4H HOD/LOD Checkpoint Analysis4H HOD/LOD Checkpoint Analysis - Detailed User Guide
OVERVIEW
This indicator is a data-driven probability framework for NQ Futures traders that predicts High-of-Day (HOD) and Low-of-Day (LOD) placement based on statistical analysis of 3,136+ trading days (2013-2025). Unlike traditional indicators that rely on technical signals, this tool uses checkpoint-based state analysis with zero forward-looking bias to provide real-time probabilities of whether the daily range is complete.
⚠️ IMPORTANT: This indicator is specifically designed for NQ FUTURES ONLY. All probabilities, patterns, and statistics were derived from a 10+ year historical dataset of NQ 1-minute bars. Using this on other instruments will produce inaccurate results.
CORE CONCEPT: CHECKPOINT METHODOLOGY
What is a Checkpoint?
A checkpoint occurs when a 4-hour candle closes. At this moment, the indicator "locks" the current market state and calculates probabilities for the remainder of the trading day. The key innovation is that state never changes after locking - probabilities remain constant throughout the session until the next checkpoint.
The Six 4-Hour Candles (EST):
6PM (18:00-22:00) - Evening/Globex open
10PM (22:00-02:00) - Asia session
2AM (02:00-06:00) - Early London
6AM (06:00-10:00) - Late London + NY Open
10AM (10:00-14:00) - NY Morning
2PM (14:00-17:00) - NY Afternoon (3 hours only)
Five Checkpoints:
10PM Checkpoint - After 6PM closes
2AM Checkpoint - After 10PM closes
6AM Checkpoint - After 2AM closes
10AM Checkpoint - After 6AM closes (most critical)
2PM Checkpoint - After 10AM closes (highest conviction fade signals)
HOW IT WORKS: THE THREE-FACTOR STATE SYSTEM
At each checkpoint, the indicator evaluates three critical factors to determine probability:
1. ELIMINATIONS (Quantity)
An "elimination" occurs when a candle trades beyond a previous candle's high or low, effectively removing that candle from contention for HOD/LOD.
Example at 10AM Checkpoint:
6PM high = 18,000
10PM high = 18,050 (eliminates 6PM high)
2AM high = 18,100 (eliminates 10PM high)
6AM high = 18,075 (does NOT eliminate 2AM high)
Result: 2 eliminations
The number of eliminations indicates trend strength:
0 eliminations = Range-bound, high probability extremes already set
1-2 eliminations = Moderate trend
3-4 eliminations = Strong trend day, range likely to extend
2. STRUCTURE (Pattern Type)
The indicator distinguishes between two elimination patterns:
Sequential: Eliminations occur in order (6pm → 10pm → 2am → 6am → 10am)
Indicates smooth, consistent trend
Example: 10pm eliminates 6pm, then 2am eliminates 10pm (sequential)
Skip: Eliminations skip candles
Indicates choppy/reversal behavior
Example: 2am eliminates 6pm but NOT 10pm (skip pattern)
Why it matters: Skip patterns show 2X probability differences compared to sequential patterns. At 10AM checkpoint with 2 eliminations, skip pattern shows 64% participation rate vs 36% for sequential pattern with previous survived.
3. PREVIOUS CANDLE STATUS
Did the immediately prior candle get eliminated?
Eliminated: Previous candle's high/low was taken out
Indicates relentless trend
Higher probability of continuation
Survived: Previous candle's high/low still intact
Indicates trend pause
Higher probability of mean reversion or range completion
Critical insight: High and low are tracked separately. At 2AM checkpoint, 10PM might have eliminated 6PM high (relentless uptrend) but NOT eliminated 6PM low (low survived). This creates different probabilities for HOD vs LOD.
VISUAL ELEMENTS
4-Hour Candle Boxes
Each 4H candle is displayed as a colored box showing its range:
Gray = 6PM (evening)
Blue = 10PM (Asia)
Purple = 2AM (early London)
Orange = 6AM (London + NY Open) - THE CURVE SESSION
Teal = 10AM (NY morning) - THE MONEY SESSION
Red = 2PM (NY afternoon) - THE FADE SESSION
HOD/LOD Lines
Black horizontal lines extend from current HOD/LOD with labels showing:
Which candle set the extreme
Current price level
THE CHECKPOINT TABLE EXPLAINED
Table Header:
Shows current checkpoint (e.g., "🎯 10AM CHECKPOINT") or "⏳ PRE-CHECKPOINT" if between checkpoints.
Main Metrics (Side-by-Side Comparison):
The table displays HOD and LOD separately in two columns because they can have different patterns:
METRIC
HODLOD Eliminations
Number of candles eliminated so far for highs
Number of candles eliminated so far for lows
Structure
Sequential or Skip pattern for highs
Sequential or Skip pattern for lows
Prev Candle
Was previous candle's high eliminated or did it survive?
Was previous candle's low eliminated or did it survive?
Pattern
Combined interpretation: Relentless/Paused/Skip/Early
Combined interpretation: Relentless/Paused/Skip/Early
Color Coding:
Structure Row:
White = Sequential (smooth trend)
Orange = Skip (choppy/reversal)
Previous Candle Row:
Red = Eliminated (relentless trend continuing)
Blue = Survived (trend paused)
Pattern Row:
Red = Relentless (previous eliminated + sequential = strong trend)
Blue = Paused (previous survived + sequential = trend pause)
Orange = Skip/Chop (skip pattern = reversal likely)
Gray = Early (0-1 eliminations, too early to tell)
Probability Section:
Prob Already In: Percentage chance that HOD/LOD has already been set
Color coding:
Green (>75%) = High confidence extreme is in, FADE
Yellow (45-75%) = Moderate confidence
Red (<45%) = Low confidence extreme is in, CONTINUATION likely
Sample Size: Shows how many historical occurrences match this exact state (n=XXX)
Larger samples = higher confidence
Most common states have n=500-2,000+
Current: Which candle currently holds HOD/LOD
Pattern Guide Section:
Appears when you have 2+ eliminations. Provides interpretation:
📈 Paused: Trend has paused, 2pm more likely to set extreme
📈 Relentless: Breaking higher/lower, continuation expected
📈 Skip/Chop: Choppy pattern, next session likely
Same for lows with 📉 symbol.
PRACTICAL TRADING EXAMPLES
Example 1: High Conviction Fade Setup
State at 10AM Checkpoint:
Eliminations: 0 (both HOD/LOD)
Structure: None (no eliminations yet)
Prev Candle: Survived
Table shows:
HOD Prob Already In: 68.9% (n=582)
LOD Prob Already In: 73.6% (n=785)
Interpretation: Range is likely complete. Fade extremes. With 0 eliminations and 70%+ probability, this is a high-conviction mean reversion signal.
Example 2: Strong Continuation Signal
State at 10AM Checkpoint:
Eliminations: 3 (both HOD/LOD)
Structure: Sequential
Prev Candle: Eliminated (relentless)
Table shows:
HOD Prob Already In: 29.8% (n=1,758)
LOD Prob Already In: 34.6% (n=1,451)
Pattern: 📈 Relentless / 📉 Relentless
Interpretation: Strong trend day. Only 30-35% chance range is complete. Look for breakouts in direction of trend. 10AM and 2PM likely to extend range.
Example 3: Pattern Structure Edge
State at 10AM Checkpoint:
Eliminations: 2 (HOD)
Structure: Skip (orange background)
Prev Candle: Eliminated vs Alternative State:
Eliminations: 2 (HOD)
Structure: Sequential
Prev Candle: Survived
Result: Skip pattern shows 64% chance 10AM participates vs 36% for sequential+survived. Skip pattern = 2X more likely to see 10AM high. This structural edge is unique to this indicator.
Example 4: Different HOD vs LOD Patterns
State at 10AM Checkpoint:
HOD: 2 eliminations, Sequential, Previous Eliminated (Relentless) = 46.7% in
LOD: 2 eliminations, Skip, Previous Eliminated (Choppy) = 48.4% in
Interpretation: Highs show relentless uptrend but lows show choppy behavior. This divergence suggests potential for upside continuation but with volatility. Not a clean trend day.
KEY CHECKPOINT STATISTICS (DERIVED FROM 10-YEAR DATASET)
10PM Checkpoint (After 6PM):
Very early in day
13.5% HOD in, 21.3% LOD in
Most likely outcome: Range extends into 6AM/10AM
2AM Checkpoint (After 10PM):
Still early
With 0 elims: 22-31% in (balanced)
With 1 elim: 8-12% in (strong trend signal)
6AM Checkpoint (After 2AM) - Critical Decision Point:
With 0 elims: 40-47% in (balanced, could go either way)
With 2 elims: 18-22% in (strong trend into 6AM/10AM)
Most likely outcome: 10AM sets extremes (~38-40%)
10AM Checkpoint (After 6AM) - Highest Conviction:
With 0 elims: 69-74% in → FADE (high confidence)
With 3 elims: 30-35% in → BUY/SELL continuation
This is THE money checkpoint for high-probability setups
2PM Checkpoint (After 10AM) - Maximum Fade Conviction:
With 0-3 elims: 67-95% in → FADE strongly
With 4 elims: 49-61% in (monster trend, weaker fade)
2PM is primarily a mean reversion session
UNDERSTANDING THE UNDERLYING DATA
All probabilities are derived from analysis of:
Instrument: NQ Futures (E-mini NASDAQ-100)
Timeframe: 1-minute bars
Period: January 2013 - December 2025
Sample: 3,136+ complete trading days
Methodology: Real-time checkpoint analysis with zero forward-looking bias
Why NQ-Specific?
Each futures contract has unique:
Session characteristics (6AM in NQ shows 60-64% curve behavior, other sessions differ)
Timing patterns (NQ's 10AM session has 67-74% immediate takeouts)
Volatility profiles (NQ 2PM shows 56% bullish bias vs ES shows different bias)
Using this indicator on ES, RTY, or other instruments will produce inaccurate results because the probability tables are NQ-specific.
ORIGINALITY & INNOVATION
What Makes This Indicator Unique:
Zero Forward-Looking Bias: State locks at checkpoint moments. Traditional indicators recalculate continuously, introducing bias. This indicator freezes probabilities at the exact moment a 4H candle closes.
Three-Factor State System: Combines elimination count, structure pattern, and previous candle status. Most indicators only track one dimension. This multi-factor approach provides 2X+ probability differentials.
Separate HOD/LOD Tracking: Highs and lows can have different patterns simultaneously (relentless high with choppy low). This indicator tracks them separately for precision.
Pattern Structure Analysis: Distinguishes between sequential and skip patterns, a concept not found in standard indicators. Skip patterns show mean reversion while sequential shows continuation.
10+ Year Statistical Foundation: Every probability is backed by hundreds to thousands of historical occurrences (sample sizes shown in table). Not based on theories or assumptions.
Checkpoint-Specific Probabilities: Different checkpoints have different probability profiles. 10AM checkpoint with 0 eliminations = 70%+ fade. 6AM checkpoint with same state = 40%+ fade. Context matters.
HOW TO USE THIS INDICATOR
Step 1: Wait for Checkpoint
The table will show "⏳ PRE-CHECKPOINT" until a 4H candle closes. Probabilities are only valid at checkpoint moments.
Step 2: Read the State
Check the three factors:
How many eliminations?
Sequential or skip?
Previous candle eliminated or survived?
Step 3: Check Probability
Look at "Prob Already In" percentage:
>75% (Green) = High confidence extreme is set, fade
45-75% (Yellow) = Moderate confidence, use other confirmation
<45% (Red) = Low confidence extreme is set, continuation likely
Step 4: Check Sample Size
Larger sample (n=1,000+) = higher confidence
Smaller sample (n=50-200) = use caution, edge is real but less robust
Step 5: Consider Pattern
Read the pattern guide:
Relentless = trend continuing
Paused = trend stalled, mean reversion
Skip/Chop = reversal/range likely
Step 6: Compare HOD vs LOD
If both show similar patterns = cleaner signal
If divergent patterns = complex day, be cautious
BEST PRACTICES
Focus on 10AM and 2PM checkpoints - These have the highest conviction signals
Combine with price action - Don't fade blindly at 90% probability if price is breaking out strongly
Larger samples = better edges - Prioritize setups with n=500+
Watch for pattern divergence - When HOD and LOD show different patterns, expect complexity
Remember session characteristics:
6AM = THE CURVE SESSION (60-64% mean reversion when Q2 breaks Q1)
10AM = THE MONEY SESSION (67-74% immediate takeouts, highest conviction)
2PM = THE FADE SESSION (67-95% extremes already in)
SETTINGS
Show 4H Candle Boxes - Display colored boxes for each 4H candle
Show HOD/LOD Lines - Display horizontal lines at current extremes
Show Checkpoint Analysis - Display probability table
Table Position - Choose where to place the checkpoint table
Table Size - Tiny/Small/Normal
Colors - Customize box colors for each session
LIMITATIONS & DISCLAIMERS
NQ FUTURES ONLY - Do not use on other instruments
Not a standalone system - Use as confluence with your strategy
Historical data - Past performance doesn't guarantee future results
Sample size variance - Some states have smaller samples, use judgment
Requires understanding - Read this guide fully before trading with this tool
FINAL NOTES
This indicator represents 10+ years of NQ futures data distilled into actionable, real-time probabilities. The checkpoint methodology ensures zero forward-looking bias, while the three-factor state system provides granular edge that traditional indicators miss.
Remember: This tool provides probabilities, not certainties. Trade with proper risk management, and use this as one input in your decision-making process.
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