Episode 1, Volume 1: Core Setting Material - Candlestick Structure

Introduction

• Focus: Identifying valid highs and lows using candlestick structure.
• Purpose: To identify pullbacks which will aid in understanding market structure in subsequent videos.

Key Concepts

• Candlestick Structure: Differentiates bullish and bearish candles.
• Pullbacks: The first step in identifying market structure.
• Trend Dependency: Candlestick analysis is trend-dependent.

Steps to Identify Highs and Lows

Identifying a High

• Prerequisite: A low must be identified first.
• Process:
  • Wait for a bullish candle (grey in this example) after a low is confirmed.
  • Look for a body and wick closure below by a black candle.
  • Ensure closure is clear without need for excessive zooming.

Identifying a Low

• Process:
  • Look for bearish candles that close above by a subsequent candle.
  • Confirm with a body and wick closure.

Time Frames

• 1 Minute: Closure should be below the highest bullish candle.
• 15 Minute & Higher: Follow the same principles but on the respective time frames.
• Example of Discrepancies: Differences between MNQ and NQ

Examples and Nuances

Valid High and Low Example

• High: Establishes when a bullish candle is closed below.
• Low: Confirms when the bearish candle is closed above.

Non-Structural High/Low

• Non-Structural Low: Occurs when no high is established due to lack of closure below.
• Non-Structural Example: If a body does not close higher, it's not considered.

Concepts of Fractality

• High-Low Sequence: Importance of establishing a sequence.
• Closure Confirmation: Requirement for confirming structural changes.

Additional Examples

• Complex Examples: Illustrated with higher time frames.
• Visual Learning: Encouraged to practice and seek clarification.

Conclusion

• Candlestick Structure: Vital for identifying market trends through external highs and lows.
• Future Lessons: Discussion on market structure to come in the next video, focusing on swings and flips.

Questions and Clarifications

• Encouragement to ask questions about candlestick structure to ensure comprehension.

This concludes the first video on candlestick structure, setting the foundation for understanding market trends and structures.