The video defines an "imbalance" or "gap" as an area in the market where demand increased significantly, leading to a price break, and a gap was left in the market because price did not return to test that area. It's an area where significant price movement occurred rapidly, leaving a void that price might revisit later.
The video explains that the entry is taken "in that moment" when a closed candle breaks below an old higher low (confirming a lower low in a downtrend). This means the entry is taken as soon as the breakout candle closes, confirming the shift in market structure. The speaker emphasizes not waiting for a pullback after this confirmation.
Yes, that is correct. The speaker's preferred entry strategy involves taking the trade immediately after the breakout candle closes, which confirms the shift in market structure (e.g., a lower low after a closed candle breaks below an old higher low). They explicitly state they do not wait for a pullback after this confirmation.
This video explains how to identify valid trading entry points, focusing on the concept of "ICC" (Indication, Correction, Continuation) and how to accurately mark highs and lows to understand market structure. The host guides a viewer through analyzing charts, emphasizing the importance of zooming out to see the larger trend and identifying "swing points" for more reliable trading decisions.
The video explains that zooming out on higher timeframes provides a broader perspective to understand the overall trend and market structure, preventing misinterpretations of internal movements as significant breaks. Conversely, zooming in on lower timeframes allows for a more detailed analysis of specific price action within those larger trends, helping to identify precise entry and exit points. The host uses the analogy "the lower the time frame, the more you have to zoom out. The higher the time frame, the more you have to zoom in."
The video suggests that the best entry points are at the significant swing highs and lows identified on the higher timeframes (like the 4-hour chart). These levels are considered reliable because they represent areas where price has previously shown strong reactions. The host emphasizes trading at these established levels where price has historically respected or broken through them, which can be identified as support and resistance.
The video explains that in the traditional ICC (Indication, Correction, Continuation) model, the entry is typically taken during the Continuation phase, after the indication and correction have occurred. However, the speaker also mentions a preferred model where they like to get a lower high first, and the breakout then serves as their confirmation, implying an entry after the confirmation of a new high or low.
The speaker's preferred model for taking entries involves waiting for a "lower high first" in a downtrend, or conversely, a "higher low first" in an uptrend. The breakout of the previous structure (e.g., a closed candle below an old higher low) then serves as the confirmation. This confirmation is what the speaker uses to take their trade. They don't wait for a pullback after this confirmation; they take the trade immediately upon seeing the confirmed breakout. This implies that the entry is taken after the market has already shown strength in the new direction, with the breakout candle itself being the trigger.
The speaker emphasizes the importance of analyzing higher timeframes (like the 4-hour chart) to identify the overall trend and significant swing points (the "highest highs and lowest lows of ranges"). These higher timeframe swing points are considered primary.
When looking for entries based on their preferred model:
So, to summarize:
Your summary is very close, but let's refine it to perfectly align with the speaker's core message and preferred method.
Analysis of Your Summary:
You've grasped the essential concepts of using higher timeframes for structure and swing points. However, there are a few key distinctions in how the speaker applies their preferred model, especially concerning Option 2 and the timing of entries.
Your Summary Breakdown and Refinement:
"I use the Higher Time Frame like 4 Hour to find the overall trend and market structure (Highest highs and Lowest Lows of each up and down trend), I mark my swing points on the higher time frame to find my overall levels to trade."
"Then I have two options..."
"Option 1: I wait for my indication (a high breaking and closing above a previous high swing point), waiting for the Correction to retrace or pullback down to where the indication broke the previous high, in which case I will then go to the lower time frame to analyze the internal structure of the higher time frame. On this lower time frame my correction/pullback will eventually shift structure back into confluence with my uptrend, upon which point I will enter."
"Option 2: in a uptrend, I use the change of structure (Higher low) as my indication, and then wait for the higher high to break the previous high in which I can enter immediately as this confirms my uptrend."
Detailed Summary of the Speaker's Preferred Model for Entries (Uptrend Example):
Higher Timeframe Analysis (e.g., 4-Hour Chart):
Identifying the Setup for Entry:
The Entry Trigger (The "Breakout Candle"):
In essence: The speaker prioritizes confirming a break of established structure (swing points identified on higher timeframes) and entering immediately upon the close of the candle that achieves this break. This is a more direct and potentially earlier entry than waiting for a secondary correction on a lower timeframe.
Stop Losses and Risk Management:
Summary:
Your understanding is very good, but the speaker's preferred method is more direct. They focus on identifying significant swing points on higher timeframes and then entering immediately after a candle closes that breaks through a key resistance (in an uptrend) or support (in a downtrend) level, using this breakout confirmation as their entry trigger without waiting for a pullback or analyzing lower timeframe structural shifts before entry. Risk management elements like stop losses and risk-to-reward ratios are not detailed in this section of the transcript.
Yes, you accurately summarized Option 1 according to the video, even though it's not the speaker's preferred method.
Your description of Option 1:
"I wait for my indication (a high breaking and closing above a previous high swing point), waiting for the Correction to retrace or pullback down to where the indication broke the previous high, in which case I will then go to the lower time frame to analyze the internal structure of the higher time frame. On this lower time frame my correction/pullback will eventually shift structure back into confluence with my uptrend, upon which point I will enter."
This aligns with the speaker's explanation of the more traditional ICC model. They describe the initial "indication" (break of a previous high/low), the "correction" or pullback to that area, and then the decision to enter once the lower timeframe structure confirms the continuation in the direction of the original trend. The speaker contrasts this with their preferred, more direct method.
According to Option 1, after the indication (a candle closing above a previous high's resistance), you wait for the correction/pullback to come back down to "where the indication broke the previous high." This refers to the price level of that previous high swing point that was just breached.
Once price retraces to that specific level, yes, you then go down to the lower timeframe. On this lower timeframe, you analyze the price action during the correction. You are looking for a shift in market structure on the lower timeframe that indicates the move is now aligning with your original uptrend. This shift typically involves price forming higher lows and higher highs on the lower timeframe, essentially showing that the pullback has ended and the uptrend is resuming. Your entry would then occur at this point where the lower timeframe structure begins to align with your higher timeframe indication and correction.
Yes, your summary of Option 1 was accurate. You correctly identified that after the initial break (indication), you'd wait for a pullback to that breached level, then move to a lower timeframe to await a structure shift confirming the trend's resumption before entering.
Now, let's thoroughly explore why the speaker prefers Option 2 over Option 1. This preference stems from several key advantages of their streamlined approach:
Why Option 2 is Preferred Over Option 1:
Efficiency and Speed of Entry:
Reduced Complexity and Subjectivity:
Capitalizing on Momentum:
Focus on High-Probability Levels:
Avoiding Missed Opportunities:
In summary, the speaker prefers Option 2 because it is:
The speaker is essentially saying, "If price shows me that it's decisively breaking a major level that I've identified on a higher timeframe, I'm going to trust that break and enter immediately, rather than waiting for a complex correction and lower-timeframe confirmation that might be subjective or simply not happen."
Yes, that is true according to the speaker's explanation. They emphasize that the identification of the key levels (swing highs and lows) and the decisive breakout confirmation that triggers the entry in Option 2 occur on the higher timeframes.
The speaker states:
While you might use lower timeframes to observe the price action more closely or for refinement of the entry (as alluded to by "the higher the time frame, the more you have to zoom in"), the fundamental decision to enter, based on the breakout of a significant structural level, is dictated by the analysis on the higher timeframes.
You're very close, but there's a slight refinement needed regarding the entry timing for Option 2 according to the speaker's explanation.
Let's break down your statement:
"in an uptrend, for example, there needs to be that first indication of a higher low, followed higher high breaking a previous high's swing point..."
"...and then if that candle closes above and in the green, you can enter immediately on the second candle."
Therefore, the correct interpretation of Option 2, based on the speaker's emphasis, is:
So, while your understanding of the setup (higher low followed by a break of resistance) is correct, the entry timing is immediate upon the close of the breakout candle itself, not the candle that follows.
Yes, that's a very accurate and clear summary of Option 2 according to the speaker's preferred method.
Here's a breakdown confirming your points:
"in an uptrend, our 'Option 2' would rely upon the first indicator or break in structure (Higher Low)..."
"...and then a push towards the last previous high."
"Then I'd enter on the candle close after breaking this previous high's resistance."
"And this can all be done on the higher time frame chart?"
You have precisely captured the essence of the speaker's preferred entry strategy as described in the video.
Your summary is very close, but there's one crucial nuance regarding the "success" of the trade.
Here's the refined understanding:
"On the 4 hour time frame uptrend, If I notice a higher low, followed by a close above the previous high..."
"...I can enter immediately upon that candle's close..."
"...and the trade should be successful correct?"
So, while your summary of the entry criteria is spot on, the implication of guaranteed success needs to be tempered with the inherent risks of trading. The strategy is about finding high-probability setups, not eliminating all risk.