Um but that's all good. So, you guys see
25:27the strength switch here as well.
25:29Very, very nice trade, bro.
25:31Very nice sequence here.
25:34So, yeah, I'm just showing you guys that
25:35this high probability gap cuz it's a
25:36relevant swing. Look at the space
25:38between this low and this low. And you
25:40get this beautiful SMT sequence with
25:42these relative equal highs.
25:44And it's really just nice and uh Sunday
25:47was the high of the week at 1,800, so
25:49even the weekly profile supported this
25:51super nice. This is A+ price action
25:53here, honestly. I did capitalize very
25:55nicely down here, but yeah, beautiful
25:58example of how to trade this breakaway
26:00gap as well.
26:02This would be the inverse sequence as
26:03well, guys. Right? Again,
26:05what do we have here? SMT
26:07followed by what? A gap.
26:10The first gap, right?
26:12We don't have to wait for the 30-minute
26:13gap because of where it's positioned.
26:15And that's very important because you
26:16might miss this trade thinking that you
26:18got to wait for this to close, which is
26:19not the case. Okay?
26:21Um so, let's go ahead and move on to the
26:23next example. So, here is another
26:26example of gaps and relevant swings, how
26:29they are combined. So,
26:31as you guys can see, this is a perfect
26:33example
26:34of how not every gap is relevant, right?
26:36This is a gap, of course, that we can
26:38use for continuation,
26:39but the low of this gap is not relevant.
26:42Look on the hourly time frame.
26:44This is not a relevant level.
26:46This gap, right? It's just the opening
26:49price of 1,400, right? The 1,400 4-hour
26:51candle
26:52is what created this gap, but it's just
26:54a high of the 1400 candle. That's it.
26:56When you look inside of that, you have a
26:58relevant high. Within that gap,
27:01this is really all I care about, to be
27:02honest. Take it like this. I only care
27:04about this area in price right here. So,
27:06as soon as we trade into this high, is
27:09when I would expect price to reverse,
27:10right? Cuz otherwise,
27:12you might get an SMT filler you might
27:14get an SMT fill here, for example. Let's
27:16say like right here or something.
27:18You're going to take an L, bro,
27:20probably.
27:21Right? Because you're just in
27:22consolidation right now.
27:24You guys get the point of this lecture
27:25or this topic here?
27:27It's very This is pretty important,
27:28right?
27:31So, yeah. Just understand that. Pretty
27:33important. Here's a good example of it.
27:36All righty, here is another example of
27:37breakaway gaps. Just couple examples
27:40here. So, check this out here, guys. We
27:42see multiple 4-hour gaps in price.
27:45Go up to the 6-hour time frame.
27:48You're going to see here.
27:50We have one gap in price, if it loads.
27:53Here we go. We have one gap, right?
27:56And
27:59we have an SMT fill there. Perfect.
28:02Right?
28:03So, we have our key level. We have our
28:04potential universal model. It's going to
28:06be IRL, ERL. Here at the ERL up here.
28:09And what are we in with our What are we
28:11in right now? C3. So, in this candle,
28:15you're going to see this is where
28:16breakaway gaps
28:18occur the most, right? We're also low in
28:20the range. So, this is what we want to
28:22be trading, right? So, we're going to be
28:23trading this C3. Now, if we go to
28:2530-minute, all right, we're also within
28:27a C3, right? We're in C3 on multiple
28:29time frames here.
28:31But, here you can see there's a gap,
28:33right? So, if you want to fade this, you
28:35can,
28:36right? If we have a lower time frame
28:38gap. So, we do.
28:39Do we have an SMT fill there? Let's
28:41check.
28:44Yes, we do.
28:46All right, we do indeed have
28:48that SMT fill.
28:51Um but which asset do you want to trade,
28:53guys?
28:54Ideally, this one.
28:57Right? Now, mechanically, I can't trade
28:59this though
29:00because if I look at the wick size,
29:05right, very, very large, right? So, when
29:06you want to fade a reversal candle, this
29:07is also in the course,
29:09we want to be positioning ourselves down
29:10here. So, we can't trade this, right?
29:13Just because we have our gap, whatever,
29:17um fading gaps, you know, sequence and
29:19all that. You know, other things need to
29:20align, so we can't trade that. But, it
29:23does end up holding.
29:24But just again, just cuz it holds
29:25doesn't mean we missed the trade
29:27necessarily.
29:28But this is a good example of that,
29:29right?
29:30Um
29:32this is a good example of if you're
29:33trading C3 and it closes like this,
29:35you're cooked.
29:36Right? Look at this gap here. Look at
29:38the way it closes, candle three, when it
29:39creates the gap.
29:41Like a reversal candle.
29:43Uh if you traded this
29:45asset over here and it closes like this,
29:47you're probably going to get an SMT fill
29:49like this.
29:50Right? Because it closes strongly. Um
29:53and as you can see, it just rips. Well,
29:54this asset over here
29:56trades into that gap.
29:59Right? So, it's important you wouldn't
30:01want to be trading this asset is what
30:02I'm trying trying to tell you.
30:04Right? When you get this SMT fill here,
30:06it's arbitrage play.
30:08You know, when it sweeps out this
30:09candle's low and creates the SMT,
30:11this is a 15-minute model, so you can go
30:12to the 1-minute.
30:15You don't want to take this trade
30:18because it's the weaker assets. It's the
30:20one that is creating or trading into the
30:22gap, right?
30:23You have a much higher likelihood
30:26of being left open, this gap being left
30:29open on silver because it's stronger. It
30:31is the leading asset. This is the lag
30:32asset. So, hopefully that makes sense
30:34there.
30:35Now, when this candle closes, guys,
30:38we're essentially going to get the same
30:39thing.
30:40Right? You can kind of anticipate a
30:41potential
30:43gap
30:44being left open. Why is that? Because as
30:47you can see candle three here
30:49only or sorry, the candle four open
30:53is kind of far away from candle two's
30:55high as you guys can see. So also
30:57breakaway gaps just going to be created
30:59within the first swing formation, right?
31:01Between candle three and four typically.
31:03You want to be within a higher time
31:04frame of three or four. Ideally candle
31:06three.
31:07But as you can see we haven't really
31:08candle three didn't really expand too
31:10much so candle four can definitely
31:11expand. We don't really hit anything
31:12either. We're still in discount. This
31:14gap would be still low in the range like
31:16very very low in the range. So still
31:18fine. Um and as you can see
31:20this is what ended up happening.
31:23What do you see? A future gap. But it's
31:25the first one.
31:26Right? Um
31:28it's just on a higher time frame. So of
31:30course down here you're going to get
31:32higher ones but or or um lower time
31:34frame ones that are pretty much within
31:36this swing formation. Um but as you can
31:38see here we're getting hourly one.
31:40So that's pretty much really where
31:41you're going to get them on is the
31:42hourly is the highest time frame one.
31:44Um we don't care about by the way we
31:46don't really care about 90 minute future
31:48gaps and four hour future gaps. We can
31:50fade those all the time. Those are those
31:52just take way too long to close. Um the
31:54only thing you need to be concerned with
31:56is the end of those candles. So like if
31:59you're trying to take a trade for
32:00example
32:01and the candle those heights of the
32:03candles is about to close for example
32:05going to be create a future gap you
32:06should just wait till they close. Like
32:08see how they close. Do they close a
32:10reversal candle? If they do you're
32:11probably going to trade into the gap. If
32:13they don't it's probably not going to
32:14trade into the gap. It's as simple as
32:15that guys.
32:16Um but anyways
32:18what do we need to trade this future
32:20gap? What do we need What would we need,
32:21right? A lower time frame gap. You go on
32:23a 15 minute
32:26is what we have here.
32:27Is what I ended up taking or alerted
32:29live. Right? It's because of this.
32:33This sequence.
32:34Um and as you can see this is the assets
32:37that is creating the failure swing. This
32:41asset traded into the gap, right? Which
32:42is actually strength switch.
32:44This asset takes the high,
32:47trades the gap.
32:49Well, this asset is very low in the
32:50range,
32:51does not trade into the gap,
32:53right? But, we can trade this future
32:55hourly gap because we haven't even
32:57really expanded on this on this
32:59timeframe. You see, on this timeframe,
33:01the hourly, we haven't really expanded.
33:03So,
33:03there's really no reason to just um,
33:07wait like wait around and then trade to
33:08the gap, like we need to expand first.
33:11You know what I'm saying?
33:12Um, so as you can see, when we hit
33:13objectives, and we actually expand, this
33:15is when we trade into gaps,
33:17right? That's when we typically trade
33:19into gaps. So, that's a good example
33:20there.
33:21So, now let's go over an example of the
33:23ideal sequence for trading a break of a
33:25gap. So, firstly, let's break down the
33:28narrative for this trade. So, here we
33:29are on the daily chart. You can see
33:31clear consolidation. We have an SMT with
33:34this high.
33:35We drop down to the correlated assets
33:38here on the daily timeframe. You can see
33:39that we have this space down SMT.
33:44This high, look at Friday's high. Look
33:46how far away it is from this level here,
33:50right? We can note this
33:52advanced premium discount here. Just
33:54space down SMT, simply.
33:56We have fair swing to the opposing side.
33:58So, essentially, it looks like this,
33:59guys.
34:01Looks like this, where silver
34:03looks like this.
34:06So,
34:07let me also just drop another gem for
34:09you.
34:10If you guys ever see SMT like this, you
34:12see this SMT got created a very long
34:13time ago.
34:17It got created essentially at 2:01 2:00
34:19in the morning, right? We're not
34:20reversing until 10:00, so why is that?
34:22Right, we're holding the SMT, but we're
34:24waiting for a specific time to actually
34:26expand away. And that's going to be
34:27news. So, whenever you see SMT like
34:29this, right? We don't typically trust
34:31this type of SMT, cuz there's no
34:32reversal signature, right? Um you're
34:35going to only trust this essentially and
34:37when we have a specific time, right?
34:40Price can wait for time to reverse. So,
34:42that's going to be news events, right?
34:44So, sometimes this happens.
34:46Um you can still trust it as long as the
34:47driver expands away from the SMT. So,
34:49here we have 10:00 news, red folder
34:51news. We expand away from it. So, what
34:54do we have? We have SMT
34:57with our key level. Price expands away.
35:00Creates a gap. So, what is that, guys?
35:01The inverse sequence.
35:03You Basically every example that I've
35:05shown you is the inverse sequence, guys.
35:07Um It's always the first gap after
35:09reversal, right? There needs to be
35:11framework [snorts] to your trade.
35:13Framework two stages SMT is confirmation
35:17or some type of confirmation. The dis-
35:18dis- The displacement really is the
35:20confirmation away from the SMT, which
35:21makes it so good. And we're trading
35:23continuation. So, really what are we
35:24trading a lot of times with the GXZ
35:26inverse sequence is continuation. And
35:29continuations always the easier than
35:31reversal, of course, right?
35:34So, what do we see here on the 30-minute
35:35time frame? Let's go to 15-minute time
35:37frame to really show you. We expand away
35:40and retrace
35:42in the same hourly candle. You guys see
35:44that? And then C3 opens,
35:46right?
35:49What is C3 high formed from? A 30-minute
35:52SMT fill. So, you see how we do not
35:53trade into that? If we go to gold, we
35:55do.
35:58And what is this? This is asset
35:59correlation.
36:01This asset here already took out this
36:03low.
36:04Or this asset had not. It still has lows
36:07available. It still has intraweek lows
36:08available. So, what is this? A strength
36:10switch to catch up. Yeah, so this is why
36:13we can expect this to be left open and I
36:15took this trade as well. Um and you have
36:18our nice perfect V-shape signature here
36:23to confirm that. This is the opposing
36:25candles
36:27uh into the
36:28gap, essentially.
36:30And it is V-shape expansion expansion
36:32that is a reversal nature.
36:34Go ahead and enter here, put your stop
36:35loss here.
36:37TP here, right?
36:38Look at these fair swings. And again,
36:40this is an ideal sequence, right? Why is
36:42it ideal sequence? Because
36:44look at these close proximity lows,
36:46guys.
36:48Again, doesn't matter if there's SMT
36:50here, because both assets are expanding
36:52away. And you know when both assets
36:53expand away and create close proximity
36:55SMT,
36:56it's not relevant. It's only used to
36:58retrace price typically into what? A
37:00gap. The gap is then used to continue
37:04the expansion to break the SMT.
37:07And what do we confirm a gap with, guys?
37:09SMT sequences. SMT fill, like we have
37:12here, or a PSP,
37:15right?
37:16That is exactly how it forms. Right? The
37:19mechanical process of GXT,
37:21um
37:23and yeah, that's it, guys. So, hopefully
37:25you guys
37:26understand how to
37:28better trade and anticipate breakaway
37:30gaps, how to filter gaps,
37:33and the overall framework for gaps,
37:36which is the universal sequence. So,
37:39catch you guys next time. Hopefully you
37:41learned something.

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