**Protected Swings – Understanding Trend and Invalidations — Transcript & Summary | SozAI**
Source: https://sozai.app/transcript/protected-swings-understanding-trend-invalidations/

TTrades explains protected swings (protected highs and lows) in trading: how to define them via sweeps, closes through down/up-close candles, and fair value gaps, with chart examples on daily and hour

## Key Takeaways

- A protected swing is a high or low expected to hold as the trend continues, confirmed by a close through the candle series that formed it.
- Protection typically requires a liquidity sweep followed by a close through the relevant down-close (bullish) or up-close (bearish) candles.
- Protected swings can also form from fair value gaps and can be validated using SMT with a correlated asset.
- During consolidation, focus on the external range highs and lows, looking for sweeps and protected swings to trade reversals or continuations.
- Waiting for confirmation of a protected swing avoids failed reversal setups such as turtle soup trades.

## What the video covers

- Defines a protected swing as a high or low that price is expected to hold as the trend continues.
- Describes the first type: a short-term low is swept (liquidity taken), then price closes through the series of down-close candles that formed the low, making it protected.
- Explains that with SMT (smart money technique, using a correlated asset), the low may be protected when the correlated asset sweeps the low, without needing the sweep on the primary asset.
- Describes the second type of protected swing, formed from a fair value gap: price reaches into the FVG, and the low with its down-close candles is marked and protected once price closes over that level.
- Covers consolidation phases of price, advising focus on the external parts of the range (highs and lows) when price is consolidating.
- Demonstrates a bearish example on TradingView: price sweeps the previous day's high, but fails to form a protected high until price closes through the series of up-close candles that swept it.
- Explains why a turtle soup reversal setup is not enough without a confirmed protected swing, since the close through the candle series may fail.
- Shows how protected highs are used to identify continuation of a bearish trend and lower-timeframe reversals within it.
- Walks through a range example with range highs and lows, equal highs, and daily and 15-minute chart confirmation.
- Emphasizes that protected swings act as invalidation levels: if the protected high or low breaks, the trend bias is invalidated.

## Chapters

1. 00:00 Introduction to Protected Swings
2. 01:25 Defining Protected Lows and Liquidity Sweeps
3. 03:25 Using SMT and Correlated Assets
4. 04:43 Protected Swings from Fair Value Gaps
5. 05:57 Bearish Example: Daily and Hourly Protected Highs
6. 06:40 Continuation and Reversals Within a Bearish Trend
7. 08:00 Range Examples and Equal Highs
8. 11:00 15-Minute Chart Confirmation and Entries

Answers

## Questions about this video

What is a protected swing in this video?

A protected swing is a high or low that price is expected to hold as the trend continues. It is confirmed when price sweeps liquidity and then closes through the series of candles that formed that swing.

Why does the presenter wait for a close through the candle series before calling a high or low protected?

Because a sweep alone is not enough; without a close through the series of down-close (or up-close) candles, the reversal can fail, as shown in the turtle soup example where the setup simply breaks down.

How does SMT change the requirement for a protected low?

When using SMT with a correlated asset, if the correlated asset sweeps the low and forms a protected low, the presenter anticipates the primary asset's low will hold as well, so the primary asset does not necessarily need its own sweep.

## Full Transcript — Download SRT & Markdown

00:05

Speaker A

How's it going, everyone? In this video, we are going to talk about protected swings, or protected highs and lows, in the market. So, let's get into the video.

00:25

Speaker A

which I'm expecting to hold as the trend continues. So what do I mean by that? In this case, in a bullish scenario, I'm expecting this low to remain intact if this trend is going to continue higher.

00:37

Speaker A

So, what is a protected swing? A protected swing is a high or low in which I'm expecting price to hold as the trend continues. So what do I mean by that? In this case, in a bullish scenario, I'm expecting this low to remain intact if this trend is going to continue higher.

00:49

Speaker A

or swept and then close through the series of downclo candles that made the low. So, you can see here, here is the low. we find the series of downclo candles. I mark that out once price closes over that level. This is now a

01:03

Speaker A

Now, how do I define a protected high or low, or a protected swing? Well, there are two types, and this would be the first one. If we are bullish, I want to see a low, or a short-term low, be run out or swept, and then close through the series of down-close candles that made the low. So, you can see here, here is the low. We find the series of down-close candles. I mark that out once price closes over that level. This is now a protected low, and I expect it to hold if we're going to continue higher.

01:10

Speaker A

Well, that is only if we use SMT. So, in this case, using SMT, the correlated asset has ran out the low forming a protected low. So, then we can anticipate this low to hold as well. So in this case, I'll use the series of

01:25

Speaker A

Now, when do we not need to run out the low? Well, that is only if we use SMT. So, in this case, using SMT, the correlated asset has run out the low, forming a protected low. So then we can anticipate this low to hold as well. In this case, I'll use the series of down-close candles that made the failure swing. Once that is closed over, we expect these to hold here.

01:38

Speaker A

of a high or low being swept out. In this case, it is price reaching into a fair value gap. I then find the low. I found this series of downcloed candles that form that low. Once price closes over that level, I then anticipate this

01:51

Speaker A

Now, the other type of protected swing is one formed out of a fair value gap. So, in the first two examples, it is based off of a high or low being swept out. In this case, it is price reaching into a fair value gap. I then find the low. I found this series of down-close candles that form that low. Once price closes over that level, I then anticipate this low to hold if price is going to continue higher.

02:06

Speaker A

into that important level. Do we close over those two downlosed candles? No. So it is still bearish. So, taking a look here now, we have swept out that short-term low or sweeping out a liquidity point. Here we have the

02:19

Speaker A

So let's get into an example here. You can see price is trending down into an important level where we may anticipate a new phase of price. You can see we have a series of down-close candles into that important level. Do we close over those two down-close candles? No. So it is still bearish.

02:29

Speaker A

that made that low. Go ahead and mark out this level. And when price closes over that level, this low is now protected. Or anticipate this low to hold. if price is going to reverse and change trend and continue higher. So

02:43

Speaker A

So, taking a look here now, we have swept out that short-term low, or swept out a liquidity point. Here we have the correlated asset to show you what it looks like with an SMT, but we're going to focus on this one. Now, with the sweep of a low, we can find this low, find the series of down-close candles that made that low, go ahead and mark out this level. And when price closes over that level, this low is now protected, or we anticipate this low to hold if price is going to reverse, change trend, and continue higher. So from here, I can look to take an entry or seek a continuation, as I'm expecting this trend to continue higher.

02:56

Speaker A

expansion lower and then we're having a consolidation. So if you understand the phases of price, if we are in a consolidation, where do we want to focus? The external parts of the range.

03:08

Speaker A

So let's get into some examples in TradingView. Here we are with our first example, and you can see we have had expansion lower and then we're having a consolidation. So if you understand the phases of price, if we are in a consolidation, where do we want to focus? The external parts of the range. Since we are bearish, what would we want to see? We would want to see highs run out, to then trade back lower.

03:21

Speaker A

it out. And if you notice, we have a candle to closure, or if you see my daily bias video, we're closing back inside the previous day's range. So, we can expect this to trade lower. Let's go down to the hourly chart to see what

03:33

Speaker A

So taking a look at this, what happens when we reach up into this high? Well, we sweep it out. And if you notice, we have a candle closure, or if you see my daily bias video, we're closing back inside the previous day's range. So we can expect this to trade lower.

03:44

Speaker A

reversal? Well, what forms a protected high? Well, let's say I was trying to frame a reversal off of this previous day high. We have that turtle soup. But what happens and why do I wait for a protected high? Well, we never get that

03:57

Speaker A

Let's go down to the hourly chart to see what this looks like. So here we are down on the hourly chart, and I have my indicator up with the daily candles so you can visualize it. Here we have swept out our previous day's high. And do we form a reversal? Well, what forms a protected high? Let's say I was trying to frame a reversal off of this previous day high. We have that turtle soup. But what happens, and why do I wait for a protected high? Well, we never get that confirmation of the close through the series of down-close candles that made that high. So you can see how it just fails.

04:11

Speaker A

candles that made the high? In this case, it is just one. Yes, we do. So, with this now, we can anticipate this trend to have flipped and we are bearish, right? And what does this do?

04:22

Speaker A

Now we have another sweep over this high. What happens here? Do we get a closure through the series of candles that made the high? In this case, it is just one. Yes, we do. So with this, we can anticipate this trend to have flipped and we are bearish, right? And what does this do? This is now a protected swing, right? I'm expecting this high to remain intact because it has been closed through, if price is going to continue bearish. So I'm expecting this wick to remain intact as we trade lower.

04:37

Speaker A

next day, let's see what happens. You can see my indicator does plot a bearish signal. We reach up into here and there's really not much going on here as this is a whole series up. I would be ignoring this small little candle there.

04:52

Speaker A

So getting into the next day, let's see what happens. You can see my indicator does plot a bearish signal. We reach up into here, and there's really not much going on here, as this is a whole series up. I would be ignoring this small little candle there. What happens if we need a protected swing? We would need a high to be swept out. Why are we looking for a high to be swept out and not a low? Well, we are bearish because this trend is now bearish as long as this wick remains intact. So now that we have swept out the high, what would we need to form a protected swing right here to trade off of? We would need this series of up-close candles that swept out that high to be closed below. So as we let this continue, do we get a closure below that? We do, right here. So now I'm expecting this high to remain, but we have a new protected high. And due to the day, I'm expecting that to remain intact as we continue into the next day, pretty late into the session.

05:04

Speaker A

bearish as long as this wick remains intact. So, now that we have swept out the high, what would we need to form a protected swing right here to trade off of? We would need this series of upclose candles that swept out that high to be

05:18

Speaker A

So here we are in the next day. We have a consolidation. Here we sweep out this high. What would we need for price to form a protected high right here? We'd need a closure through a series of up-close candles. Not really many series of up-close candles there, so it would just be that body right there. So marking that out, I would need a closure through that. We have yet to get that. Right. So now we have swept out a new high, so I'm just going to repeat the process. And here you can see where this series of closed candles would be right there. So let's see when we get a closure through that. Right there, we get the closure through. So now I'd expect this high to remain intact, and you can see how this is used for a continuation of a trend. Here is a reversal, and each one of these is a continuation of this bearish trend or a lower-timeframe reversal.

05:32

Speaker A

I'm expecting that to remain intact as we continue into the next day, pretty late into the session. So, here we are in the next day. We have a consolidation. Here we sweep out this high. What would we need for price to

05:47

Speaker A

And where would I be looking to target? Well, I have my liquidity points here, as marked out via my indicator. So as we let this continue, we go and take out that low. Taking a look, do we get a retracement or a reversal? It's looking like a retracement. What do we have here? We sweep out a high, or price moves into a fair value gap. And what do we also have? A closure through the series of up-close candles into that important level. I could then anticipate this high to remain if we're going to continue lower. And once again, we get a continuation lower. We have a very deep retracement, almost taking out this high, but it remains intact.

06:00

Speaker A

through that. We have yet to get that. Right. So, now we have swept out a new high. So, I'm just going to repeat the process. And here you can see where would be this series of closed candles right there. So, let's see when we get a

06:14

Speaker A

With that deep retracement, what do we reach into? A fair value gap here. And so now, with the closure through this up-close candle into that fair value gap, we have a new protected high, right? And all I'm looking for is this low, because that is our daily target. Let's see if that gets taken, or if our protected high gets taken out first. And you can see we get those lows taken out. So hopefully that makes sense: how we have a reversal, this forms a protected high, right, a protected swing. And then we are expecting this trend to continue until it is violated with daily closures, as we are closing outside the previous day's lows. As long as that is occurring, I'm expecting this trend to continue, and I can continue to just track the protected swings in the market, giving me areas that I want to sell.

06:26

Speaker A

continuation of this bearish trend or a lower time frame reversal. And where would I be looking to target? Well, I have my liquidity points here as marked out via my indicator. So as we let this continue, we go and take out that

06:40

Speaker A

So here we are with our same EU example. We were just up here and we had those lows taken out down here. Now, if we're expecting this to continue lower, what are we looking at? Well, we had this range high. It's taken out, and we have this r

06:53

Speaker A

closure through the series of upclose candles into that important level. I could then anticipate this high to remain if we're going to continue lower. And once again, we get a continuation lower. We have a very deep retracement almost taking out this high, but it

07:10

Speaker A

remains intact. With that deep retracement, what do we reach into? a fair value gap here. And so then now with the closure through this up close candle into that fair value gap, we now have a new protected high, right? And so

07:23

Speaker A

all I'm looking for is this low cuz that is our daily target. Let's see if that gets taken or if our protected high gets taken out first. And you can see we get those lows taken out. So hopefully that makes sense

07:36

Speaker A

how we have a reversal. This forms a protected high, right? A protected swing. And then we are expecting this trend to continue until it is violated right with daily closures as we are closing outside the previous day's lows.

07:51

Speaker A

So as long as that is occurring I'm expecting this trend to continue and I can continue to just track the protected swings in the market giving me areas that I want to sell. So here we are with our same EU

08:03

Speaker A

example. We were just up here and we had those lows taken out down here. Now, if we're expecting this to continue lower, what are we looking at? Well, we had this range high. It's taken out and we have this range low. Now, we have equal

08:17

Speaker A

lows. We have expansion. And we are consolidating. So, if we're expecting a continuation lower, what do we want to see? A run of a high and then to form a protected swing. Now, let's talk about something. The anticipation of a

08:32

Speaker A

protected swing versus a protected swing forming. So you can see here I have the narrative that I'm expecting this high to form in here to trade lower. So I can anticipate that protected swing to form and drop down to the hourly chart. And

08:47

Speaker A

that is where I could look for lower time frame setups and confirmations. So you can see here we have price running out this high here. We close through the series of upclose candles into that high, right? And so I'm expecting a

08:59

Speaker A

continuation lower here. So if we have expansion, what do we expect? either a retracement or a consolidation to get a continuation signature. Right here we are pretty much consolidating and what do we notice? We are taking out highs,

09:15

Speaker A

right? So, we reach into this fair value gap over here and we don't get that protected swing, right? We get a very lethargic move back into the range here, not confirming this as a protected high.

09:27

Speaker A

So, we have another sweep of a high here. Where would be our protected high?

09:31

Speaker A

A closure through here. So, I can go ahead and wait for that. And when we close through here, what am I anticipating? I'm now anticipating this high to remain intact, which means this wick high has formed. And I can expect

09:45

Speaker A

to trade that lower. So, we let that continue. We go and take out that previous day's low. And let's see if we run out the low. We are currently leaving this range low.

09:58

Speaker A

And then as we approach this candle for continuation, I'm expecting the lower half of this candle to push price lower.

10:04

Speaker A

We have price running out a high right here into a fair value gap. Where are the series of candles? Well, you could use these bull move here. But if we look at this, price went up, down, back up.

10:18

Speaker A

So I can really just use this level in here. So let's see what happens. We run out a new high. That gives me a new level to look at right here. Sweep. Not very clean in here, but I can use that leg up or I could just

10:34

Speaker A

use the same level closure through that. And then we go ahead and drop through those lows. So, you can see if we go back out to our daily time frame here.

10:45

Speaker A

What we can do is use that narrative on the daily chart with a daily closure to anticipate and refine it on the hourly.

10:51

Speaker A

Or if we were just going to wait for the daily setup, we'd have the anticipation of that swing. And then when we close through here, that is the confirmation that this high should remain intact as we go run out that low and we get an

11:04

Speaker A

expansion lower. So here we are on our next example. ES on the 4hour chart and we have the daily candles up here. You can see we have a nice bearish closure on the daily chart. So if expecting a

11:16

Speaker A

continuation lower, I want to see from the lower half of this. Well, what area is in the lower half? We have a fair value gap right here. So, if I'm expecting price to retrace up and continue lower, I want to see price form

11:29

Speaker A

a high in here to continue lower. So, letting another candle play out. What are we left with? Is that a bearish closure? It is not. So, I can give it another candle. Is this a bearish closure? Yes, it is. We sweep out our

11:43

Speaker A

previous and we close back inside the range. So, with this, I can drop down to the 15-minute chart. So, here we are down on the 15-minute chart. And do we have a protected swing? Well, we find this high right here. We find the series

11:58

Speaker A

of upclose candles that made it. Have we closed through it? Yes, we have. So, with that, I'm expecting this high to remain intact. Now, as we move ahead, what happens? Do we have any points of interest? Well, waiting for the closure

12:13

Speaker A

and the open of the new candle. We do right here as we have swept out this high. So now what am I seeing? If we're going to form a new protected high, we need to close through where? Right here.

12:25

Speaker A

Why that point? Because that is the series of up close candles. In this case, just one that swept out this previous high or point of interest. So as we let this continue, we close through there. And now I can anticipate

12:36

Speaker A

a move lower to that sellside liquidity point. So starting out this next example, we are on silver 1 hour chart. So you can see our daily chart here, we have a nice sweep of the highs and closure back in,

12:50

Speaker A

which is very bearish. So going ahead and marking out this up close candle here. I'd want to see that be respected as we trade lower. Now with this, where is our protected swing? Well, my indicator will mark that out. But I'll

13:04

Speaker A

find the high here. I'll find the series of candles that made that high. In this case, it is just one as it sweeps out this high previous as well. And so that is our protected high. Now, if I'm

13:14

Speaker A

looking to take a position in here, do I want to enter with my stop all the way on this high? That doesn't really give good risk-to-reward to my first target or even to my projections. So, with that, I'm going to let a new protected

13:28

Speaker A

swing form to look for an entry. So, as I let this play forward, let's see what happens. Does price reach into a point of interest? It does as it reaches into a fair value gap here. And what else do

13:41

Speaker A

we have? We have the series of upclose candles or in this case a singular one into that point of interest. And we are now closed through. So now I have a new protected swing in the market and I'm

13:52

Speaker A

expecting this to remain intact as we trade lower if this trend is going to continue. So then this is where I can sell, put my stop on the protected swing high and then look for 2 R. So let's see how this works

14:09

Speaker A

out. And you can see we hit our 2R and then we go to that first standard deviation projection. But that is an example of how I would actually look to trade with protected swings. I'm using it as my invalidation. So I want an

14:24

Speaker A

entry fairly close to my invalidation to give me good risk-to-reward. So here we are in our next example and you can take a look at this sell side of the curve here running out these lows. Here is where we formed

14:36

Speaker A

that protected swing as we've closed through here. 50% is retested and then we get a continuation lower. Now you can see all these failure swings on the highs. Once again we want to be trading towards failure swings and we want

14:49

Speaker A

protected swings on our side of the market. So we have failure swings on the buy side of the market. And what do we notice down here? We have swept out a low. Have we confirmed that low or protected that low? Yes. As we have

15:02

Speaker A

closed through the series of down close candles that formed that low. So now I can anticipate this low to hold. If this is going to be the low or the reversal off previous day low to then trade higher back through these highs. So as

15:15

Speaker A

we zoom in, let's see how this forms in here. So you can see what do we have. We have a point of interest, a fair value gap here. We have a down closed candle into that point of interest. It's then

15:28

Speaker A

closed over. So what does that give us? That gives us a new protected swing, right? So this would be the continuation or the order block formed at the low-risk buy. So once again here, that is where I could look to buy, put my

15:40

Speaker A

stop on the invalidation, and then from there I could be looking for 2 R, right?

15:47

Speaker A

or I could be looking for those highs up here, right? Because that is where I'm anticipating price to trade to. So, let's see what happens as we let this play out. We get a continuation higher and we hit our TP up there. So, once

16:02

Speaker A

again, it's just important to track those protected swings because that is where the opportunities lie. You don't have to catch them at the reversal. You can get the continuation or even the candles following that reversal or when the continuation is confirmed. Now, I

16:17

Speaker A

hope you enjoyed this video. It is a very important concept within my trading. So, I hope you find it helpful.

16:22

Speaker A

Now, when I am looking for entries, I am mainly focused on a new invalidation forming. When I can anticipate a new invalidation forming or a new protected swing, that gives me a new area to anticipate expansion from or to trade

16:35

Speaker A

off of. Now, if you have any questions, feel free to leave them in the comments below or any suggestions for future videos. I hope you enjoyed and I'll see you guys next time. Have a good one.

Topics: protected swings protected highs protected lows market structure SMT fair value gap liquidity sweep turtle soup trend continuation TradingView

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