About this video

• Video Title: Livestream Playback | How to trade high time frame setups
• Channel: Wick Sauce Ro
• Speakers: Not explicitly mentioned, but likely the channel owner.
• Duration: 01:09:56

Overview

This video explains how to effectively trade using high time frame (HTF) analysis, focusing on understanding price action, identifying key swing points, and utilizing concepts like unmitigated zones and order blocks for more precise entries and exits. The speaker demonstrates how to mark out significant levels on higher time frames and then analyze their impact on lower time frames to confirm trades.

Key takeaways

• Importance of Defined Levels: To effectively analyze high time frame candle closures, it's crucial to identify specific price levels that price must close above or below.
• Swing Points as Key Indicators: Marking out swing highs and lows on higher time frames provides a simplified yet effective way to understand market structure and trends without needing to delve into lower time frames for detailed analysis.
• Unmitigated/Untested Zones: Supply and demand zones that have not been tested by price offer a higher probability of eliciting a reaction, making them valuable areas for trading.
• Wick Analysis for Timing: Analyzing wicks, especially in conjunction with order blocks, can provide finer market timing for entries and exits.
• Confirmation is Key: Waiting for candle closures on the appropriate lower time frame is essential for confirming trades and avoiding premature entries that can lead to losses.
• Multi-Time Frame Synergy: When structures identified on higher time frames are consistent with those on lower time frames, it adds significant weight to the analysis and potential trade setup.
• Order Blocks within Wicks: Every rejection wick and fair value gap contains an order block, which can be a key area for entry if properly identified.
• Decision Levels: These are crucial areas where price is expected to react, often leading to a temporary bearish or bullish move.

Analyzing wicks contributes to better market timing by helping identify significant price levels where rejections occurred. These wicks can indicate areas of potential support or resistance, and by understanding how price interacts with them on lower time frames, traders can refine their entry and exit points, leading to more precise trades. The speaker emphasizes that wicks can signal the presence of order blocks and areas where price might reverse or continue its trend.

The speaker explains that every rejection wick and fair value gap has an order block hidden within it. To find it:

1. Identify the Wick: Locate a significant wick on a chart, particularly one that represents a rejection or a reversal point.
2. Look for the Imbalance/Gap: This wick was likely created during a period of significant price movement (imbalance) where price moved away quickly.
3. Find the Consolidation Area: Within the price action that formed the wick, look for a period of consolidation, which might be represented by two or more candles. This consolidation area represents an order block.
4. Enter at the Order Block: The speaker suggests that price will often test this order block. For instance, in a bullish scenario where a wick formed, the order block within that wick is where buyers might re-enter. Conversely, for a bearish scenario, sellers might enter from the order block within a rejection wick.

The speaker demonstrates this by showing how a wick was formed by a period of consolidation, and that consolidation area (the order block) is where potential trades could be initiated.

The speaker mentions that for a gap to be considered for trading, the key piece of structure (the gap itself) should ideally be at or below the 50% mark when looking for buys, or at or above the 50% mark when looking for sells. This 50% level is significant because it helps determine if the gap is in a "discount" (favorable for buys) or "premium" (favorable for sells) area.

Regarding timeframes for analysis and entry:

• Wick and Order Block Analysis: The speaker demonstrates this analysis across various time frames, starting from higher ones like the 4-hour and 1-hour charts to identify the overall structure and key levels. They then drill down to lower time frames such as the 30-minute, 15-minute, 5-minute, and even 1-minute charts to find more precise entry points within those higher time frame zones.
• Entry Timeframe: The general approach is to identify significant structures and zones on higher time frames (e.g., 4-hour, 1-hour) and then look for confirmation and entry signals on corresponding lower time frames (e.g., 15-minute, 5-minute). The key is to have the "proper aligned lower time frame" that complements the higher time frame analysis.

The speaker outlines a few ways to approach trade entries based on wick and order block analysis:

1. Waiting for Confirmation (Safest):

   • Identify the Zone: Mark out a significant higher time frame zone (e.g., an unmitigated order block or supply/demand zone) on charts like the 4-hour or 1-hour.
   • Wait for Break of Structure: On the corresponding lower time frame (e.g., 15-minute), wait for price to break a key structure (like a swing high for a buy or a swing low for a sell).
   • Enter on Retest: After the break of structure, wait for price to retest that broken structure level. This retest acts as confirmation.
   • Example: If looking for a buy, wait for price to break a previous swing high on the 15-minute chart, then enter when price pulls back to retest that broken high.

2. Entering at the Identified Zone (More Aggressive, but with High Probability):

   • Identify the Unmitigated Zone: Pinpoint an unmitigated order block or wick on a higher time frame (e.g., 1-hour).
   • Find the Order Block within the Wick: Zoom into lower time frames (30-minute, 15-minute, 5-minute, or even 1-minute) to find the specific order block (consolidation area) within that wick or gap.
   • Enter at the Order Block: Take a trade directly at the identified order block, anticipating a reaction. This method relies heavily on the concept that these zones are likely to hold.
   • Example: If a strong bullish wick formed on the 1-hour chart, the speaker would drill down to find the order block within that wick on a lower timeframe and look to enter a buy there, even if it's before a confirmed break of structure.

3. Using Wick Sauce 2.0:

   • Identify the Wick: Mark a significant rejection wick on a higher time frame (e.g., 1-hour).
   • Find the Order Block within the Wick: Drop down to lower time frames (30-minute, 5-minute, etc.) to locate the specific order block that created that wick.
   • Enter at the Order Block: Take the trade (buy or sell) directly at this order block, without necessarily waiting for further confirmations like breaks of structure on the lower timeframe. This is based on the idea that the order block itself is a high-probability entry point.

Key Considerations for Taking the Trade:

• Risk Management: The speaker implies the importance of stop-losses, suggesting they should be placed strategically (e.g., just below the identified order block for a buy, or above for a sell) to manage risk, especially when taking more aggressive entries.
• Context: Always consider the overall market structure and trend. The decision to enter a buy or sell should align with the higher time frame direction.
• Candle Closures: Even with these entry methods, the speaker stresses the importance of observing candle closures. A closure above a significant resistance (like a wick high) can confirm a bullish move, while a closure below a support (like a wick low) can confirm a bearish move. If price fails to close beyond a key level, it might indicate consolidation or a fake-out.

The speaker indicates that you can take your entry within the order block itself. The order block is essentially the area where the significant consolidation occurred that led to the price move.

Here's how to interpret where to enter and the role of timeframes:

• Entry within the Order Block: The order block is identified as the area of consolidation (often two candles) that preceded a significant price move (an imbalance or gap). You would look to enter your trade within the range of these consolidation candles. The speaker mentions taking trades "at the order block."
• Higher Time Frame vs. Lower Time Frame:
  • You do not necessarily need the candle closure on the higher time frame first before entering.
  • Instead, the higher time frame is used to identify the key zones and structure (like the order block, the wick, or the gap).
  • Then, you would go to a corresponding lower time frame to find the precise order block and potentially look for entry signals or confirmation. The speaker often drills down to lower time frames (15-minute, 5-minute, 1-minute) to pinpoint the exact area within the higher time frame structure where they want to enter.
  • The concept of "proper aligned lower time frame" is crucial here. You use the higher time frame for the overall picture and the lower time frame for the refined entry.

In essence, the higher time frame tells you where to look for a trade, and the lower time frame helps you determine when and exactly where to take it by identifying the specific order block or entry zone.

Wick Sauce 2.0 is an advanced trading concept introduced by the speaker, building upon the idea of analyzing wicks. Here's a detailed breakdown:

Core Idea: Wick Sauce 2.0 aims to improve trading precision by moving beyond just identifying a rejection wick. Instead of simply trading the wick itself or waiting for a lower timeframe confirmation after a wick appears, it focuses on finding the order block that created that significant wick.

How it Works:

1. Identify a Significant Wick (Higher Time Frame):

   • First, you spot a substantial wick on a higher time frame (e.g., 1-hour, 4-hour). This wick should represent a clear rejection or a point where price moved sharply away from a certain level.

2. Locate the Order Block Within That Wick:

   • This is the key differentiator of Wick Sauce 2.0. The speaker emphasizes that every significant wick (or fair value gap) has an order block hidden inside it.
   • To find this order block, you need to drill down to lower time frames (e.g., 30-minute, 15-minute, 5-minute, or even 1-minute).
   • Within the price action that formed the higher time frame wick, look for the small area of consolidation (typically two candles) that preceded the sharp move away from that level. This consolidation zone is the order block.

3. Take the Trade at the Order Block:

   • Instead of waiting for price to retest the entire wick or for a lower timeframe break of structure, you take your entry directly at the identified order block.
   • For a Sell: If the wick was bearish (a rejection from above), you'd look for the order block within that wick and place a sell order there.
   • For a Buy: If the wick was bullish (a rejection from below), you'd find the order block within that wick and place a buy order there.

Why it's an Advancement (Wick Sauce 1.0 vs. 2.0):

• Wick Sauce 1.0 (Implied): This might refer to simply identifying a rejection wick and trading based on that. For example, if price rejects from a wick high, you might sell. Or, if price pushes above a wick high and closes, you might buy. This is less precise.
• Wick Sauce 2.0: This method is more refined because it targets the specific area (the order block) that likely initiated the move away from the wick's extreme. It assumes that this order block is a strong area of institutional interest and will likely cause price to react if tested.

Benefits of Wick Sauce 2.0:

• Higher Precision Entries: By targeting the order block within the wick, you can often get entries at much more favorable prices than simply trading off the wick itself or waiting for lower timeframe confirmations.
• Reduced Wait Time: It potentially allows for earlier entries without needing to wait for multiple lower timeframe candles to form or break structure.
• Higher Confidence: The speaker expresses strong confidence in this method, attributing it to knowledge learned from other traders like "Tay." The idea is that this specific methodology is highly effective.

Example (as shown in the video):

The speaker analyzes a situation on Gold where a significant wick appeared on the 1-hour chart. Instead of just selling at the wick, they dropped down to lower time frames (30-minute, then 5-minute, then 3-minute) to find the specific order block that formed the wick. They identified an unmitigated order block within that wick and took a sell entry there, emphasizing that this was their entry point even though it might have appeared "bullish" on the surface due to momentum.

In summary, Wick Sauce 2.0 is about pinpointing the exact "engine" (the order block) that created a significant price wick, and using that precise location for entry, often on lower time frames, to capitalize on the expected reaction.