All language subtitles for transcript (15)

I'm going to be doing this.

Protected and targeted highs and lows is a very important concept that we've now
gone

over.

But once you dug into the concept, you start to ask yourself, you know, I
understand

the concept.

I know that if a high is unsuccessful in taking out a low, that high is
therefore targeted

and will be run and vice versa with lows to highs.

But it's all well and good in hindsight.

But when you're in the thick of it, when you're watching each candle tick by,
often you

can say to yourself, I don't fully understand or know how I can set myself up so
that I

can have a strong indication of what is targeted and what is protected.

So what we're going to be doing is talking about a refinements to be able to
better understand

and better predict when a particular bit of structure is going to be protected
or targeted.

We're going to be using more of the concepts that we've already discussed
throughout the

entire refined series.

So what we're going to be doing is looking at protected and targeted highs and
lows using

liquidity as a refinement.

So what we can do is we'll just look at very basically, and what we'll do is
we'll just

look at a simple liquidity grab type protected low that is happening here in the
market.

So what we can see is the market's coming down.

We pull back up.

We pull down.

So if we're just looking at it from a market structure perspective, we have a
high, we

have a lower low.

We have a lower low.

We then break to the upside creating a higher high, which we know this bit of
price action

is known as a change of character because we're switching from bearish to
bullish.

But what we can also see is that from a liquidity standpoint, this low right
here, a lot of

liquidity was sitting below here when price came to the downside, creating that
lower

low, which is following trend, it took all the liquidity that was there and what
we would

expect as the next logical step if a bear trend was to continue is that we would

form some sort of lower high and then continue pushing to the downside.

But as we can see, what ends up happening is we actually move to the upside
creating

a higher high, we get that change of character and price begins running off to
the upside.

Now if we're looking at this in the context of protected or targeted highs and
lows, what

we can see is we're putting together all of the pieces now.

So what we can say is this low was successful in taking out this high.

Therefore, this low should be considered protected.

And we can take that a step further by knowing that this low took out this
structural

liquidity and then took out this bit of structure.

So when we're looking at a protected low for an example, we need to see two
things.

We need to see the low actually taking out the previous high, which is what we
discussed

in the market structure section when we explain what a protected low was and
what we need

to see more specifically is liquidity being taken.

Now this can be in the form of structural liquidity.

This can be in the form of equal lows liquidity, any form of liquidity.

But at the end of the day, what needs to happen is we need to see that flow or
that transactional

flow of switching hands from in this case, bearish to bullish from supply to
demand.

And what we can see is once we've taken liquidity, created a low, our next
expectation when

we're just looking at price action initially is that price would create a lower
high and

continue to the downside if we are to remain bearish.

Now of course, what we can see is that price doesn't do that.

We create that higher high.

Now we compare this with a few other things in that this protected low can often
mitigate

something or take out even more liquidity before it is created.

Those are two other criteria and we know if we are to see structurally a in this
case,

a higher load to be forming, we would be looking for price to tap into say a
demand zone

or take out liquidity or both.

And in this case, then we would see something like this and then that would give
us our

point of interest.

We've cleared out all the internal range liquidity and then we continue moving
to the

upside.

And you can see how all these pieces start to build together by just looking at
a very

simple price action pattern that we're looking at.

And it's this level of detail that we really need to look into when we are
looking at this

because yes, we can get this small little model, but we need to take it a step
further and

look at it from that lens.

So again, the basic premise is that we are seeing some sort of downtrend that
can be an extended

downtrend where price is continuously making lower lows and lower highs.

And at some point, we start to build liquidity.

We take that liquidity.

And if we were to continue seeing bearish movements, we would see a lower high
being created

followed by a lower low, which would then break the previous lower low and price
would

continue down.

But once we start to see trend shifting and we break that high, we can denote
that as

a protected low.

But now you're probably asking yourself, yes, now this makes a little bit more
sense

and how I can refine a protected low.

But what am I supposed to do?

How am I supposed to predict whether it's going to happen?

Well, at this point, there really is no way to predict whether or not a higher
or low

is going to be protected or targeted to a certain level of certainty.

But what this does allow us to do is when we're planning trades, once we've
actually created

the protected low in this case, what this does is if we go back to the supply
and demand

zone refinements is we've taken liquidity.

Chances are this is going to be a very valuable point of interest or demand zone
that we

could look to be trading.

Not only have we taken liquidity and broken structure, if we have something like
this where

we created demand zone, we take out liquidity, we break structure and we've
mitigated that

demand zone.

We now have an incredibly high probability that a demand zone is going to be
respected.

And not only that, because we know it's a protected low, we also know that the
likelihood

of price breaking below this particular low is significantly reduced because it
is

protected by nature.

And then on the flip side, we can just look at the protected highs and the
targeted lows.

So what we can see on the flip side is that we're creating higher highs and
higher lows.

We have structural liquidity resting above this previous higher high after we
formed this

high.

If we were expecting to see an uptrend continue, we would expect price to form
some sort

of higher low and then price to move to the upside, which would then form our
higher

high.

But in this case, what we end up seeing is price moving to the downside,
creating a lower

low.

This lower low creates a change of character and we're switching from bullish to
bearish

price action.

Now again, what we can more than likely see as well is that price could create
something

like this where we have a lot more internal range liquidity.

We mitigate some sort of supply zone and then we create that protected high and
then

continue to the downside, which would then form a new point of interest.

And like I spoke about in the previous supply example, we have a mitigation of a
supply

zone.

We have a break of structure.

We have liquidity being taken.

So what we know is that this supply zone is incredibly high probability.

We factor in the fact that we know that this high is more than likely going to
be protected

because a lot of momentum has been entered at this particular point in the
markets.

So from that perspective, price has no real reason to move to the upside
initially.

Yeah, of course, now we can argue that we're starting to create equal highs and
that price

could eventually at some point move to the upside.

But from a mitigation standpoint, price is more than likely going to tap into
this supply

zone and continue moving in that otherwise downward trend based on the order
flow that

is being presented.

And again, we can look at this example as well where we have equal highs.

We take the liquidity of those equal highs.

We create a new higher high and then what we end up doing is we break to the
downside,

breaking structure, breaking the last recent structural point, this higher low
and we move

to the downside creating a lower low.

We see the change of character from bullish to bearish.

And again, like the other crudely drawn examples that I've done, we have a
potential

supply zone that we're tapping into.

We've taken liquidity, we've broken structure.

We now have the workings of a very high quality protected high supply zone that
is being

created, which gives us a lot of indication that this is going to be a really
great opportunity

to look for potential sales.

And even if we don't get a tap into this area and we're starting to see price
respecting

and we know realistically that price is not going to come above this high.

So looking for trades at these levels is a very good high probability area to
look at.

So again, the most important thing when looking at protected and targeted highs
and lows

is understanding that when we take liquidity, when we break that structure, we
get that change

of character, we can begin to say that price action has created protected and
targeted

pieces of structure.

And if we look at the bullish example, we can see that once we take the
liquidity and

break the previous swing point, which is the lower high, creating a higher high,
we now

have the workings of a protected low.

Now, the protected low can be used of one of two things.

We can use this as a potential point of interest or demand zone to look for
entries or what

we can do is simply just know that as price is continuing on that realistically,
unless

we tap into a supply zone that's created by some sort of other protected
structural point,

price will not need to break this bit of structure.

So we can have a little bit of certainty that this is more than likely the
lowest point,

price is willing to go in this particular circumstance.

But of course, as more candles being printed, as more price action is happening
throughout

the market, this is going to change.

And one other thing to note as well is you also have to begin to understand your
timeframes.

If you look at a 15 minute protected low, for instance, is that going to be more
powerful

than a four hour protected high?

No, of course not.

So we need to be able to understand how fractal price action is and how all of
these work

together and how price action on the 15 minute is building that four hour price
action

and how we can have protected lows on a 15 minute chart, but still be bearish on
the four

hour and have a protected high on that four hour chart and how we can see that
15 minute

shifting from bullish to bearish and then everything aligning so that we can
then look

for bearish continuation trades that are in line with the higher time frame.

And then finally, we'll just recap the supplies on as well.

Again, we have liquidity that rests above this previous higher high.

We take that liquidity forming a new higher high.

We break that swing points, create that change of character and then price
continues moving

to the downside.

We can say that this is now a protected high and that price has no reason to
return above

this point now that we've seen that change of character now that we've seen that
liquidity

grab.

And again, we can either use that as a high probability area to look for supply
and

look for trades or just understand that price in its current state has no real
discernible

reason to move to the upside above that swing point.

Unless, of course, there are protected lows on a higher time frame or order
flows be

getting to shift.

It all becomes down to yes, we may have these points, but then where are we
starting to

react off of because just because a point is created and I just want to
emphasize this

point and just because of protected highest created, for instance, doesn't mean
that it's

not going to break at all and that there's no chance of it.

If, say, this is the 15 minute chart, we're seeing that protected high being
created,

but let's just say below here is a four hour demand zone.

So we know that we're already looking at higher time frame points of interest
versus 15

minute.

Then we could see is what does price action start to give us?

If we start to see a protected low being formed within that, say, on the 15
minute reacting

off of that four hour demand zone and we start to see price action shifting, we
start

to see bullish order flow or the demand chain starting, we're starting to see
mitigations

of demand and prices continue moving to upside.

That might mean that things are changing and that this protected high on the 15
minute

is now going to be some form of external range liquidity that we can look to
target when

we're looking to buy down at the four hour point of interest.