Day Trading Decoded - Hard Close (DTD 10)

Hi and welcome back. In this lesson,

we're going to be talking about hard

closes and what they mean. The point of

a hard close is to understand when we

should take a level off our screen and

it's no longer usable. When something

hard closes, it changes the information

that we can use on our screen. Okay, so

let's first start out by defining what a

hard close is. A hard close is when you

have a level and underneath or above

that level, you close both sides of a

candle. Now, it has to be a blue candle

on the bottom side. And you need to

close the top side of a candle. So, this

is the top side. On the top side of a

level, above that, it's going to be a

white candle, and you need to close the

bottom side. So in both scenarios,

your point and your goal is to close the

lower part of the body of the candle. So

you want to close the bottom of the

candle on the top side and the top of

the candle on the bottom side. Like most

things that you're noticing, everything

happens in inverse natures in day

trading. It is the way that the data

communicates going forward. So, let's

take a look at a few examples of hard

closes and what that means. So, I'm

going to mark out some levels here and

we're going to try to walk through this.

Maybe that would be the best way to do

it. Let's just go right here.

Okay, we have a break level right here

on the 15-minut time frame. And I'm not

sure if this is the right time frame,

but we're just going to go with it

because we're here. And you have a

15-minute hold level. This will hold the

move up. That will break the move down.

Let's just kind of go forward here and

see what happens.

Now, you could mark the wick or the body

of this. This is really your call. You

might miss the trade if you mark the

body because you were being too greedy.

And if you mark the wick, you might have

gotten a better chance at getting a

little bit of a better price if you went

for the body. So, it's really a decision

between do you prefer always getting in

the trade or do you prefer getting a

better price with a higher quality of

trade. So, that's kind of how I would

look at that. Regardless, both are

tested here. So, if I was going to hard

close this level here, what I would have

to do is I'd have to go to the greediest

spot of it, which is right here. And I

would need to have a white candle close

underneath that level, like so. The top

side of this candle would have to be

closed underneath it. And if you were to

use this side,

you would have to have the bottom side

of a white candle over here. So you need

to hard close not only the bottom side

of the candle, but the right color of

candle. So let's see which one breaks

first and then discuss where and when we

wouldn't use that move. Okay, you've got

a test of a level.

You've got more tests of a level. This

isn't hard closed yet. So let's back up

a camera. uh candle here and let's talk

about what a hard close looks like.

Remember, if we are going to break a

level and remove it off of our chart, we

need to create a rejection above a

rejection as target above the level

itself. So we need to now have a white

candle form here or here or somewhere in

this chart wherever wherever the first

white candle forms and it must

completely close that candle with the

bottom side above the level creating

rejection as target. Now you don't need

to um always stay above this level. This

is simply going to act as your next

whole level. But the criteria is you

must close the bottom side of a candle

on top and the top side of a candle on

the bottom above the level. Once that

happens, you can remove this level. If

that doesn't happen, you can use this as

a reverse level in the future.

Okay, perfect. So, we did exactly that.

We hard closed it right there. And this

is the new level.

Let's continue moving through this.

Oh, there's a new one right there. This

is hard close. Oh, we're going to we got

to move it up one more. We have to move

it to the most recent candle. And then

it moves down. Okay. Moves up. All

right. And then you would move your

candle right here. So, this is when we

remove levels off of our charts as not

usable anymore. Now, you would move this

to here as the next hold level.

As you can see, it's continuing to go

up. It's not holding the hold level.

Probably hit some lower time frame hold

there. And this would now hard close to

here. Play. Let it go. And you can see

it's acting as rejection as target from

the original hard close that you

adjusted your level from. Now, if we

were to look at the bottom side, I guess

we're going to have to go find a

different example on the bottom. I don't

I don't actually know if

these candles ever got hard closed. I

guess we could just No, we they don't.

So, let's just go to this one over here.

We know this one will at one point get

hard closed because we go below it. So,

let's just use this one right here.

You've got a level here. Is it ever

tested? Here's your hold level. Yeah, it

was perfectly tested. Didn't hard close.

You can move to the next hold level

right here. Now, that one was tested,

tested, tested. Okay, perfect. I don't

think you ever back tested this. Nope.

You'd be on to your next candle, which

is here, right?

That's your reverse level. That's where

you see it right there. You're still not

hard closed. So, now what you can do is

you can move to this candle right here.

Are you going to pull back yet? No.

That's the power of hard closing is that

you understand that the level's not

broken. And this is really the benefit

of hard closing. We can take a random

spot on any chart and just say, "Okay,

oh, good. Perfect. We've got a hard

close happening right here." Okay, good.

So, this one isn't hard closed yet.

Okay. So, I want to talk about that for

a second. Just like how we had rejection

as target on the other side using the

backside of white candles, when a blue

candle creates, it will create another

hold level. And that is the key metric.

That is why we say that candle, the top

side of a blue candle has to close

because it has created a new hold level.

And that hold level will then likely be

rejection as target before you move down

because you gain this as the inverse

hold level. So right now there would

kind of be a battle between these two

levels to see which side is going to

dump. If you continue moving below this,

yeah, your your move is going to break

down completely. And you can see exactly

the same thing happens there that

happened over here. wherever that

example is that we uh we we used some

kind of uh I think it was like I don't

know where it was. Yeah, it was you can

rewind the replayer if you want to see

it, but we're seeing the exact same

thing happen. The hard close of this

candle here told us that hey, if you

hard close underneath that, it's going

to break that level. So, you could just

actually take a short at the rejection

as target on the next trade and it would

move straight down. And that's exactly

what you see. You move it straight down,

it then hits its hold level. So, you can

see the science is really at this point

starting to come together where you're

able to see hold levels, break levels.

Um, we've had no real forms of polarity

here. Well, we did have one form of

polarity which was a reverse level. We

haven't talked about that yet though,

which is fine. But the reverse level was

um I believe back here or somewhere I

remember seeing it. The reverse level

was right here. Um, and that's fine. We

have a form of polarity and that moves

up to here. when we lost that level,

then we hard closed the fact that it was

moving up, which is telling us it's

going to break down and and then you

could could have gotten into your trade

as a rejectionist target on the hard

close of the candle. Therefore, just

tying all theories together and really

getting into picture perfect trades. And

this is the point of my day trading

sciences is it's to use logic to find

and expose these spots where the trades

become

extremely high accur extremely high

chance success rates of going in the

direction that you've engineered while

having the highest level of accuracy on

day trading charts. Like if you were to

measure this and you were to say I took

the perfect short, like you would be

within 0.02%. That's that's barely

measurable. You're not even talking

about a quarter of a percent. This is a

50th of a percent. This is so accurate

that it's ridiculous. The next level

that would be hit after this would be

the hold level, not the break level.

That's hit there. That's within 0.00%

accurate. So, this again, this is the

point of the science. This is why we

have what we call add-ons. And at any

time, just like I always say, remember

to help yourself guide yourself through

this. You can always put a tag on this.

This is a rat.

And you can say it's from a hard close

rat.

It's a rejection as a target from a hard

close

with a

minus1

hold level

to protect the trade. Right? So now

you're using a bunch of these theories

cuz this was rejection as target from a

hard close from back here. So you know

that that rejectionist target is going

to be difficult to get over. Right? And

you would look at this and you would

say, "Well, wait a second, Cotton. I

thought this was the level up here and

this is the front side level, etc.,

etc." Yes, but in the moment that this

hard closed, that candle hard closing it

would have been the one you needed to

get over. So, if you were going to

continue moving this up, you couldn't

have continued moving down before you

were moving up. You either closed

underneath this and created this as

future resistance or you moved back up

here and created that as the level to

be. You see how if you were to go to the

one minute candles, the sequence of

events that happens first is both of

these 15-minute levels were in play.

This one saying we're going to move

down. This one saying we're going to

move up. Once you went to the decision

between moving up or down, you can see

it bounces here, tries to go up, has

another rejectionist target right here.

This rejectionist target continues to

hold the move down. This hold level

continues to hold the move down. And

this rejectionist target never gains. So

you've got hold levels that are holding

the move down and rejectionist target

never gaining. And then once you lose

that level and you hit that hold level

right there, you're really the the

writing is on the wall. You're just

being told this thing is going to move

down, right? And it just continues to

move further down and further down and

further down. So then if you were to go

to other time frames, you really could

see where you could say, hey, if this

was the 15-minute rejectionist target,

is there a 5minute hold level that would

stop that from hitting? Yeah, right

here. And uh as long as you know they're

the same price, but they're not always

going to be the same price. But this

would have been the 15-minute hold level

that you or the fiveminute hold level

that would have been the minus one to

this. Therefore, saying you can't gain

this if the minus one is still on the

way. And you've used now a bunch of

theories together to engineer almost a

picture perfect trade.

Hi, I'm Cotton Candy TA, the creator and

founder of Chart Raiders, the world's

first gamified day trading experience.

To see what the future of day trading

looks like, go to chartraers.com.