TTrades Fractal Model - Trading Candle 3

[Music] How's it going everyone? In this video, I'm going to cover how to trade candle 3. With this video completed, you will now have a video on how to trade candle 2, three, and four, or each candle within my fractal model. Let's get into the video. Now, the main thing you want to understand is wick size with candles. We want to be trading expansion candles which have small wicks that support expansion. You can see we make a small wick or an open low and then we have a one-sided directional move which is an expansion. And over here if we have a reversal candle that has a large wick so that doesn't support expansion and see we open we have a large opposing run then we move back towards our opening price and close. So our whole thing is we want to trade following reversal candles when we are trading candle 3. So here you can see if we had a small wick that is when we could look to trade candle 2 when supported by a change in the state of delivery on the lower time frame. But with a large wick like this I'm going to want to let this candle close. You can see once this candle closes back inside of the range of its previous we have a large wick which doesn't support expansion during this given time frame. So, we would want to wait for the open of the next candle or candle 3 to get on side with this expansion lower. So, what does this look like on the lower time frames? You can see we have that large wick which doesn't support expansion. And what do I mean by that? Price isn't trending in one direction. It opens and closes in relatively the same point. So, the first thing I'm going to look for is from this high, do I have a change in the state of delivery? I do. So, now this confirms the reversal or that candle 2 has reversed. So then I can look for a continuation in candle 3. So how am I going to do that? Well, you can look for any sort of entry model in here. But ideally, I'm going to want to let the wick form and then trade the body lower. So what does that look like? I personally wait for continuation order blocks. You can see price opens, sweeps out a high or into a point of interest, has an opposing candle formation, confirming that this wick has been created on the higher time frame, and then I can anticipate price to continue lower from that point. So, just to review, if I have a small wick in candle 2, that is when I can look to trade candle 2 as it supports expansion lower. When I have a large wick or a large opposing run from candle 2's opening price, that is when I'm going to want to let that candle close and then look to trade candle 3. And that is because we've already used a lot of range in candle 2. If you've noticed in candle 2 here and in candle 3, price moves relatively the same distance. It's just in candle three, it's spending half of that time going up and half of it going down. Versus in candle 3, it is a one-sided move. So that is what we are focusing on capturing in candle 3 is that continuation following a candle 2 reversal. We're not really going to want to focus on trading candle 3 when we have a candle 2 expansion because that is when we can get caught in a new phase of price. So let's hop into a few examples in Trading View. So here we are with our first example and it is on EuroUSD on the daily chart. Now if you take a look we have expansion down taking out lows and then we have expansion met with an expansion which is a reversal. Then we have price retracing into a fair value gap and you notice that this daily candle is a reversal candle. price has not yet expanded within this current day versus if you look down here we also have a candle 2 closure but price expands and you can see how that can set up a consolidation as price goes from expansion into consolidation so with the expansion into consolidation and then viewing this as a reversal I'm looking for price to expand higher in the next day let's drop down to the 1 hour time frame so here we are on the 1 hour time frame and you can see we are now looking to trade candle three or the third day in a swing on the daily time frame. And so what I'm going to want to look for now is that continuation. You can see we do have price reaching into a fair value gap here. Let's see if we can get a continuation from this point of interest to trade it higher. As we let this play out, you can see we failed to close over that level, which means that we want to see a new low made to form a new protected swing. So marking out the new low. Now, where is our series of down close candles? Right there. Let's see if we can get a close over that. And there we get the close over. So, then I could take a long setup on the open of this new candle, my stop on the protected low, and look for 2 R or for those projections above. So, let's see what happened here. You can see we got a retest of that level, a new swing point, and then we traded to that high. So, just to review, why is this a good candidate to trade candle 3? Well, look at candle 2. We have a nice reversal candle. Price opens, trades lower pretty aggressively, and that is met with an aggressive move higher closing relatively around the same point. So, forming a reversal on this day or a Tuesday reversal. Then, I'm going to look to trade that continuation on Wednesday cuz continuations are easier to trade. So, let's get into another example. So here we are in another example and if you take a look at this closure here we'll let another candle print. We have a nice bearish closure. You see how that is a nice reversal candle and what do we notice? We have a change in the state of delivery on the lower time frame. That means we can be looking for continuations lower in this next candle. In this case it's the hourly instead of the daily. And so instead of using the hourly as the lower time frame I'll be using the 5minut. Now marking this up what do we have? We have a fair value gap right here. Price reaches into it and does what? Closes below the up close candle there. So this is where I could then look to take an entry on the open. I have a protected swing and then I could look for 2 R or to look towards those projections that line up with the liquidity resting below. So what do we get? We get a move lower. And do we go take out those lows? We do. And it takes a minute, but we do get there. So the main thing to review here is we have a nice reversal candle which sets up a continuation candle. So that is what I want you to take away from this example is focus on those candle twos that have a nice reversal candle. Don't try to trade candle twos that expand a ton because that is when you can get caught in a retracement, a consolidation, or a reversal. So here we are in our next example and I'll show you what a less than ideal but still a tradable setup looks like. You can see here we do have the 4our forming a reversal candle, right? And it is very bearish. So we could anticipate price to trade lower towards previous day low. And if we take a look here on the 30 minute, we have a protected swing right here as price has closed below this level after reaching to fair value gaps. And then we get a retracement back up. So with this closure here, what do we notice? There is a small wick. So it's actually tradable within candle 2. So, if we drop down to the 3minut time frame here and take a look at it, you'll notice that if you wanted to when paired with SMT here, you could look to trade this reversal here. But let's say I wanted to look to trade the continuation. What would that look like? Now, normally I'm looking for a order block to form within that new higher time frame candle. Well, what do we have here? We have a order block that has already formed prior to the open of that higher time frame candle. So, I can anticipate that on the open of this candle, I want price to trade lower, but I don't want it to go take out this high. So, that gives me an idea for my stop loss and then also for my target towards this low. Now, if you notice, this is a 1 one. I ideally want to get a 1:2. So, then I'm just going to raise it until I have that 1:2. I can set a limit and then this would be somewhat of a positional entry. As we let this print, you can see my model prints out the indicator. We have that reversal. We have the projections, the liquidity. And let's see what happens as now we are trading this candle three. You can see it's less than ideal. We have an expansion somewhat of a consolidation, but we do have price doing what? Taking out a short-term high here and then closing below this level. So, we could now consider this a protected swing. So, that would be that continuation where we could anticipate this to expand lower. Do we expand lower? It takes a bit of time, but we do. So, I just wanted to review this example. And if we replay it, you'll notice we do have a less than ideal candle 2. You'll see how this candle 2 is one of those that expands. But let me talk about something important here. It is still leaving this short-term liquidity intact. If candle 2 would have expanded all the way to this low, that's something I'm not ever really going to trade. But with this drawn liquidity still open, this is where I can still look to trade that continuation in candle three because I have a spot for it to reach for. So here we are in our next example. And if you notice, we have had a reversal candle here. And now it is met with another reversal candle. So it's showing that we failed this continuation lower. And if we're reversing, then we can anticipate a continuation higher. But where would I want to see that continuation to as we have closed back inside this previous day's range is I'd want to see a new high or that buyside liquidity. So with this reversal daily candle then I could anticipate a continuation in day three. So going to the hourly time frame let's see if we have the confirmation of this reversal. So down here on the hourly time frame you see we have a nice V-shaped reversal. We have an SMT. So, if we're looking for a continuation in this day, we'd want to see price open, make a low, form a protected swing to trade higher. So, let's see if that occurs. We get a nice slow shallow retracement. And then here we get a closure through the series of downclos candles that made the low. So, this is where I could look to get on side with a position, my stop on the low, and trade it higher. And you can see our 2R is right with that liquidity there. How does that work? We hit 2R. We also have another SMT forming here with YM. Well, what is another thing we could do here? Well, this was looking to trade a reversal on the lower time frame inside that continuation day, but we could also look to trade a lower time frame continuation inside that reversal. So, taking a look at this lower time frame reversal here, you can see we were trading this reversal, but I could also look to trade a continuation off of that. And then I'm trading a higher time frame continuation with a lower time frame continuation. And that is how I prefer to do it. So if we get a closure through the series of down close candles here as we have this reversal and then this would be the continuation order block or the propulsion block then I could have a trade that looks something like this with the same target and I get more risk-to-reward. We get the closure through. We do. So then I could look to get on side here. And how does that work out? We hit RTP. So, there's lots of ways you can go about this depending on how strong your bias is. If you're always trading a continuation day on the higher time frame and you have a strong bias, then you can get a bit more aggressive on the lower time frames. If you have less strong of a bias on a continuation day, then it's better to wait for that continuation on the lower time frames as well. If you have a higher time frame reversal day, right? If you're trading candle 2 on a higher time frame, then you might want to wait for a continuation on the lower time frame as you have less of that higher time frame bias or confirmation. Now, before we get into the next example, let's go over a few other ways that I could trade this reversal in here or this intraday reversal using a continuation. So, if you take a look at the 4hour chart here as displayed on this right side here, you see how we have a nice candle to closure or a nice reversal candle here. So, let's go see if we could trade this using the 4hour and 15minute model. So down here on the 15-minute chart, what is the first thing we want to look for is we have a large wick. So I'm not looking to try to trade this reversal and we've moved open higher first, then lower, then back up, right? So I'm not expecting price to expand within this given higher time frame candle. I'm looking for the continuation that follows. So I'm going to want to let this candle close. And this candle does close. Now, do we have a change in the state of delivery or that lower time frame confirmation? We'll find the low. Have we closed over? Not yet. So, we're going to need to wait for it to close over. And here we do get that closure over. So, now we have confirmed this model and I can anticipate price to trade higher to these targets above. Now, if you notice, we just took out a target. So, we could get a retracement here. And if we're going to continue higher, I want to see price retrace, close over, and then form a continuation higher. Now, if we're going ahead and taking a look at this, normally when I see price consolidating, I'm not a big fan, right? Cuz this would be a huge consolidation. We're taking out the high and the consolidation. Then we could trade this back lower. But if we look inside here, we have a smaller consolidation. So if you see right here, we have a high, we have a low. We swept out the low in this consolidation. We formed a protected swing here on the 15-minute and then we formed another protected swing here and then we are breaking out of this range. So really, I'm going to anticipate price to trade higher. If price shows me that we are going to reverse here, I'm uninterested. So I want to see a shallow retracement, a protected swing, and then to trade the continuation. So let's see if that occurs. We do have a fair value gap right here as the point of interest. So we do have a series of down closed candles. Let's see if we can close over. And we cannot. So we make a new low. We're going to then track that new low. Let's see if we can close over now. And we do. So while still respecting these protected swings over here, we form a new protected swing. This is when I can either look to take an entry on this retest, my stop on the low, targeting this liquidity here or the highs, or I can look for a retest. So, for instance, here, if I want to be able to target this negative one or this current high of day, maybe that is where I'm going to use a smaller stop-loss or looking for a retest to get on side with this move. So, let's see what happens. We do get that retest and then we trade through our target and much higher. Now, that's not the only way you could get on side with this. If you remember, and if you like the lower time frames, we could take a look at the 30-inut chart here. You see how the 30-inut after we formed the protected swing here. Take a look. We have a protected swing. We retrace. If I didn't want to trade the continuation on the 30 minute, I could look for swing lows. So, if you notice, we have a swing low here. We have a swing low here. Each of these candles following is something I could trade. So I could trade this candle three closure here long or I could trade this candle two closure long here. So let's go and take a look at this one, right? Because we have a nice reversal candle here on the 30 minute. So we could look at the 3minut. So what's the first thing we want to do? Let this higher time frame candle close. Tell us if it is a reversal candle. It is. Do I have a change in the state of delivery? No, not yet. So we have to wait for that to occur. Now, we have formed a change in the state of delivery and we have an expansion. So, I'm not trying to trade this at a high. Also, we just took out a short-term target. So, I'm going to want to wait for a retracement to then get on side with a move higher. Ideally, retrace into the fair value gap, close over, and then trade it higher. And you see how it's the same process over and over with trading these continuations. So, there we have a retracement. We go a little bit deeper, but that is fine cuz we're still respecting this area. So I want to see if price can close over this level here. Now we are struggling to close over this area and that is okay. We just want to see if we can form a continuation. And this is what I want to talk about here. Right? If I'm going to want to trade this, it's ideal if this closes over quickly. But if you notice when we go to go close over, we're forming a new protected swing right in here. where that is what I would anticipate. So if we can get this closure over, let's see what happens. We do I have a new protected swing. Right? On this closure over, we protect this swing as well. Right? So now we have this as a protected swing and this is a protected swing. So I could take a target. So I could take an entry there. We'll target 2 R on this and then see what happens. Right? And there we go. And we hit R2R. So you can see I'm trading a continuation from the higher time frame, a continuation on my intermediate time frame, and also on this case a continuation on my entry time frame. And that is the way I prefer to trade is I'm always trading continuations. But let's get into another example. So here we are with our next example and we are on RB on the hourly chart and you can see the daily candles on this right side here. Now you can see we have a sweep and then a closure back above that. But we do have a little bit of an expansion here. So, this is something I can still look for longs as we're pretty close to this objective here, but it sets up lower expectations because we have expansion and I could get a new phase of price. So, with this, I'm going to demand a continuation on the lower time frame. This isn't a scenario where I try to trade a reversal as I'm lacking that super strong narrative. So, with this closure, we have a change in the state of delivery. We also have the SMT with CL here. So, then what am I going to wait for? I'm going to wait for that same reversal candle on the lower time frame as we let this continue. So you can see we are just kind of consolidating here within this range. And what do I mean by that? We have one candle here. Price has not taken out either side of the range. Now we do take out that side of the range. And what do we have? We have a nice reversal candle. So with that, let's drop down to our lower time frame. We're on the hourly. We can go ahead and go down to the 5minut chart. So you can see down here on the 5-minute chart, we are getting into New York where we start to get some more volume. But let's see what happens. We have a change in the state of delivery. So what would we want to see? I'm not trying to trade this reversal here as I'm lacking the bias on the higher time frame. I want to seek a continuation. So what do we have? We have price open reach down into this change in the state of delivery balancing out price. Do we get a continuation? We do. As we close over these down close candles, this is where I could look to take a buy, my stop on the current low, and then I could look for 2 R here or to that buy side liquidity or the projections above. So, let's see what happens. We almost get stopped out and then we form a new continuation. And if you notice, let's talk about this. If price isn't expanding in candle 3, that's when we're likely to get a candle 4 continuation if it is right. You can see we're kind of forming a reversal candle on candle 3 as well. Still closing outside the range. Let's see if we can get a continuation in candle four here. So there we do take out a short-term target. We want to see a consolidation or a retracement for continuation. We don't want to see price form a bearish reversal, right? We don't want to see that closure there. So let's see what happens. So not a great close, right? But we're just going to stick to our plan. It's more of a consolidation to me because let's talk about this again. If price was going to form that reversal, we'd want to see a quick close below, right? If we're trading this bearish, but since it fails to do it and takes a long time, I'm viewing this more as a consolidation, right? So, it takes out the low, then trades higher. See if we can hit R2R here or 2.6R. Just missed RTP and then we take it out. We have a nice trade there. And you can see we are trading a continuation on the lower time frame and we're demanding that because if we go back out to our higher time frame here, yes, we have a setup and it is a continuation. It's just we've had expansion and then a consolidation, right? Or a lower probability. We want to see a reversal candle that has a reversal, right? Not a reversal and expansion, but you can still trade it. It's just I need to demand more on the lower time frames in terms of confirmation. So here we are with our next example and we have a nice reversal candle. You can see price went higher and then back lower closing near its opening price. But did we have on this closure a change in the state of delivery? No. So we're waiting for the closure through that. And now that we have that the model will print. So this is where I have a pretty decent bias to this previous day's lows, right? Because I can anticipate if price is going to reverse here and form a continuation and you can see we're forming a protected swing in here. then the high of day should be made and I can anticipate price to expand lower. So let's see what happens. So there you can see we get an expansion lower and this would be a candle for trade. So if you want to check out that video that is how you could trade that candle but let's see if we can get a retracement. So you can see we are getting a retracement back up. So expansion retracement. Let's see if we can get another expansion lower. Want to wait for a reversal candle. And so you can see we do have a little bit of a reversal candle, but that's not something I really want to see, right? I want to see something that has more of a bearish closure. This is just a dogee. So that is a nice reversal candle. You can see how it's nice long wick on the top end and it's closing back inside. So with this we can drop down to the 5minut as that is an hourly candle to closure. So here we are and you can see what do we have? We have price with a nice V-shaped reversal, a consolidation, and then I'd want to see if we can form a continuation. Since we have swept out this high in this consolidation, I want to see if we can form a protected swing here. Let's see what happens. So there you can see the setup fails before forming that continuation. And that is an example of why I prefer those continuations. If I was just to trade the reversal, I would get stopped out there. Let's see if we can still keep this idea because the idea isn't invalidated. I just need to have a new setup. So, let's see. We have now a nice candle to closure once again, right? So, this would be a three drives pattern. And if you notice, do we have the change in the state of delivery yet? No. And now, let me talk about this. This is one that I'm usually not a fan of because our sellside liquidity is at almost the same point as our change in the state of delivery. So, by the time we get our change in the state of delivery, we're taking out targets. Let's see if we do form something. And you can see we do form a model as we get this closure below. But you see how we're also taking out those targets there. So with an expansion lower, I want to see the phases of price. Do we get a retracement into a fair value gap to then trade it lower? Do we consolidate? And then I can find a sweep and trade it lower or do we reverse? In which case, I'm not really interested. Right? And now we have a nice V-shaped reversal. And you see how this is forming a bullish setup. So that's not really what we want to see. So you can see we do get a weak close, but this is not something I'm personally going to try to trade cuz now we are just consolidating. So if we mark out our consolidation high and low, let's see if we can take out the high to trade it lower. And so we do take out that high. I'm not considering this a change in the state of delivery because I'm looking for the series of candles that made the high. So let's see if we can get a change in the state of delivery here to trade it lower. And this would work because we're still respecting the EQ of this original candle 2 and forming a new candle 2 and we can't get the closure. And so you can see although we do get a change in the state of delivery here, why is this something I'm not considering? Because it took so long to trade that really we are just taking out consolidation lows, right? So we're just in this big consolidation still. So I'm going to need a little more confirmation. So there we go. We take out this high. Now, it's the same idea, right? Do we get a sweep and then a change in the state of delivery? And at this point, I'm not that interested. So, I'm going to need more confirmation. So, either an SMT with the change in the state of delivery and a nice V-shaped reversal cuz we do have these equal highs now. And there you can see right here we have that SMT, right, with the change in the state delivery on the closure. So, this is something where I could take a reversal entry and be a bit more aggressive due to the higher time frame framework. Now, if I zoom out, where is my target on this? I'm wanting to see lower, right? That daily low, but I want to use that sellside liquidity resting below as a target. So, I want to see if I can take a market entry. Can I get 2 R to that low? And I can with my stop above this. Now, why does this make sense for a stop loss? Why not the high? Well, if I'm at the high, I'm not getting 2 R. So, I can go to this swing point, this lower time frame swing point. It's not a swing point on this time frame. And the reason for that is I'm expecting price to hold five of this order block, right? this change in the state delivery. So my stop is protected. So what happens? Let's see. And there we get that continuation lower. So this is an example of because my higher time frame bias is very strong. I can look for a lower time frame reversal as long as it meets my expectations. And you can see if I was waiting for a continuation, it doesn't make sense to take a continuation in here because where is my target? Right there. Where am I going to put my stop loss in here? Well, I need to allow for price to trade higher if it wants to. So, this is something I'd miss if I was trading a continuation. And this is an example of if you have a strong bias, you can trade those lower time frame reversals. A higher time frame continuation paired with a lower time frame reversal. So, this next example is another of a higher time frame continuation and then that is allowing me to trade a lower time frame reversal. So, if you notice here, we have price expanding, right? So, we have expansion lower, expansion up, that's forming a reversal. So expansion once again a consolidation consolidation is run out right and you see how we have a nice reversal candle here price is closing green forming a nice wick on the lower end here now this is an example of where I wouldn't want to use 0.5 of the wick let me give a lesson on that really quick why would I want to use the whole entire candles range and not.5 of the wick well our whole thing is trading expansion candles with a small wick so if I want to trade a small wick I want to see a shallow move than to trade it higher if I'm using 0.5 of the wick. Price comes all the way down here. Is that respecting or forming a shallow wick? No. So that's why I'm going to look for 0.5 of this daily candles range because it makes sense with this candle type. So I want to see a shallow move to trade it higher. So that is a very strong bias. Let's go down to the hourly time frame. So you can see here down on the hourly time frame, we have that candle to closure here. And you can see this sets up lowquality conditions following an expansion. This is a date where I either want to have more confirmation or avoid entirely. Here we get the reversal. Still not a great reversal day, but we do have the confirmation. So in this next day, I'd want to see price open, make a low, and then can trade it higher. So let's go ahead and play this out. So you can see we have those targets right there. And what are we doing? We have expansion into what? A consolidation. So marking out the consolidation range, right? This is something I could possibly trade here in London session as we have a reversal candle. So that is something I could look to trade higher if I wanted to. For me, I trade New York. So on this day, I was focused here. Now, if you notice, what are we doing? We're sweeping out the low in a consolidation. This is where we would want to get long, right? And on this day, I have a lot of bias. This is where I could trade this higher or anticipate that. So, how could I actually trade the reversal in here? Because I have a strong bias on a higher time frame. So, a higher time frame continuation. We're in the continuation day. Trading a lower time frame reversal. Let's drop down to the 5minut. So, down here on the 5minut, we're taking out that consolidation low. And then I want to see am I forming a reversal in here. Right? And what do you notice on this close here? We do have a very nice Vshape. And this is where if I wanted to, I could trade this lower time frame reversal inside a higher time frame continuation and look for it to trade to the highs. So that would be it on the retest. Or if I wanted to take the close, that would also give me 2 R as well. So let's see what happens. There we go. And if you want to see how I actually traded this, I actually traded a 1 minute continuation in here. And that is in a trade review video posted, which I'll link in the description. So let's get into one more example. So here we are with our last example here and we're going to be blending candle 2, three, and four all together. So if you notice here where I have the daily chart and the monthly. If you notice, we mark out the monthly high. We are sweeping that high out. And we have a nice V-shaped reversal up here. Is that paired with a change in the state of delivery? It is. Are we respecting that change in the state of delivery? We are. And if you notice, are we forming a continuation while price retraces back up into here? We have a nice candle three closure which means I can be looking for a candle for continuation lower. So my candle four here is in this case giving me my bias to trade it lower where would be lower sellside liquidity. So now I have a whole idea for this month right and that is why I posted on Twitter about my bias for the start of this month. I would expect price to trade lower here because we're forming a protected swing right prior to the open of the higher time frame candle. So with this, let's drop down to the hourly time frame and let's see what happens. So if you notice here, we do have that change in the state of delivery from the high. The projections also line up with that sellside liquidity, which is nice to see. So taking a look, let's go over something real quick. We can also use the higher time frame candles here to anticipate where we want to see price respect. So you can see we have the EQ. So we want to see price respect that. But we also have this higher time frame order block. So marking that out, the opening price right here. And then the 0.5 is above that. So really we have this little window in price where we want to see be respected right here. So I want to see the higher time frame wick form in there. Well, what is right there? We have this higher time frame fair value gap. So I want to see price trade into that fair value gap and then can trade it lower. So price does trade into that higher time frame fair value gap there and so we could look for a reversal on the lower time frame here right because we have a candle 2 closure we could trade the lower time frames now if I'm in Asia or the early parts of the day I'm trying to stay on the higher time frames so at least minimum 15 let's just see what would happen on the hourly here on the hourly you see how we form that continuation now I can anticipate that this wick should remain intact as we trade lower throughout the day let's see if we can get a retracement back up to trade it lower. And there we do. And let's see if a higher time frame gives a better perspective here. So going to the 4 hour, we don't want to see this high taken out. Can we form a swing point? And there we do form a swing point. Right now, this is a reversal candle and a reversal expansion candle. So let's go see what this actually looks like on the lower time frame. Why could we be looking for a reversal here? Well, we know we don't want to see this high taken out. So if that is the case, well then a retracement back into this range. I'm looking to sell and I want to use previous candles highs and lows for that. So either on the 4 hour or the 1 hour, right? And you can see the 1 hour will also give a swing that we could use. But for the sake of this example, we're going to be using the 4 hour and so we'd go to the 15-minut for the model. Now down here on the 4 hour and 15 minute, you can see this is the high we don't want taken. So a move back into this range or into this previous range I'm looking to sell. We have equal highs right here and I'm looking to sell that. Now, let's talk about this really quick. Why wouldn't I be interested in this? Well, you could, but look at how price is forming. Open low. It's trading higher. If you're trying to trade this short, you're trying to fight that reversal candle and it already has a larger wick versus look at this candle. It is sweeping its previous out and it has a small wick. This small wick supports expansion lower. Now, this is where I can decide, do I want to trade candle 2? as it is supported by this small wick or do I want to wait for the continuation in candle 3 and that really comes down to your higher time frame bias if you have a lot of bias you can be more aggressive with these entries and I could look to trade this reversal right here instead of the continuation so let's see what happens and there you can see we have SMT on the high we have the change in state delivery a nice V-shaped reversal and you can tell that because it is paired with an inversion here but with that that's where I could look to trade this reversal if I have a higher time frame bias that aligns with it. There I could look for an entry and I'm expecting if price is to trend lower or we make a low high high lower lower low high lower low I could look for price to trade to this low. So 4R or if we are going to have an expansion day I can really hold to the end of the daily candle but let's see what happens there we get an expansion. So expansion can we form a retracement? Well, let's see. You can see we can't close over there to form the retracement and then we get a move higher. Now, if I'm taking the reversal, I'm I just have to trust this, right? I can sure take off at 2 R if it hits it. It didn't in this case, but if I'm waiting for the continuation, there is no entry yet. So, price returns to our entry. And what do we notice here? We are forming a continuation. Price does trade higher. This looks like an expansion, but it's met with expansion. So that's forming a wick on a slightly higher time frame. We now have a protected swing. This is where I could look for a continuation. Right now, if I still want to target the same area, I'm going to have to put my stop around this area. And why could that make sense? Well, we have nice bulky bodies using.5 of that. It's above that, right? Or if I'm going to use a true protected swing, then I'm going to need to get a little more for 2. Let's see what happens. There is another continuation. Let's say you missed this one. We have another continuation here. Look to take an entry. I stopped there. Can I get two R out of this right there? Let's see. Oh, that one gets stopped out. We have SMT, right? So, this continuation may not work, right? Or we have SMT with YM. So, YM would be the better short opportunity there. But we go and trade it lower. So, two out of three of those trades would have worked. And you'll see why I prefer to trade within candle 3, right? I like to trade that first continuation instead of the further continuations because I feel like I'm chasing. But where does this eventually go to? If you remember, if we're back out on the hourly time frame, we want to see this return to that daily sellside. And you can see it does go and hit that. So, if that's something I'm going to hold, that's where you can get those really insane risk-to-reward trades. But for the sake of this, that is how I would approach it. So, I hope you enjoyed this video. I hope with the candle 2 video and the candle 4 video, you now understand each candle within my fractal model. So, candle 2, the reversal candle, candle 3, the continuation, or it can be a reversal candle, and candle 4, which is always a continuation within my model. Now, if you have any questions, be sure to leave them in the comment section below. And with that, I hope you guys have a good one. See you.