How to Time Expansions | Part 2; Continuations

Name: How to Time Expansions | Part 2; Continuations
Uploaded: 2026-02-07T08:06:28.000Z
Duration: 2 h 30 min 49 s

Timing Expansions Master Class Part 2

Introduction to Continuations

The video introduces the second part of a master class on timing expansions, focusing on framing continuations after identifying true reversals in the market.

A recap is provided on core logic, emphasizing that continuations require swing formations similar to true reversals discussed in the first video.

Market Maker Models and Liquidity

Market maker models are explained as mechanisms that distribute liquidity from internal to external ranges, which were previously defined as universal models.

The focus shifts to trading away from identified true reversals and understanding continuation sequences for effective trading strategies.

Framing Continuations

The speaker discusses how higher time frame key levels can be engaged using two-stage crack and correlation variants to frame reversals.

Emphasis is placed on zooming into fractal reversals where a reversal candle (candle 2) leads to continuation until liquidity draws are met.

Understanding True Reversals

A higher-level perspective is introduced regarding universal fractals, requiring a swing point formation at its reversal followed by expansion into opposing range sides.

Viewers are prompted to consider criteria for determining if candle 2 represents a true reversal, recalling concepts like two-stage cracking correlation and divergence logic.

Trading Dynamics of Candle Sequences

Once a swing point is established, traders can look for continuations towards liquidity draws or short-term highs/lows in the market.

A reminder is given about the importance of understanding how both reversals and continuations are framed together as unique phases of price delivery.

Recap of True Reversal Framework

The speaker recaps the two-stage variance for identifying true reversals involving PSP confirming SMT within key levels of universal models.

Three frameworks for true reversals are outlined:

PSP confirming SMT at key levels,

Inverse scenarios with SMT confirming PSP,

Two-stage SMT leading to V-shaped displacements.

Understanding Swing Invalidations and Continuation Patterns

Introduction to Swing Invalidations

The discussion begins with the importance of understanding swing invalidations for recognizing true reversals and their application in continuation patterns.

Focus is placed on identifying where candle 3 may fail as a continuation, emphasizing the use of mechanical filters to enhance trading decisions.

Mechanical Filters for Continuation

Candle 2's equilibrium serves as a critical reference point; if candle 3 respects this upper half, it indicates potential for high probability expansion.

A small opposing run within the upper half of candle 2 is ideal; large wicks into deep discounts suggest low probability for continuation.

Analyzing Candle Retracements

If candle 3 shows a deep retracement beyond candle 2's equilibrium, it signals that traders should avoid engaging with it as an expansion opportunity.

Instead, attention shifts to candle 4, which should ideally support expansion by respecting the equilibrium established by candle 2.

Summary of Key Concepts

Deep retracements invalidate the idea of expansion in candle 3; traders should look towards higher time frame candles for better opportunities.

For a C3 reversal scenario, it's crucial that candle 3 closes above the opening price of candle 2 to maintain continuity into subsequent candles.

Dynamics of Price Moves

The concept of new phases in price dynamics is introduced; these occur when market engages key internal liquidity levels before expanding towards external draws.

Emphasis on confirming new phases at relevant swings before executing trades through significant highs or lows.

Trading Strategies and Consolidation Avoidance

Traders are advised against blindly pattern trading continuations without confirming new price phases at key levels.

Strong market movements characterized by displacement or institutional involvement are preferred over consolidative patterns during trade execution.

By following these structured insights and timestamps, traders can better navigate swing invalidations and improve their strategies around continuation patterns.

Understanding Continuation in Market Maker Models

Trading Consolidation and Reversal Signatures

The focus is on trading a consolidation change in state of delivery for continuation, allowing new price phases to hold as invalidation points before executing trades based on lower time frame swing formations.

Emphasis is placed on recognizing reversal signatures and changes in market delivery, which are crucial for understanding continuation within the market maker model.

Framework for Candle Continuations

A schematic illustrates the concept of trading from one internal or external range liquidity (IRL/ERL) to another, highlighting the importance of opposing sides of the range that draw liquidity.

The process involves identifying candle 2 reversals at wick extremes, leading to higher time frame continuations with candles three and four towards liquidity draws.

Types of Continuation Models

Type One Continuation

This model represents a high probability scenario where gaps are created away from true reversals. It involves candle 3 opening into a fair value gap while respecting key levels established by candle 2.

The ideal situation generates low resistance liquidity signatures, facilitating movement towards higher time frame objectives while maintaining alignment with lower time frame models.

Type Two Continuation

Similar to type one but observes candle 3 trading into relevant lows of candle 2. This indicates a retracement rather than consolidation after an initial expansion.

Both types support continuation; however, if price does not expand away from significant swings, it may indicate potential reversals at key levels due to lack of momentum.

Summary and Key Takeaways

A universal fractal framework is essential for identifying relevant levels for reversals. Traders should look for either gaps or consolidations in relation to previous candles when framing their sequences.

Understanding these dynamics allows traders to effectively navigate between internal and external ranges while targeting higher time frame objectives through structured entry points.

Continuation Sequences and Kraken Correlation

Understanding Continuation Sequences

The concept of continuation sequences is introduced, emphasizing their role in forming the low of the next day's candle across various time frames, including 4-hour and 1-hour charts.

The speaker discusses utilizing Kraken correlation logic to identify high-probability continuation sequences in the market, building on previously taught concepts.

Types of Sequences

Focus is placed on type one IRL to ERL sequences as they indicate market displacement and fair value gaps, which are crucial for identifying continuation patterns.

Three types of Kraken correlation sequences are outlined:

At a key level (gap)

True reversal correlated assets (e.g., S&P, NASDAQ)

Key Levels and Gaps

A true reversal candle creates a gap that subsequent candles will open into. This gap formation is critical for establishing swing points through Kraken correlation.

Divergence can occur at key levels or within gaps; this divergence confirms swings either through PSP or SMT methods.

Two-stage Continuation Signatures

Type three variants involve Kraken correlations at key levels where both SMT fills and PSP closures confirm continuation signatures.

The discussion includes two-stage SMT formations that may arise from price expansion away from reversals.

Validating Swing Formations

To validate swing formations in candles three or four, traders can use either one-stage or two-stage Kraken correlations within gaps to determine lows or highs.

It’s emphasized that having a two-stage crack inside a key level isn't necessary since higher time frame swings already establish market directionality.

Practical Application of Concepts

A structured approach to framing continuations based on universal models is presented. Traders can focus on candle three towards liquidity draws if conditions align correctly.

Higher time frame reversals lead into lower time frame gaps where specific signature formations like SMT fills are expected during retracements.

This markdown file encapsulates the essential insights from the transcript while providing clear timestamps for reference.

Asset Synchronization and Continuation Strategies

Understanding Asset Synchronization

The discussion begins with complex topics on asset synchronization for continuations, focusing on strength switching and identifying the highest probability sequence where one asset trades into a higher low while another has not yet done so.

True Reversal and Divergence

A true reversal is characterized by a leading asset expanding into a key level, while middle and lagging assets form divergence within a triad. This sets the stage for anticipating price movements as they approach key levels.

Anticipating Price Movements

When trading away from a true reversal, if the leading asset fails to reverse at a key level, it can consolidate or retrace into a gap. All assets are expected to break that high under these conditions.

Lagging Asset Distributions

The concept of lagging asset distributions is introduced, emphasizing how to transition from shallow SMT (Smart Money Technique) towards breaking highs through strength switch continuation signatures.

Ideal Sequence Explained

The ideal sequence involves transitioning from a lagging asset with shallow SMT to an SMT break. It requires observing failure to reverse in the leading asset while forming continuation signatures like consolidation or retracement.

Importance of Gaps in Trading Strategy

Gaps are crucial as they indicate institutional intent to drive prices toward key levels across all assets. The ideal sequence consists of first establishing a strength switch PSP (Price Structure Pattern), followed by confirming continuation via an SMT fill.

Two-stage Continuation Process

The two-stage process includes initiating with a strength switch PSP and then confirming continuation through an SMT fill. This method allows traders to validate swing formations for effective trading strategies.

Utilizing Premium and Discount Ranges

To filter gaps effectively in continuation sequences, understanding premium and discount ranges is essential. This involves drawing standard premium-discount lines based on candle formations during price expansion.

Understanding Market Dynamics: Premium and Discount Strategies

The Importance of Entry Points in Candle Analysis

When forming continuation sequences, it's crucial to avoid placing stop losses in premium markets. Instead, entering at a discount before expansion is recommended for better swing formation.

This strategy applies to higher time frame dealing ranges as well. Trading from a discount position increases the likelihood of successful entries and effective stop loss placements.

Being aware of whether you are in a premium or discount state within the higher time frame range is essential. A deep premium requires more stringent confirmation for swings.

Analyzing Gaps and Equilibrium Levels

Valid gaps are expected when below the equilibrium (EQ) of the higher time frame dealing range, indicating that intermediate term lows will hold as price rises.

Caution is advised when trading near deep premiums or discounts; not all swings created will hold, necessitating careful analysis of market conditions.

Conditions for Trading Gaps

In a higher time frame dealing range at a discount, gaps can be taken confidently. However, longing gaps near candle highs in premium states should be avoided due to potential unreliability.

Price retracement into discounts is necessary for valid swing formations; blending filters from both candle and range perspectives enhances decision-making accuracy.

Key Takeaways on Market Positioning

If price is below 50%, it indicates a discounted market where valid continuation sequences can form without needing discounted gaps.

In premium markets, ensuring that swings form within discounted gaps becomes critical to avoid unprotected stops or irrelevant swings.

Advanced Concepts: Premium and Discount Sequences

Advanced Premium and Discount (APD) sequences help qualify if Smart Money Techniques (SMTs) will hold during continuations by analyzing leading versus lagging assets' behaviors.

Observing how leading assets interact with fair value gaps during expansions aids in determining the reliability of SMT formations across different asset classes.

Trustworthiness of SMT formations diminishes if they occur far lower in the range without supporting fair value gaps; this highlights the importance of context in trading decisions.

This structured approach provides clarity on key concepts discussed regarding market dynamics related to premium and discount strategies while facilitating easy navigation through timestamps for further exploration.

Understanding True Reversals and Continuations in Trading

Introduction to True Reversals

The speaker introduces the topic of true reversals, emphasizing the importance of digesting content efficiently.

Key learning objectives include identifying true reversals, trading continuations post-reversal, and incorporating strength switch PSP plus SMT fill dynamics.

Analyzing the Daily Chart

A daily chart is presented where a true reversal occurs at a specific high; this is confirmed using a Precision Swing Point (PSP).

The concept of an advanced premium and discount sequence is introduced to validate that the high will hold in the market.

Confirming True Reversals

Divergence between NASDAQ and S&P within a fair value gap supports the confirmation of the true reversal.

Expansion away from the identified swing point is necessary to qualify that it will hold; this involves analyzing lower time frames.

Trading Strategies Post-Reversal

Observations on Thursday's opening reveal that gaps confirm reversals; gaps are crucial indicators for confirming market movements.

The speaker discusses how to trade based on continuation sequences after confirming reversals through gap formations.

Evaluating Lower Time Frames

The analysis shifts to lower time frames for potential trading opportunities, focusing on whether there’s any cracking correlation present.

If no clear reversal signals appear in lower time frames, it may be prudent to sit out until more favorable conditions arise.

Finalizing Trading Decisions

Emphasis on waiting for gaps to form before making trades; patience is key when assessing market conditions.

The speaker highlights looking for SMT or Kraken correlations as essential components in determining entry points into trades.

Understanding Market Gaps and Continuation Patterns

Analyzing Divergence and Gaps

The speaker discusses the presence of divergence in market analysis, indicating a belief that there is a divergence present.

Upon further inspection, it is clarified that no divergence exists within the identified gap; the speaker notes this as a down close candle and decides against trading this specific gap.

The absence of cracking correlations leads to a cautious approach; the speaker emphasizes waiting for valid signals before considering trades.

Continuation Signatures and Trading Logic

The focus shifts to identifying continuation signatures near market openings, particularly during a 6-hour candle period.

A favorable signature is identified at 9:30 AM, prompting the speaker to mark liquidity levels for potential trades away from gaps formed in previous candles.

Entry Points and Trade Management

At market open, an SMT fill occurs which presents an opportunity for trading lower; V-shapes are highlighted as critical indicators for entry points.

A valid entry point is confirmed with potential returns discussed; traders can choose between different time frames (3-minute or 5-minute closures) based on their strategy.

Expansion and Price Delivery

The discussion centers around price expansion from gaps, emphasizing how these movements should ideally lead to continued price delivery towards established targets.

A clear example of trading continuation frameworks is provided, showcasing how gaps can be utilized effectively in trading strategies.

Identifying Key Levels and Ideal Sequences

Weekly Open Analysis

The analysis transitions to examining key market levels such as weekly opens and fair value gaps observed on subsequent days.

Precision Swing Points

A precision swing point forms after significant market movement; the importance of recognizing these points in relation to SMT breaks is emphasized.

Validating Market Trends

New invalidations are introduced based on implied dealing ranges; understanding where gaps form relative to equilibrium (EQ) becomes crucial for predicting future movements.

Trusting Market Signals

Discussion revolves around why certain SMT signals may not hold if divergences appear too deep within ranges. This insight helps traders assess risk more accurately.

Two-stage Sequence Trading Strategy

The ideal sequence for executing trades based on two-stage patterns is reiterated, providing practical examples of how these sequences unfold in real-time trading scenarios.

Understanding Trading Logic and Gaps

Introduction to Protraction Profiling

The speaker introduces the concept of protraction profiling, emphasizing its significance in trading strategies, particularly during the London session. A future video is promised for a deeper exploration of this topic.

Daily Range Reversal

A true reversal within the daily range is identified at 2 a.m., highlighting the importance of recognizing candle wicks as indicators of market direction amidst gaps.

Market Expansion and Invalidation

The discussion covers market expansion despite choppy conditions, noting that clear invalidation points are crucial for traders to identify potential gaps in S&P and NASDAQ markets.

High Probability Sequences

Emphasis is placed on identifying high-probability sequences in trading, specifically through two-stage PSP (Price Structure Patterns), which help filter trades based on gap continuations.

Liquidity Draw and Entry Strategies

The speaker discusses strategies for entering trades towards liquidity draws, stressing the importance of waiting for specific signals like gaps before making moves in the market.

Trading Continuations vs. Reversals

Importance of Continuation Trades

The speaker shares insights from personal experience, stating that while reversals can be profitable, continuation trades offer higher probability due to confirmed displacement via gaps.

Market Maker Models Explained

An explanation of market maker models is provided, focusing on swing points and how they relate to internal ranges of liquidity. This model helps traders position themselves effectively within market movements.

Identifying New Phases in Price

Anticipating New Price Phases

The discussion shifts to recognizing new phases in price action. The speaker emphasizes understanding invalidations when transitioning into these new phases as critical for successful trading strategies.

Market Analysis and Trading Strategies

Understanding Market Swings

The relevance of market swings is highlighted, emphasizing the importance of recognizing expansions away from consolidations. This understanding aids in predicting price movements.

Analyzing Price Levels

A focus on the 4-hour chart reveals that price trades into a key level, raising questions about potential continuation lower towards previous lows.

Identifying True Reversals

The daily candle analysis shows a sequence of continuation, indicating an expansion away from the open. This sets the stage for identifying true reversals during trading sessions.

Recognizing Patterns in Price Action

The concept of SMT (Smart Money Technique) is introduced as a critical element in identifying true reversals at highs, particularly when analyzing 4-hour candles.

Continuation Trading Strategy

A discussion on how to trade continuations follows, focusing on identifying lagging assets and waiting for high-probability continuation signatures like SMT fills.

Importance of Key Levels and Gaps

Emphasizes the significance of gaps and key levels in trading strategies. Recognizing these can lead to better decision-making regarding entry points.

Anticipating New Phases of Price

After price expands into a low, traders should anticipate new phases rather than shorting immediately. Understanding premium vs. discount levels is crucial here.

Evaluating Trade Failures

Analyzes why certain trades fail by examining gaps within premium areas and emphasizes caution when trading lower probability sequences like SMT fills.

Validating Trading Ranges and Key Levels

Highlights the necessity of considering ranges and key levels in analysis to avoid misjudgments about market direction after significant price movements.

Final Thoughts on Market Dynamics

Concludes with insights on forming new phases of price following gaps, reinforcing the need for continuous learning about quarterly theory and its implications for trading strategies.

Understanding Advanced Premium and Discount Sequences

Introduction to Price Gaps

The speaker discusses the significance of price gaps in trading, emphasizing that one should avoid shorting after a key level.

An example is introduced regarding an advanced premium discount sequence, highlighting the importance of observing specific candle formations at 6 a.m.

Foreseen Distribution and Manipulation

The concept of foreseen manipulation is explained, with a focus on identifying two-stage Price Structure Patterns (PSP).

A gap is identified as a critical indicator for determining asset manipulation and directionality in trading.

Asset Synchronization Insights

The discussion shifts to how the S&P 500 opens into a gap, indicating potential market behavior.

Observations are made about NASDAQ's performance relative to S&P 500, illustrating how different assets can signal market trends.

Trading Strategies Based on Market Behavior

After recognizing distribution lower in the market, the speaker emphasizes trading lagging assets towards liquidity draws.

The ideal sequence for asset synchronization is highlighted using various time frames to analyze market movements effectively.

Final Thoughts on Market Dynamics

A gap is marked as an imbalance; this indicates where price may move away from its current position.

The speaker concludes by reiterating that understanding logic behind trades is more crucial than precise entry points.