Welcome to Butterfly Effect 2, lesson number 6. Today we're talking about rejection as a target, or inverse levels as a target. The creation of an inverse level, how can that be a target? The creation of a whole level, how can that be a target? So there's a famous clip of me quite some time ago where in a lesson live I said, and this is all posted up, so people probably are already well aware of this. A clip of me with an inference here, and I said something along the lines of this.
It would be heard in the halls of the great day traders one day. Create the four hour and let it dump, right? Like there was that famous saying that I had, and that was about.
Kind of an Easter egg, a blast from the past in this lesson. We did this in a few of the other butterfly effect lessons and we're going to do it again. An inverse level or the creation of a level becomes a new form of polarity that we are going to work with. Cotton, what did you just say?
Don't worry about it. I'm going to go over that. Okay, so let's just pick like a random spot.
Let's go like. this um no let's just like swing the chart like that sounds good looks good feels good let's pick a random spot okay right here good let's go one candle back until we just have like two white candles that's good so whenever you are in a move you have a different type of polarity i want you to start thinking about you're moving up you're moving up things look good wow this is so great um all of a sudden you have a level that could technically be created so in the sense that this would maybe create a four-hour inverse level. You have to start thinking about that as, hey, that has to be our target, polarity as a target, because this moment, if we were to start moving down right now in the next candle, if we were to get underneath this level, it would therefore be creating a four-hour level in the future, almost like a perfect shield.
You could create a range trend off of it. You could have combination levels inside of it. You could have all these great things, right?
But imagine being able to enter somewhere like right here, because you said, okay, this could be our target, and that would be polarity. So anything above that kind of means that you would keep moving up, and anything below this would mean you kind of keep moving down, just by the kind of common sense that, hey, this is an inverse level, and it could be created as such if you go underneath it. So we won't get into the deeper criteria of this. We're just getting into an introduction lesson with this today, but there is a much deeper set of criteria to be followed up with.
here. And one of the introductory topics I want to talk about this, where, you know, rejection or an inverse level is, we would call this micro polarity, like a polarized moment in the charts could be this right here, because it's a ladder point. So if it goes over that ladder point, it means trends can no longer be created, because even if it was at the same exact point, it would be a zero degree angle. So that wouldn't be a trend, that would just be a level.
Well, that wouldn't even be a level, that would just be like this. Oh, you have a level here? No, that would actually just be an origin from back here. right? So you would have a deeper set of implications there if you were to go straight.
So that latter point would be polarity on a higher timeframe. So that would be your like kind of classic form of polarity. A move is polarized because it can't go any deeper before it kind of breaks its chart and create something different. But micro polarity could be in the moment. So if you were here looking at this candle and you're saying, oh, we've got a four hour level that could create.
you go here and you could say oh well okay fine there is an hourly level right here that could also create so let's start color coding these let's let's do our due diligence here not let's not be lazy guys guys and gals um let's create this as a four hour candle let's create a one hour there use kind of a theory of combination levels no real 15 minute level yeah you could use a five minute here and I don't think we can go any lower than this time frame. So that's just kind of going to be where we leave it. So, you know, if you were to start closing under this level, you'd start hard closing under this.
You'd start threatening the actual loss of this four-hour level. So we can kind of just walk through this and see what happens. And that would be it right there, right?
Like you haven't hard closed the level yet on a five-minute time frame, but it looks like right there you would have hard, oh, no, not quite yet. Is this the one? No. Oh man, this is a tricky one.
Retest the four hour. Let's just go a few candles. There we go. We have the hard close of the level. And then you could go back to the four hour level.
And kind of at this point, you would almost be too late and you'd be saying, okay, well, we're creating this four hour level. So this becomes almost micro polarity in the moment as to where it also becomes a target as well. This yellow line, this four hour level, and now we can kind of delete these.
it becomes a target as well, because this is what could be the future creation of inverse levels. So you could just kind of play here in this and you keep going further and further. And you could see where that becomes a target, just like this would now become a target in this trade. So if you were to go here and the same thing, this would become a target.
So let's actually back up and walk through that candle one at a time. so this would be a target. So you could go to like a 15 minute timeframe and you see how the creation of that four hour level right there, you see how that became a target in the trade.
This is where that four hour level was created. And that can become a rebuy spot above polarity or a breakdown spot below polarity. So this can be the best entry polarized for a long, and it can also be the best entry polarized for a short.
if you wanted to get into it as a long, you would want to get into it at a level before. And if you wanted to get into it as a short, you'd get into it at a level above. So they become in the moment targets to your trade.
So we're just going to really work with a four hour candle here. And we're going to go to the next one as well. Okay, so this would also be again a moment where you could use it as a target. And what we really want to do here is kind of get a blue candle. So there we go.
This would also be a target, again, of polarity in this move. The dictation of whether it can continue to move up or it's going to start moving down. So if you believe this was going to start moving down, you would use the inverse level as an entry to break that move down.
So if you were to enter here, what you'd be saying. is you'd be saying, I am trying to create the four hour level below by entering short right here, right? So there's that entry. and you can see how it's kind of bouncing back and forth between what's the inverse trying to hold down the move and that actual four-hour level being the creation because again you have to realize that once you get underneath this level this becomes a major target in the trade just step through a few candles and you can see how once you lose that level this thing just falls off a cliff right once you actually have lost that level after fighting with it for long enough you you you lose that level and over time, you just completely collapse it altogether. And then the four-hour level just becomes the perfect re-entry spot, just as your standard hold level, right?
And you break above it and go back up above it. Then you see the same thing happening right here on this candle right here. So we can kind of just delete this, right?
Go right here, take this. This would become the ultimate target in the trade because... losing this moment, if we were at time right now at this price, losing this moment would mean that you've created a four-hour hold level on the bottom or a shield for shorts, right?
You've created kind of the perfect, again, shield or targets. You'd have things like range trends in play right now. You'd have something like this to this. So you'd have your range trends in play and the range trend is holding and you've created that four-hour level.
So that's going to be really a perfect target. So when you were to break this trade down. you would see that this four-hour level will become something that it has a big difficulty losing because it actually acts as micro polarity in the moment. and you can see it how it's trying to continuously hold this level and then over time bouncing back off of it right you've got your range trend and eventually that four hour level it becomes the perfect entry point for shorts to get in above that level so if you were looking at kind of a trade to get into here you would start going down the trail of you know we can just use why not start with an hourly sure um we don't really have any hourly hold levels no so we can go for smaller time frame we can even maybe go to like a five minute here start marking hold levels on your five-minute chart right there.
That's your set of hold levels. This is your next one right here, right there. It gets hit perfectly.
Your next hold level is right here. And then that kind of continuously holds it down. You break a little bit above it, but that's fine too. So you can start looking at these things as hold, like the hold levels above the break of this move can become perfect entries.
So if you were going to dump this move, the perfect entry to break this hold level, would be after you've targeted it a bunch of times, it's hit the level, it's come back, and it's still laddering down and rejecting the move. You found that five-minute hold level, and once you gain this, it's just kind of like the perfect snapping your fingers point, a scalp that turns into a swing trade or a position trade, because once you gain that level, you're not leaving it anytime soon because you just created a four-hour shield. You're going to have to sometime in the future now come back up and bounce that level. So it becomes the perfect moment to say like, oh, here's an inverse hold level.
If this creates, it turns our scalp into a swing trade. and what's going to happen is that by using comparative analysis, we can see the five-minute levels are the ones being targeted, so we can enter a five-minute short, and if we continue to hold that level, we can exit our short, so you can just go back and see that exact same thing happening. You have a five-minute level right here. You mark your first one, five-minute level.
If it continues to hold that level, you exit your short. You're holding that level. exit the short right you take your profits you walk away because it might still be breaking up because this will act as polarity in the moment that four hour level so that's one trade perfectly executed go to your next trade which would be this one and you would go here and you would say okay like this hit and bounced up so you know you exit that trade here you exit that first trade here right you take the short right there it's bouncing, moving up, exit the trade. Very, very straightforward, very simple.
Your next trade, we can delete this one off the charts, right? You can delete that one. Your next trade, your five minute would be here. You go, you see this level get hit. It's not really bouncing.
It loses its level. You've now started to enter the realm of polarity where you're not bouncing the target. you change your trade from a short swing to a short position trade or a short, sorry, a short scalp trade to a short swing trade or position trade.
And that becomes micro polarity in the moment. So it's a really interesting way to look at your trades when you can see hold levels and the creation of them as the inner polarity to the move. But not only that, also targets for a move.
You could just hit play here and kind of find the next one on the chart and just hit play here. you could find the one on the bottom side too i'm sure of it um alternatively this one right here would be the perfect target on the adjacent side so actually if we were to turn this blue to our hourly candle color you would have seen that would have been the perfect target there in the moment too as polarity it's already tested the polarity can no longer hold and that actually would have been acting as the exact same moment on the opposite side of the chart so the exact same thing on both sides right let's find another one Uh, sure, use this one, right at the top of the move. Four hour level, right? Why not? Try this one.
let's use a replayer tool go right here this will act this four hour level will act almost as like the perfect spot from its moment of creation forward on once it loses that level it's like pretty polarized in a micro sense right so you could even go to like a five minute candle here and you you can see like once you've lost that level you dump straight down once you're over top of it you're trying to hold it and you're holding straight up once you've lost that level again right that four hour level say you're in 15 minute time frames you've gone over top of it. If you can't hold this level here, this four hour level, there's going to be a point in time. So you are at five o'clock right now. So by nine o'clock, let's go, let's go into the charts here. once that nine o'clock hits, which is right here, so we can find the exact moment, that's the creation of the next candle.
So if we lose this now, now that it's nine o'clock, if we lose this, we have now lost that four hour level. So this becomes your ultimate target in that moment, your ultimate kind of spot where you would start saying, okay, well, maybe we should start thinking about taking a short, a new four hour candle could open. Let's get really greedy.
Let's look for, I don't want to hit the three. I think we're going to, we're going to lose a chart. Let's just go and do the five minute. inverse body, without going too deep into the trade.
I think we're going to lose our chart if we go to the five minute here. Okay, we got entry on our trade. Let's see what happens on the bottom side.
Remember, this becomes a polarized target. Target is hit, bouncing off of it. right? If you kind of can't, if you can't break this level down here, you got to get out of the trade because you're just kind of locking up profits and you'd just be going after your next trade. But if it continues to collapse, this is like the perfect moment to stay in, right?
Because at this point, once you've hit that level, once you've hit that polarity past nine o'clock, you've entered your short here, your trade here, you know, whatever, whatever your trade is here, you've entered it here. And once you've lost this level, that's kind of it, right? Like it's acting as polarity in the moment.
And this thing probably just sinks to the floor, you know, shortly after. can even go to a 15 minute time frame on the four hour time frame this is what it would look like it would look like a major loss of a critical level right i'm sure if you hit play you just kind of lose them lose the move here right it would be it would be the same thing as this would be a target to stop the trade on the other side, right? So if you were to go here, mark this as a four-hour level.
Inverses as targets are critical. You mark this as a level, right? Once you're over top of that and holding it, realize this is polarity in the moment. So once you're over top of it and holding it, guess where you're going?
You're going straight up, right? And you're going to continuously try to hold this level over the course of that four-hour time frame. And you could do the same thing.
Go here and say, okay, this was at 1700. So by 2100 yeah 1721 i should be i should know this i should know how to count uh by 2100 you would say we got to go one more candle back at that point if you're staying over top of this four hour level like you're you're pretty polarized to the top so you know the real trick here is getting entry above that you 2100 so so here once you gain that the move is pretty much done right like you gain that it's it's polarized it's it's holding its move um you know you don't really have too much cause for entry past this you're just kind of missing the trade at that point right and then that's i think that's exactly what happens you would have just missed the trade oh no you got one more spot to enter so that's not bad you miss a trade and you just go straight up so um yeah polarity becomes a huge target in the trade polarity an inverse level and you can find these on all time frames you could just go and pick like a random one right in the middle of your screen the one hour level right here in the moment this would have likely been target for a move to go either long or short, micro polarity in the move, right? So you have this here. This was created in this moment. And that's exactly what it is. It becomes a target for the trade, gets underneath it, continues to hold it.
Trade moves down, right? Like here's an hour level, just a random one on the screen. Right there.
That becomes target for the trade. So this is a polarized moment where if you are sitting here in this trade and you're short from up here, realize that's what you need to gain. If you gain that, you stay in your short. You stay in your trade. if you're holding over top of it, it's invalidating the level.
Let's try to find a spot where that happens so we can kind of go over that. Let's just find like a one hour level. Let's just go to a random spot on the chart.
Yeah, it looks like we did some work down here. This one looks good. Which one?
Which candle? Let's move to a different spot. No, let's move back.
No, let's go somewhere else. Kidding. Let's just pick a candle and try to see what we can find.
Here you go. This is a target, right? Well, we want one that's not going to break it, but one that's going to invalidate it this time instead, where it's going to be a target, but it's going to keep moving in that other direction.
So this one, because we picked it, we can just go and see that it again is going to be that same thing where this becomes a target in the trade. Data point unavailable. Brain.
Brain's failing me. Okay, let's find something more relevant in the moment. Let's get our replay tool off. Let's remove all drawings.
And let's just go hourly chart. Yeah, sure. That's perfect.
Let's just go right here. This move is going to try to continue moving down. But instead, it will use this as a target to also move up. see right there, it's a target not only to hold this move down, but also to keep it moving up. So if this needs to continue to move up, it has to gain this level, which makes it micro polarity in the moment, which means that you could just go to your next hold level, untested hold level.
This is a floating level. You could take your floating level, enter it as a scalp trade. And if you were to gain this level off your floating level, floating level, hold level, right? If you were to gain this lower timeframe floating level.
you could make a hold level. I guess that was a five minute, right? Floating level, lower timeframe.
You could say, we could take this whole level, gain that whole level to make it a floating level in the future to create a range trend. So that'll become a big target in the trade. So if you were in this trade from this point here and you gain this level, you simply stay in the trade. If you can't gain the level, you get out because it's polarized against that at a micro time sense, right?
Or as a micro level. play floating level re-entry perfect higher time frame just like i told you last video with floating levels so i think that's good here i think we've done enough of these kind of advanced topics um really some huge magic being passed down in these levels where or or at this point in butterfly effect 2 where um we're kind of at this point where i'm showing people a lot of the deeper parts of the science questions that have been asked for years and years and years on end and it was like wow you gotta wait for butterfly effect 2 well butterfly effect 2 is here and this is where you're seeing floating levels combined with combination levels combined with range trends combined with inversion as a target or inversion i would call this micro polarity so if i had to put a you know official title on this it would be micro polarity or a polarized candle micro polarity polarity exists on all time frames inverse as a target right advanced polarity right so a lot of components working together here to really pinpoint and isolate exact entries laser sharp moments Yeah, really just taking butterfly effect 2 to the next level. So that's it for this one and I'll see you on the next one.