Speaker A
how's it going everyone? This video is going to be about how I use equilibrium in continuations. So you've seen my discount and premium video, you know that's how ICT uses discount and premium. However, I use it the opposite.
TTrades explains why he uses equilibrium (EQ) opposite to the ICT discount/premium method, applying it to expansion phases with multi-day examples.
Key Takeaways
- Equilibrium is used in expansion phases to confirm continuation rather than to look for deep retracements.
- Upper half respect supports bullish continuation; lower half respect supports bearish continuation.
- Failure of the EQ to hold should prompt a bias flip toward the opposite side of the range.
- Measuring candles wick-to-wick, rather than body-to-body, is central to the method's range definition.
What the video covers
- The video explains that the creator uses equilibrium in continuations, the reverse of the ICT discount and premium approach.
- Fibonacci is set up simply, with only the 0.5 level kept, and candles are measured from wick high to wick low rather than by bodies.
- The key reason for the inversion is price phases: in expansion phases, price rarely retraces deeply into discount or premium.
- In expansions, the upper half of the range is expected to hold for bullish price, and the lower half for bearish price.
- If the equilibrium fails to hold, the trader flips bias and anticipates the low or high of the range being taken.
- Fair value gaps and protected lows in the upper half of a range serve as PD arrays that are expected to support price.
- A worked example uses equal lows, a daily range, and the New York session on indices to show continuation through the upper half.
- Each day is reviewed to show respect for the previous day's EQ, forming higher timeframe wicks as the trend continues.
- A second example walks through daily closures paired with EQ and lower timeframe structure, including sweeps of previous highs.
- Ideal invalidation points are identified for each day, and the video notes when to avoid trading during new phases of price.
Chapters
- 00:00Introduction to Using Equilibrium in Continuations
- 01:33Fibonacci Setup and Candle Measurement
- 02:33Price Phases and Expansion Logic
- 04:48Expansion Examples and PD Arrays
- 06:24New York Session Walkthrough on Indices
- 08:39Multi-Day Continuation Example
- 11:34Bearish Scenarios and Invalidations
- 15:58Closing Review and Final Structure
Full Transcript — Download SRT & Markdown
Speaker A
get into the video the first thing you have to understand are the Fibonacci settings I'm going to use a simple Fibonacci with a 0.5 and a 1 marked out and generally I remove the zero and one and just have
Speaker A
So let's get into the video. The first thing you have to understand are the Fibonacci settings. I'm going to use a simple Fibonacci with a 0.5 and a 1 marked out, and generally I remove the zero and one and just have the 0.5.
Speaker A
I do for the change in the state of delivery or order blocks now something you have to understand is the phases of price and this is the main reason why I use it opposite of how most people use
Speaker A
But how am I going to measure the candles? I'm always going to measure the candles from wick high to wick low, and then mark out the equilibrium. That way I'm not going to use the bodies like I do for the change in the state of delivery or order blocks.
Speaker A
retracement and you can see it expands higher before reaching down into a discount and once again the same thing so understanding this with expansions what can you anticipate the way I use equilibrium is in expansions I'm looking for the upper half to respect for price
Speaker A
Now, something you have to understand is the phases of price, and this is the main reason why I use it opposite of how most people use discount and premium. If price is in an expansion phase, which is the phase that I trade, price rarely goes in retraces to a discount or to a premium. You can see here we have an expansion leg up, a retracement, and you can see it expands higher before reaching down into a discount. And once again, the same thing.
Speaker A
have the previous day marked out we have an expansion I'm looking for 05 of this range to support price higher so what I'm going to do is match PD arrays in that range as you can see we have a
Speaker A
So understanding this with expansions, what can you anticipate? The way I use equilibrium is in expansions. I'm looking for the upper half to respect, for price to trade higher, and the lower half to respect, for price to trade lower. Now if these do not respect, I can then flip my bias and anticipate the low of the range being taken.
Speaker A
have a fair value Gap in the upper half of this range above the protected low so as we trade into the next day you can see that is where we get a reaction a change in the state of delivery and then
Speaker A
So here is a quick example. I have the previous day marked out. We have an expansion. I'm looking for 0.5 of this range to support price higher. So what I'm going to do is match PD arrays in that range. As you can see, we have a protected low right here, as a low has formed out of this fair value gap, closed over. So if I'm not expecting this low to be hit, where is a PD array that I can anticipate to be touched? Right here I have a fair value gap in the upper half of this range, above the protected low. So as we trade into the next day, you can see that is where we get a reaction, a change in the state of delivery, and then we continue to expand or trade higher.
Speaker A
and go over a few examples of this so here we are with our first example and just to give it a little bit of context we have these equal lows that were ran out to our left and we have this high
Speaker A
Looking at that on the higher time frames, you can see this higher time frame candle just respected the upper half of the previous candle's range to trade higher. Let's hop into TradingView and go over a few examples of this.
Speaker A
so one thing we know about this is we do have that closure where we sweep out and close back inside the range so I could view this to trade higher another thing we can note is we are closing over the
Speaker A
So here we are with our first example. Just to give it a little bit of context, we have these equal lows that were run out to our left, and we have this high above us. So we are in a range. We have just purged the low of the range, so we have an accumulation. This could be a manipulation, and then we could see a distribution or a move back higher.
Speaker A
to look for the next day to respect the upper half of this day's range what PD arrays can we Mark out I'm going to look in the upper half of this range taking a look there drag it over what PD arrays
Speaker A
One thing we know about this is we do have that closure where we sweep out and close back inside the range, so I could view this to trade higher. Another thing we can note is we are closing over the previous day's EQ. So if we're not respecting this side of the range, we are going to look to trade to the other side, and we have these failure swings also resting here.
Speaker A
expect this low to hold if this day is going to trade higher so let's go move forward towards the New York session where I generally anticipate expansion for the indices you can see we are consolidating and there we get a move
Speaker A
Going to take a look down here on the hourly. If we are going to look for the next day to respect the upper half of this day's range, what PD arrays can we mark out? I'm going to look in the upper half of this range, taking a look there, drag it over. What PD arrays do we have? We have a tiny little fair value gap right here, and we also have our protected low right here, as this has wicked into a fair value gap, closed through the down-close candles. So I can expect this low to hold if this day is going to trade higher.
Speaker A
trade higher I'd want to see it do that there and now we have close through the down Clos candles sweeping out all these lows so if you've seen my change in the state of delivery video that is a change
Speaker A
So let's move forward towards the New York session, where I generally anticipate expansion for the indices. You can see we are consolidating, and there we get a move into that fair value gap, and I ask myself, is this fair value gap respected? No, it is not, so I pretty much ignore it. Now we are down near these opposing candles. If I'm looking for price to trade higher, I'd want to see it do that there. And now we have closed through the down-close candles, sweeping out all these lows. If you've seen my change in the state of delivery video, that is a change in the state of delivery. I'd want to see the upper half of this respected, or this to trade higher from this fair value gap, and you see we respect that area. We get a new continuation candle.
Speaker A
let's go into the next day now we have traded and we have closed over the previous day's high and we have left these highs to our left as well as the other side of the range so if I'm
Speaker A
Now let's go into the next day. We have traded and closed over the previous day's high, and we have left these highs to our left as well as the other side of the range. So if I'm expecting this to continue to trade higher, here is my EQ, and if I have a PD array in this area, I'm taking a look. I have a small fair value gap and this opposing candle here, and I have a protected low right here. So really I'm expecting price to trade higher, leaving this low, trading to the highs. As I let this continue, we reach down into those opposing candles, we close over the opposing candles, which forms the wick of the higher time frame candle.
Speaker A
protected low right here so really I'm expecting price to trade higher leaving this low trading to the highs so as I let this continue we reach down into those opposing candles we close over the opposing candles which forms the wick of the
Speaker A
So just to review each day: we respected the previous day's EQ to trade higher, so you can see each time, respecting the EQ to trade higher, forming that higher time frame wick. And going into each day, I mainly focused on finding an invalidation for that day and the PD arrays that I anticipate to support in the upper half. Since this is a bullish scenario, and there you can see we go take out these failure swings here and are trading to the other side of the range.
Speaker A
mainly focused on finding an invalidation for that day and the PD arrays that I anticipate to support in the upper half since this is a bullish scenario and there you can see we go take out these failure swings here and
Speaker A
Let's get into another example. In this next example, we are going to stay on the 1H, and here we are on the hourly chart, but let's hop out to the daily, as this is where I like to use the equilibrium. You can see here on the daily chart we have taken out this low and closed back inside the range, but we have a nice bearish expansion candle. So this is where I give myself an if-then scenario: if the EQ is respected, then we can trade lower through the previous day low and possibly to the low to the left here. If it is not respected, then I anticipate it to trade higher to these failure swings on the high.
Speaker A
the daily as this is where I like to use the equilibrium you can see here on the daily chart we have taken out this low and we have closed back inside the range but we have a nice bearish expansion
Speaker A
But once I have determined that, I go down to the hourly chart and take a look at the intraday price action. You can see we get a consolidation as we reach early New York. We sweep out this side of the range and then trade back through. So I will drop down to a 15-minute chart just to give you a better picture, and you can see we do have a very aggressive sell-off here. But since we are respecting the equilibrium of this daily candle, I can then expect these lows to get taken, instead of, if we close through and over this equilibrium, looking for the failure swings on the high.
Speaker A
anticipate it to trade higher to these failure swings on the high but once I have determined that then I go down to the hourly chart and I take a look at the intraday price action you can see we get a consolidation as we
Speaker A
Let's hop into another example. In this next example, we're just going to do a walkthrough of a few days of price action while watching the daily closures paired with the equilibrium, and then the lower time frame chart. You can see here, if we get into the close of the day, did we respect the EQ of the previous day? Marking that out right here, we do respect it, but we have a nice bearish close with the sweep of the previous day high. So if we can respect the equilibrium of this previous day, then we can trade lower to these lows down here.
Speaker A
have a very aggressive sell-off here but since we are respecting the equilibrium of this daily candle I can then expect these lows to get taken instead of if we go and close through over this equilibrium looking for the failure
Speaker A
Now, looking for a PD array in this area, this is where it's not always perfect. We don't really have a PD array in the lower half of this range. We really just have all these failure swings lined up, and then reaching up into this fair value gap here. This is where I will allow it to trade a little bit higher than I normally would, because of the structure on the hourly time frame. So as I let this play forward, you can see we do get a little bit of consolidation, we then sweep that high into the fair value gap, and then trade lower.
Speaker A
frame chart you can see here if we get into the closure of the day did we respect the EQ of the previous day so marking that out right here we do respect it but we have a nice bearish
Speaker A
So as we get into the next day, we have now closed nice and bearish. So if I'm expecting this to trade lower, I would want to see it respect the lower half. But what do we notice? We notice that price already gapped down and then traded back into the range. So now my whole thought pr
Speaker A
we don't really have a PD in the lower half of this range we really just have all these failure swings lined up and then reaching up into this fair value Gap here this is where I will allow it
Speaker A
to trade a little bit higher than I normally would because of the structure on the hourly time frame so as I let this play forward you can see we do get a little bit of consolidation we then sweep that
Speaker A
high into the fair value Gap and then trade lower so as we get into the next day we have now closed nice and bearish so if I'm expecting this to trade lower I would want to see it respect the lower
Speaker A
half but what do we notice we notice that price already gapped down and then traded back into the range so now my whole thought process is wait for the next daily closure as this range has already expanded you can see that EQ does still
Speaker A
give a reaction at the New York open to sweep out these intraday lows minus the gap down but let's get into the next day so the way I view this is we have taken out the previous low we have
Speaker A
closed back inside the range here with a nice bullish candle now we have respected the EQ of this but I'm more focused on the swing formations so if we're going to respect the EQ of this candle what do I have well in this case
Speaker A
there's two things that can happen we can either sweep out this low or we respect it I don't really know what's going to happen so that's when I just let the daily profile confirm or invalidate my thought process as we
Speaker A
trade lower here we get awful close to this low I'd want to see this low swept out this low gets swept out we're respecting the EQ if we are going to trade higher this is where I would want
Speaker A
to see it and I would look for the change in the state of delivery or an order block formation here we get that order block formation and we get this continuation higher right so I have a series of if then statements and then I
Speaker A
search for the PD array as we let this continue we take out this previous day high we close back in but it is a nice bullish range once again if I'm zooming in here if I want to see the upper half
Speaker A
of this respect and I have an opposing candle here and I would not want to see this low taken out now the only concerning thing is we have already taken out this previous High here which can set up a deeper retracement let's
Speaker A
see what happens intraday here we are currently respecting this opposing candle do we get the confirmation of the close through the series of down Clos candles that made this low Let's see we do not so without that confirmation there is no
Speaker A
bullish setup there and you can see it fails pretty good now as we let this go into the next day and carry on our bias what do we notice in this candle we have a very large Wick so it doesn't really make
Speaker A
sense to use the EQ of the whole candle if you go back to my Wick video it will make a lot more sense to use 0.5 of this Wick here if 0 five of this Wick gets respected here I can see if this low
Speaker A
gets swept out let's see we sweep out this low we have a nice closure though if we're going to trade this higher I'd want to see us close through this series of down close candles that made this low we do get the closure through it
Speaker A
with this new order block formation now I'd want to see a closure through this level to trade higher it took a minute to close through that down close candle but once it does we do get that expansion to the failure
Speaker A
swings on these highs over here but hopefully that makes sense how I pair daily closures with the daily equilibrium to search for expansions I'm going to use it just as I showed in the PDF with PDR a matching and then just
Speaker A
pairing it with a change in the state of delivery and basic Market structure now let's go through a few more examples so you really get this locked into your brain you can see here we have had a consolidation and how does that blend
Speaker A
with the phases of price we have expansion into a consolidation we have taken the high in the consolidation but we are going to trade lower this is where I'd want to see it now paired with the equilibrium and the closure we've
Speaker A
swept out the high had a nice closure lower we have swept out the low right so this is less ideal as it has taken both sides of the range but if I want to see this trade lower where would I want to
Speaker A
see that from the0 five of the range so once again dropping down to the hourly chart we'll let my indicator plot the EQ and the higher time frame candles and let's see how this works out so you can
Speaker A
see going into this day if I'm looking for the previous EQ which is right here do I have a PD aray in that area I do is I have an opposing candle or an order block and that also gives me that
Speaker A
protected High going into the day so if I was wanting to take a positional entry that is where I could take a short with my stop over this high and then looking for the other side of the range or two R
Speaker A
but let's see how this plays out we reach up into that opposing candle once again if you have seen my video we want to see5 of that be respected it is being respected and then we trade lower off of
Speaker A
that we get expansion into retracement now we're getting a new expansion in which I could use that whole series of up Clos candles and we continue through the low now continuing this bias into the next day what do we get we have a
Speaker A
nice bearish closure right so if price is going to respect the lower half of this I'd want to see it Go lower so as we let this go what PD arays do we have in this area right and to just highlight
Speaker A
it this whole area here here I look left I don't trust this as an order block because it is just in a consolidation so I will use the high of the range as a point of interest and either look for a
Speaker A
sweep or an smt on that high and there we go we get a sweep and what do we get at the sweep a change in the state of delivery and we continue lower so you can see in that example how
Speaker A
during expansion upclose candles are going to be respected and the EQ is also going to be respected we're not going to get those deep retracements into premium to look to sell so here we are in our next example and you can see we have had
Speaker A
expansion do we get this met with expansion consolidation or retracement well price isn't consolidating price isn't expanding back into this range so this is a retracement in which I can anticipate another expansion lower with this daily closure this is where I could
Speaker A
use 0.5 of that Wick as we have a large Wick to see that be respect to trade lower now on the next candle you can see we respect 0.5 that Wick and then we'll drop down to the hourly chart here for
Speaker A
the structure so you can see here on that new day we open we make a high that is paired with the change in the state of delivery while respecting exactly that 05 but I would also allow it to
Speaker A
trade slightly a bit higher using this Wick and then we get this continuation lower from these PD arrays now with this closure once again I asked my myself do I have an invalidation well if this is where I want to see price hold below
Speaker A
here is an invalidation for me and here is a point of interest but I can use this fair value Gap here so letting this trade through let's see what happens we trade lower first which usually means we're going to return to
Speaker A
the opening price at least and there we go so in this case you can see we do just leave shy of this fair value Gap so maybe I miss it or if I'm watching that higher time frame candle so if we replay it you can see it
Speaker A
printed without a wick price comes returns just to put in a wick on that higher time frame right and then we have an aggressive closure and then trades lower so maybe I miss it maybe I catch it it
Speaker A
really depends on what I would be thinking that day and we continue lower so you can see how each day we first respect the lower half of the wick then we respect the lower half of this daily candle and then if we're going to
Speaker A
respect the lower half of this candle we would also continue lower but at this point we have 3 days of expansion into lows this is where I'm going to avoid price is there can be a new phase of
Speaker A
price delivery either consolidation retracement or we get that reversal so I just wait for new daily closures to tell me what is up so the next thing I want to talk about is this is a fractal concept you can see I was using it on
Speaker A
the daily and hourly and that is mainly what I use for my bias in lower time frames structure but is it also fractal right just like my fractal model used on any time frame it's the same with this
Speaker A
concept so let's take a look at the 4-Hour chart you can see I've adjusted my indicator to use the 4-Hour chart as the higher time frame for this equilibrium and if we go ahead and replay this price action here what do we
Speaker A
notice we have this expansion lower we hit this low here so if this is going to respect and trade lower I'd want to see5 of this be respected right which is right where price is opening up you can
Speaker A
see on the next candle not only do we not respect that but we also close through the down Clos candles into this low so now I can view this as if we are going to trade this higher I'd want to
Speaker A
see 0.5 of this candle be respected so as we let this print 05 is respected I'm now looking at this order block and then we go and take out this high right here we have now had a few expansion candles
Speaker A
one two three so if we are going to get a new phase of price delivery this is where I would expect it as it has taken out liquidity reversals occur at highs and lows so as we let this print here we
Speaker A
sweep out this High we have a nice closure this is where we could then see if we respect this Wick to trade it back into the range as a retracement but I prefer to just align that with the
Speaker A
higher time frame Direction and trade the Longs here you can see we get that expansion reach into this opposing candle or the change on the state of delivery now I want to see is 0.5 of this respected and here is a good thing
Speaker A
to notice we're closing above 0.5 of this candle's range which is generally when I view it as a reversal and I can use 0.5 of that Wick let's see what happens we respect 0.5 of that Wick we now close through the down close candle
Speaker A
into this point of Interest the fair value Gap and this order block so this is now a propulsion block and if we are going to respect that and trade it higher 05 of this candle right here so now we have this little range that we're
Speaker A
looking for price to trade higher off of you can see we tap right into that range that would be the t-spot and then we expand higher and if we continue to respect 05 there we go expansion so now
Speaker A
with three expansion candles I could get a new phase of price delivery but the main thing I wanted to show is how this is a fractal concept you can use it on any time frame I prefer the daily 4H
Speaker A
hour hourly candles because that just gives me enough time to analyze it if I'm doing this on a 5minute chart it just becomes a lot to look at so I hope you enjoyed the video if you did please
Speaker A
consider liking and subscribing and I'll see you guys in the next one have a good one
Topics:equilibriumpremium and discountexpansion phaseICTfair value gapPD arrayscontinuation tradingprice actionTradingViewmarket structure
