How to journal the Daily Candle using ICT Concepts
Summary
TLDRIn the video, Oliver discusses the daily candle and the business of power 3, emphasizing the importance of understanding the process and fundamentals behind it. He suggests that by journaling the daily candle's open, high, low, and close, one can build skills and reference experiences. Oliver explains that each unit interacts and influences the others, and by studying their relationships and dependencies, one can navigate the daily candle effectively. He also highlights the role of the environment in shaping the process and the necessity of adapting to it. The video encourages viewers to iterate and learn from each daily candle, ultimately improving their understanding and becoming more proficient over time.
Takeaways
- 📈 Understanding the daily candle and its business involves recognizing the interaction and mutual influence of its components: open, high, low, and close.
- 📊 Journaling the process of the daily candle helps build skills and reference experiences, leading to a better understanding of its fundamentals.
- 🌟 Each new daily candle presents an opportunity to study the input, observe the output, and learn from the feedback, enhancing awareness and skill level.
- 🔄 The process of the daily candle is sequential, with each step (open, high, low, close) depending on the previous one and contributing to the overall structure.
- 📈 The environment plays a crucial role in shaping the daily candle, whether it's bearish, choppy, or range expanding, affecting the process and outcome.
- 🔍 Identifying and understanding the filters within the process are essential for determining the appropriate actions (do x or y) in navigating the daily candle.
- 📝 Journaling should focus on the relationships and dependencies among the components of the daily candle to understand how they contribute to its formation.
- 🚀 Repeating the journaling process over time leads to a deeper understanding and improved ability to navigate the daily candle, as it becomes second nature.
- 🎯 Focusing on the fundamentals rather than complexity allows for more significant results, as a few key components can lead to 80% of the outcomes.
- 🌐 The business of the daily candle is a system where each part has a specific role, and understanding this system helps in implementing strategies effectively.
Q & A
What is the main focus of the video?
-The main focus of the video is to discuss the daily candle and the business behind power 3, explaining how to understand the process and start journaling it correctly to build skills and reference experiences.
What are the four units that make up the daily candle mentioned in the script?
-The four units that make up the daily candle are the open, high, low, and close.
How do the units within the daily candle interact and influence each other?
-The units within the daily candle interact and influence each other in a specific sequence, where each unit depends on the previous one, such as the low depending on the open, and the range expansion depending on the low.
What is the significance of understanding the sequence and structure of the daily candle?
-Understanding the sequence and structure of the daily candle is crucial for navigating the market effectively, as it allows traders to recognize patterns and make informed decisions based on the relationships between the different units of the candle.
How does the environment affect the process of the daily candle?
-The environment plays a significant role in shaping the process of the daily candle. A bearish environment will lead to a bearish process, a choppy environment will result in choppy price action, and an expanding range environment will lead to an expansive and aggressive process.
What is the purpose of journaling in the context of the daily candle?
-Journaling helps traders to dissect and understand the relationships and dependencies between the different parts of the daily candle, which in turn builds their skills and reference experiences, allowing them to better navigate future daily candles.
What does the speaker suggest as the best approach to learning and implementing the fundamentals of the daily candle?
-The speaker suggests that instead of focusing on complexity, traders should focus on understanding the fundamentals, the process behind the daily candle, and the few key components that make up the system. By doing this repeatedly, they can improve their skills and become more adept at navigating the daily candle.
How does the speaker describe the process of improving one's understanding and skills over time?
-The speaker describes this process as iterative, where traders should continually study the output of the daily candle, learn from it, and bring that new awareness back into the original understanding. Over time, this iterative process will lead to significant improvement and a deeper understanding of the market.
What is an example of a specific narrative that can be derived from the daily candle?
-An example of a specific narrative is the 'hunt on previous days low and then reverse with a New York session reversal,' which indicates a price movement that starts by testing a support level from a previous day and then reverses due to market manipulation or other factors during the New York session.
How does the speaker suggest traders avoid getting lost within the daily candle?
-The speaker suggests that traders should understand the sequential order of the daily candle, the relationships between its components, and the environment's influence on the process. By focusing on these elements and journaling them consistently, traders can gain clarity and avoid feeling lost.
What is the role of intermarket analysis in understanding the daily candle?
-Intermarket analysis can provide additional insights and context to the price movements within the daily candle. It can help traders identify key levels, such as support and resistance, and understand how external factors, like news events or actions from central banks, can influence the market.
Outlines
📈 Understanding the Daily Candle and Power 3
This paragraph introduces the concept of the daily candle and the business of power 3. Oliver explains the importance of understanding the process behind the daily candle and how to use journaling as a tool to gain insights. The daily candle is described as a collection of units (open, high, low, close) that interact and influence each other. The goal is to build skills and reference experiences by studying these interactions and the feedback received, leading to a deeper understanding and ability to navigate the daily candle effectively.
🌐 Interconnected Units and Their Influence
In this paragraph, the focus is on the relationships among the units within the daily candle. It is emphasized that each unit (open, high, low, close) has a specific role and is influenced by the others in a sequential order. The paragraph explains how the low cannot be determined without knowing the open, and how the range expansion depends on the low. The importance of understanding this sequence and the structure behind the daily candle is highlighted, as it is crucial for predicting and analyzing market movements.
📊 Dissecting the Daily Candle's Components
This paragraph delves deeper into the components that make up the daily candle and their interactions. It discusses the need to understand the process, structure, and relationships between the units (open, low, range expansion, etc.). The paragraph stresses the importance of journaling these interactions to gain a better understanding of how each unit contributes to the final candle formation. By doing this repeatedly, one can develop a strong foundation in the fundamentals of the daily candle, which is essential for successful analysis and navigation.
📈 Analyzing Price Action and Narrative
In this section, the focus is on analyzing price action and the narrative behind the daily candle. It discusses how different factors such as news, market sentiment, and institutional order flow can influence the price action and shape the narrative of the day. The paragraph explains the importance of understanding these narratives and how they fit into the overall structure of the daily candle. By identifying key levels and understanding the narrative, one can better predict and adapt to market movements.
🔄 Iterative Learning and Improvement
This paragraph emphasizes the iterative process of learning and improving one's understanding of the daily candle. It highlights the importance of studying the output (the closed daily candle) to learn about the processes and structures that led to its formation. The paragraph encourages the viewer to repeat this process over time, which will lead to a deeper understanding and the ability to adapt to different market conditions. By continuously learning and refining one's approach, one can achieve significant growth and become more adept at navigating the complexities of the daily candle.
👋 Conclusion and Future Discussions
In the final paragraph, Oliver concludes the discussion by reiterating the importance of journaling and iterating to understand the daily candle and its components. He suggests that future discussions will delve into identifying filters and other key elements that can further enhance one's ability to navigate the market. The paragraph ends with a promise to continue the exploration in the next video, leaving the viewer with a sense of anticipation for further learning opportunities.
Mindmap
Keywords
💡Daily Candle
💡Business of Power 3
💡Journaling
💡Input and Output
💡Open, High, Low, and Close
💡Range Expansion
💡Offset Distribution
💡Feedback and Awareness
💡Sequence and Structure
💡Fundamentals
💡Adaptation and Environment
Highlights
The importance of understanding the daily candle and the business behind power 3 in trading.
The process of journaling the daily candle to build skills and reference experiences.
The concept of input, process, and output in relation to the daily candle.
The four main units of the daily candle: open, high, low, and close.
How the units of the daily candle interact, influence, and depend on each other.
The sequential process of the daily candle formation and its significance.
The role of environment in shaping the process and outcome of the daily candle.
The importance of understanding the fundamentals to navigate the daily candle successfully.
The concept of range expansion and its dependence on the low of the day.
How the relationships among the units of the daily candle influence the entire data candle.
The process of dissecting the daily candle to understand its components and their interactions.
The significance of understanding the narrative behind the daily candle.
The concept of using a few key fundamentals rather than focusing on complexity for better results.
The role of journaling in improving awareness and refining trading strategies over time.
The iterative process of learning from the output and applying it to future trades.
The idea of simplifying complex trading concepts into manageable fundamentals for effective trading.
Transcripts
Hey, it's Oliver. In today's video,
we're going to talk about the daily candle and the business
of power 3 How you can understand this entire process the business
behind it and then start journaling that
process correctly so that we can understand the
main fundamentals of the daily candle and
the whole process behind power 3 and then when we understand
those components and the fundamentals by journaling
it every day because there's a new opportunity every day where we journal
it we're building the skills we're building our reference experiences so we understand
the daily candle and from where we understand the
daily candle we can start implementing the fundamentals to
navigate the daily candle so if you want to get good at the daily
candle or The business behind a
candle as well. This is how you should approach it understanding the process
after each input Looking at the output and then studying
the feedback so that you have new awareness and with that new awareness
you bring it back to the original understanding so
this is how you level up basically on a daily basis so
let's start with here so there's always going to be an
input into this whole process and the
input here is just a new daily candle you can expect
a new daily candle to print I was born in
1999 so ever since 1999 there has always been a
daily candle that's printing so understand that there's always going to be
a new daily candle, a new daily candle and that whole daily
candle is a collection of units that interact with each
other. interact and mutually influence each other. So if you look at this whole
daily candle right, what is the collection of units?
Well there's the open, there's the high, there's the low and there's the close.
And we're going to see these units every time there's a new daily candle
close. So first of all we need to understand that.
Second of all we need to understand how these units
within the whole that prints every day with these
units. It's how do these units interact with each other and
mutually influence each other and also depend on each other.
So that's the first part. Once we have this we know there's going to
be a new open. Every new day that open goes through a process.
So what is the process?
Well we're linking it back towards the open high low close.
How do they interact?
How do they mutually influence? How do they influence each other for that daily
candle? So you're studying the collection of units now,
the open, the low, the range expansion,
the offset distribution and then the close.
So that's the entire process behind power of three and the
power of three we're studying is the daily candle. So
we need to inter, we need to study how these parts,
these units, of the daily candle,
how did they interact, how did they mutually influence each other and what's the
structure because there's a sequence behind it as well.
You can't go from this messing around,
mixing around, right? There's a specific sequence.
It's behind it as well. You got step one,
step two, step three, step four and you need to understand how
each of these steps, how did they interact and
mutually influence each other or you can't have the low.
Without the open,
because the load depends on the open,
such as accumulating open flow for the daily
range, so that's based on the open.
Or you can at the low, if you don't know what the opening price
is, you can at the low,
you can at the Judas, because the open determines where that Judas is going
to high probability seek towards,
so we can see that this sequential sure.
In order from open to low, um,
the low pretty much depends on the open as well,
similar to how the range expansion depends on the low here as well.
You can't have the daily range.
If it hasn't set the low of the day yet,
as you can see our range expansion, which is typically in New York,
it can't happen without the low which is normally set in London.
So you can see the relationships among these units as well,
how they influence the entire data candle.
Notice how every step of the process I outlined here,
each influence the generation,
the manifestation. Or the daily candle.
So understand, okay, what does the open, what does it do?
And then how does that influence the low? Understand the low,
what does it do? How can it perform?
All the details behind it. The fundamental is.
The low. And then the details.
Get like three or four. And then see how the low
influences range expansion.
You can't have range expansion without the low. Understand
the sequential order and then understanding the processes behind it as well,
step by step, you prevent being lost within the daily camp.
Sometimes you might jump into a new session and then you might not be
sure, uh, if. Going up or going down
as my bias or it all depends on,
um, first of all,
tracking where you are at within the day by starting at the open and
then looking at, okay, where does the day? What does that want to go
to? What's the narrative behind the day?
Does it want to trade higher because the environment says so?
Are we on bullish institutional order flow on the daily or the 4-hour because
the environment is going higher? The weekly candle,
are we going higher as well? So this is going to be large range,
right? This entire process shows us how to not be lost within
the daily candle. Let
me walk through the process one more time.
So you have the input.
This is going to happen every day. Then you have the process behind it
that forms this with the environment that helps influence the process.
If the environment is bearish, the process is going to happen for bearish
way. If the environment is choppy,
the process is going to happen for choppy type price action.
If the environment is range expanding. This entire process is going to be
expansive, fast,
aggressive. So that plays a role as well,
but also the parts of the process.
So the business is AMD, right?
Each process have a relationship with each other,
how is it structurally formed or step by step.
If you know these fundamentals of
the daily range system, it's really hard to get lost because it can
either be doing x or y.
It's that simple. Because these have filters
as well that tell you to do x or you do y.
But if you don't understand the process first,
then you won't be able to do it. What do you identify the filters?
The filters is the gems. It tells you to do x or do you
do y? Okay, so we'll leave that for another discussion.
So when you're journaling the daily range here That's
when you want to do it during the output.
So you wait for the input It runs through its process.
It creates like a let's say bullish Power
three candle then Offset distribution that's in
between process output because that's the result you're getting But
let's say it's the closed. So now you have daily candle closed bullish You
want to study that you want to study the process how did they
how did the structure how did the relationships how did these units interact
with each other to produce that candle that
was bound to happen okay so what are the processes structures
relationships that made that happen then
you'll understand that there's only a few um
components that help with this process so
what we do then is just
journal that journal the parts of the
relationships and dependencies how each of these interacted to give
that specific close that happened.
What were the parts? What were their relationships?
How did they depend on one each other to contribute to
that daily candle being printed? Thank you.
So you're studying that, um,
you're dissecting the results. What happened here,
here, here, and then you're gonna, after a while,
after, well first of all, after the first time you do it,
you have a new awareness where you'll learn something new about the day.
Then if you repeat this process over and over and over,
let's say you do a hundred candles, then you're just gonna have a
lot of references of what are the main fundamentals of this process.
Do I need to keep it complicated? Do I need to learn that?
Do I need to know this? It's just a few that make this operate.
And also if you do it a hundred times and you're aware of the
environment, then now you know how to adapt certain narratives on that.
So, this
is how you understand all the components of the daily candle necessary
for success. You don't have to focus and
fixate. Like, you don't have to know
81 pd rays to navigate
this. You can pretty much just do it with
a fidelity gap, but understanding
the business behind the data candle allows
you to see where do I fit this fidelity gap within the system because
this is just a part this is the whole this is the
the car is the whole f
e g is just a little part within that so it could be like
the wheels or the the mirror or the seat but you
can't run the car on the seat alone it's a collection of units
so all you need to have is pretty much
one pd array to focus on or two it could be order block and
further gap I like this combination and then seeing
where does that fit within the business power of three basically
you're journaling the fundamentals and then a it's just a reference point that sticks
out to you and this is important part you understand in daily candle
where that fits in and then when you do this over and over again
you understand all there's only a few options is X or do Y
based on these processes to get this result because after you
do it over and over and over again the output is just going to
get better with time because you're breaking it down and you're having new awareness
and then you bring in new awareness into the next output so over over
candles you're just going to get better over and over and over again so
that once you do start implementing the fundamentals to navigate the input
it just becomes a part of you it becomes second nature and
you only need like one piece to follow that entire
process of this so you don't have to make it more complicated
than it needs to be focus on the fundamentals such as
daily candle and what are the process behind it what's
what are the parts components behind that that make it the data candle focus
on that because that's going to give you 80% of the results of
the daily candle instead of focusing on the complexity which only gives you like
a minor a minor increase in
understanding of this. Like short 81 PD rays might help you navigate
the daily candle a lot more but you can do it with one PD
ray which is the Feralig app. But you use that to operate this entire
system. That's all you need.
81 PD rays alone is not going to help you navigate this entire
system because you don't know where those PD rays fit in the specific narrative
of the process. So let's
get into a few examples here of journaling.
So this is what you want to be doing every day.
So first of all, today, Who is this candle here,
which is a large range there. We could see it's bullish or we could
say the environment affecting this type of PD,
uh, this price delivery was bullish on the daily chart and
also large range. So within the week,
it could have been news that was was studied later,
which made it large range day trades
aligned with the large ranges. They're the best because if you didn't have
any awareness and you would. Finding for that a gas within here.
Your results would not be as good as finding for that a gaps one
sided on here. So that's narrative.
It tells you where to fit the that's about a gaps.
so the narrative for this day was stump
hunt on previous days low and then reversed
with new york session reversal to offshoot offset
distribute these longs and an area of liquidity which
is the previous days high here okay and then we can also see a
bit of the previous days here so we had Tuesday's high raid pretty
false low it took a little bit but it's still a false low with
space and time here and then we can see after that
false low inducements breaking out higher
so trapping longs we'll dive into that as well
and the fact is behind it so we're setting up all this
liquidity to stop hunt into this key level then
reverse into the day so that's that's the narrative okay we can see there's
a bit of chop a bit of a choppy
week this week with this type of fire section as well so
once you understand the narrative or that you want to understand what are the
parts and the components of everything within that day that may
you want to do is break it down with time and
price. essentially if you want to make it more
complicated in your journaling you can include intermark analysis at key
points like here or here is that the SMT is it not the SMT
but if you just want to learn about price delivery i mean narrative
from intermark analysis can give you like 20 exp levels but if you
just want to start out understanding price delivery just focus on time and
price and then level up to include intermark analysis so
what are the time components within this day we have the
kill zones we have the news and we have the opens that's pretty much
it so let's study the time first we had at New York session
this had central bank manipulation from the Fed
and on unemployment claims so what this tends to do for
a daily candle is it tends to wait on
to New York to have its volatility and that's what we see we see
New York happens and then volatility happens.
range expansion why because it's waiting late in the day to do so
but sometimes price doesn't like to hold and wait
for New York when it's choppy and it especially
in these this week instead of chopping like that it can do inducements
to generate liquidity instead of the consolidation so
that's what we see here so we understand that okay price is going to
wait for New York but here inducing liquidity
for New York okay why because New York is going to have its manipulation
why to form the low of the day open low high
close okay so it's either a New York session
continuation or a New York session reversal it's pretty much the two
options now I'm describing the factors behind that that make the daily
candle what it is so
we have the inducement here one two
three what is this doing it's forcing breakout traders here where
they're going to put their stop laws intraday lows where
is this close proximity to okay Asia lows is Asian lows clean as well
yes so you can see there's just a major liquidity pool being
generated here for this okay
why did London have some moves upside well
we can see that Asia was just contracting sideways so it's building float so
it's seeking the float above it first that was the first narrative
of the day induced liquidity then the second narrative of the day
was manipulation so we can see the accumulation start
of the manipulation but also still accumulating liquidity here then
the manipulation then the range expansion okay
so we can see our time that was just the influence of time now
let's look at the influence of price if we're going to see some sort
of inducement here it's going to be seeking a specific objective
and that's simply previous new york's ferretica
up here so the inducement has a specific narrative
as well its narrative is oh okay induce but i have a termness on
me based on time so what what does
price do it's either seeking liquidity or an imbalance
so we can see the price for that first narrative
of the day was inducing liquidity in terms of price narrative it just is
imbalance and the second portion of the day i
said okay imbalanced on liquidity okay
imbalanced liquidity now we have liquidity here what's
the second narrative of the day range expansion where can it range expansion
to opposing liquidity so we have clean highs here then we open float
and then we seek higher time frame jewels on liquidity so this is the
favela gap we talked about on monday which is here
so now that you have price you have price and then
we did time earlier you want to see okay how did these
two components what are their relationships how
do they depend on each other you can see price depends on
time so often this move
to the imbalance would not have happened without
a kill zone okay or this inducement
wouldn't happen without late-day news okay
this consolidation to build float above and below wouldn't have happened
without dead time here 15 to all the way to Asia
okay this move wouldn't have happened if there was no consolidation because
consolidations start all frameworks okay see how
we're piecing together each relationship within the
whole and we're understanding how
this day printed and that's just how you want to journal things every day
going from now on so if you just want to get really
good at studying or just operating within the daily
candle like how you not be lost you need to understand each of these
components transitioning together how did they depend
on each other and the sequential order of the business
of power three the step by step movements and
the environments and this will tell you how to
prevent getting lost then when you understand the fundamentals
over and over and over again okay you can start
implementing it and then when you implement it just follow the process again
you'll learn about yourself so every time you get the output you
say what are three things I can learn from that output what are three
bad things I can remove and then focus on removing this
focus on reinforcing the good and bringing that new stage of awareness for
the new data candle and then we can see over a progression of time
let's say you're like 10 x exp over
time you'll be 100 exp and then you're just going to be
a complete different person here because you've iterated and
you're becoming a brand new version of yourself over and over and over again.
So not only do you want to journal, yes you want to journal,
but you also want to iterate because this is how you translate.
So instead of just journaling blindly and not really
understanding what I'm exactly trying to navigate,
what am I actually trying to operate within.
And that should be it for today.
I'll catch you in the next one.
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