Hi and welcome to my strategy series. In these videos we look at quick ways to analyze the markets and in this video we'll be looking at ladder points. Ladder points are a pretty cool magical thing on the charts. If you were to go all the way out to the biggest time frame on all of the charts everything is laddering back and forth between all time frames.
For years on end things ladder and they ladder back from the top of this point to the bottom of this point and you could go crazy looking at these ladder points finding them for 50, 60, 70 years on some charts and to say, hey, this thing has been laddering forever. But the cool thing about ladder points is they act as a moment of polarity. You have to think of all charts respecting the confines of trends.
So above everything else, trends and levels are what respect the charts and give them their parameters. So if you were to have a ladder point and to just let's talk about ladder points and what a ladder point actually means. A ladder point is something like imagine climbing a ladder.
Like if you were physically climbing a ladder one step at a time up. up or down. That's exactly what a ladder point on the charts is too. It's where you have one moment here and it takes a small step up over here and then it takes another little ladder step up here and it takes another one up here.
And this can often be an indication of a level that is holding or a move that is about to happen in the other direction. So if you notice right here, you can see that you had the ladder point previous from back here and you have the next one right here. And if we zoom in, you can see it's... ever so slightly going up every single time. This is laddering its move, laddered up there, laddered to here, and it's having a breaking moment up there because it's breaking its opposing ladder, which is here to here to here and so forth as time goes on.
If you were to simply mark out your trends, you would have a better distinction of what's actually happening in these points. So you could go accumulation to accumulation on this side, right? First, you'd be here. You would hard close that.
Well, you never have a hard close. And you notice how that exact moment you break out of that ladder point trend, ladder points will interact with trends in ways that show you that something is either moving is still in the same direction or it's about to break down. So in this case, what you'd want to do is you'd want to mark out your ladder points on this side of the chart and you could find some deep possible great trades that exist in there.
So you'd mark out this ladder point. If you continued, we can continue marking the trail of ladder points. You need to stay above this one now and we can just take the replayer tool off. you can see that this trend broke and it gave you the awesome ladder point that it has to stay above. So if you were to go in here and find your hold levels, well, you know that if this thing hits a hold level, which in the previous video, we went back and we looked at this one here.
I believe it was a five minute hold level is what we settled on. Maybe it was a 15 actually, five minute hold level. I can't quite remember if it was a five or 15, not important for right now, but this ladder point is respected as long as it stays above.
this level. We're going to mark the 15 just so we know we have a property. I have a little bit of inclination that it's the 15 also because the trade missed.
So I'm pretty sure that what we did was the 15. So you are looking at this trade now and you're saying, hey, you're hitting a hold level. You're closing above this hold level. Hmm, this is pretty cool because now you have a new hold level established right here and you're laddering off of this move. So if you continue holding this right here, which is this hold level here, and you continue to hold this level above this ladder point, you've just established the next ladder. point.
And what happens with a ladder point is after enough time has passed, a ladder point will eventually break a trend. You could do your trend work, work this thing down from the top side. So you'd end up being from this point to this point here, like this, which ends up just working its way all the way down to something like this.
As you work through your trends, you're going to be something along the lines of accumulation to accumulation like that. And you can see your trend that needs to break off of your ladder point. So accumulation to accumulation. And we have a hard close here. We don't.
And this is the 15 minute chart. So we know if we hold this 15 minute level, we can use this as a ladder point entry in the trade to go and attack this trend. So the cool and interesting thing about ladder points is they're kind of twofold as they can validate and verify that something is moving in the same direction.
Same with right here. When you had that three minute hold level from the previous video, you had a ladder point that looks like this top of the move ladders from here to here, to here, to here, before it takes a huge fall off of a cliff. And what is this based on? This is based on a hold level.
So this is a great way you can use your hold levels and trends to assess, hey, are we in success or failure? If you were to take a short here, for example, you could take the short on this first candle and say, hmm, are we laddering? Yes or no?
If we're laddering and the answer is yes, this is great. We've taken a short here and we're laddering down. It's about to break the bottom side trend.
So it's about to break whatever little local trend it has. So that local trend may be like. this or maybe even more aggressive like this it would be kind of a range trend like this and it hasn't closed yet so then you maybe go to a different time frame i think you end up with a five minute looks like right here maybe uh actually it's right here that's the five minute candle so we can actually go back here and make sure we mark the right candles. We'll walk through trends again anyways. So you don't have a hard close here.
You can see the little tip of the candle is still over it, but you do have one right here giving you trend accuracy. So you notice how it's following this trend. And if we are following this trend and kind of moving back and forth between these two levels, well, we have this one broken down right here. So we can now move our trend to there.
If you continuously ladder off of this move, There's the first move, even though it's ever so slightly, it is still laddering down. You've entered this trade. This is going to end up breaking your trend if it continues to ladder.
So this can give you great clarity and safety in a move. If you've entered a long or a short and you notice you have a trend that's getting compressed against you and you are laddering down against the move, this laddering can be a very key giveaway to say, hey, this move is breaking and you're on the right side of things. Hasn't broken yet. Hits that ladder point again.
This one hard closes. Oh, it hasn't hard closed yet, but I think it's enough. There's the hard close.
And I'm just going to hit play here and I'll probably fall off the face of the earth. Oh, it goes after one more ladder actually. So maybe there's one last final trend here that it establishes.
This could possibly be a larger timeframe trend, 15 to 15. Oh, come on trading view. Don't freeze on us now. Not while we're recording. 15 to 15 and it gives you your final break point to get to your next trend.
So just more trend play. And the great thing about laddering is it gives you a lot of definition in a trade. So if we were to fast forward this trade right now to the current space of where we're at, we can take the replay tool off, hit the auto button.
We can see that if we continue to hold this level and we establish a moment where it's like, okay, we've hit that level. We went a little deeper than expected, but we hit it again. Aha, we're starting to ladder up and now we just laddered this.
You're likely going to have a breakout in this trend. So ladder points can be great clarifiers. and great votes of confidence of the direction of something can go in.
And you could even say in a chart, if you wanted to go really crazy and take some pretty big risks, you could then go one step further and say, hey, as long as I don't break this, I could even ladder off this part of the move and we're still kind of technically in accumulation. Well, this would actually be true. You technically are still in accumulation, even though you broke your final hold level. As long as you stay above that ladder point, trends can still be created, trends can still be respected, and it can give you great clarity on your trades going forward.
So if you were in this trade right now, what you'd look is you'd look to see this hold level hold, and you'd look to establish some type of ladder points to confirm that, hey, my hold level is still good. And if you're not creating those ladder points and they're laddering in the opposite direction against you, well, I think you know what that means. Probably that the trade is going to fail and break down unless it's still holding a hold level from the past.
See you on the next one.