The fourth day in a swing, also known as Candle 4 in the TTrades Fractal Model, is one of the most powerful opportunities to align with the market’s natural price delivery. By analyzing the daily time frame and then drilling down to middle and lower time frames, traders can anticipate expansions with precision and reduce unnecessary guesswork.
If you haven’t seen the earlier lessons on swing highs, swing lows, and equilibrium, I recommend starting there first. These concepts build the foundation for trading Candle 4 effectively.
Understanding Candle 4 in the TTrades Fractal Model
The core principle of the TTrades Fractal Model is simple:
The market cannot reverse without forming a swing high or swing low.
A swing low signals a shift from bearish to bullish.
- A swing high signals a shift from bullish to bearish.
Once a swing point forms, Candle 4 becomes a continuation candle. By understanding how to trade this phase, you can anticipate directional expansion.
How Candle 4 Works
When a swing low is confirmed, we look for bullish continuation. A strong bullish close on Candle 3 implies that Candle 4 should expand out of the upper half of Candle 3’s range.
When a swing high is confirmed, a strong bearish close on Candle 3 implies that Candle 4 should expand out of the lower half of Candle 3’s range.
This is because expansions rarely give deep retracements. If the market is ready to expand, price should move directionally with minimal pullbacks, showing clear strength (or weakness).
How to Trade Candle 4
Trading Candle 4 involves a top-down approach:
1. Start with the Daily Chart
Identify swing highs and lows.
Mark Candle 3’s equilibrium (50% level) to establish bias.
2. Move to the Middle Time Frame
Use the hourly or 30-minute chart to find structure and points of interest (PD arrays).
3. Refine on the Lower Time Frame
Drop down to the 5-minute or 3-minute chart to confirm entries.
Watch for a change in the state of delivery (CISD) to validate your trade idea.
This alignment across time frames ensures that your trades are framed by the higher-timeframe narrative while executed with precision on the lower time frame.
Example: Bullish Candle 4
Imagine price forms a swing low followed by a strong bullish Candle 3 close:
On the daily chart, confirm the swing low and mark Candle 3’s 50% level.
Expect the wick of Candle 4 to be created in the upper half of Candle 3’s range.
On the 30 minute chart, watch for price to retrace to an important level: fair value gap or low.
The TTFM Indicator prints out this area using the Daily – Hourly Model.
After retracement into the 30 minute level, use the 3 minute chart to find a bullish CISD.
This process repeats across markets and is fractal—it works on multiple time frames because price structure repeats itself.
Here is a visual of the completed daily candle expansion.
Example: Bearish Candle 4
The same process applies in reverse for bearish setups:
Confirm a swing high and bearish close on Candle 3.
Expect Candle 4 to form its wick in the lower half of Candle 3’s range.
Look for price to retrace into a PD array or fair value gap. Wait for a CISD to confirm bearish price action (formation of daily wick). Pair with SMT for extra confluence.
The equilibrium of a previous candles range when paired with lower timeframe fair value gaps and smt is a powerful level.
Key Concepts for Candle 4
- Bias begins on the daily chart. Lower time frames are only for execution.
- Candle 3’s equilibrium is critical. Expansions do not tolerate deep retracements.
- Session timing matters. Often, London forms the low (or high), while New York drives continuation.
- SMT (Smart Money Technique) divergences can confirm valid lows or highs.
Key Takeaways
Candle 4 represents a continuation move after a confirmed swing.
Use Candle 3’s equilibrium to frame bias.
Align daily, middle, and lower time frames for precision.
Confirm entries with CISD and session timing.
Apply the same logic fractally across markets and time frames.
By mastering Candle 4 in the TTrades Fractal Model, you position yourself to trade with the market, not against it. This structured approach turns what might feel random into a repeatable and rule-based system.
