Transcript for:
Butterfly Effect L28: Final Hold Final Low 1

last time we spoke about ladders and and the way that ladders are affecting the chart so what we're going to do here first um in order to learn trends at the deeper levels is we are simply going to work from the outside of the chart and the reason we're doing this is because we have two different types of trends so the first thing we have to dictate now is the distinction between interior and exterior trends okay so we have exterior trends that control the confines of the entirety of the chart right so you'd very much have something like this to this which are closest to here so this is like the exterior confine you guys know these as legacy trends so this is your legacy trends that are on the chart and you work inwards from there and you would have you know something along the lines of this which would be a we'd have something like this that would be there we go good it's not third point we'd have something like this that would be our legacy global and then and then local to this piece of the move so even this on a smaller time frame would be right here that's the hard closed candle it goes to i know this because i've walked through this chart and then and then you'd simply be here uh local global legacy so this is something we all know very um very straightforward parts of the move like we know this already we've learned this to death we do it all the time but this is important to understand that this has a very defining faction that it has which is called an exterior trend or creating a moment of polarity so as we as we go deeper into understanding how moves get polarized exterior pieces of our chart create polarity so we'll come we'll come back and talk about that but it's important to know from the start of this lesson that there is moments of polarity caused by exterior events okay so so this is an exterior these are all exterior events okay so we're simply going to go delete some of the stuff we have in here so so we are going to delete this we are going to delete this we don't really need these pieces for this lesson rather rather than to just do a recap of of legacy global local and how these trends fan out interior wise so now we have the trends that we are going to work with even more locally here so we'd have something simply quite like this right here we just broke over that there and i would even be from here to start but that's fine we're just kind of shortcutting it so that legacy global and then you would have even in this minute had a local rate here which would have had its own local trend rate here right and so forth and so forth so this is just a fanning out of trends right just just the simple founding of trends maybe not to confuse this lesson here because we will talk about the the ways in which we work with trends in the future we would have had this to start and then it would have been adapted to here and so forth and so forth so for now we're just going to leave a pin to this candle although this is something completely different we will work with that in the next lesson on trends what we do with trends in different points and where we are allowed to adjust the uh the differential between the base and the reach point and things like that because they do represent a different set of knowledge so again these are exterior events when we work with trends before we talk about trends we we are going to look at this first okay so what we're going to do is we're going to remove this completely i suppose we could just put this here for now since today we had this kind of new piece of the move high come off of this part of the move here which was i believe the four hour right here there was a greedier point in this trade right here that it was actually the the proper part of the uh the move that was actually the level but you could find you could you could have uh taken the back side of this and still you know backside frontside combinations you'd have a backside you'd have a greedy front side here and then even a prettier range in here which is fine we can simply just mark the backside for now so we we have this backside front side and and this is you know we're going to mark this trend here and this is again just just simply an exterior event there's always a set of questions we have to ask ourselves when we are looking at the trade the trends exterior and interior so this is kind of a defining parameter that we are going to use on all interior and exterior trends so now we have two classes of trans okay we have exterior trends like this and we're going to color this maybe a purple just to give it some visual difference we're going to go interior trends like this and we'll color this one maybe uh blue that's fine oopsies i didn't need to do that so what we're gonna do copy paste this just set this back to exterior trends and market purple again so we have two defining classes of trends now so we have exterior trends and we have interior trends these are two different defining classes so this is going to be important to know as we uh go forth in this lesson we are also going to say on each of these both x interior and exterior and right now we only have exterior on our on our screen in both of these we have a set of questions we ask ourselves with trends okay so so the questions become what is it trying to create this is the one of the questions we ask ourselves right when we have trend interior and exterior what is it trying to create how much viscosity does this have viscosity did i spell the right yes oh nice first try how much viscosity does it have and viscosity the meaning of this how much viscosity does it have how much fuel is left in the tank how much juice is left in the cup well however you want to say it i just like to say how much viscosity is left how strong is it would be another how much strength does it have left but you know i just use this term that's fine so what's it trying to create right how much viscosity does it have viscosity is is dictated by come on double click viscosity and this is dictated is is equaled by how many trends has it broken how many trends has it broken is equal to how many trends has it broken so so right now we're just going to put like say zero to five so how much viscosity does it have would be equal to high in this moment so so just hang in there how many trends has it broken so we're going to do this we're going to take that here and we're going to put a little bit of visual separation here so how many trends has it broken equals zero to five is is equal to the how much viscosity does it have left so as something breaks trends com more and more trends get broken the less viscosity it has or the less strong it is and continue to use this so this will be a little clearer and there's something else there's two more things that we need to create here has the final low being hit that's another question we have to ask ourselves is the final low being hits has the final hold being created so these are the questions we ask ourselves so this is the criteria of all exterior and interior trends what is it trying to create is the first thing we ask ourselves has the final low been hit has the final hold been created and how much viscosity does it have versus how many trends it's broken so the final low can't be hit until that event happens and the final hold can't be created until the final low has been created so the final low becomes has the final open hit that becomes the first piece of the architecture of the move okay so now we're getting into the uh the beginning of talking about chart architecture one of many lessons to come in the future that will divulge into how we understand chart architecture as it's unfolding right so has the final logan hit is an important one and when the final low gets hit then the final hold can be created on all exterior and interior trends again all we've defined all we've done in this lesson is asked a few questions we've put text on our screen to ask a few questions and we've simply defined an exterior trend so we haven't really done anything yet so this is pretty important to know we've kind of defined a criteria so that we can learn this going forward today so so there's nothing nothing here yet that we need to look first we are going to start with exterior trends okay always the first question we're gonna move this stuff off the screen for now we can uh not worry about this always the first question we say is is what is trying to be created so so we know there's an exterior an interior chat so we can just put this off the screen somewhere that's fine we don't even need this other than to just understand that there's a visual clarity there's not a visual clarity but a visual difference here right so what is trying to be created is the first thing we ask ourselves so so if we were to simply rewind this move to here we come down and we hold our trend and hit our whole level and all this magical stuff that we've discussed to death already we would simply say okay look there's a there's a back side here and there is a front side here somewhere in here in this range you know even the greediest point right there on the front side so what we are going to do is we are going to mark these as the weekly time frame so it's going to be kind of important to know here that these are the weekly time frames and maybe i'm going to [Music] bump up the thickness here a little bit so that's clear on the screen because these are pretty thin lines on a dark chart so then we're going to go here like this and bump it up so you kind of have this front side back side hold and then inside of here you're going to have greedier ranges where you have kind of combination levels and and we've talked about ranges so we know that this is the top of the range between the front side back side on the daily so your range is going to live in here somewhere so what we can do here is uh further develop the next part of this move as a red candle right here right okay and then we have the oops not that one and then we're going to do the same thing we'll take that copy and paste it then there's a range inside of here inside of this front side backside combination on the daily and there's a range in between the front side back side on the weekly okay so that's perfectly fine this is stuff that's important to know as we are going through this move okay you are going to have points on this chart where you have right again the back side here front side somewhere down in this range here or possibly here so the back side you know has clearly already been hit it takes the move up and then it creates its own backside inside of here so we can even go and uh maybe rewind this again this is all an important part of understanding trend work and why we're walking through this so you know you have your backside it gets hit there creates kind of the point in the move where you would have the next ladder point which would have a uh and we're going to change this one to yellow now because we're in deeper time frames and we're just going to go thin on this one just so we have some nice nice clarity and so you'd have like a front side front side greediest level right here so as long as this holds it's fine and you'd have the back side here possibly some looks like what could be an original right here you'd have the front side backside combination here representing this piece of the move perfect greediest point gets hit therefore taking this ladder to here to the same range where you have like kind of a point right here it's one time frame and then this right here that will ladder this part of the move right so actually that is right there that's perfect and then you know you'd have over here back side i believe this is the one that gets hit i'm not 100 sure here might even go lower it's the weekly and so this is fine this is we we can just stop it there really the point we're trying to show here the visual the visual point that we are trying to show is like really the visual point we're trying to show is is we are laddering this move right so so laddering is an important part of understanding trends and we just uh learned about laddering so so this becomes an important piece to understand you have a ladder here you have a ladder here that's created here it ladders to here it ladders here so you see the common the commonality that all these have is it is it is all tested levels right it has all a range of tested levels so go back to your weekly charts here and you look at this and you say oops let's get rid of that for a second here you go back this and we can just step it forward on the weekly a little bit here and just let this play out and find really what you're doing here is you're trying to do what's called create the final low so so you can even see in this moment here you would have had the uh the whole level here and so so you can see the perpetual ladder up like you can you can see it it's back side here bounces they move up here creates this hole bounces it there it creates this hole bounces it there creates this hole bounces it here creates this hole bounces it here it's just you know continuously laddering up but really if you were going to look at this trend you'd want to see where the final low is created right and and what that means is you want to see the untested level because here you're simply simply at a point where the move kind of can't fall any lower than this right now can't really fall any lower than that because once you have broken this whole level you're basically breaking the ladder because this is tested this is tested this is tested this is tested this is tested you don't really have any untested ladder points on this move that doesn't mean you can't go back and hold one of these ladder points over time it just starts to show you the degradation of the move so so you really can't be in a point where o you come back here and all of a sudden this ladder doesn't hold and it goes down and and really you've you've already tested all these to break right so this is kind of like common sense so you do have an untested level inside of here so actually if we go back to the weekly we can start there and we can say ah we don't really see anything that's already actually tested this right here the body of that candle is already kind of tested so we can go to the daily and say oh that backside is tested this is even kind of i would you know kind of consider this tested as well so you don't really have a point in there and you know then we can go to the toil bar and say oh okay we actually have something there's an untested level right here so we actually have an untested level that can hold this move up right so we go to the four hour and we say oh look at that right there we have an untested unscathed level it's completely unhinged even even this one here is it's kind of tested right like you see the base there bounces off to start the bigger move up right so it did kind of create its point but this is kind of like a completely unscathed unhinged level so you know if you start to break this ladder here well we're going to take out all the untested levels so if we take that out we take that out we take this out we take this out here come on mechanical uh breakdown of my fingers not working properly so then if if we break this level you can kind of see that the next unscathed untested level is right here so we we kind of have this point where holy crap our ladder is uh you know if this breaks wow this is going to look to uh probably test this level back to see if it can hold the entirety of the move and it could even come down and test something inside of this candle here but i suppose this is the first big one right like you could have some other levels and ranges in here that are tested or untested i'm not sure i haven't really looked but but you know importantly this is relatively untouched front side of the leg to this back side that this backside created the entirety of this right so this backside creating the entirety of this does give you a trend like so right like it does give you a trend like this that's created right here right so you break that you move through and that's not important we're not learning about that kind of trend work today we're just starting to uh dictate and define the ways in which we start the criteria so so then when we when we understand that if this level breaks where is it going to go it's going to go right here to this level here what this does is it creates your final low because at this point you don't have any levels oops you don't have any levels left in here that will hold the move up so we're going to actually go and confirm that so what we're going to do is we're going to take this here replayer 2 and we're going to start walking through this thing down here okay you have a hold level here and that's a smaller time frame hold level oh shoot that was tested and you have one here oh shoot that was tested so now your range kind of exists from the bottom of this candle to the point right here in this candle so now if you were to go to the hourly you can say do you have anything even untested here on the on the hourly because like this is the back side hourly that's tested this is the front side that's tested so so these are no good do you have anything lower than this so so we've basically already analyzed this area here from this top of this candle to the base of this so that's that's all you know you can go here and say oh shoot that's tested there so there can't be anything here we have this one here oh shoot that's tested there you have kind of something like this right here is the greediest part of the range because this is like the back side was tested so maybe a 15-minute front side like right here possibly question mark um i don't really see anything else because you can see how everything else is tested so you kind of have like a final backside front side combination range here so we can what we can do here simply take off our replayer tool get us back to where we were and and we can now see that there's there's really only like kind of these these two untested levels this is what will create the final low because it is the final untested level right all of this ladder up here this this is all tested stuff like this is tested there this is tested here and so forth and so forth as we walk through the move so this is the first important thing about understanding trends right where is the final low right and then let's go back to our create criteria here has the final low been hit that's the first thing we need to do with with trend because that gives you a point of polarity that gives you if we were to hit it there you know what that gives you that gives you this as you have this trend right here and it fans out to here and this ends up breaking or maybe i think it's actually here for another on another time frame so this ends up breaking you know what that does that gives you your final low on the move so has the final low been hit because and what we're going to do we're even going to go here we're just going to assume that this one didn't hold or it did hold locally and then it broke down to this 15 minute we're going to we're going to assume that it hit the greediest point that's untested in this level now there may be another greedy point here in the 15 minutes somewhere we didn't we didn't really analyze it overly we didn't go in here and spend a few hours looking for that one precise moment but we would if we were trading but anyways for this example we're going to use this but there could be something in here right we didn't analyze the the previous three candles before that which could definitely um have something so has the final low been hit if it has you have to realize something if that means it's the final o it means there's no hold levels left below it okay so once that happens you create your final low on the move so that's your final low your final low will create your final hold on the move so this is the first thing with trends your final low will create the final hold in order for the final hole to be created so so this is what's gonna happen you're gonna fall down like this hit this level bounce off this to create the final low the final low is going to give you your legacy trend for this move like it's going to give you your defining piece or your polarized trend for this move that will bounce off of this level like so and create some little hold level on its own this will be the final hold and this will be the final low so you can see how that works you hit the final low because there's no more untested hold levels that creates your first defining trend on this move and when this trend breaks you are starting to lose a viscosity in the move which will get you after and that final low will create your your your legacy trend which will create your final hold level because it will hit bounce off and create some type of little hold level inside of here which means that this is the last untested hold right because you have your final untested hold here but then you're gonna have one further untested hold level that's called the final hold so what is the final hole the final hold is a final hold of another polarized point as we go forward so your final low that that gets created on your deepest hole level your greediest told level inside the move creates your final low which creates your trend which creates your final hold so it's kind of like this big overarching set of criteria that happens but i mean it makes sense right if you have if you hit a hold level that's the greediest point in any move even right now this is the greediest point in any move and we hit this right here and so let's just say it did hit that it will create its own little hold level inside of here and that's the final hold level just you know before this whole thing collapses so it just kind of makes sense like the final low of the move creates the the final trend which creates the real final hold right like this is like the final hold that creates this is the greediest hold that's the way we say this is the greediest hole that creates the final low that creates the final hold right here so