Gxt Beginner course - 4 Swing formations

Swing Formations and Candle Closes

The lesson explains three related candle events—C2 reversal closes, C3 swing formations, and C4 continuation setups—and emphasizes waiting for a candle to close before treating a formation as valid.

C2 Close and Reversal

A C2 reversal occurs when price reaches a key level and closes back within the range of the previous candle. The instructor describes this as a reversal candle on a higher timeframe.

A close beyond the previous candle’s range—for example, below its low in the example shown—is treated as a failed close.

C3 Close and Swing Formation

A swing formation consists of three candles: C1, C2, and C3, with C2 between the other two. C3 cannot be assessed until it has fully closed.

In the examples, a C3 close must meet the relevant level around C2 to confirm the setup. The instructor gives a close above C2’s open as one confirmation and describes a close below C2’s open in a bearish example.

A C3 that fails to close past the required level is not a valid formation.

C4 Continuation

C4 is the continuation trade considered after a valid C3 close.

When a C2 candle forms a reversal at a key level, the lesson looks for C3 to close above C2’s high to confirm a bullish continuation setup.

The instructor also shows a formation without a C2 reversal close: after price trades toward an unconfirmed high, a three-candle swing can still form, with C3 expanding and closing below C2’s open before considering C4 continuation.

Practical Takeaway

1. Identify the key level and the relevant C2 candle.
2. Wait for C3 to finish and confirm the required close. Do not act on an unfinished candle.
3. Only then consider the C4 continuation.

A daily-chart example is used to illustrate the formations.

Speakers and Sources

• Speaker: One unnamed instructor or narrator.
• Sources shown or referenced: Candlestick charts, including a daily-chart example.