Speaker A
How's it going everyone, and welcome back to another video. In this video, we are going to talk about entry timing, how to trade expansion candles, and when to wait for the next one. Let's get into the video.
Learn when to enter expansion candles in trading: how to use time and range within higher time frame candles, avoid late entries, and wait for the next candle.
Key Takeaways
- Enter expansion candles early in the higher time frame candle and near the opening price to preserve both time and range.
- A shallow wick relative to EQ indicates the candle has range left to expand.
- When most of the higher time frame candle's time has passed, wait for the next candle rather than forcing an entry.
- Always verify both remaining time and remaining range before taking a trade.
What the video covers
- Expansion candles have a limited amount of time (defined by the higher time frame candle) and a limited range (typically determined by ATR or average expansion candle size).
- The ideal entry is early in the higher time frame candle, near the opening price, after a shallow wick forms relative to the equilibrium (EQ).
- Enter early enough in the candle so there is sufficient time left for the expansion to play out.
- Avoid entering near the opening price if the price has already used too much range, since this risks getting caught in a new phase of price action.
- If a significant portion (around three-quarters) of the higher time frame candle has elapsed, it is generally better to wait for the next higher time frame candle to provide fresh time and range.
- The concept is fractal and can be applied across any time frame.
- Before every entry, ask two questions: is there enough time left, and is there enough range left?
- Intra-candle changes in the state of delivery, where a high or low forms early in the candle, signal potential expansion.
- Gold and silver can be compared as correlated assets; a candle that fails to respect EQ and forms a larger wick may not expand, while one with a small wick can support expansion.
- Studying multiple chart examples and practicing on your own charts is recommended to internalize the timing principles.
Chapters
- 00:00Introduction to Entry Timing and Expansion Candles
- 01:17Time and Range Limits of Expansion Candles
- 02:17Entering Early and Around the Opening Price
- 03:40When Time Runs Out: Waiting for the Next Candle
- 04:16Gold vs Silver Wick Comparison Example
- 07:24Additional Chart Examples and Late Entry Cases
- 10:20Reviewing Expansion Behavior and Key Lessons
Full Transcript — Download SRT & Markdown
Speaker A
candles. So, you can see here we have a candle to closure, a change in the state of delivery, and I want to trade this candle three lower. Now, with expansion candles, they only have so much time and so much range. The time is defined by
Speaker A
So, I want to trade expansion candles. You can see here we have a candle close, a change in the state of delivery, and I want to trade this candle three lower. Now, with expansion candles, they only have so much time and so much range. The time is defined by the higher time frame candles. So, if this is a 5-minute on the lower time frame, we have 1 hour to expand. Now, it only has so much range. That's usually determined by an ATR, or just what the average expansion candle looks like.
Speaker A
Usually, you're not going to have a candle. This is a general expansion candle. It's not going to be 3x this size, right? Normally, we have a normal size for expansion candles. So, we have an allotted time and range for a candle.
Speaker A
Usually, you're not going to have a candle that is 3x this size. This is a general expansion candle. It's not going to be 3x this size, right? Normally, we have a normal size for expansion candles. So, we have an allotted time and range for a candle.
Speaker A
wick and be able to enter that candle around the opening price with enough time left for it to expand. So, you can see here, we formed that wick of the higher time frame candle in respect to the EQ. It's a shallow enough wick and
Speaker A
So, we want to enter early in that candle so we have enough time for the candle to expand. We also want to enter around the opening price, so we have enough range, right? So, the goal is to let the wick form, right? Have a shallow wick and be able to enter that candle around the opening price with enough time left for it to expand.
Speaker A
is early into the candle, entering around the opening price. We have met the criteria where we have enough time and enough range for this to expand lower within this higher time frame candle. Now, if you notice here, we have
Speaker A
So, you can see here, we formed that wick of the higher time frame candle in respect to the EQ. It's a shallow enough wick, and we have what? Enough time for this candle to expand. Now, I don't have a hard rule on what is early or late. You can kind of segment it into half the candle, but you can use your own discretion. So, you can see here, this is early into the candle, entering around the opening price. We have met the criteria where we have enough time and enough range for this to expand lower within this higher time frame candle.
Speaker A
candle, so there's not much time left for this candle to expand. Generally, when that occurs, I like to wait for the next higher time frame candle because then we have another new hour, or whatever that higher time frame candle
Speaker A
Now, if you notice here, we have a bit of a consolidation. What has run out? Well, we're still entering around that opening price, right? So, we have enough range left in this candle, but we're running out of time. We've already used three-quarters of this higher time frame candle, so there's not much time left for this candle to expand. Generally, when that occurs, I like to wait for the next higher time frame candle, because then we have another new hour, or whatever that higher time frame candle period is, to expand. So, you can see on this next candle, we can wait for that new candle, and it starts to expand because we have new range and new time.
Speaker A
Now, this is a fractal concept you can use on any time frame. Now, the two things I want you to think about when taking an entry within my model is, do I have enough range left and do I have enough time left? For the range, you
Speaker A
Now, this is a fractal concept you can use on any time frame. The two things I want you to think about when taking an entry within my model are: do I have enough range left, and do I have enough time left? For the range, you want to be entering around or near the opening price before it has already expanded. That's going to keep you from getting caught in a new phase of price on the wick formation of the next candle. And do I have enough time for this candle to expand? You want to enter early into that candle, so we have enough time for it to expand.
Speaker A
this candle to expand? You want to enter early into that candle, so we have enough time for it to go and expand. So, every single time you look to take an entry, ask yourself, is there enough time left? Is there enough range left?
Speaker A
So, every single time you look to take an entry, ask yourself: is there enough time left? Is there enough range left? If you can answer yes to both, you're going to be set up a lot better than if you can't.
Speaker A
talking about this, but if I'm going to be looking for a continuation to the downside, essentially using silver as a weaker asset to frame that to the downside, but we're going to use gold as the example here. What do I want to see
Speaker A
So, let's go into TradingView and go over a few examples of this. So, here we are in our first example. I dropped a video on Twitter talking about this, but if I'm going to be looking for a continuation to the downside, essentially using silver as a weaker asset to frame that to the downside, we're going to use gold as the example here. What do I want to see if this is going to be an expansion candle? Well, one, I want to see it remain in respect to the EQ, because that allows it to have a small wick. Then I want to see this have enough range left before an entry and enough time left.
Speaker A
left. So, generally with expansion candles, you want to see that higher or low formed early into the candle and that intra-candle change in state of delivery. So, let's see what happens here.
Speaker A
So, generally with expansion candles, you want to see that high or low formed early into the candle, and that intra-candle change in the state of delivery. So, let's see what happens here. You can see right here, what do we have? Right, we form that intra-candle change in the state of delivery. We run out of this consolidation high, and then we have a continuation that forms, which creates a new protected swing. So, we want to take a look here. Do we have enough time and range left? Well, we are only in London, so we have New York, right? We want to take our entries in early New York or London, or early in the day, so we have enough time for New York to expand or for that daily range to be created.
Speaker A
want to take a look here. Do we have enough time and range left? Well, we are only in London, so we have New York, right? We want to take our entries in early New York or London or early in the day, so we have enough time for New York
Speaker A
So, we have enough time, and we have enough range left, as we're still around the opening price. You can see we're right here at the opening price. So, this would make sense in terms of an entry, because I could take an entry, put my stop on what I believe to be the high of the day following my intraday reversal video protocol, and then I could look for price to expand lower. Now, if this is an expansion candle, we can expect this to expand throughout the day. Let's see what happens.
Speaker A
entry because I could take an entry, put my stop on what I believe to be the high of the day following my intraday reversal video, that protocol, and then I could look for price to expand lower. Now, if this is an expansion candle, we
Speaker A
And you can see, that's where we currently are in price, but we have expanded lower. You can see this expansion candle forming. We have formed the high early into the candle, so we have enough time and range left to expand lower.
Speaker A
expand lower. Now, let's go ahead and replay back to this previous day and go over it. Right, because what do we notice? Does it really expand? No, right? And what does that have to do with it? And it has to do with what? The
Speaker A
Now, let's go ahead and replay back to this previous day and go over it. Right, because what do we notice? Does it really expand? No, right? And what does that have to do with it? It has to do with the wick forming early into the candle and how much range we have used. This also ties into my wick size for reversals video. What do we notice? If we want to see an expansion, we want to see a shallow wick form earlier into the candle, and then we can expand lower, right? We're using our range to expand. But what are we noticing here? We are using our range to form the wick.
Speaker A
candle, and then we can expand lower, right? We're using our range to expand. But what are we noticing here? We are using our range to form the wick. So, when I have price not respecting the T-spot, not respecting the EQ here,
Speaker A
So, when I have price not respecting the T-spot, not respecting the EQ here, that's when we're forming a large wick. My wick size for reversals video talks about having to readjust my targets here. I'm not expecting price that used all this range to just continue to expand, right? It only has so much range. So, with the range, I can expect it to go back towards the daily open or those intraday lows. You can see price does have expansions within this daily range, but the day itself doesn't really expand that much. That's because it used so much time and range to form its daily wick, it doesn't really have time to expand lower.
Speaker A
range. So, with the range, I can expect it to go back towards the daily open or those intraday lows. So, you can see price does have expansions within this daily range, but the day itself doesn't really expand that much. And that's
Speaker A
That's why, instead of looking to take an entry in this day, where you're not going to get that expansion because it already used so much time and range forming its wick, you can just wait for the next day. That's what we talked about here for gold to form its continuation lower. You can see, yes, this is almost like a new reversal day. Price doesn't really move that much, and you can just wait for the next day, because you get more time and more range to expand.
Speaker A
so much time and range forming its wick, you can just wait for the next day, which is what we talked about here for gold to form its continuation lower. And so, you can see yes, this is almost like a new reversal day. Price doesn't really
Speaker A
Silver here is basically the exact same thing as gold, but what do we notice is the difference here in candle three? You can see gold did not respect that EQ and made a larger wick, so it can't really expand. You can see it closes similarly, or closer, to its opening price. But if you look at silver here, it has a small enough wick to support that expansion, right? It didn't use all of its range to form the wick, so we can still use that range to expand lower, and you get an expansion candle. It's the same principle: price forming a small wick early into the candle. You want to enter around or near that opening price, because that gives you enough time and range to continue to expand lower into these higher time frame targets.
Speaker A
see gold did not respect that EQ, made a larger wick, so it can't really expand.
Speaker A
And if we go out to the daily, you can see we have those monthly lows resting below.
Speaker A
use that range to expand lower, and you get an expansion candle. But it's the same thing, price forming a small wick early into the candle, you want to enter around or near that opening price because that gives you enough time and
Speaker A
So, here we are in another example. I will give quite a few examples here, but I really want you guys to go into your own charts and study this, because it'll be something you pick up on your own.
Speaker A
So, here we are in another example, and I will give quite a few examples here, but I really want you guys to go into your own charts and study this because it'll be something you pick up on your own. But what do we notice up here about
Speaker A
the C2 candle as well as the C3? The reversal forms early into the candle, which gives it enough time and range to expand or have a expansion candle as well. What do we notice about this candle three? It opens, it forms its
Speaker A
wick early enough into this candle not using a lot of range, so we can do what?
Speaker A
We can continue to expand and create range. Now, what do we notice about this? This is still a C4 bearish. Yes, we have taken out these consolidation lows, but would we still want to look for any sort of short set up here? No,
Speaker A
because what have we done? We haven't really used the range, but we've used most of our time. So, if a short set up appears, I would rather wait for the next higher time frame candle anyways. Let's let this continue.
Speaker A
Right, I wouldn't want to take that short set up because it's so late into the candle. Now, let's see what happens here.
Speaker A
We go run out the low. You can see the next candle gets that expansion lower because this one just consolidates.
Speaker A
And what happens next? Right? We start to form this reversal in the other direction, which is actually aligned with the daily candle and the daily bias. So, if we go back to the daily here, what do we have? We have this range which has been manipulated.
Speaker A
We have a candle two closure, so we could be bullish on this candle three if it remains in respect to the EQ, which it is currently. So, going back to the 4-hour and 15, let's say we wanted to trade this on the reversal candle here
Speaker A
higher. What could we do? We'd want to take an entry earlier into the candle, right? So, not super late into this candle and before it already expands.
Speaker A
Let's see what happens here. Do we form a continuation? We do right here. So, what do we have? We still have enough range and time for this to expand, and I see that my stop loss would be in a good position down
Speaker A
here lower into the candle. Why is that important? Let's say this candle closes exactly how it does. I ideally want my stop below the EQ, right? Because that's what I want to see respected in the next candle. I could look to take an entry
Speaker A
long in here and look for it to trade towards the highs cuz I have enough time and range for this to continue to expand.
Speaker A
And you can see, we do go get that move higher. I want my entry early into the candle and before it expands. Let's go talk about some really good setups here.
Speaker A
So, here we are. We're going to a 1-minute chart here on Nasdaq. What do we notice about this reversal candle? The reversal forms early into the candle, right? And it forms right around that opening price. So, what does this
Speaker A
allow? It allows for enough time, which means we have the majority of the candle left, and enough range for this candle to expand lower. So, we get expansion there. Now, would I really want to trade this candle lower? Probably not
Speaker A
following a large expansion, right? You possibly could, but let's see if we can frame this the other way. Now that we have a candle to closure on the low.
Speaker A
Now, if we're trying to trade this as an expansion candle, where do we want to enter? We want to be entering around or near the opening price of this higher time frame candle and early into the candle. Now, early isn't mechanical for
Speaker A
me, but the best way to think about it is in the first half if you want to make it mechanical. Let's see what happens.
Speaker A
There we form the intra-candle change in the state of delivery, and where are we?
Speaker A
We're right around the higher time frame opening price here, and we've already anticipated it formed a wick, and we have SMT. So, we have what? Another 13 or so minutes left in this higher time frame candle, and we've already formed a
Speaker A
wick. We're around the opening price. We have time and range for this to expand.
Speaker A
I could look to earn entry here. And you can see we start to expand. Why would I not want to take any further entries in this higher time frame candle? It's not early into the candle. We've already expanded. This is where you get caught in any new phase of price is if
Speaker A
you're trying to trade at the end of a higher time frame candle. If If want to continue to trade this higher, wait for this candle to close and then wait for a new candle wick low to form and trade that expansion. That keeps you out of a
Speaker A
new phase of price and getting stopped out prior to the move actually occurring. So, here we are on the Nasdaq. We're on the 5-minute chart now and let's take a look at this in hindsight. Do these entries make sense?
Speaker A
Here you can see we have a candle two reversal right here and this entry right here. Where does it form? All right around the opening price and right away first 5 minutes of the higher time frame candle. So, then we can expand the rest
Speaker A
of the candle. Now, here we just kind of consolidate and then we have a candle two closure with a PSP and SMT. So, if I wanted to trade this lower, when would I want that entry to form? Early into the candle. Ideally here the first few
Speaker A
candles. You can see it struggles a good bit before it finally closes below and we're almost halfway through the candle, right? And we've already used a lot of the range. So, yes, we could take this, right? But, we're going to have to
Speaker A
expect to hold that into the next higher time frame candle. Another thing we can do is if you're have a new protected swing or an area you expect to hold in the next candle. Let's say I do expect that to hold because what? I want to see
Speaker A
a small wick, so I don't want to see it to go over this level. That is where you can learn about positional entries and I have a video on that, but this we can wait for the new candle to give an expansion and then have my stop loss
Speaker A
above that EQ area and looking for 2R, right? But, this is a really important lesson that I want to get across to you guys. The most simple way to think about this is am I entering around the opening price and am I entering early into the
Speaker A
higher time frame candle. If you keep those two things in mind, you're going to stop having those trades where you're entering right at the end of a higher time frame candle and getting swept out on the new candle's wick before it goes
Speaker A
without you. So, I hope you learned it. I know it's a little bit more advanced.
Speaker A
If you have any questions or comments, leave them below and I'll take a look at them. I can always make more advanced videos on this concept if you need it, but I hope you enjoy the rest of your day and I'll see you guys next time.
Speaker A
Have a good one.
Topics:expansion candlesentry timinghigher time frametrading time and rangeequilibrium EQATRintraday tradinggold silver SMTchange in state of deliverytrade entries
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