7. Continuation Framework

4 min read

7.1 Core Continuation Conditions

Continuation is more suitable in the following context:

Trend is clear.
Consolidation appears.
Daily high / low has already formed.
Price respects gaps.
Price manipulates internal swings.
SMT / SS supports the original direction.
Gap retest appears.

Continuation usually does not require SMT as strong as reversal does. In recent gaps, 1-stage SMT is often enough.

7.2 Continuation Entry

Continuation setup:

Universal sequence;
15m+ gap retest;
early continuation can use 15m+;
late continuation prefers 30m+;
if C2 has already expanded, do not trade C3;
do not trade C4+ candle.

Two continuation sequences:

Retrace into FVG;
Order-pairing range.

7.3 Continuation Invalidation

Mark EQ of the previous candle’s range and look for a key level, such as a fair value gap, order block, or relevant swing, close to the new candle’s opening price.
Demand a swing point from that key level, then require expansion away from it. That expansion creates the next invalidation level, effectively moving the goalpost forward.
If price fails to expand away, give it one more chance at the next relevant swing in close proximity. If that also fails, the continuation idea is invalidated.
Candle 3 should itself stay in respect of the upper half (EQ) of candle 2’s range. A deep retracement of candle 3 past that equilibrium invalidates it as the continuation candle — wait instead for candle 4 to open, respect that same equilibrium, and expand from there.
When continuation would require trading through a relevant swing (not just a failure swing), do not pattern-trade straight through it. Confirm a genuine new phase of price at that swing first — a consolidation or retracement signature, not a V-shaped reversal — before trusting continuation beyond it.

7.4 Judging Continuation Quality

Community insight

Around any open draw there are three trade types: the reversal (catching the key level itself), the continuation (trading a retracement back towards an already-established draw), and the lagging-asset trade. Continuation is generally the easiest, since the draw and direction are already established. — Erik — "Trading with an Open Draw" lecture, 3:37
If the first half of an hourly candle expands aggressively towards the draw, expect the second half to complete it. If the first half only consolidates, the candle is waiting on the higher timeframe to close and form a fresh gap instead. — Erik — "Trading with an Open Draw" lecture, 12:13
When a 30-minute SMT fill fails to deliver, don't scrap the idea — wait for the hourly to close and form its own gap; if that fails too, wait for the 90-minute; escalate one timeframe at a time until one actually delivers. — Erik — "gap continuations" mini-lecture, 1:00

After an SMT or gap fill, demand immediate expansion away from it. If price instead consolidates or only makes a shallow retracement right after the SMT, that is a low-probability signature — it does not confirm the continuation on its own, even if price does eventually go the right way. Wait for either a re-sweep or a higher-timeframe close to re-confirm before trusting it.
Intra-candle fractal alignment predicts whether a candle will complete its objective: if the first half of an hourly candle (its first 30 minutes, for a 30/60 alignment) expands aggressively towards the draw, expect the second half to continue and complete it. If the first half only consolidates without expanding, the candle is effectively waiting on the higher timeframe — expect it to close, form a fresh gap, and continue from there instead.
The three trade types available around an open draw are the reversal (catching the key level itself), the continuation (trading the retracement back towards an already-established draw), and the lagging-asset trade (trading a weaker asset to catch up once it shows a strength switch). Continuation is generally the easiest of the three, since the draw and direction are already established — you are trading into it, not trying to catch it.
When an SMT fill fails to deliver on the timeframe it formed on, escalate one timeframe at a time rather than abandoning the idea: wait for that candle to close and the next timeframe up to form its own gap (for example 30m fill fails → wait for the 1H gap; 1H fill fails → wait for the 90m gap; 90m fill fails → wait for the 4H gap). Trade the CSD that forms right after whichever timeframe actually delivers, and only scrap the idea once you run out of higher timeframes to escalate to.

7.5 Trading Against an Existing Gap

A gap is itself an expansion signature in its own direction. Don’t fade a move that has an un-negated gap supporting the opposing direction — phase of price can’t go straight from one expansion into an opposing expansion; it has to retrace, consolidate, or produce a genuine reversal (an AMD reversal, or a fresh gap in the opposing direction) first.
A gap in the opposing direction is what invalidates — “counteracts” — an existing gap. Once that opposing gap forms, the original gap’s directional bias no longer holds and the new direction can be traded.
If you do trade directly against an existing gap anyway, treat that gap itself as your management point: partial, move to break-even, or take full profit as soon as price reaches it, since you cannot assume price will continue through it.
Treat a gap as a level you use only once. Once price has tapped it and expanded away, don’t keep treating it as ongoing support or resistance — it behaves like a low-timeframe swing that has already been used.

Personal study notes, shared as-is and in good faith. Educational material only — nothing on this site constitutes financial advice.