Profiling the 4H Candles | A Mechanical Framework for Entries

Summary

This video by Eleventrades explores the concept of 4-hour candle profiling, which offers traders a mechanical framework to read price actions using swing points. Unlike other conventional methodologies, this framework, inspired by MXM Trader's model and T TR teaching, focuses on reversal and expansion patterns within daily and weekly candles. Different trading sessions, like the London and New York sessions, have unique candle patterns that traders should prioritize. Entry strategies involve looking at the change in state of delivery, while aligning with daily market dynamics. The video encourages a detailed observation of reversal and expansion candles and their specific profiles across varied market conditions.

Highlights

• Profiling 4-hour candles is key for understanding market movements. 🔍
• London and New York sessions have distinct trading windows for candles. 🏙️
• Candle reversal leads to expansion, important for entry strategies. 🔄
• Entry strategies involve analyzing change in state of delivery. 🚀
• 4-hour candles align with daily price action to predict market direction. 📊

Key Takeaways

• Learn how to profile 4-hour candles for effective trading! 📈
• Identify key reversal patterns with daily range insights. 🔄
• Master entry strategies with a focus on state of delivery changes. 🚀
• Explore session-specific candle strategies for better trading decisions. 🌍
• Understand alignment of swing points for maximum gains. 💡

Overview

In the ever-evolving landscape of trading, understanding candle patterns holds significant importance. Eleventrades introduces us to the concept of 4-hour candle profiling, a unique approach that deviates from the norm by focusing on reversal and expansion patterns. Inspired by the MXM Trader's model, this framework emphasizes the dynamics and significance of swing points within trading sessions, making it an intriguing strategy especially for those focusing on index and Forex markets.

This enlightening session dives deep into the anatomy of daily and weekly candles, providing a granular perspective on how different portions of the day influence market reactions. The video explains the critical junctures where reversals occur, like during the London or New York sessions, which can lead to significant expansion or contraction of the market. Such insights into candle behavior allow traders to refine their approach, basing entries and exits on anticipated market rhythms.

Moreover, the video discusses entry strategies that align with a change in the state of delivery, a concept pivotal in predicting the transition from a reversal to an expansion. By examining how different session patterns influence candle behavior, traders can better prepare to exploit market conditions. Swing point alignment with daily and weekly profiles sheds light on market movement predictions, aiding traders in making informed decisions.

Chapters

• 00:00 - 00:30: Introduction to 4H Candle Profiling This chapter introduces the concept of 4-Hour candle profiling, a mechanical technique for interpreting price actions by analyzing swing points. The methodology is unique and not derived from CRT or traditional models but is inspired by techniques from mxm Trader and T TR teaching.
• 00:30 - 01:00: Profiling Weekly and 4H Candles The chapter discusses the concept of profiling weekly and 4-hour candles in trading. It starts with a weekly candle pattern, highlighting the potential for reversals around the midweek, usually from Monday to Tuesday, and a counter-reversal on Thursday. This same profiling technique is applied to 4-hour candles. When observing a 4-hour candle reversal, it typically marks the second candle of a swing point, anticipating the next candle to expand beyond it. In a daily range, there are six 4-hour candles, and the chapter emphasizes monitoring the following candles, particularly in the context of trading indices.
• 01:00 - 02:00: Focus on Session Timings This chapter focuses on the optimal session timings for trading, particularly highlighting the importance of different trading sessions across London and New York. The recommended timings for the London session are between 1:00 a.m. to 5:00 a.m., while the New York session is suggested between 5:00 a.m. to 9:00 a.m. and continuing until 1:00 p.m. It is advised to execute trades before the New York lunch break at 12:00 p.m. This summary emphasizes the need to align trading activities with these key time frames to enhance trading effectiveness.
• 02:00 - 03:00: 4H Candle Profiling Patterns The chapter discusses 4H candle profiling patterns, primarily focusing on the "Asia Reversal" pattern. It explains that if the Asia candle experiences a reversal, it is likely that the London session will expand on this movement, and the New York session will continue in the same direction. The concept of NCS (presumably Non-Central Session) reversals is also introduced, highlighting that the reversal might occur within specific candles, namely between the 18th and 22nd candle of the day or the 22nd to 2nd candle, which relates to the daily range of the second candle.
• 03:00 - 05:00: London and New York Reversal Patterns In this chapter, the focus is on reversal patterns in the Forex market, specifically around the London and New York sessions. Forex market reversals are expected to occur between the 17 to 21 candle for the first 4-hour candle of the day, and 21 to 1 a.m. for the second 4-hour candle. The London reversal pattern is similar to the classic buy or sell day, with an expectation for London to reverse and New York to continue expanding. For NES, attention should be given to the 2 a.m. to 6 a.m. 4-hour candle.
• 05:00 - 08:00: Entry Ideas and Framework Alignment This chapter discusses entry ideas and frameworks for trading, particularly focusing on specific time sessions. It highlights the importance of the Forex trading window from 1 a.m to 5 a.m, coinciding with the London session. The text explains different candle formations: the 18 candle opposing run, the 22 candle reversal (related to the Asia session), and the third to fifth candle expansions (2m, 6m, and 10m candles). The chapter suggests how a typical daily candle might present itself, emphasizing the open, low, and high points.
• 08:00 - 13:00: Example 1: 4H Candle Reversal This chapter discusses the '4H Candle Reversal' pattern, focusing on the dynamics and expectation of candle movements across different trading sessions - London, Asia, and New York. It starts with the London reversal and describes how a series of 2m, 6m, and 10m candle reversals contribute to creating a swing point. The New York session candles, particularly the 4-hour candles, are aimed at expanding upward unless reversed or manipulated by the previous sessions. In cases where London and Asia sessions fail to reverse or manipulate, the New York session is expected to handle the reversals.
• 13:00 - 18:00: Example 2: London Reversal The chapter "Example 2: London Reversal" focuses on the strategy for identifying potential reversal points in Forex trading during the New York session. It explains the importance of the 6-minute to 10-minute candle as a trigger for reversal into an expansion candle, primarily due to the coverage of significant news events. If the 6-minute candle does not indicate a reversal, traders should focus on the 10-minute candle as it may reverse and lead to an expansion. Additionally, for the New York reversal, attention should be paid to the 5-minute to 9-minute candles, suggesting that these timeframes are critical in anticipating market movements.
• 18:00 - 22:00: Example 3: New York Reversal with 6 AM Candle In this chapter, the concept of a 'New York Reversal' using a 6 AM candle is explored. If the initial reversal fails, the next potential reversal could occur at 9 AM using a four-hour candle. The process involves a schematic pattern where a 6-minute (6m) candle reversal is followed by an 18:22 2-minute (2m) consolidation. This is characterized by the 6m candle taking the low because it aligns with 'new Z'. Thereafter, a 10-minute (10m) candle expands upwards, resulting in a daily candle pattern that maintains the same open, low, high, and close. For a 10-minute reversal, a combination of 18:22 2m and 6m opposing movements is noted.
• 22:00 - 25:00: Example 4: Manipulating Range High or Low In this chapter, the focus is on trading strategies related to manipulating the range high or low of market prices. It elaborates on taking advantage of a 10-minute run by targeting a 6-minute low and then expanding upwards, described as a reversal into an expansion candle. The approach involves manipulating the previous candle and expanding higher. Key entry strategies include using the 'change in state of delivery' for catching reversal candles and specific 'a block methods' if engaging with expansion or third candles.
• 25:00 - 30:00: Example 5: 10 AM Reversal into Expansion Candle The chapter titled 'Example 5: 10 AM Reversal into Expansion Candle' discusses the strategy of trading via a '10 AM Reversal.' The focus is on identifying and aligning critical concepts such as the Pre-Existing Daily Buy and Next Day Model, Price Delivery, and OHLC (Open, High, Low, Close) frameworks. The text explains that the first step is identifying a sequence of candles, either with down closes or up closes, followed by a closure, with the subsequent candle serving as an entry point. A key concept introduced is the classification of the third candle in sequence as an 'expansion candle.' The chapter suggests dropping down to a 4-hour chart to align swing points, indicating a more tactical, time-frame specific approach to align with the broader framework, thereby helping traders predict which candles will behave in certain ways on the following trading days.
• 29:30 - 30:00: Conclusion The chapter titled 'Conclusion' discusses a consolidation pattern observed throughout the day within the financial or trading landscape. It highlights the importance of a closure above a 'down close' candle, and an anticipation of a new candle pattern at a 10 a.m. market open. As the previous pattern ends, the expectation is for the market to move upwards. There is a significant 'stop run' noted, tapping into a change in the state of delivery, and once again closing above previous levels. This indicates a notable shift or conclusion in the market's behavior.

Profiling the 4H Candles | A Mechanical Framework for Entries Transcription

• 00:00 - 00:30 [Music] what's going on everyone welcome back to another video and happy New Year to all of you this video will cover the 4-Hour candle profiling it is a mechanical way to read the price section using the swing points here's a quick disclaimer this framework is not based on a CRT or any other conventional methodology it is inspired by mxm Trader next time model and the T TR teaching now what would be my thought process if we can profile a
• 00:30 - 01:00 single weekly candle like Monday Tuesday reversal like midweek reversal consolidation reversal Thursday counter profile same logic will be applied to the 4-Hour candles when one 4-Hour candle is reversing it is actually creating the second candle of the Swing point and the following candle is expected to expand now inside a daily range there are six forour candles and the key Focus would be on the following candles for the indices you have to
• 01:00 - 01:30 focus on the 2: a.m. to 6: a.m. which is covering the London session the 600 a.m. to 10: a.m. and the 10:00 a.m. to 2 p.m. and better to close the trade trades before the 12:00 p.m. which is the New York lunch so these two are covering the New York session and the 2m. to 6 a.m. is covering the London session and for 4ex you have to focus on the 1:00 a.m. to 5 a.m. which is the London session the 5:00 a.m. to 9:00 a.m. which is a New York session the 9:00 a.m. to 1: p.m. which is also covering the New York
• 01:30 - 02:00 session when there is a news on the 10m now the 4H hour candle profiling patterns the first one is the Asia reversal if Asia candle reverse expect London to expand and New York to continue now for NCS the reversal is likely to occur with them the 18 candle are the 22 candle like the first 4our candle of the day is the 18 to 22 the reversal will likely occur within that candle are 22 to 2m which is the second candle of the daily range
• 02:00 - 02:30 now for Forex the reversal will likely to occur within the 17 or 21 candle the first 4-Hour candle of the day is 17 to 21 and the second 4our candle of the day is 21 to 1 a.m. now the London reversal pattern uh this is same like the classic buy day or the classic sell day expect the London to reverse and new we to continue expanding for NES you have to focus on the 2 a.m. to 6 a.m. 4our candle will
• 02:30 - 03:00 likely occur within that window for Forex you have to focus on the 1 a.m to 5 a.m which is also a London session for our candle the reversal will likely to occur on that candle now these are the schematics we are having the 18 candle opposing run the 22 candle reversal which is Asia session and then the third four fifth candle expansion which is the 2m the 6m and the 10m candle the daily candle will look like like this open low high and
• 03:00 - 03:30 close now for the London reversal we are having 18 and 22 candle consolidation 2m candle reversal which is creating the second candle of the Swing point then the 6m candle and the 10m candle which are the New York session candles are expanding to the upside now the 4-Hour candle profiling patters for the New York session when the London and Asia failed to reverse or manipulate the New York candles are expected to handle the reversals and
• 03:30 - 04:00 continuation for indices you have to focus on the 6m to 10m Candle which is acting a reversal into expansion candle the reversal is likely to occur on this candle because it is covering the mejor news events of the New York session and if the 6m candle is failing to reverse then the 10m candle will reverse into expansion candle for the Forex New York reversal you have to focus on the 5m to 9M candle or if the 5m to 9M candle is
• 04:00 - 04:30 failing to reverse then the reversal will likely to occur on the 9 A.M forour candle so these are the schematics we have a 6m reversal 18 22 2m consolidation 6m taking this candle low because it covers the new Z and then the 10m candle expansion to the upside the daily candle will look like same open low high close now for the 10m reversal we are having 18 22 2m and 6m M opposing
• 04:30 - 05:00 run 10m taking the 6 M low and then expanding to the upside so this will be a reversal into expansion candle because it is so manipulating the previous candle and also expanding to the upside now comes the entry ideas the entry follows the classic change in state of delivery and the a block methods like when you are catching the reversal candle then you have to use the change in state of delivery as an entry if you are trading the expansion candle or the third candle then you have to use the
• 05:00 - 05:30 continuation a box down Clos candles or up close candles and Then followed by closure and the next candle is an entry now comes the framework alignment you have to align the pre-existing daily buy and next day model the pH the price delivery and the open low high close and the Open high low close of the candle and you have to align the swing Point like in a next day model we know that the third candle is going to expand so we will drop down to the 4our chart and we will align the swing points with now
• 05:30 - 06:00 these are the schematics we have a consolidation throughout the day sexm manipulation within the news window followed by a closure above the down close scandle and also here the next ml patn is forming so we would expect the next scandle which a 10 a.m to expand to the upside open low high close candle so going into the 10m open we had down close candle stop run and also tapping into the change in state of delivery followed by a closure above now we know
• 06:00 - 06:30 that the 10 a.m. low is established because we have the order block pattern now I could enter on this candle putting my Stop Plus below the slope aing part two are our whole daily range now I will go over each of the example we covered previously so here with the first example I will go over the aure reversal in terms of the 18 to 22 forour candle reversal are 22 to 2 a.m. so here we have reverse the signature established
• 06:30 - 07:00 Tuesday High Wednesday and Thursday continuation to the downside the Wednesday candle is having a large Wick but if you notice we have a failure swing because this candle is not reaching a willed level or a wied low so I want to see a potential downside idea with that in mind I would drop down to the 4our Chart now on the 4our chart I would want to see a open high low closed daily candle and for that I would want to see a for our swing point and then
• 07:00 - 07:30 expansion to the downside with this objective keeping in mind now with that I have 18 candle reversal which is uh the start of the day inside this fair value GI and if you use the phases a price delivery we have expansion retracement another expansion potential retracement into another expansion now from now on I would skip it to the London session and we would trade that an open high low close candle
• 07:30 - 08:00 to the downside so going to the 15-minute chart so here on the left side you can see that candle uh the second cand reversal third candle expansion I would want to see uh the Lund session also expanding to the downside skipping the price section to the London session now with the 2 A.M candle open we are we are opening up but we haven't created the week up this scandle and if
• 08:00 - 08:30 you notice we are having a consolidation so I would wait for some sort of manipulation or smt Divergence to then continue to the downside now I need a change in the state of delivery the confirmation and then expansion to the downside now with this scandle we have the change in the state up delivery established uh on the 5 minute time frame uh we have a change instead of reestablished before that with this
• 08:30 - 09:00 candle but I would use the M5 time frame now with that I could enter on the next candle my stop above the 50% of the change in state of delivery are the 2m candle wick I would Target just about 2 hour now with that our 2R objective is reached and if you have noticed we are having an open high low close candle another potential trade opportunity with the 6m candle because with the 18 reverse we would expect the 22 the 2m
• 09:00 - 09:30 and the 6m candle to expand to the downside this was my another trade opportunity 6m candle open then creating its high which is a protected swing and then expanding to the downside with a two our targets so this was my another trade opportunity in the second example we will cover the London reversal so starting with the daily chart we have a candid two closure a potential reversal signature and a swing point so we would expect the Monday
• 09:30 - 10:00 scandle to expand to the downside so with that keeping in mind I would drop down to the 4our Chart now on the 4our chart I would want to see an open high low close daily candle and for that I need a 4our swing point to be established and then continuation to the downside uh now with the 2m candle we have taped into this fair value gift and also if we use the f as a price delivery we are having a retracement expansion
• 10:00 - 10:30 into another retracement and another potential expansion and remember that the new phas of price delivery is always starting with a swing point so we are creating the second candle of the Swing point we would expect the 6m candle to be an open high low close candle now first let's confirm the reversal inside the 2m candle so I will drop down to the 15minute Chart here on the 15minute chart we are having the 2m reversal
• 10:30 - 11:00 which is also a London reversal in terms of the daily profiles uh up close scandles closure below it confirming the change in the stup delivery and also the week up this 4-Hour candle now with the 6m candle I want to see an open high local scandle now with the 6 a.m. open we are having a continuation aut block and if we pull up the NQ chart which is pretty weak and creating a strong candle now with that on the sexm
• 11:00 - 11:30 open I would enter with that and put my stop loss Above This High because the manipulation is already occurred and a block high is a protected high so I would trade that to the downside with two R and with the six same open we expanded to the downside reaching that profit Target and we kept expanding to the downside this was a trade idea uh in this case I didn't wait for the high of
• 11:30 - 12:00 the 6m candle because we are we have already created that a block and a block high is always a protected high so we don't need another manipulation if it was a consolidation then I would have waited for the Range High to be manipulated and then the 6m expansion to the downside but order block high and prot swing was already created so I enter on the 6m open and stop loss above this and then expansion to the down side now in the third example I will cover
• 12:00 - 12:30 the New York reversal with the 6 a.m. forour candle so we had a reversal there and then we would want to see a continuation to the downside for that I would want to see an open high low close candle and a 4H hour swing point to continue to the downside now the 18 and the 22 candle drift away from the opening price and we need the high of the day to be establish now with the 6mm candle we have created the high of the day inside
• 12:30 - 13:00 this fair value gift and also if we use the F of price delivery we have expansion into retracement into another expansion and we are closing below up close candle which is also creating an order block so from this point onward I would drop down to the 15minute Chart so here on the 15minute chart we have the high of the day already established I have skipped the price section too much but with the 10m open
• 13:00 - 13:30 we had an open a high potentially creating that or block inside another or Rock which is a propulsion block then a closure below the up Clos candles which is telling us that this high will be a protected High I could enter right here my stop above here and targeting just about two hour and we have expanded to the downside and if you have noticed we are having a volatility driver or a new zeen inside the section M to 10m Candle which was
• 13:30 - 14:00 the 930 930 manipulated the daily high and then the 10m was an open high low close candle open high creating that Wick then a close below the up close candles and then expansion to the downside now in this example starting with the daily chart we are in a consolidation so I want to see a range high or a range low to be manipulated and then we will Trad it to the either side so dropping down to the 4our chart and waiting for the Range High or the
• 14:00 - 14:30 range low to be manipulated so on this day with the news event we have manipulated the Range High with a 6m candle now if 6m is manipulated the Range High so this mean this high is a protected High and the 10mm candle will expand to the downside so with that keeping in mind I would drop down to the M15 chart now on the M15 we have a larer series and that is too much in the discount so I would drop down to the 5 minute
• 14:30 - 15:00 now on the 5 minute we are having a change in state of delivery already established but we would wait for the 10: a.m. open high low close now with the 10m open we are closing below the series of up close candle which is uh which is creating that high probability a block and also the wick up the 10m candle now with that I would enter on the next candle my stop Above This High which is an aut block high and I would Target just about 2
• 15:00 - 15:30 hour and with that we have reached our profit Target up 2 hour and notice that the volatility driver which is 8:30 and 9:30 are also inside the 6 a.m. to 10 a.m. forour candle so if it's reversing then we would expect the 10m candle to be an open high low close candle now in the last example we will trade the 10 a candle as a reversal into expansion candle but for that you have to understand the reversal into expansion candle first the reversal into expansion
• 15:30 - 16:00 candle means that the candle will reverse the price action but also it will be having a small Weck and a large expansion usually the reversal can will look like this uh which will be having a large week and a small body but in this case the reversal into expansion candle is like uh we have manipulated the previous candle low and then with a small Wick and then expansion to to side and shout out to the Garrett for teaching us this candle so for this example example we are on the daily
• 16:00 - 16:30 chart we don't really have a point of Interest so I will Mark out the previous day low is my point of interest for expansion to toide and we are having equal highs on the top of that so with that I would drop down to the 4our chart and I would wait for a swing point to establish and then we would trade it on the 15 chart so marking out the previous day low and these equal highs now with the 10m candle open we have manipulated the previous TR low now we could expect an
• 16:30 - 17:00 upside price section or to these equal highs so I drop down to the 15 chart here on the 15 minute chart as you can see we are establishing that reversal into expansion candle uh we have a change in the stup delivery established asan consolidation then a London protraction and then taking the previous ST Low and we are having equal highs so I would Target that and we have established a
• 17:00 - 17:30 change in state up delivery with that I would enter on the next candle my stop below the 50% of this over Block in this case it's too large I would put my stop loss about 50 points and I would Target just about two r or the Range High and with that we have expanded to theide and this was the example of the reversal and expansion candle we are having a small w and then expansion to
• 17:30 - 18:00 theide hope you guys have learned something from this video thank you guys for watching make sure to subscribe to the channel and like the video and see you in the next one