Speaker A
Hello, everybody. Welcome to the Anomaly Course Core Constant Lesson Four. Here, we're going to be covering if-then statements using profiling. So, if Asia consolidates, what should we expect London to do?
Learn how to trade forex sessions using if-then profiling statements, session kill zones, and key reversal and continuation strategies.
Ask about this video. Answers come from its transcript only — with the timestamp, so you can check them.
Generated from the transcript and can be wrong — check the timestamp.
Key Takeaways
- If previous sessions reverse and hit key levels, expect continuation in the next session; otherwise, expect reversal.
- Session kill zones are critical, with specific 4-hour candles and hourly segments driving volatility and trade opportunities.
- Asia session reversals should be traded cautiously, focusing on wick size and key level validation.
- London session trading focuses on specific 4-hour candles and avoiding trades when large wicks invalidate reversal setups.
- New York session trades rely on liquidity draws and reversal profiles when prior sessions fail to reverse.
What the video covers
- Introduction to if-then statements for trading Asia, London, and New York sessions using profiling techniques.
- Explanation of session interactions: how Asia consolidation affects London, and London reversal influences New York continuation.
- Detailed discussion on session kill zone times and the importance of specific 4-hour candles for trading decisions.
- How to interpret 4-hour candles as session representations and trade expansions or reversals within those periods.
- Criteria for trading Asia session reversals and continuations, including wick size and key level hits.
- Use of SMT divergence and order blocks to identify potential continuation or reversal points.
- Guidance on trading London session, including when to avoid trading reversals based on candle structure.
- Overview of New York session reversals and continuation setups, emphasizing liquidity draws and key levels.
- Use of manipulation ranges across multiple timeframes to identify high and low of day for trade setups.
- Practical examples of trading setups using hourly and 4-hour timeframes with gap and key level analysis.
Chapters
- 00:00Introduction to If-Then Statements and Session Profiling
- 01:56London Session High and New York Continuation
- 03:41Session Kill Zone Times and Relevant Candles
- 05:15Sessions Represented by 4-Hour Candles
- 07:13Trading Asia Session Reversals and Continuations
- 08:42Using SMT Divergence and Key Levels in Trading
- 10:11London Session Reversal Trading Guidelines
- 12:36New York Session Reversal and Continuation Strategies
- 14:58Manipulation Ranges and Multi-Timeframe Analysis
- 17:04Practical Examples and Final Trading Tips
Full Transcript — Download SRT & Markdown
Speaker A
Reverse, right? Off of Asia's low. And if London reverses, then we should be expecting a New York continuation using key levels that London created after it expanded away. So, as you can see, London reverses, expands away.
Speaker A
Here we have our gap. That is going to be our key level for New York to continue. As you can see, we have some order blocks for continuation as well. So, now, what happens if Asia nor London reverse?
Speaker A
Well, it's pretty simple, right? We're going to reverse off of London's low. So, as you can see, London prints a low, which is the current low of day. If neither of the previous sessions reversed, then you have to create a
Speaker A
reversal profile, right? So, it's pretty simple. Previous sessions didn't reverse, then we're expecting a reversal profile for the session that you're trading.
Speaker A
If the previous sessions did reverse and hit a key level, then you're expecting a continuation profile for your session.
Speaker A
Here we're going to be covering the if-then statements for sessions with an example.
Speaker A
Here we're going to be covering Asia/London session. So, if Asia consolidates and doesn't form an established low or high of the day, we're going to use the Asia session high to reverse off of, right?
Speaker A
So, if we play price forward, as you can see, London forms an established high of day. It forms that V-shape signature and hourly change state of delivery.
Speaker A
So, if London forms the high of the day, what can we expect New York to do if they're still in open draw?
Speaker A
We would expect it to continue. And where should we expect it to continue from? It's from a key level that London actually created. So, if we just zoom in here back from the previous session's range here. Right now, it's 9:00.
Speaker A
We can see that we have this gap here. And really, this is the only area to continue from if New York is going to continue. So, let's play price forward.
Speaker A
And as you can see, we expand away from London's high and close near the lows, forming a reversal into expansion daily candle.
Speaker A
So, now let's go ahead and go over an if-then statement where Asia and London do not reverse. So, if they do not reverse, then you have to expect a New York reversal. So, as you see, Asia does nothing. What does London do? London
Speaker A
kind of just consolidates at this low, right? So, that's not really an established low of the day. So, ideally, we come back down here and manipulate this relevant low. As you can see, the space in this low and these lows down here make it
Speaker A
relevant. We have failure swings on the opposing side over here that we can use for targets. So, let's see what price does.
Speaker A
So, as you can see, price doesn't really trade into anything up here. We come back lower. We use Asia's low to reverse from. And there's actually an SMT divergence here as well with this overall low. And now, we can expect Asia
Speaker A
to continue to our draw on liquidity. And as you can see, since the previous session didn't reverse, we're going to demand New York session to reverse off of those levels for our invalidation level. So, now let's go over an overview of the session
Speaker A
kill zone times. So, for London session, you're going to be trading one 4-hour candle.
Speaker A
Which candles are we mainly concerned with? That is the 2:00 a.m., the 3:00 a.m., and the 4:00 a.m. candle. Not so much the candle that runs from 5:00 to 6:00 a.m. That's not really the most relevant time, um, in the day.
Speaker A
So, here's the 30-minute as well. It's going to be those first six out of eight candles that make up a 4-hour candle.
Speaker A
Now, let's go over the relevant timing within a 6:00 a.m. 4-hour candle. That is going to be 8:00 a.m. to 9:00 a.m.
Speaker A
6:00 and 7:00 a.m. Again, no volatility, not relevant. Why is 8:00 a.m. to 9:00 a.m. relevant? Because those are where the drivers exist, right? 8:30 red folder news, we have 9:30 equities open.
Speaker A
You want to be positioning yourself in the market with high volatility. So, what is the relevant timing within a 10:00 a.m. 4-hour candle?
Speaker A
Ideally, that's going to be 10:00 a.m. to 11:00 a.m., especially when trading a reversal candle. Ideally, it's the early hours within that candle, right? So, here's the 30-minute candle. It's going to be about half of that time span. P.M.
Speaker A
session really starts at 12:00 a.m. So, it's a totally different kill zone. If you're a New York A.M. trader, you really want to cut off your trading at about 12:00 o'clock.
Speaker A
So, now we're going to view sessions through 4-hour candles. We're going to really simplify it. We're going to view a 4-hour candle as a session, right? So, there's 1, 2, 3, 4, 5, 6 4-hour candles within a daily candle, and each candle
Speaker A
will represent a specific session. So, the Asia session is going to be made up of two 4-hour candles.
Speaker A
So, if you're looking to trade an expansion within your session, you're essentially looking to trade a 4-hour expansion candle, right? That represents the session that you want to trade. So, if you want to trade an Asia reversal/
Speaker A
continuation, then you're looking to trade the 1800/2200 expansion candle. It's pretty much that simple, right? So, when can we expect an Asia continuation? That is either when late in the day the previous day 1400 reverses and the day is opening up
Speaker A
within a C3 on the 4-hour time frame. So, essentially PM session late in the day previous day reverses.
Speaker A
So, you're going to expect an early day expansion, right? Late day reversal, early expansion 1800 expanding. If you get that nice closure, you're expecting 2200 to expand if there is a draw on liquidity open or if the first half of Asia session, so
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the first 4-hour candle within the day prints a C2 reversal, hits a key level, and all that good stuff, then you can expect 2200 to expand and continue. So, now let's talk about Asia reversals. So, here would be on the left
Speaker A
side would be some negative conditions. We wouldn't do not want to really participate in these Asia reversals, especially within the first half, you know, if 1800 forms a low day but has a large wick, you're not going to trade
Speaker A
this first half of Asia. You're going to trade that 2200 continuation. If 1800 doesn't form a low day but 2200 does but has that large wick, you're not going to trade an Asia reversal. You would trade a London continuation,
Speaker A
right? This is the way you can trade an Asia reversal, right? If you hit a key level, we have that small wick, maybe 1800 hits the key level or it doesn't hit the key level but it simply doesn't reverse, then
Speaker A
you're going to want to reverse off of 1800 low, right? If it has that small wick either or, then you're pretty much good to go.
Speaker A
So, now let's go over how to trade the Asia session. So, firstly, let's go over Asia continuation.
Speaker A
So, this is either where 1400 reverses and 1800 continues or 1800 reverses and 2200 continues. Here we're talking about the 4-hour candles, right? So, as you can see here, we have this low put in the market. We have an SMT divergence.
Speaker A
Now, when was the low of the day put in over here? Let's go to the 4.
Speaker A
So, as you can see, 1400 prints AC2. So, 1400 prints AC2 after hitting a relevant level. This is where we can expect 1800 to actually expand.
Speaker A
And it doesn't really have to create some like crazy open low. All it has to do is respect the previous 4-hour candle. So, what we're going to do is look for a refined key level in the previous 4-hour candle range. So, let's
Speaker A
drop down to the hourly time frame. So, here within that previous range, you can see that we have an hourly gap. And this is the only level to reverse from.
Speaker A
This is the very rare case you're going to, you can actually use an hourly gap as your refined key level. And that's when you make that reversal really late in the day. As you can see, the low of the
Speaker A
day is 1400 here. Um, and if we're not going to stick out that previous day's low, then we pretty much have to use this gap, right? So, we're going to expect...
Speaker A
right now. Let's mark that out. Here. So, it opens low first, prints that C2 candle.
Speaker A
That C2 candle should form the low of the 4-hour candle um as GXT confirmation, right? But, it's also technically forming the low of the day as well, right? So, as you can see, that 4-hour candle expands 1800.
Speaker A
Now, here's an example of a 1800 reversal and 2200 uh continuation. So, here on the daily chart, we have SMT with the previous day's high.
Speaker A
You have a previous day's close as a C2. So, what are we going to do?
Speaker A
Look within this wick for a refined key level. Let's first drop to the 4-hour time frame. So, here we are on the 4-hour time frame. And as you can see, we have a key level close to the daily
Speaker A
open. This is going to be that daily open. And yes, we do. As you can see with that forward gap.
Speaker A
So, that's going to be our refined key level. And this is when you can expect Asia reversals, guys. Is when the day the daily open is actually opening near the refined key level, right? Because if if it's opening near that refined key
Speaker A
level, then of course Asia's going to hit it likely. So, Asia can actually reverse.
Speaker A
It's pretty much as simple as that. So, you can see that this new 4-hour candle's opening near it. So, you can expect an Asia reversal. That's how you trade Asia reversal. As long as it has that small wick,
Speaker A
you're pretty much good to trade that 4-hour candle, right? And as you can see, we have our candle closure at um 1800. So, as long as you have a drawing liquidity, you can trade continuation. It's as simple as that.
Speaker A
So, we This is how you can expect a 2200 candle to continue as an 1800 reverses. And as you can see, it's going to reach this target and even further. Now, let's talk about London session. We're going to be viewing
Speaker A
London session in 1 4-hour candle, which ranges from 2:00 a.m. to 6:00 a.m. So, what would that look like for a London continuation? That is either where Asia puts in the low of the day. That can happen two ways, whether 1800 puts the
Speaker A
low of day in, then you have to have 2200 expand, or if 1800 doesn't put the low of day in, but 2200 does, then you can trade C3 continuation. Then you can trade C3 London continuation on the 4-hour. Now, let's get into some chart
Speaker A
examples of covering the London session. Firstly, we're going to be covering the London continuation. Here's an example where 1800 is actually the high of the day.
Speaker A
This is honestly the perfect example because 1800 expands very largely. So, when a session expands very large, you really don't want to trade continuation um for the next session. But, we can see the first half of Asia expands, the
Speaker A
second half retraces. That creates a gap on the closure of the 2200 candle, which the London session is opening near, right? So, if it's opening near it, we can create that uh reversal to expansion candle. And this candle can actually
Speaker A
expand, and this retracement, or the current low of day, is actually a draw on liquidity that we can use.
Speaker A
So, here we have an example of London continuation where the low of the day is created at 2200. So, here is the daily open, right? Opens low first. That's what we want to see for a bullish reversal. We have this sweep of a low.
Speaker A
It doesn't have to close a perfect um you know, C2 candle where we have to close back inside this candle. Has that large wick respecting it, right? As long as you have those um lower time frame reversal signatures, you're pretty much
Speaker A
good. And as you can see, we can trade this continuation because we have that small wick. We have no established high of the day and an established low of the day with a draw open. Now, let's talk about London
Speaker A
reversal. This is where the previous sessions do not reverse, so you're essentially going to be reversing off of 2200 low, and it's all about wick size, man. You see this wick size? We're trading very far beyond this low. That
Speaker A
is creating that large wick, which is an invalidation, right? We want that reversal to expansion candle at all times. We ideally want to be trading expansion candles.
Speaker A
Now, let's go ahead and go over a London reversal. So, here we have a C2 candle.
Speaker A
So, what are we going to do? We're going to mark out the previous candle's range cuz we have this C2 candle on the daily time frame. We're going to look for a refined key level in the lower half of
Speaker A
the previous candle's range. As you can see on the forward chart, we have no refined key level, so we're going to drop down to the hourly.
Speaker A
In here, Asia session consolidates, that consolidation creates a uh relevant swing in the market. Where this relevant swing is positioned in the lower half of the pre-stage range. As you can see, we tag this key level and we print a C2 candle, right? So, now
Speaker A
you're going to ask yourself, does the 4-hour wick support expansion? Let's go see. Yes, it does. Very, very small wick. So, that means that this specific candle can actually expand.
Speaker A
Now, let's go over London reversal where we cannot engage within this 4-hour time window or within the 2:00 a.m. 4-hour candle. And that is simply because when we take out this key level, what do we do? We have this large run away from the
Speaker A
opening price, which creates that very, very large wick. So, you're not going to be trading the London reversal. You're going to be trading the 6:00 a.m. continuation.
Speaker A
Now, let's go over the New York a.m. session, which is created from two 4-hour candles, but specifically, we're first going to be talking about the 6:00 a.m.
Speaker A
4-hour candle. So, now let's go over New York continuation. Ideally, this is where the day opens low, 2:00 reverses, creating that C2. Then you can trade that 4-hour 6:00 a.m. continuation as a C3. Now, let's talk about New York reversal.
Speaker A
Essentially the same thing, right? The previous sessions do not reverse, so you know that this 6:00 a.m. 4-hour candle must reverse. If it has that large wick, you're not going to be trading that.
Speaker A
You're going to be trading 10:00 a.m. If it has a small wick, you can engage with this reversal profile. Now, let's talk about the second half of New York a.m.
Speaker A
session, and that is going to be the 10:00 a.m. 4-hour candle. What will that look like in most cases, or the most ideal case, is where 6:00 a.m. hits that key level, reverses, but has that large wick. So, we're not really going to be
Speaker A
participating in this. We're going to wait for 10:00 a.m. to open because that's when the expansion will occur.
Speaker A
So, how to trade a New York reversal, right? Same thing on all of these candles man.
Speaker A
Large wick, you're not going to trade it. That's an invalidation for this reversal profile or this time window to reverse. If it has a small wick, then we know that this candle can indeed expand and we can participate in that New York
Speaker A
reversal profile. Now, let's talk about the New York PM session, which is composed of one 4-hour candle, which opens up at 14:00.
Speaker A
So, now let's cover the New York continuation. And one thing that is absolutely crucial about trading the New York continuation for PM session is there needs to be an open draw no matter what, right? Because this is towards the end of day, especially when
Speaker A
it is a large expansion candle. The day is most likely capped off at that point. So, you trying to trade on an already existing expansion candle, right? That ADR could be already capped off. And you could just consolidate in
Speaker A
this 4-hour candle. So, it's really important that there's an open draw liquidity. And as you can see here, 10:00 a.m.
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reverses, what do we have at 14:00? When it opens, it's an open draw, and that's where we can look to trade a New York continuation.
Speaker A
Now, let's go ahead and cover the PM session trading the 14:00 4-hour candle. So, here we're going to be going over continuation. That is when 10:00 a.m.
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reverses, as you can see the profile here is very ideal. Where we open high first into a low high, create SMT there.
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And the most important thing for trading continuation is there is an open draw in close proximity to the 14:00 open, which is right here.
Speaker A
As you can see, there is plenty of time in the day to get to the strong liquidity, and that's really what you need to trade continuation. So, now let's go over the New York reversal for PM session. So,
Speaker A
typically, this is going to be happening when you're trading a reversal candle. Let me explain. So, over here to the left, as you can see, this daily candle is likely going to print that large wick, right? So, here, price expands
Speaker A
away from the opening price, which is creating that very, very large wick when price returns back to the opening price.
Speaker A
What do we know about large wick candles? They cannot expand, especially beyond the opening price. So, when 10:00 a.m. comes up here and dips above that opening price, 1400 is going to have a very hard time expanding beyond this level of this
Speaker A
daily open, right? So, looking for a New York reversal back into the range is often a pretty good trade. Now, let's go ahead and go over this reversal scenario.
Speaker A
It's somewhat similar to this, but it's a it's actually a little bit different. This is more so with a daily profile.
Speaker A
This over here is really showing, you know, hitting an actual key level. So, when the day when a daily candle hits a key level, this is where we can obviously get a reaction, right? And what you're really looking for this day
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to kind of do is ideally, you know, close back within this range. You know, that's going to be the reaction off that key level. Maybe it's a form of C2, right? A C2 candle typically closes back within this daily
Speaker A
range to form that large wick. That's what this is creating right now, right? The daily open's here, price is coming back into the daily open to form that large wick. So, you're kind of anticipating that to happen. You could
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view it maybe as this as well. Maybe three expansion candles in a row into a key level, coming back in the range, or maybe ERL is a key level, IRL is your drawing liquidity.
Speaker A
Whatever Whatever you view it as, uh it can be a good scenario for a 1400 reversal.
Speaker A
Now, let's go over how to trade a 1400 reversal. And this is going to be using a specific profile that is a delayed retraction profile, just like we went over for the 10:00 a.m. candle.
Speaker A
And as you can see here, the daily candle opens low first, right? But, what's the problem here?
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We can't trade continuation. Why? Cuz price has made a very significant move away from the daily open, creates that large wick, right? So, price going to have a really hard time expanding beyond the high. So, we can use that to our
Speaker A
advantage and understand that the 14:00 candle is not actually likely to continue higher. It's probably going to close back inside of the range. And we can trade a little countertrend trade.
Speaker A
Maybe you can target EQ or a gap within the previous 4-hour candle. So, it's really like trading IRL to IRL countertrend, basically. And as you can see, price reverses off of the previous candle's high at 14:00, and you can look to target
Speaker A
some of these gaps. Now, I'm going to be talking about the most ideal way to trade a 14:00 New York reversal.
Speaker A
And that is when the day expands into a relevant level. This is very important to understand because what we're trying to go for is the anticipation of a daily reversal candle forming, right? Where we hit a key level late in the day,
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and that day is going to be capped off by 14:00 to come back into the daily range, to kind of close back inside of the previous day's range, or kind of create that wick that the next day will
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use to continue off of. So, as you can see, this is even better when all three sessions prior all expand the same direction. Because when you have all three sessions expanding the same direction, PM session is not going to continue,
Speaker A
usually. It's really going to cap off its daily range and come back into the the range here. But, when it's all three sessions into a key level, I mean, that's even better, man. Um really, you don't want to see two
Speaker A
sessions expand in the same direction. I would avoid that next session. But, that's what you see here, man, every single 4-hour candle prior is an expansion candle. So we're expecting that reversal off of the 1400 low. We can trade that continuation.
Speaker A
We can trade that reversal back into the day range targeting gaps or any gaps in this previous 4-hour candle.
Speaker A
In this specific logic also works very well if 10:00 a.m. reverses off of a daily key level and you trade 1400 continuation back into the range.
Speaker A
So now let's go ahead and show you guys how to put it together using the daily and the 4-hour chart. We'll be covering how to trade a reversal day, right?
Speaker A
Using IRL to ERL. So how to trade a reversal candle, you always need a key level. So IRL is our key level. And what are we going to confirm the low of this reversal day is a 4-hour swing, right?
Speaker A
So as you can see, once we engage with this 4-hour key level, this candle doesn't reverse. So what do we expect? A reversal off of this previous candle's low. Once we create that and get our confirmations, we can trade this candle here, right?
Speaker A
You can It can be any session, right? Maybe this is the London session. Maybe this is 1800, 2200. This is 2:00 right here. If it has a small wick, you can trade it, right? If you have that drawing including the open, we're
Speaker A
expecting that New York continuation, right? And this swing formation, this C2 candle is confirming the low of this 4-hour candle. We can even trade this candle before it closes because it has that small wick, right? So as you can
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see, we're kind of aligning expansion candles, right? Daily reversal to expansion candle, 4-hour expansion candles. Now let's go over the same thing using IRL to ERL, but a continuation day. This is where the previous day expands. We're going to
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mark out equilibrium of that previous day's range. A refined key level within the upper half will be a fair value gap.
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And when we engage with that level, if we have that small wick, we can trade it, right? Aligning expansion candles in the same direction. Now, let's go over a reversal day using manipulation ranges.
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This is where the daily candle engages with a range low, and the low of the day is printed from a 4-hour C2 candle. We can look to trade back to the daily open, right? What do we want this data form like? Open low
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first, has a very large wick. So, what are we going to do? We're going to go ahead and target that opening price, right? Which is right here. As you can see, price can have trouble trading beyond that level. Now, let's go ahead
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and cover a continuation day using manipulation ranges. This is where the previous day reverses a refined key level within the upper half is a relevant swing. That relevant swing is your manipulation ranges. Going to reverse off that relevant swing. 4-hour
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reversal candle confirm the low of day. We're going to be looking to trade that continuation into the opposing range high, which is the previous high, and potentially to further objectives.
Speaker A
Now, let's go over manipulation ranges. Manipulation ranges you can use on any time frame. It doesn't have to be a daily key level. It can be a 4-hour. It could be the 1-hour. It just has to form a high of day. The key level will be
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used to form the high of day. So, here it can be a reversal candle, continuation candle. Here, we're just going to be going over a reversal candle first. So, as you can see, we take out the previous high, which if we drop down
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to lower time frame, this is a relevant high. Um you can see the market profile. We trade into this relevant low. We do not manipulate it. So, we're likely to continue lower. We are in seek and destroy conditions. So,
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when we engage with this high at the external range, uh it is likely to continue that movement lower. So, essentially, it's expansion, consolidation, expansion. So, dropping down to lower time frame, what do we have? A relevant high. You can see a C2
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candle forms the high of the day at 10:00 a.m. So, we can expect a 1400 continuation as the low of the day is currently 1,800, which is a fair swing to the previous day's low. So, the low of day wasn't created from anything
Speaker A
relevant. We have a bunch of fair swings, that's a perfect recipe for it, a draw on liquidity.
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Now, here we are on the daily chart. You can see on the higher time frame we're trading I R L to E R L technically.
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That's our draw on liquidity, but this is a continuation day using manipulation ranges. We have a valid C2 candle here.
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We're going to mark out the whole candle's range. And we're going to look for a low that we can use to trade away from and create the low of the day to get to our overall draw on liquidity.
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So, let's go ahead and drop up to the hourly time frame. So, as you guys can see, here we are on the hourly time frame. You can see the current low of day was London session.
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We had no reversal prior to the low of day or the high of day. So, this is essentially a manipulation range, right?
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Manipulate the low of the range to create the low of the day and target the high of day. Now, let's go see if we 4-hour confirmation created the low of the day.
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And as you can see here on the 4-hour time frame, what do we have?
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A 4-hour C2 candle created at 6:00 a.m. The profile opens low first. Once we put in that C2 candle, we're assuming that's the low of day from our manipulation range key level on the hourly or above.
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We can expect 10:00 a.m. to continue to expand towards our draw on liquidity and creating that C3 daily expansion candle for continuation. Now, let's go over an example of a reversal day using E R L to I R L. This is where the daily
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candle engages E R L and we're looking for that to turn into a reversal day to target I R L, the low of the day again confirmed by a 4-hour swing, aligning expansion candles in the same direction. And now, this is the
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same thing, a reversal day using E R L to I R L, except your I R L will be actually found within the previous day's range, right? This day here might expand into a key level, right? So, you're
Speaker A
going to reverse off the previous low since this candle did not reverse. And when you look back within this previous day's range, you will find 4-hour gaps.
Speaker A
So, as you can see, price expands, consolidates. Here's that previous low. Once you engage that, we're looking for our 4-hour reversal into expansion candle or our 4-hour C2 candle and we're looking to target back to the previous range into the IRL as our draw on
Speaker A
liquidity. Now, here's another way a reversal day can form where your IRL will be within the current day's range.
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So, as you can see, the day starts off by expanding into a key level. We're going to get a reaction off of that key level.
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That can be your ERL. Your IRL will be found, like I said, within the current day's range. So, I went over this earlier within an example with PM session. And this is often when you will have this set up here is if the
Speaker A
net 1400 candle, right? Basically, this key level will cap off the daily range. Price will come back into the daily range and form that large wick or that reversal candle.
Speaker A
Now, let's go ahead and go over ERL IRL with some chart examples. As you can see, this is going to be a reversal day.
Speaker A
Every single ERL IRL trade you take is pretty much counter trend um off of a higher low. You're going to target a fair value gap. So, this is going to be where we trade into a higher low on the daily time frame and you're
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going to be targeting the previous day's low, which is a fair value gap, right? So, technically, you don't have to hit a key level on the daily time frame as a swing higher low.
Speaker A
It could technically be this as well where maybe you have consecutive days of expansion. Maybe you have a fair value gap here. And on the lower time frame, the previous high is a Maybe it's a relevant high, right?
Speaker A
So, this would be your daily you know, the next day opens up, maybe consolidates, hits that ERL.
Speaker A
You know, has SMT or something. This will be your ERL. This will be your IRL into the precious low, which is a gap.
Speaker A
Is this is trading back into the precious range, which is IRL. But, as you can see, this day specifically does trade into a daily swing high or low.
Speaker A
And we're going to print that reversal day and target that IRL. So, let's go into the 4-hour chart and see what forms a high of the day. And as you can see, how does this day print? It opens high first, which is exactly what
Speaker A
we want to see. What forms a high of the day? 2:00 a.m. reversal candle.
Speaker A
So, what can you expect the next candles to do? It's make its way back to this unestablished low of the day. Very, very large wick. So, what do we target as our maximum TP? Is the current low of the
Speaker A
day or just beyond it. And that level here is the daily fair value gap high. So, now let's go over an ERL to IRL example where the IRL or the fair value gap exists in the previous day's range found
Speaker A
on the 4-hour time frame generally, okay? And this happens where the current day is a reversal candle and it either reverses off of the previous day's low and then we trade into the precious range targeting that 4-hour IRL
Speaker A
or the day trades beyond the precious low into a key level like here, like in this example, reverses and then we target that IRL found in the precious range. So, let's go ahead and go to the 4-hour time
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frame. So, here as you can see, how does the day form? It opens low first.
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A C2 forms a low of the day. What can we find in the previous day's range? Is that beautiful fair value gap, right?
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So, here is your ERL and here is your IRL for your universal model putting them all together.
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Now, lastly, we're going to be covering ERL to IRL when fading a higher time frame expansion candle. So, it's going to be something like this where ideally, you have a reason to come back into the range, whether that's
Speaker A
you know, three consecutive expansion candles in a row to come back into the range and you face a price, or just one large expansion day into a key level on the daily time frame where you're going to cap off that daily
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range, something like that, right? So, you can see this daily candle's really, really large. We're just coming off of a very, very large expansion in general.
Speaker A
So, you kind of have that logic. You need that logic in order to do this. Uh we're basically just fading a expansion candle back into its own range and targeting the IRL that exists uh in that range that basically created the
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expansion in the first place, um or the expansion candle in the first place. We're kind of assuming that it's going to close like this wick, right?
Speaker A
Really just looking for a swing formation that's going to cap off that higher time frame candle's range. We're going to look for the expansion back into the range. Target the IRL.
Speaker A
So, now here we are on the 4-hour time frame. As you can see, price has expanded very far away from the daily open, right? Price cannot expand forever. So, we're kind of looking for this range to be capped off, and that's
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going to happen from a C2. And as you can see, 6:00 a.m. candle reverses off of 2:00 a.m.'s candle, and that creates a level for price to target, right? Going from ERL to IRL, right? We can trade 10:00
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a.m. continuation as 6:00 a.m. confirms that reversal. We can target the IRL back into the daily range.
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Now, let's go ahead and put it all together. Here, we're going to be showing examples on how to trade out of universal models on the higher time frame, how to confirm the high and low of these expansion candles, reversal
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candles, away from these higher time frame universal models with 4-hour swing formations. So, here we're going to be going over IRL ERL first, talking about trading a reversal day. You can only ever trade a reversal day from IRL on
Speaker A
the daily time frame. As you can see, this daily candle is opening low, taking out the previous candle's low, so we know it's a reversal day. As this day is tagging the IRL, we're going to anticipate it to turn
Speaker A
into a reversal into expansion candle, given the small wick making its way towards the ERL. So, simply IRL ERL and we want to confirm the low of this reversal candle with a 4-hour swing. So, let's go ahead and drop down to 4-hour.
Speaker A
So, as you can see, we are on the 4-hour. How does the day form? How do we want reversal days to form or any bullish day? We want to open low first ideally.
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And as you can see, we get that reversal candle on the 4-hour time frame. There's plenty of range to go. We can target these fair value gaps or the 10:00 a.m.
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continuation. Now, we're going to be talking about how to trade a expansion candle or a continuation from a 4-hour gap, which will reside in the previous candle's range.
Speaker A
So, here as you can see, candle one, candle two, candle three is then confirmed as it closes above C2's open, validating a C4 expansion.
Speaker A
Now, let's go ahead and drop to the 4-hour time frame and look at the 4-hour key level that is going to be used to create the protraction phase or the wick of this higher time frame bullish expansion candle.
Speaker A
So, here is the previous day's range. What do we see within it? This gap in premium end of that previous candle.
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And what are we going to use to confirm the low of the day? Is a C2 candle on the 4-hour time frame. As you can see, London reversal. How does the day form?
Speaker A
It essentially opens low first. This is perfect IRL to ERL using the daily profile combining all the concepts together.
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