A Simple 3-Step Trading Model (Full Breakdown)

How's it going everyone and welcome back to another video. This week we are joined by AM Trades who's going to be talking about daily bias and 7-hour daily profile confirmation. Once he is done with that, I will join in to talk about fractal model entries that align with that daily bias and with that daily profile. I hope you guys enjoy, so let's get into the video. Getting right into this, the first part of any trade is framing the idea off the higher time frame so that you're not caught chasing price intraday small reactions back and forth. We want to keep our logic rooted in the higher time frame and supported by this framework that we're going to be following. And this is not something that has to be over complicated at all. We're only going to be using highs and lows off the daily chart, something called relevant swings, which are extremes of the current range in price, so that when price reacts there, we know without a doubt that reaction holds a weight for what should happen next. And that's going to be our bias backing every single trade idea that we have. The first part of understanding relevant swings and honestly the most important is knowing what a failure swing is. That is the entire premise of what we're doing here and you'll see why. What we're looking at in this chart would be a daily time frame and this is just a general example. This could form in multiple different ways, but the idea that we're seeing here is that price is trading lower. It forms an initial low and then trades away from that point inside of this daily candle. That could be a potential reversal because we've run on a low, manipulated, closed back up into the range, but then we see the following day here make a deep run back down into that initial point, that low, and then without taking it out, it makes that deep run and then starts to trade back away from it. This deep run, whether it was one day after or multiple days after, into this initial point of reversal without taking it out, is a failure swing. What we see this as is an unestablished point of reversal. So, when the market reverses, true reversals are going to turn and then we will not see deeper retracements back on that initial area. We will reverse, then expand, shallow retracements along that way. Deep runs back into that initial area, creating that failure swing, is an area that we will not trade away from. That is the one rule with failure swings. If we form failure swing lows, like in this example, and we start to trade higher, we will not trade that move away because we view this as an unestablished point of reversal. It would be the same with highs. If we see failure swing highs and price is trading down off of it, we are not going to trade the downside. We are filtering that out completely. So, that's a rule around failure swings, but this also plays into how we're identifying relevant swings on the daily chart. This low, the initial one that was formed, the deep run which follows, creating that failure swing, is how we identify which low is a relevant low. This is where we note out that initial low before that deep run was made back into it as the extreme. That is your relevant low inside of this daily chart. And the only way we're going to trade this higher is if the following day or days returns back down into that relevant low, engages it to manipulate, and then expands back into the range. We know a manipulation at this low, without any doubt, holds weight in the market because it is the current extreme of this range in price. Unlike if price were to come back down, only take out this failure swing low, again fail to take out the extreme, and then trade higher, that is an unestablished reversal. It didn't trade into the extreme of price where the reaction has weight. This is that scenario where price would come back down into the relevant low where we had an unestablished reversal, but at the point where it manipulates it, closes back up into the range, because that occurred at a relevant low, this reaction matters. It's going to lead us to assume this is the true reversal and we can trade the continuation to the upside. This is the final layer of understanding relevant swings and just being able to identify them because now you know where to look for failure swings on the daily time frame and we're not going to trade away from them. So for example here we have a deep run into this initial high which is the extreme of that current range. Off the low we have a deep run into this initial low and the next piece here is knowing separation between one potential relevant swing to the next. This example here is showing valid separation where we've engaged this extreme low, that relevant swing, and then traded higher off of it. The reason why this is valid is because the low of this manipulation did not create another failure swing to a daily low to the left of it. That is making it valid separation and something that we can trade to the upside. Versus let's take this similar piece of price action and imagine that we have these same lows to the left but with less separation between them. In the case that this daily candle comes down to engage this low that seems to be an extreme, that low of the manipulation is just making a failure swing to these daily lows to the left because there is a deep run because the separation between them is not enough. And if there's failure swings off the lows, although it looks like a manipulation here, leaving failure swings off the lows is not something we could trade higher leaving this to be an invalid manipulation and ultimately this would become your relevant low. Now let's take that very simple logic of understanding what a failure swing is leading us to focus on the relevant highs and lows in the market alongside our idea of valid separation. This here is a daily chart from NQ. So we're just going to walk through this and how you would actually apply it. Starting in this area of price, we opened up a new week here. This is where we'll start. This is a Monday daily candle. And we look to the left and we have failure swings off the highs because we had a deep run into this initial daily high. So, this here is a relevant high, but we opened up the week gapped down into this low, which is an extreme of the current market because it is not a failure swing to anything else to the left. So, this is a relevant low. Now, if we judge the reaction that occurs here, this is something that we'll get into. We made a small wick to then develop and show a manipulation intraday to expand higher into our opposing target being failure swings. This is where we want the market to draw into. Then, on the close of that day, we get an opposing reaction. The most recent reaction at this relevant high matters because this is an extreme of the market. We ran into it and closed back into the range to create this wick. That means that this is a valid manipulation and we could look to trade away from that. The next day remains very neutral and is creating this new range in price. When we think about this day, both sides of this daily candle have valid separation to this daily high and this low to this daily low. So, a reaction off either side, this is acting as a relevant swing. So, when this following day trades up into this high as a manipulation closing back down into the range, we see that as valid because this high is not a failure swing to this high here. So, we can use this reaction to assume price should trade lower. Price ranges, creates a new relevant high, manipulates in this previous day, and then the following day, we can look for price to respect that reversal and expand to the downside. That's the reaction that we're having and our bias inside of this day here. We can view this and say that we're in the continuation. We have an opposing relevant low as a target and price again continues from that previous day, breaks down into this open area. Monday opens up here and remains pretty neutral. It doesn't have a reaction off of this low, which was previously a relevant low, that's previous week low, but it didn't have a clear manipulation back up into the range. So, we can't trade this to the upside internally on this next day. I can also understand that there's a small wick off this low. So, for price to go into this next day, we would expect it to run out this low, and that is your relevant swing. Intraday, we have a small opposing run framing it back up into the range, and we expand higher in the other direction. Now, once price has this valid reversal, this is a day that could be traded to the upside. We could also look for the following day to be another continuation day where we see that fall through higher. Now, inside of this day, it fails to continue and instead makes a deep opposing run into this daily low, and because there's a lot of separation from this low to this previous daily low, this is a relevant swing. And the reaction that occurs there holds weight, and it matters. And we look off the highs of that same time, we're opening up this next day here, failure swings at the high, manipulation at the low, we are going to have a bias to trade up into the failure swings because this is an unestablished reversal, and that becomes your target. Now, this day also forms that large wick. We'll get into why we wouldn't be trading that day, but we see off the lows it appears like there are failure swings, and that's a very fair assumption. This specific scenario, ES has a lower low to this same low where NQ is making a higher low. So, these are failure swings that appear like it on one pair, but on the other pair is a divergence, so there would be a higher low on NQ, a lower low on ES, and we can view this as a bullish scenario because we have a manipulation on ES of this relevant low because there is separation to this next daily low and we return back up into the range and we have this framework where we are looking for a continuation away from these lows into our opposing relevant high as an initial target. We see a valid manipulation in the previous day because we have that divergence with ES. That's a tip for you. Anytime you see potential failure swings on one pair, your first instinct is to go to that correlated pair and see if you find a divergence in that area because that divergence means it's now something that we couldn't initially trade away from thinking it's failure swings, but a divergence we can trade away from. So this here frames the upside bias as a continuation on this following day. As we hold the continuation, we can again trade that day in the same direction and then Friday lacks a follow through in either direction here. Now we go into this new week and Monday gaps down from the previous week close. What does it do there? Do we have any engagement of a relevant low? Well, this is a daily low that has separation to this next daily low. So this here is a relevant swing. In intraday, the development was showing a small wick to then trade back up into the range, the development of this and that is a valid manipulation to trade up into the opposing relevant high. Now on the following days, we've already had a continuation day, a valid reversal. We are looking at this as a continuation. We failed to manipulate this high, so we can expect price will continue through upside bias continuation and upside bias continuation. You can see how a very simple logic like this on the daily chart is really all you need to gauge a bias. We're filtering out a lot of the noise by focusing on the extremes of the current range by just ignoring failure swings and saying if there is a failure swing in the market, that is a false reversal and we will not be trading away from that area. We're looking for price to hit the extremes of the market, these ones that we've noted out here in this sequence of price, and the reactions that happen there, because they are extremes and because of that valid separation that we're talking about, the reaction that happens there actually matters and we're going to trade the follow-through of that. With what you understand now for relevant swings, there's only two types of daily candles that you should be trading if you want to make this as simple as possible for you. A small wick reversal or a daily continuation. The only two that we're looking for. We can anticipate the potential for a small wick reversal to take place when we open a daily candle near a relevant swing. So, this example, we have a relevant low. This day opened near that point, so we only need to make a shallow run to trade into that relevant swing and then close back into the range through the development of that daily candle, which is giving us a bias to understand we had a manipulation at a relevant low and the rest of this daily candle should trade higher away from it. The reason we want to see a small wick on this daily candle, not some deep opposing run to reset relevant swing to then reverse, is because small wicks support expansion. Go to any daily chart, look at the large range days. They're all going to have small wicks because expansion days, directional daily candles, do not have time to make deep opposing runs. They're going to make that shallow move and then begin the expansion right after it. So, we want to demand that from our reaction on the relevant swing if we're going to trade a reversal day. Here you can see that annotated relevant swing. The wick is from the open to the low in this example. That's a small wick and that is our trigger to understand we have the potential for a reversal day to be an expansion daily candle. This type of daily candle can really occur in two different scenarios. The first is it's an actual reversal of the previous trend. So, in this example, we were trading higher in a continuation. We found a relevant high, small wick reversal off of that area here. We can also find it as part of a continuation of the previous trend. So, we were previously bullish in the continuation, we paused for a brief period of time, found a relevant low in that period of consolidation, and then made a small wick reversal to then continue from that previous direction. The next type of daily candle we're looking to trade is the daily continuation in any fashion. What you're seeing here is we had a reversal day in the previous day at a relevant swing. And again, this is not a daily candle that we would trade because we have a large opposing run from the daily open to reach into that relevant swing, and then close back into the range. So, we're going to avoid that type of reversal day, but then focus on the continuation of follow because we closed back up. That is a valid manipulation, and the continuation day is going to have that small wick, that shallow opposing run, not a deep run to create a failure swing, a shallow move, and then trading away in the continuation from that point of previous reversal. Again, annotated here, this would be a relevant swing, a previous reaction to reverse, a valid manipulation, and then the following day or days as a continuation. Whenever we're trading a daily continuation, we need to set an invalidation point in the previous daily candle. Anytime we're trading a continuation day, that implies that either the previous day low when bullish will not be traded back to, or the previous day high when bearish is not going to be traded back to. We're just going to expand away from those areas, so we need to set an invalidation point to understand where that high or low of day should form while looking for that small wick that we're looking to see. So, a very simple and universal way to do this is take a 50% fib tool and anchor it in the previous daily candle when expecting a continuation from the opposing swing, so the previous day high or low, depending if you're bullish or bearish, to the closing price of that daily candle. What that looks like in this scenario, for example, is we would have a manipulation in a previous day at a relevant swing, and we're looking for this day to be a continuation. We would anchor our invalidation point from the closing price of that previous daily candle to the opposing swing, which is a low because we're looking to trade away from that low. 50% is the area where price should not trade back to. We want to see a continuation and a low of day formed above that level because that is going to force that small wick. Any run through this is creating a large wick on that continuation, potential failure swing, and that is going to invalidate or make this day uninteresting and unlikely to continue higher. The exact same thing applies when we're already in the continuation. You can see this is a continuation day, another continuation day. If that is still in the continuation and price should draw higher, we would set our invalidation point in the previous day from the closing price of that previous daily candle to the opposing swing, which is again a low if we're trading to the upside. And then in that range, that 50% level that's set, we don't want to see the day we're expecting a continuation for that low of day to form beyond that level because that's going to create a large opposing run, which is unfavorable and does not support expansion like we're looking to trade. We want directional daily candles, and this is the process to force that. Now, relevant swings are just the first part of this. It's a very simple way to understand where the opportunity exists and which direction it should play out in. That's going to be our focus and our filter on the market, but we don't just get a bias and then suddenly put on an entry. We don't skip to that step. We get a bias and an idea, and based on that, we are getting a confirmation using the development of that daily candle. This is where you stop thinking in predictions and always wanting to be right on a bias, to starting to think like a trader and have an actual process around execution. When we have this expectation for the daily candle to go in one direction from a certain area in price, we don't just skip to taking an entry. In between these two steps, we place a confirmation layer, where we're not jumping ahead, instead we're using the development of the sessions intraday, pairing it with daily profiles to say, is this bias actually going to play out? Yes or no? If we have alignment, then we know exactly what we should be focused on for the session, and it's going to help us frame our entries while confirming our bias at the exact same time. Hope you guys have been enjoying the video so far. We just wanted to let you know about a one-time live training that is coming up this Wednesday, June 24th at 6:00 p.m. Eastern Standard Time. We're going to be breaking down an entire playbook around our systems with everything from our deal setups to the exact approach we use every single day. All of this is real actionable processes we've created that you can bring into your own trading to build consistency at any stage. This will be shared for free, so make sure to sign up using the waitlist in the description below. So, let's get back into the video. Inside of this system, we are only going to be focused on the New York session. And it's very simple for why we do this. We don't want to be focused on setups at any time of the day and hoping for something to play out. We are going to dial in on a very key time of the daily candle across any market. It doesn't matter what you're trading, indices, forex, commodities, New York session is the time to be trading because we can build real narrative behind our trades. And we're going to use the previous sessions as development and context. The New York session here is very obvious of why this is important. General volatility picks up extremely high in the early hours of New York. This is 8:00 and onwards. The overnight session, especially towards the open, the Asia session is extremely slow, low volatility. London session has an initial spike from the London market open, but again, tapers off very slow. And then once we hit 8:00 and after, volatility becomes extreme and the highest of the day. It starts because often times we get 8:30 news, high impact, low impact, and then most importantly, especially for the indices market, is you have the 9:30 market open. That is a consistent driver of volatility. The New York session, and especially these earlier hours, is the period of the day that is most likely to be directional and expand, most likely to close in the direction of the daily candle, and forms the majority of range in the daily candle. And all alongside that, once you understand how we're going to be using daily profiles, we're getting the most context from the previous sessions as to know exactly what should happen here with our bias. To make daily profiling extremely simple, we're going to use a 7-hour time frame. And I know at first that may be something that you've either never heard of, or it sounds like it's trying to be different just for the sake of being different. The 7-hour time frame perfectly captures session logic in each of the three sessions. The first 7-hour candle is Asia session, the second is London, and the third is New York, which is where we're looking to trade. We have three higher time frame candles that can form three distinctive daily profiles. And like I said, this here is perfectly capturing the session logic of the day. Our only rule here, as we're going through this, is we are not going to trade the Asia or London session. This 18:00 and 1:00 candle, these are ones we are going to completely skip, mainly because they are lower volatility, less likely to create the reversal or make the expansion. Everything is focused on that New York session, but even more importantly, when we allow these two to print, we don't have to guess on the daily profile. We get a defined understanding of our alignment inside of that day, and we use all the context and development from these previous sessions to know exactly what we should be focused on inside of that New York session. The first daily profile that we're going to look for is the 18 reversal, which is when Asia forms the intraday high or low, the London session expands away from that point of reversal to the extent that the 8:00 candle or that New York session is already assumed to be in that continuation if we're aligned with our bias. The second daily profile is the 1:00 reversal where London forms the higher low of day, the 18 candle fails to establish a reversal, 1:00 candle runs that range out to then reverse, and then the New York session is set for the continuation. And of course, the final daily profile is the 8:00 reversal where New York forms that intraday higher low. It's when these previous sessions failed to establish a higher low of day, and the New York session must return and engage the intraday higher low to then manipulate and reverse for that session aligned with the bias. And just to give you a visual, these would be the bearish examples of the three daily profiles that we're going to be looking for alignment on. We're going to get into some more detail behind these profiles and why they work and what specifically look for, but we first want to understand where we're actually going to identify these daily profiles. Of course, we want alignment with our expectation or that bias that we have using relevant swings and the reaction at them, but where do we look for the daily profiles? There's only two places we're looking for daily profiles to form to confirm our bias. The first is going to be that small wick reversal where we're trading that daily candle at a relevant swing. So, we have a relevant swing in the market, the daily candle opens near it, and we make that small wick reversal, align the profile, and then we already determined intraday that is a small wick manipulation, and we are trading the continuation away from that higher low of day. The second example is in respect to previous day invalidation point. This is that second type of daily candle that we're going to look to trade. The first is a small wick reversal, the second is a continuation day. This day here, we would already have an expectation for the day to continue in one direction. We look inside that previous day, which would already have an invalidation point set, and we want a low of day because we're bullish here to form above that invalidation point. We see it forms above, we get alignment of a bullish profile with our expectation for the day, the bias, and then we see New York session is confirmed to trade higher. These are the two scenarios that you're looking for, and this is where we're going to seek our alignment of the daily profile. Now, to get into a little bit more detail of each profile and what you're going to be looking for and understanding the slight variations because, of course, not every single profile is going to fall perfectly under a template. We want to understand the slight in-betweens of what's actually important, but really maintaining the core logic of each profile. This here is showing that 18 reversal profile, that first one that we talked about, and we can really use a series of if this, then that statements to mechanically understand if we're aligned with the profile. So, if the 1:00 candle expands away from the 8:00 candle reversal, then seek the 8:00 candle continuation. So, if we're looking for alignment of a bullish profile, that's under the assumption that we have an expectation for a daily candle, that current one, to expand to the upside, and we're looking to confirm that through the daily profile. This one here is showing the 18 candle formed a low of day, and the 1:00 candle expanded away from that intraday reversal to the extent that there is no reason for price to trade back down to that intraday low because we've already started that continuation. The difference would be if the 18 candle formed a low and the 1:00 candle just remained ranged, well then that's not an expansion away. We're likely going to return to that intraday low and form a New York reversal. So, the logic under this profile is we've already started the continuation of this daily candle and there is no reason for it to return back to the intraday low and we're looking for New York session to already continue in that direction. This next one here is the 1:00 candle reversal. If the 1:00 candle reverses off the 18 candle range, then seek an 8:00 candle continuation. So, again, we would have a bullish expectation because it's alignment of a bullish profile here inside of that daily candle. We look back at the previous two sessions which were letting print on the chart to get all of that context. The 18 candle makes an opposing run or relatively remains ranged and that 1:00 candle runs out that previous intraday low to manipulate and then closes back up into the range. This is showing a development where we've ran out the 18 candle, reversed intraday, and that is setting the New York session to be a continuation away from that London reversal. Really, when we think of both of these profiles, the 18 reversal and the 1:00 reversal where it's setting the New York session for a continuation, the idea is very similar to the daily candle. The New York session should expand. It's that time of day that should move fast and make up the majority of that range. If we've already traded away from that intraday reversal and formed it, we don't want to see a deep run back to that intraday low. It should already be in the continuation and we're looking for that wick to form to then expand higher. Finally, we have the 8:00 reversal profile. If the 18 and 1:00 candle fail to establish a reversal, then seek the 8:00 candle reversal. This is one of those profiles where if you look in that overnight session and it's relatively ranged or sustaining an opposing run, not yet confirming an intraday reversal, then we need that New York session to run out the intraday higher low to then manipulate and reverse off of. It's very simple. Did the previous sessions establish a higher low of day and New York is in the continuation or did it fail to do so and we need that 8:00 candle to manipulate the intraday reversal to then reverse and expand. There's really only two scenarios that you're looking for under these pro files and when we understand the alignment that we're looking for, that is determining what you need to demand from the New York session. One final piece to daily profiles is that in the same way we set invalidation points in previous daily candles when we're expecting a daily continuation, we can do that inside of the profile when the New York session is set for a continuation under that 18 reversal and 1:00 candle reversal daily profile. So, the logic remains exactly the same. We're going to take that previous 7-hour session candle which will be the 1:00 candle from the opposing swing to the closing price, 50% of that range is going to be our invalidation point that should be respected in the continuation. This would be our 18 reversal daily profile example where you have an 18 candle low, 1:00 candle expands away to confirm that profile because we assume we're already in the continuation and then inside of this 1:00 candle, since this is already set for the continuation, we can take from the closing price to the opposing swing which is a low, 50% of that, we should see the New York session remain above. We don't want to see deeper tracings back into previous session lows or even worse back into the intraday low. That deep run is not a good sign for the New York session. We want to see that shallow move to then frame it to the upside and allow it to expand. It's the exact same process for the 1:00 reversal profile. If we have that 18 candle either opposing run or ranged, 1:00 candle runs it out to then close back up into the range to form that reversal, that higher low of the daily candle. Then we can go from the closing price to the opposing swing. 50% of that is our invalidation point. And generally, where we don't want to see the New York session retrace to that extent because that would be a deep opposing run and a negative signature for this session to expand. The one profile that doesn't have an invalidation point is the 8:00 reversal because we don't assume this is in the continuation. We have a failure to reverse in the previous sessions, so we are looking for a manipulation at the extreme of that high or low of day to manipulate and then expand off of. Remember with daily profiles, once you align one of those profiles, you are only looking for either a continuation in the respect of your invalidation point from a previous session or a higher low of day has failed to form and you must require that the New York session manipulates the intraday higher low to reverse and expand off of. That is going to be your framework for entries because we know exactly where they are going to exist inside of the day. >> So here we are in the entry section and there will be two types of entries we are seeking. You're either going to seek entries on the 15-minute chart using the 7-hour as our higher time frame within a fractal model with a 15-minute entry or we will use a lower time frame hourly and 5-minute fractal model or lower time frame 30-minute and 3-minute fractal model. So let's go over this first example of a Asia reversal using the 15-minute aligned time frame. So with an Asia reversal, we're looking for London's equilibrium to be respected and New York to trade higher. Now, this is all based off of the daily and the 7-hour profiling that aligns together to look for this entry higher. Now, what we're going to do on the 15-minute time frame is look for that intra candle change in the state of delivery. So what are we doing? We're looking for this wick to form, right? We're wanting to find the wick formation of the 8:00 a.m. candle and then trade that higher. So, you can see price opens, we form a low into a fair value gap or a point of interest, and then we have a closure through the series of down close candles into that important level. Now, with that intra candle change in the state of delivery, we now have a protected swing for our stop loss, and we can take an entry on this closure through or the retest, and then look to be on side for this expansion. Now, why does this work? We have a daily candle with a small wick aligned with a daily profile that supports that, and then we're taking a continuation entry higher. Now, what else can we do with an Asia reversal? We can also align lower time frame fractal models with that. So, I know this might look a little bit complex, but it's really not. We're trying to let the wick of that 8:00 a.m. candle form, and usually that's going to occur via a lower time frame fractal model. So, here on the hourly or the 30-minute time frame, looking for a candle two closure or a candle three closure or a valid fractal model closure. Here we have a candle two closure, which is forming the wick of that 8:00 a.m. candle. It is possible to trade that candle three and that candle four higher. Now, how would I do that? I would use an intra candle change in the state of delivery or a continuation in that candle three or in that candle four. So, I could look to trade that reversal higher there, or once that wick low has formed and we have displaced away, I can seek a further continuation with a new swing point aligned with that. So, based off the daily candle, a small wick supporting expansion, an Asia reversal, and then we're respecting that London range. We're looking for the wick of the 8:00 a.m. candle to form and then trade away. And that is the common theme of every entry within this model is I'm trying to let the wick of the 8:00 a.m. candle form and then trade it away. Let the wick form and then trade the body. So, let's get into an example of a London reversal. I am already covered the daily chart and what a London reversal is. So, how do we look for an entry? The first thing we are going to do is making sure it's going to respect that London range, right? And so, we're going to mark out the EQ just as we did with an Asia reversal. And then, I'm going to look for points of interest in that area. Here, you can see we have a protected swing right here. So, I don't want to see price trade below there and it's also below the EQ. Here, we have a swing low right here and then price takes out that low, closes through the series of candles that hit that point of interest, which is an intra-candle change in the state of delivery or a new protected swing. So, once again with the 15-minute, we're just letting the wick form on the 8:00 a.m. candle. Once we have confirmation in a protected swing, we can then trade away from that area higher. Now, what does this look like with a lower time frame aligned fractal model? Well, with a London reversal, we're looking for that New York continuation. Once again, the same thing. We're letting the wick form on the 8:00 a.m. candle. Here, we could look to trade this reversal right here, this candle to closure and this continuation, or we can let that trade away and then find a new swing aligned with that. And this will be on the hourly or 30-minute chart. And then, you'll use the aligned time frame for an entry. Now, let's get into a New York reversal. This one is a little bit more complex as it is not forming a continuation, but is a reversal. This would be trading candle two within my model. So, we're letting the wick form on the 8:00 a.m. This is because of that consolidation. So, once we have that external range manipulation, we want to see a change in the state of delivery. Now, it is possible to trade this reversal, but I always prefer to seek a continuation. So, I'd be looking for a new 15-minute continuation formed off of that reversal and then expansion away. Now, this is ideal if this is occurring prior to 9:30 because the volatility hasn't really entered the market, and those 15-minute candles will give you the closures that you want. Now, if it is closer to 9:30 or after 9:30, that's when I prefer to use a lower time frame fractal model. What I can do is once 9:30 enters the market, I can look for that candle two closure at the external range manipulation, and then look to trade candle three higher. Usually when paired with volatility, this is a pretty explosive move. And once again, how am I going to do that? Looking for a continuation on the lower time frame. If I miss that initial move, as long as I still have range left in the day and expecting this candle to go higher to targets, I can look for a new swing to form with that. Here you can see we have a candle two closure. Can look to trade candle three or four. So, just in review, what am I going to do is I can either look to align a 15-minute candle with a 7-hour candle, using that as a custom fractal model time frame, or I can look to align a lower time frame swing point with that 7-hour candle. I'm looking for on the hourly or the 30-minute chart, a candle two or a candle three closure to form the wick of that 8:00 a.m. candle, and then look to trade that continuation higher on an aligned time frame once we form a protected swing or an intra-candle change in the state of delivery. >> At this point, you have an entire framework, a complete system from top to bottom. We start with relevant swings on the daily time frame to get our expectation for a daily candle. Once we have that, we're confirming that with daily profiles, and then you use the fractal model. Once we understand where that 8:00 candle should go and enter in the highest probability hours of the entire day. Now, we're ready to bring that understanding into some real trade examples. Starting here on the daily time frame, we have this currently developing daily candle, and we'll look into the profile after, but what is the expectation for this day? We look to the left to identify relevant swings and determine what the framework is here. Immediately I'm seeing this low here, which was previously engaged and we are trading off of that. This is a relevant low in the market because we have separation to the next daily lows down here. So we have this swing that we've engaged and we are trading back up off of. Now this may not immediately look like a manipulation now we're trading higher, but if we start to compare a correlated pair, this is ES here. If you go over to NQ, we can see under the same idea where ES had a lower low, we have a higher low on NQ. So we have that divergence paired with that relevant swing. That is our framework. We expanded away from that, this day could have been tradeable, but then we also look to say we're in the continuation already. We're going to use the development here to say our expectation is that we're looking for another continuation day higher and expansion, so we want to first frame our invalidation point. Back on ES, we would look at our previous daily candle. We have the closing price to the opposing swing, that is the low of day in the previous daily candle, and we have this range where we don't want the following or current daily candle that we have the expectation for to make a wick below that area. We're already seeing this development, this is hinting at something that we'll get into for the daily profile, but it is respecting our invalidation point. a shallow opposing run and we started a continuation here. Now looking down on the 7-hour, we're trying to frame the daily profile. Do we have a confirmation to that expectation we set off the daily chart for another continuation day? What does this profile look like? We have a 18 candle, which formed a low, and then allowing that 1:00 candle to print, it expanded higher to an extent that we no longer need to return back to these previous session lows. So the New York session is already in the continuation and we're getting confirmation to our bias. So, with that in place, we want to take that same idea with the invalidation point, go from that closing price to the opposing swing of that London session, and then going into New York, we should look for that 8:00 candle to form a wick in respect to this invalidation point, and then trade higher off of that. >> Now, looking for entries, we have two techniques we can look for. We can use the 7 hours the higher time frame and look for 15-minute opposing candles or protected swings, or we can use lower time frame fractal models. So, in this first example, we're going to take a look at both of those. So, what do we notice here? We have opened at 8:00 a.m. and we have traded lower. Now, this does look a little choppy, but let's look towards a correlated asset. You can see on Nasdaq here, we have went into this fair value gap here, as well as taken out this low here. Now, if we go back to ES, what do we notice? We have not hit that fair value gap and we have not taken out this low here. So, what does that mean? It means we have an SMT right here, as well as an SMT right here. Now, this doesn't mean anything until we actually have some sort of confirmation with that. It just means that I can use this low here as a protected low if we close over and we don't need to make a new low because the correlated asset already did. So, let's let this continue to play out. You can see, we remain with that low. And what do we do? We go ahead and close over the series of down close candles that made the low. Now, like I said, because of SMT, we don't have to make the new low because the correlated asset or NQ already did that. Now, with this closure over, we have a protected swing. We can now consider the fact that the 8:00 a.m. may have formed its wick low and we can look to trade the body higher. So, with that, I can look to get on side with a long position, put my stop on that protected low, and then look for 2R. So, marking out that 2R, let's see how this works out. We get a little bit of a consolidation, and then we go and hit our 2R before the end of day. So, just to review, we are looking to let that wick form in the 8:00 a.m. candle, and then trade a continuation away from it. So, here you can see we're letting that wick form, and this is a continuation of the reversal of the day. So, it's valid to take this. Let's go ahead and rewind and take a look at the other ways to enter this. We could go ahead and look to align a lower time frame fractal model with this. So, first let's take a look at the hourly and 5-minute model. What am I going to look for? An hourly candle to closure. Now, if you notice, we'll let this play ahead. Do we have a candle to closure? No. But, if we take a look at the correlated asset or NQ, we have a candle to closure into that fair value gap. So, we can use this to frame the other asset and treat this like a candle to closure as we did get that closure on NQ. So, we have our point of interest, a fair value gap, which is an SMT, and then we have that candle to closure on NQ, so we can treat it like a candle to closure but trading the stronger asset. This means we can go to the lower time frame or the 5-minute and look to trade this higher in the next candle. But, down here on the 5-minute time frame, what do we have? We have that SMT. Because of that SMT, we can consider this the reversal, and then we're looking for a continuation. Price sweeps out the low into a fair value gap, rebalances all of this area, and then closes through here. I can look to take an entry anywhere in this area as long as my stop is on the low, and then look for 2R. So, let's see how that plays out. And it works out pretty well into the highs. Now, let's take a look if we wanted to trade this on the 30-minute and 3-minute. What do we notice here? We'll go ahead and remove all the drawings. So, going ahead and rewinding this, what do we have? We have a candle two closure on the 30-minute with that SMT. So, it is valid to look for this to go higher cuz we have two SMTs here, a candle two closure, it's engulfing, we can look to trade this higher. So, we go to the 3-minute time frame, and this is where we would want to look for a continuation. Now, before we get into the next candle, have we had a continuation form? Here is the reversal. Here is the continuation. Price reaches into this fair value gap here and closes over the down close candles. In this case, it's one right here. Now, we have a new protected low going into this candle. So, we could look to take an entry on the open, put our stop on this low, and look for two R, or we can wait for a new continuation to form in the candle three. So, let's see what happens. Here we reach back into this area, we form a new continuation. So, if I was waiting for that continuation entry, I could go ahead and take an entry on this close looking for two R as well. Either would work. Let's see how it works out. And you can see this one makes us wait quite a while to go ahead and hit our TP, but both of them go ahead and get two R there. So, just to review, going back out to our 15-minute time frame, here we have that SMT, which is why we can look for the low to form in this area while respecting London's range, and we have a continuation that forms. So, it's valid to take the 15-minute entry long here. Right? That's our first technique that we talked about. The other would be using an hourly or 30-minute closure. Here, it's less straightforward on the hourly because candle two closure is on Nasdaq, but you're trading the stronger asset. Or on the 30-minute time frame, trading this candle to closure. With those candle closures, allowing that to form the wick of the 8:00 a.m. candle, we can look to trade that higher. And we're going to do that by looking for continuations on the 3-minute or the 5-minute candles. Now, like I said previously, if you do miss this move, you still have the possibility to catch an entry later on. So, if you notice here, we do have a candle to closure right here. Candle three closes strong. You could still look to trade this continuation on the 5-minute because it's still in line with that expansion. The wick has formed, we can look to trade the body. So, I can look to trade this reversal in here or the wick low. Or I can look to trade this continuation in here. So, now that you understand all the entry techniques between the 15-minute, looking for opposing candles, or using a lower time frame aligned swing point, let's get into some more examples. Here in this example again, we have a currently developing daily candle that when we're looking to potentially trade, we want to determine what is the framework off the higher time frames using relevant swings. So, we're going to look to the left, and immediately we're going to see something of interest. We see these lows that were engaged on Monday. This initial impulsive move higher is coming off of a relevant low. This day's actionable, a small wick reversal, and this day's actionable as a continuation. And then inside of this day, what are we expecting? There's no reason to assume reversal. We have another potential continuation day to the upside. One other thing to note with this is when we look to the left, we don't really have any recent relevant swings that are in close proximity to this area here. One note to keep in mind is when noting out relevant swings, we don't really want to look too far into the past because they lose their relevance in terms of what actually matters to the current day of price. So, anything that's really beyond 30 daily candles, we don't want to consider that as range or highs or lows that we want to start noting out and bringing into our analysis. We're going to focus in this case because there is none in that range, just on this intraweek price action. So, from that we have this idea that we should continue this move as we've been in the continuation from this initial point of reversal, and there's no reason to assume otherwise, so I can set my invalidation point from the closing price to the opposing swing. And then inside of this day, we should see a low of day form in respect to this invalidation point. But for now, this is just an expectation for the day. We need to get a profile alignment to actually understand if this is going to play out, and if it will, what is the specific profile so we can understand what New York session is looking to do. So, when we look down into the 7-hour to view this daily profile, we can see the 18 candle failed to reverse. That 1:00 candle came in and ran out that Asia session low and formed an intraday reversal because we ran it out, closed back up into the range, and that would set the New York session to expand higher without taking out this low. So, not only do we have profile alignment, which is confirming our bias saying this day is prepped to trade higher with our expectation, but we know the New York session should develop in a way where we set our invalidation point from the closing price to the opposing swing, and that 8:00 open, that wick should form in respect to that invalidation point before returning higher. So, that's our range where we're looking for entries from open low to expand. So, now looking for an entry aligned with that London reversal, what am I going to look for? Well, here you can see we have that change in the state of delivery formed in London. Ideally, that is going to hold as the low of day if New York is going to get a continuation. That means what are we left for with a point of interest? We have this low right here. So, we're not going to try to predict this low. We're going to let it form and see if we have a new protected swing form. So, we'll give it a few more candles. Zoom in here. Let's see what happens. And there you go. We get a nice V-shape recovery. It's ideal to have that occur in a few candles. We can mark out that continuation, which is also the opening price. And then we can look to take an entry on that closure through our stop on this low. Now, why are we putting our stop on this low? Cuz we're anticipating the wick of the 8:00 a.m. candle to have formed. Right? We want to only trade once we anticipate that wick low to have formed. Now that the wick low we think has formed, we can take a position on that looking for 2R for a continuation higher. And you can see there we do get that continuation higher. So, just a quick review. We have that London reversal with a change in the state of delivery. And then we're just seeking that continuation into New York. And it's ideal if that continuation is also forming the wick low of the 8:00 a.m. candle. We're going to let that wick form and then look to trade the body of that candle. You see how we're entering early into the candle around the opening price. That is what is allowing this expansion candle to form. You can see we get 2R, but if we let it go, it continues to expand much further. So, now that you've seen that 7-hour and 15-minute alignment, let's see if we can find a lower time frame fractal model either on the hourly or the 30-minute and then use the aligned time frames to see if we can find something also to get us into that move. Now, we'll start here with the hourly and then the 5-minute and then we'll also see if there's anything on the 30-minute and 3-minute. Now, one thing I like to note, if I'm taking pre-market entries, I generally prefer the 15-minute time frame. It just allows me to not get too caught up in the lower time frames and put my stop loss on something that might get ran out during the New York open. Let's see what happens here. We currently have nothing to do because we don't have a candle to closure. Here you can see, now we have a candle to closure. Does that align with the formation of this wick? Well, it is respecting the EQ here on the 7-hour, so we can look for that to potentially trade higher. If we're looking for this low to hold, which would be ideal. We have a change in the state of delivery. We'd want to see a continuation. Let's see if we get a continuation. One thing I want to talk about, I'm not going to use this single down close candle because I like to use the series. Even though this is a green one, it's not very significant. This is the whole move down. I'd be looking for this to get a closure over to form a continuation. There we get the closure over, and so we could look to take either an entry or a retest on that. Right? And it is pre-open. So, you could either put your stop here, or if you're not confident in that pre-open, what else can you do? You can just let open sort itself out and then see if we form another continuation. So, you can see we come back down here. We have a nice reversal right near this low, so we can check the correlated asset. Here you can see ES, we took out that low. So, what does that mean? It means we now have an SMT right here on this low. And so, we could look for another continuation here if we get a closure over this level. So, this would be possible as long as we have targets that exist higher. Right? Do we get the closure through? We do. So, I could take an entry here. I would just have to have my stop covering 50% of this down close candle or more. I prefer around 75%. And then you can see to get 2R on this, it is quite a distance, so it's not something I prefer, but it is still valid in terms of an entry. So, you can see there's one possible entry, two possible entries. Let's see what happens. We do go ahead and hit that 2R. So, now let's go take a look at a 30-minute and 3-minute. So, we'll go ahead and rewind to about the same point. Let's go ahead and go to the 3-minute time frame. Remove all of these drawings. Now, we're waiting for a 30-minute candle closure. So, let's see. Do we have anything? Right, we don't have a candle closure. We almost got a candle three closure, but we didn't. So, we'd have to wait. Let's see if we form anything here. Nope, there's nothing there, right? There's no candle closure within my model on the 30-minute time frame. And also not right there. So, this might be something I just miss if I'm using the 30-minute and 3-minute time frame, but I could potentially catch on the hourly and 5-minute. But, it is a very nice setup on the 15-minute time frame right here with that continuation. So, you can see not every setup is going to give you an entry on all those possible time frames. So, you kind of have to decide which one you prefer, which one you are most comfortable with, and which one you want to stick with, or if you are flexible and can use multiple different time frames. >> This example here is coming from that same price like we talked about earlier in the video when noting out relevant swings. So, you can see this from top to bottom and how it actually works. So, we have our framework off the higher time frames. We can note these out. Previous relevant swings, manipulated, and then off the highs. This is again looks like failure swings, but the first thing we should do here is I see that deep run into this high. I want to go to ES and determine is there a higher high at that same level? Yes, we have a higher high. So, that is not a failure swing on NQ. This is actually a divergence. So, that is good framework. Previous day expanded. This would be actionable here. And then we're looking to set a framework inside of this day here. We have the current development showing us some context, but the framework inside of this off the daily is setting an expectation for a continuation to the downside of this previous move. This is where we'd set our invalidation point at the closing price to the opposing swing, which is that previous day high, and we're going to say that this day should form a high below this invalidation point. That's going to force that small wick, and we're seeing the potential high of day already in, so we want to look down and determine is the profile there. On the 7-hour, we're seeing the development of this daily profile. We're already expecting this day should expand to the downside, but the profile is showing us more. It's showing that it's willing to make that move and aligning with that bias. So, what profile are we seeing? 18 candle makes an opposing run, does not form a reversal. Instead, the London session comes in, runs out that high. That would be your 1:00 candle reversal and expanding back down into the range to an extent that New York session should already be in that continuation, and we are trading away from this high. So, if New York session is in the continuation, well, then we want to set an invalidation point inside this 1:00 candle from the closing price to the opposing swing, and we expect that that 8:00 candle, the upper wick of it before expanding lower, we're going to be looking for entries below that invalidation point, and we should be expanding to the downside away from that high. So, here we are on the 15-minute time frame looking for an entry. What are we going to be looking for? A protected swing to form the high or a high we can trust with this 8:00 a.m. candle. Now, what do we notice here? Right immediately, we form a protected swing. We have a fair value gap right here. We closure through the series of up close candles into that fair value gap. So, it's very valid to take this entry. It's around the opening price. It's early into the candle. I could look to take an entry like this. Now, if this isn't something I'm comfortable with, I can always wait for a continuation. Let's see what happens. Right there. We go ahead and take the low. You can see we do form another continuation in here. We go back up, sweep out these lower time frame highs, and now we've closed through this area. So, even if I miss this initial move, like I said, if I'm going pre-market, I want to be on that higher time frame, the 15-minute time frame. Now, even if I miss this initial entry, I could still look for swing points to form in the bearish direction to align with it. So, I'd want to use either a 30-minute or an hourly. Now, with the volatility of the open, I generally would prefer the 30-minute and 3-minute here. Let's see if we form a swing point. Right? I need a swing point at a point of interest. Where is our point of interest? I'm going to go ahead and remove these drawings here. We already went over that. Here is a fair value gap. Now, price reaches into this fair value gap. Am I immediately bearish? No, I need a closure to align with that. So, do I get the closure? Here I have a candle to closure on the 30. So, this is what I was talking about in the PDF, where I have a aligned swing point, not at the reversal or what forms the high, but inside this higher time frame candle. So, I could look to, if I'm using the 30-minute, look to trade the 3-minute time frame because it is aligned with that. Let's go down to the 3-minute time frame. So, down here on the 3-minute time frame, you can see we have that 7-hour expansion candle, which we are looking to align with. And what do we have? A candle to closure on the 30-minute, and we have a change in the state of delivery. So, you can see my entry model will print there. All I'm going to be looking for here is a continuation. As I said, already went into another fair value gap here. We go ahead and mark that out. And then we are looking for that continuation or the closure through here to get on side. So, do we get that closure? Let's see. We do. So, then I could look to either take a short here or on the retest, put my stop at least over the bodies, preferably on the high. It's around the same spot, so I'll put it on the bodies and then look for 2R here. Now, what are we doing? We're aligning a lower timeframe swing point within that expansion candle within the daily candle with a small wick. All timeframes here are aligned for expansion, so you'd expect this to trend or continue lower. Let's see what happens. Little consolidation. Get a retracement before we go ahead and continue this trend lower hitting 2R. So, we see that on the 30-minute and the 3-minute timeframe, would there be something on the 5-minute timeframe here? Taking a look, we do have a candle to closure. We do have this little continuation, but what don't we have? This change in the state of delivery doesn't form until rather late. We could potentially get a continuation all the way over here, but that's a bit late into the move for me or my liking cuz this has already expanded. So, just to review, we have that first 15-minute entry that we could take prior to the open setting up for expansion or we can look for that continuation entry that forms out of this 30-minute fair value gap. So, we have that first initial entry, this continuation entry, we're all aligning for expansion with the daily candle. >> Here on this example, we have the current developing day. This is the one that we're looking to potentially put a trade on, and this really just emphasizes the point that the development of the sessions provides us so much valuable information because we didn't need to predict that we had a framework inside of this day. The sessions and the profile when we look into it is giving us a lot of information that we can use here to frame a trade. So, when we look off the daily, we first want to make sure there is a valid framework using relevant swings. We have an extreme low that was ran out, closed back into the range, but more importantly, when we look inside of here, Monday gapped lower into a relevant low. This is a daily low with valid separation to this next daily low. So, when we engage this low, what happens here matters. This low is not a failure swing to anything to the left, so this is a valid manipulation intraday. And then when we look off the highs, we have that deep run into this high here, which is an extreme of the current range. That becomes a perfect draw straight away from the manipulation into the failure swings for the rest of that daily candle. If when we look down, we have alignment of a bullish daily profile. I'm going to move over to NQ for this step because it is showing relative strength in the way it's trading higher. And if we're going to potentially take a long, I'd want to be on the stronger pair. NQ here is showing an 18 candle low manipulating that relevant swing. The 1:00 candle is staying away and continuing higher. This here is setting that 1:00 candle. And another good example where the template isn't always perfect, but we have the same logic that we're looking for. It's expanded to an extent that the New York session has no reason to drop back down into any of the session lows. We've manipulated our relevant swing. We've expanded back into the range. We've started the continuation of that daily candle, and we have a target in the other direction. So, our next step is to set our invalidation point where we'd like to see the New York session, that 8:00 candle, form its wick. And that's going to be from the closing price of the 1:00 candle to the opposing swing, this low here. And we're looking for the 8:00 candle to form a wick in respect to this and then expand higher up into our opposing target. So, here we are looking for another entry aligned with our daily profile and our daily candle, which is supporting upside movement. We have that nice low formed in London here that we're looking to trade away from. We're just looking to find a continuation in this New York area to trade upside. Right, since we're premarket, I'm going to sit on the 15-minute time frame and see if we can find something. So, let's see what happens. As you can see, we reach lower, we sweep out this low into a fair value gap. It's much preferred when I have both a fair value gap as well as a sweep of a low. And then what do we have? We have that closure through which forms that continuation. So now, I can anticipate that what? This wick low has formed on the 8:00 a.m. candle and I can look to trade it to the upside. Since it is pre-market, I prefer to be on side on the higher time frame, in this case the 15 minute, rather than a 5 minute or a 3 minute, because I know my stop is on an area that I expect to hold during the open. If I get too low here, I can get swept out before the move actually occurs. Look for 2R. Or I can look to those highs to the left. Let's see what happens here on this move. You can see a nice move there as we just get a nice expansion at 9:30, right? 8:30, forms a manipulation, 9:30 expansion. Now, I hope you enjoyed the video. If you did, please consider giving it a like, subscribing to both of our channels, and share it with a friend that might enjoy it as well. And I hope that you are left with something that you can apply to your own model or in your own trading. But with that, I'll see you guys next week. Have a good one.