All language subtitles for 3 Mechanical Swing Structure Internal

all righty so hopefully we're all now extremely comfortable uh with how we

view and how we map internal structure okay so what we're looking at is if i

can get the paintbrush to work there we go

we were looking at those very very tiny movements in price okay and we were

essentially defining the the bullish movement in price action as whether or

not the candle breaks the prior candles high as soon as one candle fails to

break the prior candles high all right we start to mark that out as a pullback

right we can we can mark that out as our high when the market is bullish okay

when the internal structure i should say is bullish right and now we only know

where the new internal low will be once price breaks that high let me zoom

in so it's not super small on your screens

okay so in a bullish market we mark out the internal high as soon as

the next candle fails to break that prior candles high right

now we only know where the next internal high low is once price wicks at least

wicks that high okay we want to see price break that high then we look back

and we look for the next uh

the the most nearest low and that becomes our new internal high low okay

and as soon as we get the next candle failing to break the prior candles high

what do we do we can mark out the new internal range we are within we don't

have to do this on the live market okay i'm just just so we understand what's

going on that becomes our new internal high low this becomes our new internal

um uh high right only wants the candle first to break the prior account as high

but as price is pulling back right even if price say does this at this

point we do not we do not know that that is the internal high low right in a

bullish market in an internal bullish structure until this high is taken

because what can happen is price can come up it can pull back a little bit

and then when it takes the internal high there right to form an internal higher

height then where it becomes our new internal high low it's not here with

internal structure we take the nearest one okay so this becomes our nearest

internal higher low okay we would mark that out all right and then we would

wait for for the next counter that fails to break the next camera's high so then

we get that pullback okay and then that is when we can mark out uh this being

our next internal high so on and so forth okay but obviously

i'm not going to mark these out in the market what i do is when price is coming

into a really nice level that i like right i'm going i'm going over this i'm

being repetitive but i really want it to sink in okay once price comes into a

level that i like i would then uh potentially

wait for right that change of character and i would want to see the bullish

internal structure shift bearish i would look for that most recent internal high

low to be broken okay and now at this point we have our bearish uh change of

character okay so that's essentially our internal structure

now in this lesson we're gonna focus on swing structure so remember we're

looking at those those uh bigger movements in price section so we're

looking for those big swings right where we get a big pullback that's our higher

high right we wait for price to break that that swing high so we call this a

break of structure okay a break of swing structure is only

what we refer to as a boss it has to be swing structure for it to be a boss okay

that's the way we define it only once we get our breaker structure right we look

back at the lowest point and this becomes our swing low so obviously it

can be a little bit more complex than our market where you have a movement up

you could have a bit of a pullback like this all right so on and so forth it can

move around and then finally we get that breaker structure okay so once we get

that breaking structure to form a higher high

the question is how do we know where our higher

low is right if it was if this was just internal

structure not swing structure it would become this point right because this is

the nearest low but with swing structure we always take the lowest point that

took out the high so after the high was formed

where is the lowest point that broke it so after this forms right you can

like look to the right of this orange line um where is the lowest point after

the high forms that then goes on to break it this is it

so that's kind of the easiest way you can define it another way uh someone in

the community recently defined it which i quite liked was it's the lowest point

between two highs okay so between this high and then this high where's the

lowest point it's down here right that's how essentially we take swing structure

so that's the difference between internal we take the nearest so it'll be

this one with swing we take the lowest okay

so when we were looking at internal structure in the previous lesson

the way in which we define that is 100 mechanical

so what you learned in the previous lesson you can literally program that

into an algorithm to define um the way that that works to define

your internal structure and to literally point out to you when that change of

character occurs okay so with swing structure we well as

you'll see throughout this entire course kind of my aim is always as best i can

is to try and make my strategy as near to 100 mechanical um you know

wherever i can okay so with swing structure one of the ways in which

hopefully you can see in which i've tried to do that is when we get a

breakage structure here we always pick the lowest point okay so that's a

mechanical way of finding out where your higher low is in a bullish market

okay because one only once this high here is broken for swing structure we

need to see a candle closure above that high to form a high high then we look

back for the lowest point right after this high was formed where is the lowest

point that broke it so from this point onwards right where is the lowest point

it's here all right and that becomes our new high low okay so that is 100

mechanical we wait for the for the price to close

above the height for a higher high that is 100 mechanical okay in a bullish

market so we know where our higher low is and we know we're now going to form a

higher high up here but how do we make it mechanical

to know where that higher highest formula

because price could go up it could pull back a little bit it could go up it

could pull back a little bit and it can move back a little bit here but is this

the high is this our new swing high is this the new higher high because price

can keep going right with these little pullbacks and we never quite know when

when price action is printing like this when can we mark out with certainty that

the swing high has formed right that the swing one is over the swing high has

formed and we're pulling back well some of you may be saying well we wait for a

change of character yes and no that's not really correct a

change of character all the change of character does is signal

that the internal structure is shifting from bullish to bearish or

bearish to bullish okay so let's say this is our most

recent internal low right that tiny little pool back there if price was to

come down here now and break that so we get a bearish internal structure change

that would signify that potentially a swing pullback is starting that's all it

is all the change of character is remember its internal structure shifting

from bullish to bearish or bearish to bullish right

but it just gives us a potential signal that we might be getting a pullback

or the pullback might be finished and we're going okay that's what it is it's

just a signal that the pullback is either finished or starting but it does

not on its own define that this is now going to be the new swing high so when

we see that various change of character you can't straight away just mark out

this as a swing high okay so you're probably sitting there

thinking well you know what is the answer how can we make this mechanical

so that i can now mark this as my swing high i now know that this is my current

swing low and now i can draw the swing range that we are currently within right

because this is what we want to do in the market we always want to know what

swing range we're within so we can draw these lines and then we know what range

we are working with okay because that's where we're going to start to build

trade ideas around this so right i don't want to confuse you but i

really want to go into detail so you know exactly exactly how to do this okay

so again i'm going to go over this when we break the current swing high right we

get the break of structure to form a higher high straight away the moment the

moment you see a candle right on the timeframe you're looking at close above

this break of structure we have now started to form a higher

high so the moment that that candle closes it closes there you can then look

back right and find the lowest point and that becomes the new swing high low okay

so that is 100 mechanical there's no discretion to this the moment you get a

counter closure above the breaker structure line above this high

you look back for the lowest point right after this high was formed where's the

lowest point that went on to break it it's this point here okay so i'm going

to mark a line here i'm going to make this as clear as i possibly can

all right this becomes whoops make a solid line right and we're going

to put text on it just so they can really really draw this home

current swing low okay uh put at the bottom put it to the right

all right so this is our current swing low so the moment price breaks and

closes above this high we look back for the lowest point and straight away we

can do you know put a nice little uh we use a highlighter tool right this is

something i do in the live market just to make it nice and clear where my swing

points are boom you can mark it straight away that is your swing low no ifs butts

and maybes okay this is your swing low okay now when price continues to move up

this can obviously continue moving up for a little while oops and you can get

these tiny little pullbacks right and sometimes you know it's questionable

because it can be um a decent sized little little bearish move and you're

thinking well is that swing pull back is it not is that minor you know what do i

what do i call it uh eventually we then get that uh bearish change of character

because remember you should know from the previous video that that is 100

mechanical because we're defining it well i don't want to go over it again

but you've seen it in the previous video how we define it right that's 100

mechanical when we get the bearish change of character all that does is

signal potentially we're going to pull back

but at that point that does not necessarily mean that we know with 100

certainty that this is going to be the new uh this this point here is going to

be the new swing high right so trying to get here to the

answer so how do we do it well

this is kind of i want to give you a clear

around so this is going to depend upon each trader

upon what pair you were looking at what

instrument you were trading and what time frame you are on okay

this is the way that i have made it mechanical and basically you have to

test it first and you have to come up with a minimum pip size

okay so try and simplify it for me on eurodollar the main pair that i trade

the pair we're looking at now obviously with the four-hour chart i have tested

it so that i know personally at the moment on the four-hour chart i need to

see this movement this pullback as soon as i see that price pulls back from from

the highest point to the lowest point 40 pips a minimum of 40 pips

right once that happens let's imagine that this this from here from this high

here to this point here let's imagine that that is 40 pips the moment price

pulls back 40 pips now i can mechanically with certainty

circle this as my current swing high okay so hopefully that makes sense so

the way i have the rule with the four hour chart only on euro dollar is that

as soon uh as we have that break of structure here right i can obviously

look back there's nowhere but so maybe it's always the lowest point that led my

not to break the high that's the high low

but i do not know where my actual current swing high is in a bullish

market until price pulls back at least 40 pips the moment i see price has

pulled back 40 pips now i mark on the swing high okay so let me change this

to that right so now what you can do is you can draw the range you're in so

we're within this current uh range okay so

you can see how the way i define a swing high in a bullish market it doesn't

really have anything to do with when we get the change of character okay the

change of character signals that we probably are about to have a pullback

that's going to be more than 40 pips and then i can mark at swing high but the

bearish change of character does not when that happens it does not tell me

that i've had the swing high what tells me that i have to swing high is that

price has pulled back at least 40 pips on euro dollar on the four-hour chart

okay so hopefully that makes sense so the way i came up with that rule is when

i went on price action i basically just marked out what what does a significant

pullback look to me with my naked eye okay so i went and um basically mapped

out structure just kind of using discretion

right and i looked at all of the big swings in the market you get a little

swim like that i kind of ignore it then we get a bit more of a significant

pullback and then we get a movement like that right a bit of a small swing

whatever then we get a bit of a vapor pullback and so on and so forth and then

what i would do is i'll just go okay well for me

uh let me get the highlights tool i would say that as a swing high that to

me looks like a swing low that's all i would say that's one big swing moving up

these are little minor pullbacks i don't care about that's the swing high that

looks like a prominent swing lower right because that's the lowest point that

breaks the high again that looks like a pretty steep pullback this one isn't but

this looks pretty significant to me right so that's my swing high and that's

my swing low and then what i went and did is i then measured them all all

right and i go okay that's 76 pips how big is this one

that's 103 pips how big is this one right that's about 70 pips so then on

average when you look back right if you do about a year well enough data and you

look back and you you'll suddenly see what your mind likes to see a

significant structure and you'll go okay on this time frame on this pair i know

that at a minimum i want to see a 70-pip pullback right if it was based on this

and that's and that's the rule i would come up with okay and that says kind of

the way that i currently do it there might be better ways to do it there

might be more mechanical ways that's fine use whatever you want but for me

this is how i do it okay so i i use my naked eye for a lack of a better phrase

i measured oh well i just drew all out a swing structure i then measured all of

those swings um and that told me what what you know the

minimum pip size that i want to see and now i just use that so like i said in

the bullish market the moment we get the camera closure above the breaker

structure line right i know that now we have continued the bullish swing trend

and we're making a higher high right but i don't know where that higher high

truly is where the swing high is until i see at least a 40-pip pullback on euro

dollar on the four-hour chart okay and i the only the way i got to that point was

just doing a little bit of a test first seeing what makes most sense to me and

then coming up with a minimum pip size rule and now that works for me okay but

obviously in a bullish market the swing low will always be the lowest point

right so hopefully that makes sense now that's for a bullish market so it's it's

you know essentially the opposite in a bearish market whereby

let me draw it out right we have a nice clean movement down we have a nice clean

movement up okay price pulls back potentially lower highs forming we never

know right now at this point here as soon as we get this breaker structure

here all right we can use lines so you guys know exactly what i'm talking about

i want to make this so clear so you really really understand it

uh cool so that's our breakfast structure

right so this was our swing low the moment we get that break of structure

let's join let me do a slightly more complex example so i can really drive it

home so we have a clean movement down let's say we get a bit of a complex

pullback all right price comes down like this

now we get the brake construction the moment we get that right you can set an

alert it goes off it pings it tells you how to break a structure we can see

these swing bearish trend is continuing all right the moment with that low

breaks and we get a candle closure below the low

right where is our swing high it's the highest point that broke this

low after the low formed okay so another

simple way to think about it is after this load formed here where my mouse is

anywhere within that box uh i draw it to where the breaker

shortcut happens anywhere in the box where's the highest point this now

becomes my new swing high so can you see how mechanical that is no matter what

right you could plug that into an algorithm okay that's how mechanical

that is it would always be the highest point as soon as we get the camera

closure so now we know where our lower high is right there's no if butts or

maybes about that right how do we know where our swing low is so we can map out

the range so i can map out right because at the moment i can do this i know this

with a certainty that is my current swing height right and i know the low is

going to form at some point but i can't say right if the price if price was

starting to move up a little bit here i don't know that this is going to be my

low my swing low because that just could be an internal low we could keep doing

this so we could keep trickling right and here we could get a bullish change

of character okay boom we've had a bullish chalk the internal structure has

now switched bullish right that's a good signal that this probably is going to be

the swinglow and we probably are going to pull back right that is what change

of character tells us it's a good sign that potentially we're going to get that

swing pull back but i cannot mark out and tell with

certainty that this is going to be the swing low right until i get that 40 pip

pullback on euro dollar on the four-hour chart

okay because what can happen is it could be a little full signal and price could

keep going then we get another bullish change of character here

and then let's say that this now is 40 pips the moment that this movement moves

40 pips boom now i can mark out what i can mark this out as my swing low right

that is how basically i have personally made it mechanical it's what works for

me um there are other ways and you know you can potentially make this more

mechanical but this is my method okay if you guys want to use it so that now

becomes my swing though you can put a little circle on it you can draw swing

low right we always knew the swing height was up here right as soon as we

had that breaker structure there now this is the current spring range we're

playing with them okay so hopefully you can start to see how we

are well one this lesson is concentrating on

how i mechanically define my swing highs and swing lows right you kind of have to

look at slightly different things whether it's bullish so when it's

bullish we know straight away where the swing low is we that's the lowest point

but we wait for a 40 pullback before i know the swing high and then obviously

the opposite to that when it's bearish the moment we get a break of structure

and the candle closes below i look back for the highest point that is my swing

high no matter what right the highest point after the low forms and then down

here i don't know where the swing low is i can't map this out put a little nice

little pretty circle there and draw my nice line across until i personally see

at least a 40-pip movement okay so that faulty pitfall is going to be different

for every currency pair or whatever instrument you trade because they're all

going to have different volatility amounts so this is why you have to do a

little test first to see what works for you okay

um and then yeah once we get the 40

movement boom i know okay so for the four hour chart i use 40 pips for the

m15 i currently use 15 pips for the daily i'm a little bit more

loose but my general rule is at least 90 pips okay

so obviously we're only looking at one time

frame at the moment so let's keep it simple and what i say to you guys is

just follow what i use okay so when you're first starting out i highly

recommend you just look at euro dollar before you look at anything else um the

four hour it will be your main chart for now until we start to look at multi-time

analysis so the rule you just need to have in your heads is for a four hour

pullback right in a bearish market you need to say 40 pip pullback right before

we can mark out the swing low and in the bullish market we need to say 40 pip

bearish pullback to mark out where the swing hires right and that's how you

build rules um so hopefully that makes sense uh and

then quickly i kind of just want to do kind of one last example uh before we

hop on the chart so again let's say we're in a bearish market right we price

pulls back and now pulls back more than 40 pips okay boom so what i will do is

what i will mark out this as my swing low right

now what am i waiting for i'm waiting for price to break this okay so let's

say uh my current swing high let's just say it's uh let's just use this right

it's all the way up here price has now pulled back more than 40

pips so this bus line is essentially also my swing low but we'll just call it

swing load for now right um put it to the right

right so that's my swing high

prices pull back 40 pips i've now marked out my swing low and the internal

structure is bullish just making internal higher highs and higher lows so

what i then do right to to do what's a signal that potentially the lower high

may be forming it's just a potential signal is we wait for this internal

structure to have a change of character to switch bearish okay boom we get that

change of character so now it's a signal that potentially the lower high is

forming right and now we can look to target the weak low okay so let's say

price comes down it messes around and this is what can happen it can be a

little bit more complex you can get a bullish change of character but price

can still go okay so now boom we have had

a break of structure where the sling swing low has now been taken right so

this becomes um our breaker structure right so now with certainty uh we can

mark out that this becomes where the the highest point that broke the slow after

it forms here okay it's not here it's the highest point for us swing high so

now you can move this line down this becomes our new swing high okay and you

can mark that out straight away okay now where's our swing low going to

be i can't scroll price across because i'm too uh

anyway you guys will know what i mean but i can't zoom out i'm gonna have to

try and draw some nice and tight but essentially as soon as we get a break of

structure all right i don't know where the swing low is until we pull back at

least 40 pips on this time frame but we can look for a little change of

character to potentially signal okay so you don't have to wait to if you want to

trade this pullback right you don't have to wait for a 40 movement first you

can't wait for that change of character of course we're going to play this other

confluence but it's just to understand that the change of character is just a

signal we might be putting back but it's only when we pull back that 40 pips that

now i can go mechanically that is my swing low and now i mark out the range

i'm in the case so i'm in this between the swing low and between the swing high

okay and then we follow the same process right i don't want to bore you to death

anymore with that but i just want to make this super super super super super

clear for all of you guys before before you move on okay so i appreciate this is

like watching paint dry but when you really really get this nailed into your

subconscious i promise you so much that everything will be easier

okay all right with that said let's go look at some price action examples

okay so i'm not gonna do a super long walkthrough just now because there are

videos that you're about to watch that do this in a lot of depth but i do want

to just kind of like i keep saying like these videos

right now that you're watching this one and the previous one are both been added

since those videos have been recorded so these two videos kind of represent the

most simple and clearest way that i currently view the market and my current

approach so really follow this process um and then yeah

you'll you'll see how i apply it in the next videos but these two videos right

now that you're watching should be the clearest kind of kind of way that i

currently view and map structure okay so for our chart we are currently bullish

we have made a swing high and a swing low now just to double check that this

was a swing pullback right this movement here that it wasn't just a minor

pullback right an internal port that i don't care about what i do is i mark out

right you can measure it the high so the way i'm doing this is i'm holding shift

and clicking and then it will bring you you can measure it in pips okay

and that will give me that says it was 51 pips okay so remember i want to see

at least the 40-pip pullback so that tells me okay it's a mechanical way of

defining that yes this was a swing pullback right so let me mark out

i'm just going to do this so you can see exactly what i'm talking about right we

pulled back now when we got this here this breaker four-hour structure

all right as soon as the candles for you right now

the candle has closed above it where is my current swing low well it's

the lowest point that took this high out after it formed so again if this is this

will help you right because sometimes it's easy in this case sometimes a bit

more complex what you can do is you can draw a box from where the high is right

and then draw it across to where price broke structure and then just drag it

down as far as you need to go right and somewhere within that gray box wherever

the lowest point is that is now your swing low okay that's the easiest way i

can help you guys out with that okay so this point here becomes our new swing

low right boom that's our swing though okay

so you can see how there's no if but some heavies about it that is our swing

low no matter what and we have now gone on to make a higher high but i cannot

mark out with confidence where my actual uh swing high is until we get what until

we get a 40 pit pullback so i can mark this out as my as my swing low

all right put it to the bottom put it to the right

okay a little bit bigger you can see it

that's my current swing low we've now made a higher high but all i'm doing now

is waiting for a 40-pip pullback right we haven't even had a change of

character because what all of these candles broke the prior candles heights

all part of the out move right nothing's happened yet let me measure this pull

back let me see just quickly uh see this is what we'll be doing right

we've only pulled back 23 pips that's not significant for me for the four hour

chart okay now we've taken out this height

so that wasn't a 40 pip pullback so that to me is not a swing pullback that is

just an internal pullback okay so what that means is if you're also looking at

change of character where is your most recent internal low

that you would need to see be broken with a wick at least a wick for there to

be a bearish change of character it would be this low here okay because

this is the nearest low right obviously it's a significant though because it

took out the high right and we look back all of these cameras broke the prior

cameras high that's all part of the up move so this is our most recent internal

low okay so hopefully it's now making sense

of what how how we map this so this is my swing low we've gone on to make a

higher high but we have not yet had a 40 pip pullback so there is no significant

swing pull back just yet okay but we have had a minor pullback

we've had an internal pullback right so now if price was to come down right like

this and wick that low that for me would be a

bearish four-hour change of character and what that would signal to me is that

potentially we're gonna have a four-hour pullback and then what i would wait for

is for that four our internal lower high to be broken to the upside so we would

then get a bullish change of character right remember the swing trend is

bullish the whole time that would now signal to me that potentially the for

our higher low is in place and now we can look to get long to target that weak

high okay so this is how i would have it mapped out

right and this is what you can do in a live market whatever current

wherever current price action is always have your swing load marked out right

use a horizontal line like this this can really help you starting out and you

could probably always leave you know if you wanted like a dashed line where your

nearest internal low is right when we're bullish and then you know exactly where

you are you know what range you're playing within you know this is your

swing low you know that this is your your nearest internal low right so right

now the swing trend is bullish and the internal structure is bullish so let's

keep going okay that counter breaks the prior count as high so does that one so

does that one okay now we've had a bit of a pullback right mind a pullback but

there's nothing to do yet okay because this is still our recent internal low

and we have clearly not had a 40 pip pullback right okay boom so now what

happened in that one candle we pulled back right and then we took the high

so now my most recent internal low becomes this one because this is the

nearest low that took that high out that internal high now again just double

check that that wasn't a 40 pip pullback clearly wasn't right that was 18 pips

okay so swing low is still down here and we

still don't know where the swing high is okay and the internal structure has

stayed bullish the entire time so let's keep going okay

inside bar inside bar so it's getting a little bit messy now we have a weight to

that low okay so now we have had a bearish change of character so it's the

first time right this entire time that the internal structure has now shifted

bearish and potentially signaled that we may now be having at least a four hour

pullback at least right or it could turn into a reversal right we never know but

the trend is still bullish right now let's also measure from the high down to

the low have we had 40 pip movement yet okay almost pretty much there right so

if you're gonna be super mechanical whoops i didn't mark it properly there

we go let's see okay that's a 43.7 pip

movement so let's try and be 100 mechanical right that for me now means

we have had a swing pullback because it's more than 40 pips on the four-hour

chart on eurodollar okay so i know it's really pedantic but trust me you will

need this so now i can draw my pretty little circle

on my high to tell me that that is now a swing high right we have also now had a

bearish change of character okay but we're still bullish because this is the

swing low so now that i've put my pretty little circle on because we've had a 40

pit pullback what i can do right just to help you this is really useful if you

want to do this in the live market and and when you're you know practicing this

now becomes your four hour swing high right

boom okay now we can potentially anticipate a pullback and let's see what

happens now you'll probably recognize this price action because we we looked

at this when we looked at the previous video in the internal structure now

one point i kind of want to drive home is um

you could now we've had that breast change character right we can have that

pull back you need to remember that change of character is extremely

extremely aggressive right it's just that first little sign of internal

structure shifting so at the moment right when we get that bearish change

character here and price continues to move down right all those counters break

the prior counters low and they pull back remember that for there to be a

bullish change of character what would we need to see we would need to see the

nearest high go it would be this inside bar remember i always take the nearest

inside bar if there is one okay so the internal structure has switched bearish

it's had a little bit of pullback but it's still bearish but the point i want

to drive home here is that let's say that price did have a bullish change of

character there that can signal now that the high low is

in place and we could be ready to go for the heart again it is a good signal but

i just want you to be aware i really want to make this point clear now is

that it doesn't necessarily mean that we get that you know that we're just going

to go we can def like price can be quite complex and you can have these complex

pullbacks so this is why i only pay attention to change of character as you

go through the course when we come into decent levels of value so imagine

there's a nice supply zone here all i'm waiting for is that bearish shift and

structure to signify this level and i'll be looking for price to come down okay

so we could you know potentially switch bullish here but it still doesn't mean

that we can't come down so this is why you know it just becomes a little bit of

a confluence on its own um but yeah i don't want to confuse you guys too much

at a stage okay so let's see what happens with the internal

structure we stay bearish right we continue so this is the point where i'm

not going to label this i only concentrate i'll only draw on structure

when it shifts but if we stay bearish with the entire structure i'm not going

to draw anything on okay because you want to keep your charts nice and clear

and also i don't care about every single little breaker structure right

so now what happens we've stayed bearish in terms of structure now if the four

hour chart is going to stay bullish what do we expect we expect this strong low

to hold the swing low because it took out the high right so that would be the

expectation all right so we can look to get long here right there's a demand

zone here i won't draw it once you don't need to worry about it right now but

this is where i would be looking for a higher low to form so what can we wait

for we can wait for a bullish change of character right now for some of you it

might be easier if you just always have your nearest change of character line on

just because it helps you to know what you're waiting for so this would be it

okay because this is the nearest at the moment this is the nearest internal high

uh in the bearish entire structure because we had a movement down all those

counters but the prior counters low then they failed to do so right so this is

part of the pullback and then all of these candles right see how they all

broke the prior candles low and then we pull back right so this is

the current internal structure range we're playing with in so if you are

waiting for a bullish change of character to confirm that this level is

going to hold you just want a little bit more confirmation right now you'd be

sitting on your hands and you'd be waiting for this dotted line to break

okay so if price was to do that that

potentially confirmed that the four-hour high low is in place potentially and the

swing trend is going to continue and then we can look to target that high

right it's just a little signal you don't have to wait for that but that's

just basically the way that we use the concept okay

so price is just ranging do we break that high don't believe we do yeah we

trade as high as it but the price remember it needs to break it even if

it's one micro pip pipet whatever you call it it has to break it by one micro

pip so what you can do right if you're not sure is if you put your mouse on the

candle so here and then bring your eyes up to here this this top

bit here right use this to your advantage where it tells you the high

the low the close of the candle so again put your mouse on the candle look up

there what does it say the high it says uh is one point one eight

fifty one three okay fifty one three that's the high if we go to here what is

the higher this candle fifty one two okay so that is a micro pip short of

breaking it right so we never breached the high now if these were exactly the

same right they were both 51 3 again it's still not a break of the high right

it needs to break it by at least one marker put okay so never trades higher

at this point we keep going we keep going

and now we have not broken the 4-hour low so we're still bullish enough for

our chart but the bearish internal structure is still bearish because we

never took out that high but now we're taking out this low this this bearish

internal low where is our nearest internal high

right you can take this one if you want right if you just adjust it across

but i like to be a bit more aggressive and i always remember i always hit the

nearest inside bar me personally i like to be more aggressive with it okay but

you might want to use the kind of more obvious height if you want to but this

is the way i do it okay so now at this point i need to see this high go for the

bearish internal structure to switch bullish to give us that internal change

of character that bullish chalk to confirm potentially that the high low is

going to form here and stay intact okay boom next candle and remember it's

key you have to wait for the candle closure wait for it to close because

what can happen is price can wick down aggressively right and then it can wake

back up and it can close back above and and that means the trend stayed bullish

you have to wait for that candle closure on the swing trend if you do it the same

way as me right you don't have to do it but if you want to do it the same way as

me this is the way i do it okay boom now we have a candle closure so what that

means is this now here it's going to change this to

a breaker structure put it in the center so we know exactly what we're looking at

right and i really recommend you starting out you do this with all your

labels and your words in it because it will just help you to keep track of

where you're at okay so now we've had a bearish break

construction on a four-hour chart for me now the four-hour trend is confirmed

bearish okay so

what the remember what i said the moment we get that counter closure below a

swing low or a high like a swing break of structure the very very minute that

this candle closes straight away i can now mechanically 100

certainty define where my swing hires okay where is my swing high it is the

highest point after the low forms that was broken so

after this low formed where is the highest point that broke it so use the

box rule if it helps draw your box from where the low was right

to where it was broken and then just drag it upwards okay

so from where the low formed to where it was broken and then drag it upwards the

highest point in this gray box becomes your swing high

so in this instance when we had the trend change

excuse me in this instance the swing high stays in

the same place because that was the highest point right that went on to

break the low after it formed but sometimes what can happen right and it

is a little bit more complex sometimes it's gonna be confusing is when this

price actually happened this price could have moved up it could have spiked that

high when we're still bullish and close back below so that means we would never

would have had a break of structure right if we didn't close above the high

we just spiked it we come back down and then this happens right so imagine this

is just a big this is just a big uh wick it's just a big all right it was never a

true break of structure and then we come down and close and now we're bearish

where would the swing highway be in that instance right you would have to

adjust it and this would be the new swing high okay i'll put an example

below in the um in the notes below the video just to

explain that okay so hopefully you can see now the moment

we get that kind of closure below the low straight away you can now define

where your swing high is in this case it stays the same simple okay so now we

have a four hour break of structure what do we expect we expect a pullback on

that time frame so we expect the four-hour pullback now it doesn't have

to happen straight away price could literally tank for ages but we just have

to have in the back of the minds that potentially before our pullback is going

to kick in okay so what can we use uh to help us potentially signal that

pullback starting well we wait for a bullish change of character we wait for

that internal structure to switch bullish so let's play price forward see

how all of these cameras break the prior candles low it's all part of the down

move right all the way from here that's all bearish right so that is our most

recent internal high that we would need to see go for there to be a bullish

change of character um but remember for a swing to to know

where the swing low is what do i need to wait for i don't want to wait for a 40

pip pull back on the four-hour chart on your dollar so just make sure right

how big is that let's see okay that's over 40 pips so this is an instance

where we have not had a bullish change of character but we have had a 40-pip

pullback so i can now mark with you know 100 mechanical

certainty because of the rule that i have put in place in my plan that the

moment we get that 40 pip pullback in a bearish market right when we get the 40

pip bullish pullback i can draw my pretty little circle and i now know that

this is my swing low so drag

use one of your lines right and map it out so now what you can do and this is

just really really useful right is go okay now we're playing within the

swing range here all right

so now you know as long as price does not come up and close above this high

right it can do anything it wants right in terms of it can come up here it can

break the internal lower high to make an internal higher high so that would be a

bullish change of character right it can do that up here that's fine but the

swing trend is bearish right it can come all the way up here as long as it

doesn't close above the high right you could spike it like that if it wants or

whatever as long as it doesn't close above the high and then come down the

swing trend has been bearish the entire time okay so let's go through this a

little bit more quickly now and you can just see a bit more of an example and

then we'll leave it there okay so let's see what happens

nothing's happening we're just ranging we're just ranging okay boom now we have

a candle closure okay so what will happen then is i'll just move uh this

swing low line out of the way and we'll use that in a second so i'll delete this

one uh we'll put this as a breaker structure okay so i'm going to try and

do this quickly but hopefully you guys can follow now after me going really

really slowly okay so now we've had a break of structure

as soon as we get the counter closure what we can do is we can mark out with

mechanical certainty where our swing higher is our swing high is the highest

point that broke the slow after the low was formed so that becomes here so now i

can put my pretty little circle uh on my swing high right this becomes the

highest point that broke the low so now we can move this line down right this

becomes the swing high now where do i move the chuck line to where is the

where is the most recent internal lower high that i would need to see

broken for there to be a bullish chuck it's this high here okay because if you

look back that's the last candle right this is the high

you can see the movement there right

price comes down it moves up it comes down it moves up and then all of these

candles break the price comes low so that would be the high that i need to go

for the internal stretches switch british so that becomes my chalk line

right okay change your character so

we're bearish that's my change of character that's my swing high we know

those with a mechanical certainty there's no little butts about it that is

it it's black and white but we don't yet know where the swing low is until what

until we get a 40 pit pullback so we've had a break of shasha what do

we expect after breaking structure we expect to pull back on this time frame

how can we anticipate when that pullback is going to start we can look for a

bullish change of character and that would be the line that i would need to

see go right before um i would know that okay so let's have a look is this 40 pip

yet not quite yet

that might be 40 pips

not quite yet okay boom let me just double check that

okay 38.4 pips i'm going to be as mechanical as a robot that for me is not

swing structure but we have now taken out the internal low to form a level so

now we move this line down because this becomes our nearest internal level

height that i would need to see go right to get that bullish chuck okay but we

have not had a swing low yet because we have not had a 40 bit pullback right

let's keep going all those counters break the prior counters low it's all

part of the down move okay we'll pull back a little bit let's measure this

okay not quite 40 pips okay that's probably about 40 pips now

okay boom right let's call that yeah 40 pips okay so get your pretty little

circle out now you can mark your swing low now you can draw your line there

right now here this we have to be careful but

all of these channels you can double check it if you put your camera on there

and read all this but all of these cameras break the prior counters low so

still we have not had a bullish change of character now that doesn't mean that

the four hour can't have a decent pullback it's just telling you that you

know the change of character is not confirmed until that high goes okay okay

boom now we have a candle closure below here

so i'm just going to move this out the way

this will be the last example just so you guys get it that's the breaker

structure we have a counter closure below so mechanically where is our new

swing high it's the highest point that broke this low after it was formed so if

you're confused use the box draw it from the swing low over to where it was

broken drag the tool up okay where is the highest point you see how it's not

here it's this point here so this point becomes our swing high so now you can

get your pretty little circle all right a highlighter 10 uh

highlighter pen tool what's the word trying to get

out there that's our new swing higher case and now we can bring this and we

now know we're playing within this much smaller range okay because this becomes

our new swing high all right so the price was to break up and close above

that high then the four hour chart becomes bullish okay now

where is our change of character line where is the nearest internal high and

this is an example where it's in the exact same place as the internal swing

high okay so sometimes they will overlap they will be the same thing so right now

if price was to come up and if it was to to break this level okay if it wick

broke it which broke it if it wick breaked it whatever the english phrase

is if if if price came up here and just wicked it that would be enough for me to

see there's a bullish chark but i would need to see a candle closure to say

there's a true break of structure and to say that the swing trend has switched

bullish decay so it's pretty much in the same place i appreciate uh well we'll

just leave that there okay so that's 27 pips it's not a swing pull back yet that

probably is a swing pull back okay so now we can cement okay this is my swing

low put your pretty circle on so on and so forth right and that's essentially

how i do it whenever you know price is doing in the live market you can see how

it doesn't reach the high and then we can continue down um so on and so forth

and you can keep following that process so that's how i do it that's how i speak

to myself every single day um i just really wanted to put this video

out here to go through it almost painfully slowly and tell you

well based on the last video and based on this video

you should as far as i'm personally aware maybe you guys will point out any

holes in my in my in my method but as far as i'm aware that is now a

hundred percent mechanical right the internal structure there's no if much if

bots maybe is about it right you can you can plug that into an algorithm now with

the swing structure it's discretionary when you first start out because what

you'll need to do is you will need to take the four-hour chart right zoom out

do like a year or two is worth the price action and just with a naked eye right

don't worry about um doing all your changes of character and stuff right the

internal structure just focus on the swing structure okay use the circle tool

whatever is quickest um i would recommend drawing the boss line as well

so you don't get confused right take your time and just look at what to you

with your naked eye looks like a significant pullback because some of you

you might think well no actually uh just circulating about you actually no for me

that is a swing pullback i i see that as swing structure but what you need to

then do is measure that i go um okay it's not quite 40 pips so maybe

your rule needs to be 35 or 30. so on and so forth some of you may think um

well that's not that big of a pullback you may want to focus on bigger swings

in price action right you want to see something really prominent so your rule

might be 60 pips or 80 so on and so forth the key here and i i do a big rant

on this later in the lessons that you're going to

gonna listen to and i'm sure you'll enjoy is the key with training is to be

consistent okay bring your method to the madness so that's why when i tested it

out and i've got my 40 pip roll in there now i just try to stick to that it's

just mechanical um and that's it and that's how you know

hopefully you're learning here the ways in which you can you can make your

strategy as mechanical as possible just to remove uh any you know

you know if any um that's what i'm looking for any

any doubts john i mean if you're not sure okay so hopefully that makes sense

you know drop a drop a comment below if if you have any questions or anything um

but yeah start now with just eurodollar you'll see as we do a full full another

full chart walkthrough uh just focusing on the four-hour chart for me i will put

this below the video but for me at the moment i currently like to see at least

40 pips on the 4-hour chart at least 15 pips on the m15 but again don't worry

about the time frame too much just yet we'll get into this uh and a daily chart

generally more than 90 pips but as you'll see i'm a little bit more uh

loose with the daily chart i like to use a little bit of discretion there but

i'm getting ahead of a bit ahead of myself here but the two main time frames

i personally use are the four hour and the m15 for structure right they are my

two main go-to time frames i have them on my charts all the time so for four

hour keep it mechanical i want to see at least 40 pips for m15 i want to see at

least 15 pips follow this process and as far as i'm aware this then becomes 100

mechanical okay but just do that test first with

your swing structure to find out what pip rule makes sense to you now the

final final caveat i will leave with you is that if you're using something like i

am which is a pip rule volatility can change on a currency pair

over time okay so if you potentially backtest the

four-hour chart eight years ago volatility might be higher or might be

lower than it is currently okay so 40 pips back then might not make

as much sense as it does you know in the nearest two years

okay so that's why this isn't necessarily something i would build into

you know an ea or an algorithm but as as you're continuously obviously trading

every day you're going to notice the volatility changes and then you can

adjust your rules but i know right now with all of the recent data that i have

in the last year to two years 40 pips for me works pretty perfectly okay so um

i just stick to that it's not going to change that much okay over time it takes

a long time for you to kind of gradually notice that so don't worry too much but

yeah i'll leave that there before i kind of go on any other tangents and confuse

you any more than you need to be please if there's two videos right that you

need to master it's this one and the one before and a tunnel structure just watch

it again and again and again and again until you have this mechanical method

right it just absolutely printed into your mind until you're having nightmares

about it every single night and talk to yourself out loud like the way i have

right when we get a break of structure wait

for the candle closure to confirm it the candle closure confirms we've had a

break of structure and we've continued the bearish trend after we have a break

of structure where is our new swing high it's the highest point that broke this

low after the low form so you can draw your box mark it out okay we do not know

where the swing low is until we have at least a 40 pip pullback on a four-hour

chart on you're a dollar also whereas you know and then do the

change of character stuff okay um i won't go any more about it right i'll

leave that there hopefully enjoy it now in the next few videos we are going to

do a bit more of a chart walkthrough and it's a bit of a bit of a faster pace and

it's not with bar replay and again if you hear me kind of talk

about minor structure and substructure don't worry too much basically anything

that isn't swing structure from now on just refer to it as internal structure

okay and that is as simple as your trading needs to be to be effective in

my humble opinion

all right this would be a swing pull back okay and then we break the swing

high right so that would be the break of structure to form a higher high so let

me draw this on super quickly

okay so let's say that is our m15 break of structure so now we form a higher

height where was the lowest point that took out that high it's this slow down

here okay so this becomes my swing low and i need to see that logo for there to

be a train change okay which obviously we see we eventually get

but if we zoom in in this price section here

all of this right is all part of the up move and then this is the swing high and

then we start to pull back okay but you see within that run

there's a little pullback so we come up and then we pull back right and then we

come up so when price comes down and

wicks that low here that for me is exactly what i call a change of

character right because it takes out that internal low why is it an internal

low because it's between the swing high and the swing low right so when we come

down and we take that that is a change of character and now you can see how we

can then you know look for that move to the

downside right and then we break structure down here

then what happens you see how we we come down we have a very very small pullback

and then we pull down what does that mean well that means that we have a high

here right because this high here took the low so again just want to make this

very very clear

price comes down we break the swing low to form a lower

low right then we pull back up because you see how

this candle here it fails to take out this candle is low if i zoom right in

so we move down and then we pull back up because this candle fails to break the

counters low right so it's a pullback then we break the low which means that

this is now our most recent you know aggressive high internal high whatever

you want to call it so now when price wicks that now we have a bullish change

of character right and that now signals that we're going to probably get that

pullback okay and that's how we use it um so one other point little tip i can

give you because i know some people get this confused when they're looking at it

kind of for the first time is that the color of the candle

is irrelevant for whether price pulled back or not okay so how you want to

basically look at these small pullbacks is you see on this move here all of

these candles broke the prior candles high so that it's all part of the up

move now this bearish channel here it fails to take out this candles height so

that is part of that small pullback okay and then all of these candles break the

prior cameras high so that's all part of the up move

likewise here all of these candles break the prior

candles low you see how each wick supply counter's low so that's all part of the

dow move this candle is the one that fails to

break this counter's low right so now we get the pullback

and then we take the low so at that point i would need to see this high go

for there to be a change of character but there isn't then we pull back then

we come down so now we have that new uh internal high that it would need to

see go for there to be a bullish change of character then we take it now we have

a bullish change of character and now we come in okay and then boom we're off

then we pull back then we come up and then we change character again right we

have that bearish change of character we come down

all right and then so on so you can see how this changes the characters in a lot

of random areas and that's why we just try to use them at turning points okay

like these areas here after a break of structure we look for a change of

character to tell us when there's going to be a pullback and then boom we can

get in long so on and so forth so hopefully i've made that clear it really

doesn't need to be complicated please refer to all spring breaks of

structured like this these solid lines as bosses whether it's you know a trend

change or not just call them all bosses and then these small internal aggressive

highs and lows right we'll call those when they get taken changes of character

okay the first time right this is higher high high low higher high but then we

take out that small load to form a lower low that's our bearish change of

character but then we stay bearish the entire time okay we pull back up we calm

down we pull back up all of these cameras break the prior counters low

then we pull back all of these candles break the prior counters low then we

pull back then we come down and then eventually we form that internal higher

high right and then we start to pull back but the

swing structure is this right when we get the swing low taken out that is our

swing lower low and this becomes our new swing high and then we pull back okay

right and then this is where right we'd be looking for price coming into our

level what do we wait for we can wait for a better change of character you see

here we have higher high higher low higher high we then take out that load

to have our bearish change of character that then confirms our level and then we

can wait for price to come back in right and then we're going to short and so on

so forth this is what you'll learn in a bit but yeah i'm hoping i've made that

nice and clear and you guys get that

um but yeah just really pay attention to essentially when those candles fail to

break the candles prior high then we never pull back and then here when this

candle fails to break the prior counters low that is the pullback of case then

you know where your most recent high is that you need to see get whipped for

there to be a bullish or bearish uh change of character and then the other

final tip is is we only use it really in in key areas just to give us that that

final little bit of confirmation that we need to see for those turning points so

hopefully that's clear as always if you have any questions feel free to shoot me

a message on discord

you