0. Core Trading Logic Overview

0. Core Trading Logic Overview

The core of this framework is not to treat SMT, FVG, CiSD, or time windows as isolated signals. Instead, they should be used together to answer four questions:

1. What is the current price narrative?

   • Where is the weekly candle likely heading?
   • Where is the daily candle likely heading?
   • Where is the current 4h / 6h candle likely heading?
   • Am I trading a reversal or a continuation?

2. Has price already reached a key Draw on Liquidity?

   • Daily high / low
   • Weekly EQ / Previous Week EQ
   • NWOG / NDOG
   • HTF gap
   • HTF swing high / low
   • Range edge / internal range level

3. Are the correlated assets synchronised?

   • Is there SMT?
   • Is there a Strength Switch?
   • Has the leading asset already reached the draw?
   • Does the lagging asset still need to catch up?
   • Are assets in a decoupling / re-sync phase?

4. Is there sufficient displacement confirmation?

   • CiC / CiSD
   • FVG
   • PSP
   • Driver expansion
   • Whether the 1h / 90m / 4h candle supports extension

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0.1 Underlying Causal Chain

This model can be understood as a causal chain from draw to execution:

1. The market requires a low-resistance draw to expand → Draw on Liquidity

   • For the market to expand, there must first be a low-resistance draw.
   • Draws include highs / lows and FVGs.
   • The ideal draw is low-resistance liquidity.
   • Low-resistance draws are usually failure swings.
   • High-resistance draws are usually protected swings.
   • Do not trade directly into a protected swing unless there is exceptional confirmation.
   • Without a clear draw, do not force an expansion forecast.

2. The market requires a swing formation to reverse → Profile

   • For the market to reverse, a valid swing formation must appear.
   • Swing formation is the foundation of a reversal profile.
   • The preferred profile is AMD with a small daily wick.
   • In Seek-and-Destroy conditions, trade extremes.
   • In range consolidation, SMT will usually validate a failure swing.

3. Swing formations require a key level to form → Key Level

   • High-quality swings usually form from key levels.
   • Daily highs and lows also usually form from key levels.
   • Valid key levels are relevant swings.
   • Exception: a failure swing with SMT can act as a valid reversal reference even if it is not a classic key level.

4. Cracks in Correlation validate a swing formation from a key level → CiC

   • A CiC, such as SMT / SSMT / PSP, validates a swing from a key level.
   • Without a CiC, the swing is lower quality.
   • CiC confirms a bias; it does not create the bias by itself.
   • Valid SMT should be at a key level.

5. Reversal signatures following CiCs confirm that expansion is happening → LTF Reversal Signature

   • After SMT / SS, there must be an LTF reversal signature.
   • Real expansion confirmation comes from displacement / gap / CiSD.
   • A bulky-bodied CiSD is preferred.
   • If the clean CiSD is too far away, a failure-swing CiSD may be used as the execution trigger.

Simplified formula:

Draw → Key Level → Swing Formation → Correlation Crack → Reversal Signature → Expansion

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0.2 Daily Procedure

Daily workflow:

1. Daily

   • Decide where price is likely going today.
   • Decide what price is trading away from.
   • Identify the main DoL and close-proximity draws.

2. Align Daily Logic with 4h / 6h Profiling

   • Use the 4h / 6h candle profile to decide whether the session supports the daily narrative.
   • If daily logic and 4h / 6h profiling do not align, reduce trade priority.

3. Trade on Clean 30m / 1h Price Action

   • Wait for clean 30m / 1h price action.
   • Do not force a downgrade into LTF execution when MTF price action is messy.
   • LTF is only for the entry trigger; it does not replace the HTF narrative.

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0.3 Phases of Price

Community insights

• Seek-and-destroy (a broadening formation) is a type of consolidation, not a reversal: if there's still an untaken draw on the far side of the range, price can manipulate the near side purely to fuel a move back across to the far side. Since consolidation can't reverse, this is tradeable back toward the original side once it plays out. — Garrett — Anomaly Course: Phases of Price, 3:31
• A retracement that reaches EQ of the prior candle's range — especially deep discount within a bullish leg — is a red flag that the leg may not genuinely be expansion. Real expansion legs keep retracements shallow and don't need to touch EQ at all. — Garrett — Anomaly Course: Phases of Price, 2:29
• A market profile only changes at a key time — on the highest timeframes, that's a new quarter. When two consecutive quarters have printed the same market profile (e.g. both accumulation), expect the next quarter to be unusually parabolic and one-sided, with very little retracement, rather than assuming reversion is due. — MMXM Trader — High Time Frame Bias, 5:21 ↗
• This entire framework is not just an intraday/daily tool — the same reversal, retracement, and continuation mechanics play out identically on monthly and weekly charts, with a worked example showing a two-stage PSP inside a monthly gap confirmed by fresh SMT on the weekly and daily as price expands, all nested at once. — Lathyrus Masterclass — Examples — Example 1, 1:19

Every PoP — consolidation, retracement, reversal — both starts and ends with expansion. Each phase has an if-then outcome:

• Consolidation → continuation. Consolidation is a continuation signature; price cannot reverse directly out of it. It does not have to manipulate the consolidation low/high, but a manipulation is what you demand before expecting the expansion to actually follow.
• Retracement → expansion. A genuine retracement resumes the prior expansion once it completes; it is not itself a reversal signal.
• Reversal → expansion. Once price trades into a relevant level and prints a reversal signature there, expect expansion to follow.

Signatures to identify each phase:

• Expansion: displacing through highs and rejecting lows; respecting opposing candles / FVGs; retracements stay shallow and should not reach EQ of the prior candle’s range, especially not deep discount within a bullish leg — a deep retracement into EQ is a red flag that the leg may not really be expansion.
• Consolidation: range-bound between a high and low with failure swings forming on both sides, not to be engaged until one side is met. A second form is seek-and-destroy (a broadening formation): if there is still an untaken draw on the far side of the range, price can manipulate the near side first purely to fuel a move back across to manipulate the far side — this is a type of consolidation, not a reversal, and can be traded back toward the original side once it plays out.
• Retracement: close-proximity highs/lows (failure swings) form at the point of retracement, with lackluster, low-conviction price action; price typically traces back into a gap rather than reversing. A second form: price trades into a consolidation’s low/high but fails to manipulate it — usually because there is a higher-timeframe FVG elsewhere in the range that is the real objective, not the consolidation extreme.
• Reversal: expansion into a relevant key level followed by expansion away from it (a V-shape). Confirm it with a CiSD — the candle closing back through the opposing-colour candle(s)/order block that the initial expansion into the level created — ideally paired with an SMT divergence at that same key level.

On higher timeframes, these same four phases show up as candle-level signatures: an inside bar (fails to take out the previous candle’s high and low) reads as HTF consolidation; a run of close-proximity highs/lows reads as HTF retracement (the failure swings / low-resistance liquidity that should be targeted, not traded away from); a small wick that stays within the previous candle’s closing range reads as an HTF expansion signature; and a C2 (reversal) candle forming at a key level reads as an HTF reversal signature. Confirm an HTF reversal candle by dropping to a lower timeframe and requiring the same V-shaped reversal signature (a swing-point sequence) to be visible inside it — the LTF confirms the HTF candle the same way an LTF confirms any other reversal.

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