Vocabulary & Mechanics

Every misread on this page compounds six layers deep — this is the only chapter where typos in your vocabulary become losses in your account.

Three level types working as a pair, not separately.

How an origin forms

A break is supposed to continue. Hit a topside break → close above → keep rising. If it does the opposite — hits the break, fails to close, comes back into distribution — that level converts from a break into an origin.

Origins are polarized

Polarity is when something does the opposite of what it should do. An origin level is a polarized break level: it was supposed to continue, it did the opposite, and now its first touch reacts violently — rocket or absolute dump, almost no in-between.

Holds, breaks, and origins recur at every timeframe. A 5-minute hold and a 4-hour hold are the SAME shape — just different scales. That's the fractal property. See Layer 2.3 for the multi-timeframe master diagram.

Three states. Held, broken, or the precise pixel where a punch reversed — every later layer is a transformation of those three.

Pure vs non-pure decides whether you're trading a real level or noise on the wrong timeframe — miss the distinction and the level fails because it was never yours to trade.

A range is two or more same-type candles in sequence. Two yellow (accumulation) candles = an accumulation range. Two blue (distribution) = a distribution range.

Pure vs non-pure

This distinction is the foundation for the Time & Levels rule in Layer 3.1.

A pure level is one your own eyes drew on your own timeframe — anything else is borrowed conviction.

Telling a hard close from a sweep from an engulfment is the difference between a clean entry and a stop-out — three closes that look identical at a glance, do opposite things to your position.

Close type	Pierce intra-bar?	Close vs level	Body location	What it signals	Common misread
Hard close	Wick may touch	Body separated	Entirely on origin side	Level is defended; no flip	Calling it before the bar closes
Sweep	Yes	Closes back through	Wick beyond, body back	Liquidity grab, level holds	Mistaking for a break
Engulfment	Yes	Closes beyond	Body fully past level	Level is broken / state flips	Confusing with a sweep on low TF

Decision tree — which close is this?
Candle just closed at the level. Which one is it?
                 │
        Did the BODY (not wick) cross the level?
                 │
   ┌─── no ──────┴────── yes ───┐
   ▼                              ▼
 SWEEP                  Did the body close on the
 (wick poke,            FAR side and STAY there?
  no commitment)                  │
   │                  ┌── no ─────┴── yes ──┐
   ▼                  ▼                       ▼
 SKIP entry      Did the body fully       HARD CLOSE
 (no signal      cover the prior          ───────────
  yet — wait)    opposite-color body?     trade WITH
                       │                  the close
              ┌─ no ───┴── yes ──┐       (continuation)
              ▼                    ▼
         HARD CLOSE          ENGULFMENT
         (level held,        ───────────
          no flip)           a HOLD is born;
                             trade the hold
                             on retest

A hard close is a candle close where the BODY (open and close) is fully on the desired side of a level. Wicks may touch, but the body cannot.

Engulfment births the hold

An engulfment is when a candle closes past the body of the previous opposite-type candle — yellow body covers blue body, or vice versa. The body of the engulfed candle becomes a hold level.

Sweep vs engulfment

If only the wick crosses (body never closes past), that's a sweep, not an engulfment. Sweeps don't create holds — they engineer stop-runs. The discrimination matters: real holds form on body engulfment.

The corner-touching rule

Syndotc shows both readings in V60, but the safer trading interpretation: only wicks may touch — body OR corner contact = NOT a break. Treat ambiguous corner-touches as preserved trends until a fully clear-of-line body confirms otherwise. More in Layer 2.1.

Body past = break. Wick only = sweep. Body covers opposite body = engulfment births a hold. The close is the verdict.

BUT levels are magnets that pull price back no matter how far it has travelled; reverse holds are the fallback target when no clean engulfment ever formed — without these, untested breaks and ranging chop have no anchor.

Two specialty level types. Both are fallbacks; both are magnets.

BUT — Broken Untested

A BUT level is a break level that was crossed once but never came back to retest. Price tends to magnetize back to it eventually, no matter how far it has travelled. The longer it stays untested, the stronger the magnet.

Reverse hold — the 50% fallback

When no clean engulfment forms but you still need a target inside a candle, the reverse hold is the candle's 50% midpoint. Less reliable than a proper hold but useful for ranging conditions.

Range hit origin (sub-type)

A range hit origin is an origin born INSIDE its own range — it forms before the range completes. These pump so fast they reverse on themselves. Fast moves, hard to catch.

BUT levels are magnets that never paid; reverse holds are how the market rebuilds an anchor it lost.

Failed support flipping into resistance is the most common shape that traps re-entry traders — the level that used to bounce price now rejects it, and the bounce-from-below crowd becomes exit liquidity.

The failed-support flip is when an old support level becomes resistance — typically via a hard close below it that loses the support, after which retest from below confirms the role flip. (Time alone can sometimes do it on lower TFs, but the canonical V51 mechanism is hard-close + backside retest.)

This is a special case of polarization. The level inverts role: the price action that was supposed to bounce off support instead closes through it, and the next test from the other side rejects.

What used to bounce price now rejects it. The bounce-from-below crowd becomes exit liquidity.