All language subtitles for Session 13

Hello everyone, today is December 3rd
and this is session number 13 of Wyckoff

Practicum course.

As usual, we're going to discuss the
bias game, we're going to talk about the

anatomy of the trade. I thought, you
know, it was very interesting action

yesterday.

We'll have some Q &As, market update,
then we'll talk about the horizontal

volume, and then...

If we have a chance, we'll go to the
exercise.

In the announcements, December special
is on, and again, highly

recommending it because it's in line
with everything that we've talked about.

Here will be in a more systematic way,
kind of like a system reveal on the

long term, some of the swing trades.

This is a continuation of the trilogy on
the swing and intraday.

And then for those of you who would like
to continue, you know, to stay with the

practicum, you guys are welcome to
register now. Go to our website. You

alumni rate, and that alumni rate is
also discounted right now until, I

January.

So anytime you register before that, you
get that deep discount.

And what it does is just for 15
sessions, 15 weeks, even if you're just

the videos, but you're playing the game,
you're playing the bias game, you're

always thinking, you're always
contemplating about your homework, and

what's useful.

So that's why...

We like our alumni to come back,
obviously at the lower rate, and just to

through that again because the bias game
never repeats.

It's always something new.

All right.

All right.

As always, everything is for educational
purposes.

Let's discuss the bias game. This one
was.

because for the first time, you know, I
kind of was thinking about Thanksgiving,

you know, to spice things up.

It's holidays, so how to spice this up?
Well, let's have a typical chart,

right, a typical chart. So P &F came to
mind, and then

I wanted to see how you're doing with
the current bias.

I wanted to show you guys the current
bias from a different perspective, from

the perspective of...

a PNF picture.

And as you might know, this was the S
&P, the current chart of the S &P.

So I don't really have an answer for you
whether this is truly a reaccumulation

or a distribution.

I think that this is a reaccumulation.
At least that's how I'm playing it out,

given with the last two days' reactions.

It doesn't bring us any...

Any new information yet, it has to be
more profound. We'll talk about this in

the market update.

So that was kind of like an interesting
game on its own.

I think that the volume and the columns
that you go

through are very much a tape reading
skill that you have to have to read

And a lot of you just excel in that. So
this is really pleasing to me because...

I'm a tape reader at my heart.

I just see how the market moves,
changes, and all that stuff.

And that's what I'm teaching you guys
here in this class, especially in the

practicum. So this is probably one of
the easiest ways to do that.

It's kind of interesting that today
we're going to talk about different type

volume representation, volume visuals.

We obviously could look at the volume on
the vertical bars, and that would be

one representation, one visual, you
know, for us to look at the volume.

We can look at the volume on the PNF.
This is going to be more condensed data,

so the volume signature is going to be
condensed as well.

Look, and that's what we're going to do
today.

And it was kind of like white witching.

I've prepared the slides for this
session last week.

Usually on Friday, Saturday, Sunday,
when I have a chance, I love to prepare

the whole week.

So I put in the horizontal volume
signature, and this is what we're going

through today.

And we're going to do a couple of
exercises on this.

And then Dimitri, you know, emails me
today.

and ask me about the price and volume.

So kind of like wide vision, we're going
to do this today.

We're going to go through that material.

That's the third way of how we could see
the volume.

Other ways of how we could see the
volume, we could see the volume, let's

through the cumulative wave.

David Weiss' cumulative wave comes to
mind. David, obviously, is not the

originator of the idea behind cumulative
volume.

Probably the most famous cumulative
volume indicator is OBV by Granville.

But David looks at the cumulative wave
as a function of a sweep.

And that's a really good innovation
right there. And again, not something

has not been done before.

And then also, we want to look at the
volume in other different ways.

look at the up and down volume for each
bar. And I think that's probably the

most telling information, but it could
be most confusing.

So for now, we're just gonna concentrate
on three, right? So vertical, PNF

volume, and horizontal. And that should
be enough because you would be able to

judge the action from the volume and
price signature.

And if we would look At this whole
picture here, and we would start drawing

our Wyckoff story, we definitely would
start with the huge uptrend that is

on. There's some kind of climactic run.
We see that up to this point, the price

stops, goes into the trading range, so
an obvious buying climax, automatic

reaction, several tests as uptrend.

where we have our consolidation after
the volatility.

So this is like a testing ground
absorption for what? For the next rally

that materializes into the upthrust.

That upthrust brings a lot of supply
into the end of the rally.

And please note that the rally is of
different quality than the previous

So less demand.

definitely not committing significantly
above, and then quickly

coming back into the range on relatively
modest selling,

but a lot of supply came on the last
push to the upside.

And then we don't see a lot of activity
here until we go into the shakeout

action.

And then that shakeout is being resolved
really quickly with the momentum rally

that is confirmed also by the increased
demand signature.

After that, a trading range and the apex
structure with all of the elements

that we want to see in the apex
formation value supply.

Produces a change of character.

Automatic reaction, so some kind of sign
of strength.

Buying climax, concluding this rally.

Secondary test, phase A.

And then this is probably phase C.

Volume is diminishing into the apex.

Some demand is coming in, some demand is
coming in, and then we are breaking to

the upside.

So still bullish. There is really
nothing here of bearishness

that we could see. If you are thinking
that maybe there is some kind of

upsloping structure and this is an
upthrust and we had something like this

the last couple of days, right?

So there is still nothing damaging yet
to that picture. What would be damaging?

Would be damaging to see something like
this.

with an attempt to retest and then with
the subsequent failure below this level,

right? So overcoming this level right
here as well, trying to rally again and

then dropping again.

So, and there are some analogs that, you
know, we could look at, you know, price

behavior in that way, especially the
leadership could be distributed this

you know, on the way up, but The economy
is actually stable to

slightly improving, slightly moderate.

So a lot of the money managers are
looking at that.

So earnings are kind of like hit and
miss, but overall, they are sustaining

uptrend that we are in.

And more importantly, consumer spending
is a...

the really good levels.

So money managers, when they look,
they're going to look at, obviously,

first in general, then economy in
segments, the corporate economy,

economy, and then look at the Fed, look
at the government and the monetary

policies. And obviously there, the whole
tariff story is just something else.

We'll talk about this in the market
update.

There is really nothing here on this
picture at the point of where we look at

the picture.

Nothing bearish about this.

There might be just some short -term
supply that's coming in.

All right, some examples of your work. I
thought I'd want to show some of the

examples. This comes from Eric N.

And I really like how Eric just goes
through the explanation of all of the

that he has here.

from green, you know, to pink, to
yellow, and so on and so forth. So there

that continuation of the story where
analysis is being done, and I would urge

you, you know, to stop here the
recording and just read this analysis,

great.

Another example, this comes from Sean,
and I like how there is this, you

know, comparison, constant comparison of
the...

analogous price actions.

And then again, step by step analysis
and it comes to a specific conclusion,

which in this case was accumulation.

All right, so here's my take on this
bias game.

My answer is accumulation.

I don't know yet whether this is a
correct answer or not. So that was kind

like a trick.

or a tricky bias game for Thanksgiving
that we have or that we had.

I'm going to try to come up with
something fun on Christmas as well, New

well, just for us to have fun.

Look at the counts that we have.

And I'm kind of gradually coming to a

conclusion that

We could have two types of rally here.
We could definitely have more of the

runaway rally like we had in 99.

We could have a slow running rally like
we had in 95.

We could also have a very moderate
rally.

And I think that it's prudent for us to
think about the targets that are the

closest. So there are...

A couple of targets here from the low of
the shakeout into the climactic action.

And that target from the line of 2350
takes us to 3525.

And then the trade count that we have in
the upper part of the structure brings

us to the same target, 3500.

So two confirming targets, this is
something that I would want us to see

happening every time we look at the
targets. So that's

the moderate target. There is a much
higher target of 5 ,000 that I presented

the WMD, but this is something that I
want to keep kind of like between us

we get over the hump of 3 ,500.

So we still have...

to see what's going to happen here did
you guys have any thoughts question

additional maybe thoughts on this before
we go away

no

all right great well here's your next
bias game

do i dare to ask you

what bias it is how about this i'm not
gonna ask you but for those of you

who are curious you know go ahead answer
but at your own risk if you're gonna

you know contaminate your mind you think
that you're gonna do that you know then

um you know don't do that don't don't
write it down and for those of you who

answering you know oh i still would urge
you to go and do the analysis from left

to right uh you know divide the chart
into you know logical segments uh what

you've seen and then uh you know come up
to the bias solution by

the end of this chart all right great
let's jump to the

next segment okay market charts let's
look at the market

This deserves some attention.

So for those of you who are following us
on Twitter, this is

probably not going to be anything new.

This bar right here had an increase of
the supply.

that was suggestive of some kind of
potential stop in action

and maybe some kind of reaction.

We had a little bit of the climactic
run.

And then by the end of the day, and that
was the key, you know, how do we close?

We close bullishly on the increased
effort. So there is some demand behind

suggesting a rally out of this.

So we want to see what kind of rally
we're going to have.

Well, the rally goes, does not come to
the extreme overbought condition,

overcomes and overthrows in the upthrust
type of manner.

The long -term daily resistance, which
is upsloping as well, and then it

produces a change of character bar. This
change of character bar is the largest

bar since the low of this bar in
October.

This is the largest reaction.

So right away yesterday on Twitter, you
know, as it was unfolding, I said that,

you know, this change of character is
going to bring a continuation.

Not only did we break the trend line
here, but we're also coming in on

increasing supply.

And we are producing the bar that is so
different than anything that we've seen

before.

The next step for us is to judge our
current bar against the

analogs that would exist in the same
type of context, right? So maybe like

or this, obviously this, and I wanted to
text,

not to text, but to Twitter Dimitri
because he was showing one

of the traits.

based on this bias.

So one, two, three, okay.

All right.

So let me just pick another color. So
we're looking at number

one.

Yeah, number two this was the largest
bar since this low

Number three number four

number five

So

we want to understand what kind of
strength we have for this reaction and

want to judge the extent of the possible
reaction through the force that

comes right away.

And I wanted to say, Dmitry, because I
was following that trade of yours, that

you could have a scenario like this,
where you are committing to the

supply is increasing, and then you just
have absorption.

I think it's a mistake just to think
that once the change of character bar

happens, supply increases, that that's
it, we're going down.

There is definitely a predisposition to
do that because effort increases to the

downside and result is increasing.

But as we know, on the emergence of the
supply, there are two things that could

happen.

Absorption, and that would be in line
with, let's say, the previous trend.

in the uptrend, or

there's gonna be a reaction.

So in this first case, we see that there
is no continuation of that selling.

It starts to deteriorate, and then
instead of continuing to the upside, it

actually reverses. So that's

how quickly absorption could happen and
could have all of the elements that

we're talking about preceding this bar
and even some of the elements that go

after this bar, right? So, for instance,
at number one, we have this last

climactic run, then commitment to the
downside, and then some testing action.

Well, let's look at number four.

We have somewhat of an exhaustion.

still somewhat overrun, but into the
exhaustion.

Then we have the increase of the supply
type of bar.

And then we have the test.

So the difference between these two
scenarios is that we have

an instant continuation of the initial
bias to the downside after

the test. And here we have the reversal.

So you could see how, with an exception
of the short -term causality in case

number four, everything else was
somewhat the same.

We could make an argument that there was
a little bit more demand in case number

one than in case number four. So only
those two nuances, short -term causality

prior, and there is not a lot of
causality right here, and then there is

demand. this bar then let's say in this
bar right here but everything else was

the same so looking at the current bar
and judging you know the effort

was which the reaction starts kind of
suggests that we are

gonna have more or less meaningful
correction more or less meaningful

than what then what we've had before so
what corrections did we have before on

the way up here is a correction here is
a series of corrections here is a

correction here is a correction here is
a correction so we're definitely going

to have reaction more than that we're
probably going to have the reaction of

same magnitude that we have had um you
know in all of this uh four instances um

i'm sorry in instance two three and four
and we're thinking that um uh you

know probably we are seeing a
contraction here

in reactions, and we might see that
contraction again.

There is enough space for us here before
falling below 3 ,000 to

have a reaction and maybe some kind of
consolidation.

We just hit the old time new high.

There is definitely a lot of
consolidation on the profits that needs

We see a lot of institutional profit
taken. They are actually moving really

fast, closer to the end of the year.

Those positions where they feel that
they have made a lot of money, they're

going to take the profit off.

So Apple comes to mind, just a great
example of where institutions are taking

profit right now.

just because of such a big run up of
more than 60 % for the year.

So that's a big result for them.

So I'm kind of expecting, or at least at
the beginning of this bar

yesterday, during the day, there was a
lot of selling coming

in. And there was an expectation that,
yeah, that's going to continue for some

time. You could see that selling on the
intraday right away.

And the way how to look at this is,
again, you want to look at the

reactions from the beginning of the
rally.

You want to look at the quality of the
reactions, the texture.

What is it about this structure that
allows the trend to continue?

They kind of look the same, either by
the distance that they travel or the

intensity of the reactions, the effort
behind them. There were only a couple of

spots of vulnerability during the whole
uptrend, right here and then right here.

This is where the selling has occurred.

in more meaningful way you know and we
stated you know just that this is uh you

know somewhat of a vulnerable place if
supply is being observed then there's

going to be a continuation in both cases
we had that absorption of the supply

what's the difference in the last case
well look at the texture as to how the

price was moving down yesterday so right
away even on this bar and this is just

an intraday bar You know, on the break
of that trend, that bar breaks that

trend. And you're seeing a lot of supply
coming in. Behind that supply, there is

a news catalyst.

And this news catalyst just ripped the
market for the last almost two years and

created the structure that we are in
right now.

This big trading range since the
beginning of 2018.

So this is the news that is capable
of...

you know, producing significant moves.

Yet the economic environment is such
that it reminds me a little bit of like

2017, like at beginning of 2017, when we
had a lot of

news about North Korea.

And every time we do and where, you
know, we still were not used to how

President Trump.

you know communicates and all of that um
so something like this where we have

single events that produce

some kind of abnormal uh volatility but
yet the background

is still pretty much bullish so i think
that the

strategy here and i was

in my head i'm talking to dmitry a lot
um right now because he had this

volatility trade on um or at least the
directional what was the trade that i

forgot dmitry i mean obviously put to
the downside but i forgot what what did

you buy uh did you buy volatility or did
you buy um

okay let me

know um but This looks like something
very similar to what we've been

going through. This is on a slightly
different scale.

But also look that these reactions are
not that deep.

We didn't have a deeper than 3 %
reaction on the run into the 2017

high. So I'm not necessarily kind of
like expecting here.

you know, a clean run, it's probably
going to have some kind of reactions.

And then look at the last bar.

Again, I don't know, Dmitry, if you kind
of, you know, looked at my message

today on Twitter as something else that
I was saying here.

So I tweeted an expectation that you
might see this. There was a demand

in. today on the intraday. And some of
my positions that are usually momentum

-oriented positions that misbehaved
yesterday and today in the morning

to pick up and started closing all of
the losses that they have had today.

And you kind of see that a very strong
demand comes in and picks up a lot

of liquidity that is available so
easily.

on this news.

In a way, I thought that this trade was
lucky.

Why? Because the news cycle continued
into today.

And then when they announced today that,
well, maybe

it's better to postpone this issue after
the election in 2020.

Well, that made a lot of sense to me
because now they are taking pressure off

themselves for the election.

This is something that they could always
say during the campaign that, you know,

we're going to return to this later
because, you know, the actions, and I

suspect that, you know, there is some
play with the

election deadline, you know, from the
Chinese side.

That's how I would negotiate that.

So probably it's easier just to
eliminate this altogether and just to

concentrate on the election for the
current administration.

So I think that in a way this issue is
being taken away. I

just don't know what will be the
resolution in between. So I want to

like, what are they going to do now? Are
the tariffs still staying on or not? Is

this another way to negotiate or not?

So I don't know, maybe we will have a
resolution.

Maybe this is just a part of the
negotiation.

But definitely the news cycle helped
this trade.

Yet our technical recognition came right
here on this bar.

And you could see that even if you open
in a position somewhere here, whether

you're buying volatility or you're just
directionally trading this, you could

definitely have a really good chunk in a
very short period of time.

you know, one day.

And your exit should be somewhere here.

This is definitely a change of character
to this reaction.

And we're seeing how some demand is
coming in. There is a tail.

There's a lot of volume signature.

A lot of volume signature, no progress
to the downside.

A lot of volume signature, no progress
to the downside.

Ease of movement to the upside on lower
volume, suggesting that supply has been

diminished. confirmation that supply uh
is small at this point of time and then

obviously after that we're going to have
some kind of momentum rally which still

has some supply stop in action and we're
in the testing period right here so

into the end of the day we actually have
seen quite a lot of you know bullish

activity whether that's going to
materialize somehow

we still have to see i would say that
for the bulls the best scenario is just

keep closes above this level right here
so don't close below if you're closing

below then most likely you know you're
going to kind of retest a much lower

ground but if you're staying above these
levels there's really nothing dangerous

about that we came out you know sign of
strength and now if we consolidate here

and then continue to the upside or
consolidate even in a much shorter

where maybe we have like a big bar
vertical absorption and then we are

here, then we would be still in this
uptrend and the price might continue

up.

So demand is strong and selling is

strong on news and on profit taking.

So a very interesting market where you
have to be going in and out of themes

as institutions are doing the same.
They're going in and out of specific

And obviously, the key here is just to
observe, would we have more damage here?

If we do, then we definitely are going
to reconsider this whole scenario.

So crude is also very interesting in the
way that it

doesn't want to go down. So the bullish
call that we have had here is still

on. And I was thinking, you know, what
is the tactic here for the stop losses?

And I think it just depends on how you
trade in this whole thing.

And obviously, December 3rd is going to
be a big meeting.

Hold on a second.

It's today, right? So did they do this
already?

Okay, I'll have to, yeah, okay.

Oil up on OPEC optimism. Okay, so
they're going to obviously announce the

in the production and that's why it's
holding up. So the strategy here could

either hold on to your original stop
loss because we still did not really

true breakout.

There are multiple attempts to do so and
then all of them fail, but still the

trend is kind of sustainable.

In the last couple of weeks, I think
volatility is all related to the OPEC

meeting that's unfolding.

And I would say that for more aggressive
traders, you don't want to commit to

the downside below this level because
that would constitute a retest. It would

suggest a retest of 50 -51.

And I would rather probably just not
participate in the move to the downside

just have even like a break -even or a
small win.

And then maybe, you know, if this is a
true phase C, to kind of reload the

position here, to reestablish the
position here.

These are kind of like thoughts aloud.

But it looks like, you know, the news
are going to drive the price for the

retest of 58, possibly.

So the suspect, you know, for me
personally, was this bar right here.

I'm sorry, not this one.

The Korean bar.

And the reason why it was a suspect is
because there was some supply that came

in on this bar.

Was a little bit more than, let's say,
those analog bars.

And I thought that, you know, we're
going to have some kind of stop and

reaction. The price went up.

So I decided to wait.

and see what's going to happen next.

And such a draw, but no commitment to
the downside.

So it was a little bit of a confusing
picture in this case, and we just needed

to wait.

And that's what I'm continuing to do. So
hopefully on the news, we're going to

have some kind of continuation.

Any closes above 58, and especially 59,
are going to be extremely bullish. But

then we're going to go into the...

By the way, please note how I did that.
Why did I do the resistance like this,

right? So 63 .60.

Well, I'm looking at the supply that
comes at that level.

So on this bar right here, and then on
this bar right here.

And we know that if the price goes to
this level, there's gonna be some kind

resistance as, you know, some selling
will happen again as the same type of

sellers are going to come and they will
remember this level and they will try to

sell.

Okay, gold really quickly was due for
some

kind of pop -up.

We have structural strength here on the
test.

We're seeing that supply is diminishing.

For some reason, I'm kind of, Not really
impressed with gold in

terms of how it reacts to the upside.

I don't know what it is about this. I
think that my judgment is a little bit

obscured with the market action itself.

But I know that there are instances when
both the stock market and gold can go

up at the same time.

So we shouldn't underestimate this.
Having said this, I still have a long

campaign in my IRA account, so I'm not
exiting that at all.

I'm probably going to see how this whole
thing is going to resolve itself.

All right, Francis saying that Russell
2000 showing some relative strength.

Yeah, so this low compared to everything
else, right? So a low, a low, a high, a

low, a low, a low, and then a low, low
here as well.

So yeah, absolutely, you know, and we
should see how that's going to unfold,

know, this.

very encouraging that the price does not
come in below this level but once it

does then you know we definitely will be
talking about a different scenario okay

well that's it for the market update
let's look at some questions this one

comes from simon

So here is that question.

Was my bias deduction to the downside
incorrect?

Or was it correct at that moment in time
and I would need just to

exit based on my stop loss? Have I made
some key observations?

Okay,

I know how.

Hi, Simon.

Are you there?

Hi, Roman.

I'm good, thanks. How are you?

Good, good. I'm going to put you on the
spot here.

So why don't you explain to us so that
we wouldn't go into all of these

So where is the point where we have to
make a decision? Which bar?

Okay, at bar B18, so just where you got
R3,

and I sort of see that there was a
downslope in apex, so I sort of

thought that was weakness due to the
background context, which is you have

falling ice, the lower lows and the
lower highs.

And so I thought the breakout of B16,

would have been like looked weak.

And then I was waiting for the retest.
So B16 I deemed to be the action

bar.

B17 was the test. And then B18 was the
confirmation.

And that's when I would have taken the
short entry.

Right. So the first thing that catches
my eye is diminished

supply.

So we are going down on this reaction,
and we're diminishing in

effort, and we're also diminishing in
the result. The spread here is different

than, let's say, spread here, spread
here, or spread here.

So it looks like selling is exhausting
itself.

But let's say that we've entered this
position. Then where would we get out of

this position?

So, Romain, just a quick question then.
So on that reaction

down to B19, and this is where I'll
probably get confused between

a reduction in selling to the downside,
accompanied with that volume,

and an ease of movement to the downside.

And I remember you saying that an ease
of movement to the downside is when

you... through a key support area.

And that's when I sort of thought that
that broke through a key support area,

which was B0, way back at the start of
the left -hand side of the chart.

So then I thought that was more of an
ease of movement to the downside.

Right. And it is because we are going
down and we're still committing

to the downside, and that happens on the
diminished effort. So we have that

element of the ease of movement.

But the way how it moves, you know, we
say that it moves with ease just because

there's not a lot of effort required.

In comparison to the previous movements
to the downside, we've seen

deterioration of selling.

Yep. Okay.

So I'm not against this trade per se,
right?

red bars here, and you're initiating the
position on bar number five, red bar

number five.

Then you could see, and even before
that, so maybe like seven, bar number

right?

So here, so you could see how selling
deteriorates. We had big spread, and

on the breakout, that spread diminishes,
it diminishes more. Yes, we're

committing to the downside. Yes, there
is this ease of movement in terms of the

effort being lower and the price still
commits to the downside but um you know

we have to compare it to the previous
price actions and we've seen

and please note that we still have lower
low here after that so it's not like

we're done with selling

I think that if we're missing the
character here, and let's say that we've

entered, Simon, how would we get out of
this position? On which bar?

I would have put the stop loss back up
towards where B15 high is.

So it wouldn't be for quite a while.

Okay.

If it was to go against our initial
short position to the downside.

Yeah. So, okay, so that's initial stop
loss. And where is the exit?

I think it would be on the B25 bar.

Yeah, somewhere here in this area and
even the bar before.

Because you have B23 that commits below
the support.

and then it quickly comes back into the
trading range. And that's on the

background where you had a downtrend,
you're in the oversold, and your volume

is diminishing.

Now the price still goes down, which
creates the divergence.

And that suggests a different behavior,
suggests some kind of rally.

And B25 is the first bar where, and you
could see this from the momentum.

The volume comes right here, but yet
there is no progress

to the upside.

So result to the upside is diminished.

And yet, you know, it actually almost
commits to the upside.

And then on the third attempt, we see
that it doesn't require as much volume

signature.

to move the price in a much better way.

So there is, first of all, synchronicity
between

effort and the result.

I'm sorry, effort is decreasing.

Well, it's not even synchronicity. I
can't even say that this is

This is more that concept that we've
discussed in the November special, the

of movement where, you know,

the effort that is required to move the
price in a much better way is less than

on the previous rallies.

And that's what we are looking for. This
is the timing tool for us when we

observe this type of behavior out of
this type of conditions that the rally

done.

I'm sorry, the downtrend is done, yeah.

So what you're indicating is that...

Prior to B25, there had been some
absorption of the supply already and

allowed that ease of movement to occur.

Yes. So when we are judging the
movement, we have to judge, you know,

story, right? So we can't just take one
piece and out of the context create the

story about that.

So we are kind of seeing that the story
develops.

into the condition that suggests an
oversold condition and exhausted

supply.

And then from there, series of tests,
and we see further deterioration,

non -progress to the downside, and then
B25, that's going to be the area

where... We see a true reversal. Now the
effort moves the price to the upside

rather than to the downside.

But obviously a lot of preconditions
before that happens.

Right. And when you say that it's moved
into an oversold condition, how do you

identify the oversold condition? Is that
by your trend channels?

You could use the trend channels just
visually.

Let's say if I'm looking at this whole
chart, where would I... have let's say

overbought conditions probably here
probably here right because these are

moments when the price rallies and on
any type of let's say momentum indicator

we're going to have those spikes and
then um so

definitely this would be considered by
us an overbought condition where you

just visually would we have oversold
condition when the price goes down

And then we are going to be in those
oversold conditions, especially short

when there are, you know, big moves like
this. You know, the indicators are

going to move really fast.

And then just visually without not
thinking about the indicators, but

these are going to be the times where,
you know, the price will be close to the

resistance or to the support and
therefore will be oversold and

But also, just think about the
downtrend. By the end of the downtrend,

definitely going to be in some kind of
oversold condition, either short -term

long -term.

Right. Cool.

Okay. All right. Well, Simon, thank you.
That was great.

Thank you, Roman.

All right. Let's go to the next segment,
anatomy of the trade.

Yeah, let's look at this.

And I'm really curious as to what you
guys are going to say, and this is going

to be a poll, not going to be a poll,
you know, that I'm going to post, but I

want you guys to vote and tell me what
you think we should do now.

So currently we are in this position as
a class, right? So

the position was originated on this bar.

What do we do here, guys?

Let's vote.

Let's just vote to exit, and we could
exit either as of yesterday or as of

today. As of today, even better.

You could exit. You could add to the
position.

You could stay in the position, keep the
position. So what's your verdict here?

What do you think?

All right.

All right. So majority of you are
staying in the position, holding,

keeping it.

There is one exit here.

And I think that, you know, the way

how this last two days unfolded, and
especially for the technology, I

think. The money managers who move the
market are kind of

a little bit trigger -fearful, not
trigger -happy,

but trigger -fearful in the way that
they want to sell any of their positions

that had big, quick run -ups and good
profit almost right away.

to take the profit and to secure the
profit for this year because the profits

this year for them were quite good.

And any type of news catalyst,
especially related to something like

tariffs, is going to be that trigger for
them

to sell.

And to sell what? To sell the stocks
where...

They have some profits, and this was a
big, quick run of, what, about 50

% in less than one month.

So they definitely want to take some
profits. Also, technology -related, so

saw yesterday a lot of technology stocks
being hammered, a lot of momentum

stocks are being hammered.

Why? Well, because this is where the
profits are. So they're taking the

off the table that produces that
reaction.

So I don't know necessarily whether we
should be considering closing the

position right here. I think that we
should still see how the test develops.

The test of this shakeout, is it going
to stay here or is it going to go lower

and retest the lower lows?

So I would probably just keep it and
maybe just even wait for the... uh next

test because if the next test comes and
it's you know testing correctly then

there might be opportunity to add to
this position as well francis asking

is it the backing up of the october
november minor trading range uh yeah

we could definitely you know think this
way so we're thinking about this range

high enough strength and then backing up
action starts with the supply obviously

yeah we it's a possibility yeah it's
fine thank you all right so i

guess we're just skipping it

all right let's talk

about something else let's talk about
the horizontal volume signature

um again

I'm figuring out how to teach properly
volume.

Yeah, it kind of sounds funny.

It's going to be soon, what, soon it's
going to be

10 years of my teaching, over 20 years
of just, you know, studying and trading.

coming up with this statement, figuring
out how to teach volume correctly.

I think volume needs to be taught with
different

ways of how we look at volume signature
because in its essence,

the volume that we have on the vertical
bars, the vertical volume bars, is

not very telling. It's actually hiding a
lot of the information.

that we would prefer to have.

What exactly?

Well, for instance, you know, there's a
never -ending question about the dark

pools.

You know, does it obscure our
interpretation of the volume,

especially for something like ETFs?

So that's one of the pieces of
information that might be closed.

The second and the biggest piece of
information is we can't really figure

from the vertical volume bar signature
what was

supply level and demand level on that
particular bar and where it

came from.

So this piece of information...

are hidden from us, but they could be
extracted from other tools.

One of these tools is a horizontal
volume. Another that I've shown you, a

condensed volume signature on the PNF
chart. Another one that I mentioned is

cumulative swing signature.

Another one could be an up and down
volume.

So we'll talk about those.

different tools and how they show the
volume and so on so forth so there are

quite a few ways for us to think about
volume why the horizontal volume is so

important is because it shows on the
levels

of support and the resistance and we
anticipate that around

those levels which are based not
necessarily on the price but on the

signature of the price.

This is where we would be expecting some
kind of stopping action

because one force is going to be more
than another.

There are different ways of how this
technique is called.

I just, for generalization purposes, I
call it horizontal volume so everybody

understands instantly what I mean. But
there is definitely a market profile,

volume profile, a couple of other names
that this technique has.

On this chart, you see both the vertical
and horizontal volume signatures.

We're first going to look into the
yellow square.

This yellow square shows the price of
Nautic 100 futures. This is a daily

This is the beginning of 2018, that
first initial change of character

that we had.

And horizontal volume signature works
extremely well in the trading ranges.

Why? Well, because it contains all of
the data that is being shown on the

daily basis, on the daily charts, as to
where the majority

of the volume came, at which price
level. So therefore, sometimes we call

price on volume, or volume on price.

however you're going to call this.

And the information from the vertical
volume bars is

being translated into the horizontal
volume signature. By the way, in July,

had a special with Damon Pavlados, and
he was an institutional trader

for... multiple decades he created the
volume profile signature

for TD Ameritrade when it was think of
think of swim

so he has a lot of knowledge about you

know how to construct this what it means
and so on so forth so we had a really

good special with him you could still
find that on our website and buy it if

you're interested but I want you to know
the basics because when we look at the

vertical chart, I want you to identify
where the volume was the highest, and I

want you to start anticipating what's
going to happen next as the price

progresses. So in a way, it's helpful in
the trading range, and it's also

helpful for the upswings that happen
after the downtrend, after the

accumulation, because we could...

recreate a potential structure as to how
the price might advance or might

decline. All right, well, we'll do that.
But first, let's look at this yellow

box.

And we are seeing that by the end of
this box, by the time that the new high

has been made, we have this horizontal
volume signature.

What is it based on?

It's based on the levels of the price
where we have had

the highest volume signature.

All right, so something like this as
well.

And we're going to have those kind of
like peaks of where the volume has been,

you know, the highest.

And what it does...

it incorporates not just, you know, one
downside, but all of the information

that is contained here in the price
action. So, for instance, this largest

bar, we definitely see that there is a
lot of volume signature that's coming in

on the down bar.

Then we've seen that there is some
volume signature that's coming in as a

temporary stop in action.

Then there is a consistent volume
signature here.

So that all still kind of like goes into
that horizontal volume signature. Then

look at this stop in action.

Definitely has a lot of both supply and
demand.

By the way, this is just another example
of how quick reaction could be

observed.

And then next bar as well contains quite
a lot of volume right there.

Next one.

And so we could see that by the time
that we are done going through this

level, we could accumulate quite a lot
of volume on this level.

So our expectation is that when the
price comes to that level, let's say

one, this one, or this one, we might
have some kind of hesitation stopping,

pausing, just because we know that
opposing effort.

has come and presented itself at this
level in the past all

right well let's kind of practice now so
we are here and this is

our uh horizontal volume signature so
what could we expect if

we're saying that this bar right here
acts as maybe the up thrust and the

reversal type of bar reversing the last
commitment to the

downside to the upside, I'm sorry, and
then has some kind of test and then has

some kind of confirmatory bar that
closes definitely below the big

bar. And that suggests that we are done
with the up move and we are in the

downswing.

Well, how do we look at the movement in
this downswing even prior to the

confirmation? So let's say again, we are
somewhere here.

what would we expect to happen as the
price moves to the downside?

We probably would be expecting that
we're going to have some kind of

this level.

There is both an increase in demand, and
by the way, I like when the horizontal

volume signature divides supply and
demand like this. I hope that this

information is actually accurate.

We're still seeing that supplies would
be somewhat dominant at this spot. So

we're expecting good volatility in this
area or going into this bar.

And then demand could pick up. And we
see that there is definitely this demand

tail that brings us slightly up into the
close.

Oh, I'm actually, hold on a second,
guys.

Am I doing this correctly?

All right, okay, yeah, I think we're,
hold on a second, let me just double

check.

All right, yes.

Okay, so we're expecting some demand to
come here. We're expecting some demand

to come here. So kind of like in this
cluster where we would expect some

resistance from the demand.

And here is that demand coming in. We
see this in the vertical bar as well.

And it just cannot produce a meaningful
rally, so there is still some selling

behind it.

But this is how we would recognize
the...

support cluster as to where the price
could fall and demand could actually

increase just because it increased in
the past.

So where is the next time where demand
might increase?

Well, somewhere here into this bar.

And look what happens at this point. We
see that this bar, the spread is

slightly diminishing.

and the volume, the effort, is slightly
increasing.

So there is some demand that is hidden
in this volume signature, and it's just

being shown to us prior to that, prior
to the price reaching to

that level.

And all of this information that we look
at has been accumulated on this bar

right here.

So we are expecting some kind of... a
rally from here here is attempt it's

successful than the previous attempt so
we probably would be uh thinking that

this is the beginning of the stopping
action all right so uh you kind of could

see how we could even draw the movement
of the

price based on information that we have

Well, let's try it now without looking
at the chart, right? So here is on the

right is horizontal volume signature
that is being given

to us on this last bar. And that
includes this whole information, this

trading range. And that's why, you know,
trading ranges are so useful when we

use horizontal volume signature is
because

All of the price swings are contained
within some kind of structure.

All right, well, let's look, let's see
what we could extract from this OIM

signature.

We're probably thinking here that this
is bullish.

Just because of how effort has
increased, there is a stop in action.

So this means that demand is present,
and we're expecting some kind of rally.

we are seeing that supply has been
observed significantly and now on lower

demand signature, on lower effort, the
price starts to move up.

So here is the time for us to jump into
this position and we want to know how

could possibly the price move from this
point?

Could it move in a specific way and
could we figure out beforehand how it

move? Well, we see...

on the volume profile that there are
some instances when supply is starting

increase, supply is starting to
increase.

Then again, supply is starting to
increase, supply is starting to

And we want to look at the supply
because, you know, this is where some

of resistance are going to come.

And then we want to look at the
structure and just say, does it make

this is where supply might come?

All right, so would it make sense if the
price rallies and then it meets the

supply and then it reacts?

Probably it would because we had the
previous attempt to do the same. So

probably outlining this cluster right
here as the first potential move.

If this is going to be a sign of
strength, we could potentially even

that and then come back.

And come back where?

Come back where the demand started to
increase, right? So maybe into this area

right here.

Or let's say if we're going to just go
to this level, then where would demand

increase? Somewhere here. We see that
demand was increasing. So come back into

this area first.

Hold on a second. Let me just redraw.

Like this.

Or like this.

And this would be the minus sign of
strength or a sign of strength.

And then from there, up,

down, up, down.

Again, demand is increasing somewhere
here.

And then probably overcoming.

and heating that resistance.

So this is just an approximation of how
we could possibly move here, just based

on the supply and demand signature.

Let's see how we moved.

All right, so first we're going to this
level of the resistance.

Now this was our clue here, you know,
this level.

We would experience some increase of the
supply.

It comes in like... in this instance,
has a rapid

deterioration in price and comes to the
area where demand started to become

active.

So we're thinking that it's going to
fall into this area. It does.

Next time, because it's a bullish bias
and obviously we have to have

here to confirm it, but...

Once it starts to break out, we're
thinking, where is the next target for

Well, we said here supply is going to
increase.

Stop in action here.

And then where would it stop? Well, we
saw that there was an increase of demand

into this area right here. So we were
thinking that it's going to go to this

level. Didn't go exactly to that level,
just kind of showed more strength.

So which was suggestive that maybe this
level is going to be not as important

and the price kind of like goes through
that level.

Again, you know, why is this important?
When we select stocks

for our portfolio and we look at the
character of the next potential move.

and we look, let's say, as to how the
price could potentially move through

levels, you could select a stock that
would suggest that the movement is going

to be much easier and faster, where
supply is not going to be predominantly

present, and this will allow you to
profit more and to have

a much enjoyable trade, which
emotionally might not compromise you.

All right.

Well, let's see how we understand this
concept. So let's do the exercise.

A volunteer, maybe?

Say yes, and I'll unmute you.

And this chart, I'm actually taking from
stock charts.

So you could create the chart where you
see both the vertical bar.

and also the horizontal bar volume.

No volunteers? All right.

Let's do it.

Okay, so we're coming in into some kind
of formation right here. First of all,

let's quickly think about the bias here.

What do you think the bias of this
formation is?

what do you think the bias of this
trading range is

okay

all right great majority of you are
thinking that this is an

accumulation there are a couple of uh
just a redistributional pattern. So

quickly go through this.

Increase of the supply and increase of
the result, such as a bias to the

downside.

Continuation of the move.

Let's look at how it happens.

Momentum, momentum, increase of the
momentum, and kind of increasing the

signature.

What looks like an attempt to stop here.

So this could be a selling climax or
preliminary support at this point.

What happens after that?

After that, you know, kind of like a
climactic attempt.

Test.

Test is not progressing too much.

And then some kind of shakeout and then
the next test is at the higher low.

Now in between it has the rally.

It has the characteristics of buying on
the way down and then buying on the way

up. So there is definitely some sale
buying that happens here.

Probably this was value buying as well.

Attempt to stop.

And then into the oversold condition,
the price goes down, comes back up

really quickly. So it acts more like a
spring.

And then the high -low acts more like a
test, and test happens on diminished

volume characteristic.

If we would have a commitment below, we
probably would be thinking about this in

a slightly different way.

But we don't have that commitment. Also,
look at the rally in between, that

yellow rally. Again, I talked about the
volume characteristics, but also look at

the result. This is the best rally in
this whole trading range.

So it has a lot of bullish
characteristics.

The last reaction also has a lot of
bullish characteristics, and then we are

taking off here. So yes, accumulation,
we probably would be

labeling it like a downsloping range,
phase A, selling

climax, automatic reaction, secondary
test, sign of weakness in B.

minus line of strength in B, phase C,
last point of support,

and then probably we're in phase D.

Okay, so now that we know the biases to
the upside, we kind of want to

understand, you know, what kind of
movement we're going to have to the

Our target loan term is $90.

And we see that the causality here is
somewhat okay, about half a year.

So that causality could sustain a move
to the 90 and actually

above. So we're probably thinking that
we're going to hit $100 on that type of

move. How would we go there?

What would be the path for us with which
the price would move? Could we actually

figure this out?

Well, let's try.

So looking at the horizontal volume
signature, we are seeing that

there is a lot of supply that comes in
at around 5860.

So we probably would be expecting, if
this is phase C, a break through 60.

And then where would we go? Where is
supply increasing again? So we have...

decrease of the supply, we have increase
of the supply, we have increase of the

supply. So we're probably thinking that
the sign of strength could go to this

area, 64, 66, and then would come back
somewhere.

Where would it come back? Probably where
demand is increasing, right? So think

in terms of movement up, supply is
increasing, movement down, demand is

increasing. Why do we need to see those
increases in supply and demand? Because

this is where supply is stopping the
price from moving further up, and this

where demand is stopping the price from
further moving down.

And that's how we are finding the
resistance and the support.

Please note that we could have picked
maybe 62 as the resistance.

We could do that.

could have picked maybe what um yeah 60
as the support as well

but it's going to be a little bit more
accurate if you use the actual price uh

volume on price uh just because this is
where supply has occurred so you are

anticipating that you know that supplier
demand is going to be available there

okay so let's say that this is the first
move then what happens next

Well, we are probably after the sign of
strength and

the backing up action, and we would be
thinking, you know, what kind of supply

is going to come here.

At the lower level, there is quite a lot
of supply, so there might be some kind

of testing action that we would
anticipate.

And then after that, there's going to be
an attempt to overcome the previous

high. and go to the next level where
supply has increased right so we're

probably thinking this level right here
70 64 68 um and

even coming to 72 and then encountering
some kind of resistance again

and what are we going to do again we're
going to consolidate to the point

where we're going to have some kind of
increase in demand

In this case, probably I'm thinking like
this is the increase in demand, this is

the increase in demand that we could
have.

So after, let's say, we're heating this
cluster, we could come to

6664.

Maybe another attempt to consolidate
here.

And then the next attempt to overcome
72, 74, and probably come to the next

point where supply is going to increase
more dramatically, 80, 78, so something

like that.

Demand is going to increase into this
bar, 74, something like that.

And then next attempt to go up is 86.

Supply is diminishing here, so the
movement has to be a little bit better

this area, so not with reactions that
are not going to be as substantial

as at the beginning, just because the
levels of supply here and here

are quite substantial, so it's going to
take some time to go through this level.

Okay, well, let's see.

how we did.

Okay, so here is our original horizontal
volume signature and this is what has

happened after the price has advanced.

So you could see how everything changes
because there is more data that comes

and that changes the whole horizontal
profile.

So we're looking into this picture,
picture number one. We said that most

we're going to have the move to

above this highs right here, somewhere
where supply has increased

into 64 .66.

Okay, so I would say that we're very
close.

Then we said that we're gonna have some
kind of reaction back into 60

.58.

Okay, that was perfect.

And we said that most likely this is
going to be a sign of strength because

this structure, we know where we are. So
we are combining the information from

both sources.

We are thinking about, well, where is
the supply going to come that's going to

stop the swing?

And if this is going to happen, then
what kind of labeling we're going to

for the swing? So a sign of strength, a
backing up action.

We said that supply is probably going to
come, so we need some kind of retest.

Retest is here.

And then we're going to advance to the
next level where supply has increased,

7068.

And then we said that probably is going
to come back a little bit into this area

right here, 6664.

Didn't go there.

suggesting more strength and then after
that we said that this is the next big

level 72 74 comes right to that level
and from there

we could have the reaction again into
where into 66 64

somewhere here yes so came there um

and then we know that next time it's
going to overcome

72, 74, it does so, and then we said
that this is where supply is gonna

start diminishing, so we are expecting
the movement with the reactions that are

not gonna be of the same character, that
the reactions are gonna be much smaller

than what we've had before, just because
of what we've seen prior to that.

So you kind of could see how this is
such a valuable information that we

extract from the volume signature if
we're thinking horizontally.

If we're thinking vertically, then we
will be in the way interpreting the same

information only in a different way.

So definitely, most definitely, we need
to look

at... horizontal volume signature now
the problem with students and myself

including is that when we look at the
horizontal volume signature we are being

distracted it's a different visual
information and therefore when we

look at it we sometimes forget about the
vertical on volume bars did you have

that switch always happens to me for
some reason

When I look at the horizontal volume
signature, I forget about the vertical.

So the key here, I think, is just to
look at the vertical and try to

find the horizontal volume information
in the vertical bars.

How would we do that?

Well, we want to identify the bars that
are going to have the majority of the

volume. Those are usually going to be
volume spikes.

And then you want to project that.

into the future and you're going to say,
okay, well at this level, we would be

expecting some supply to come in. So if
the price moves up into this area, this

is where it might have some encounter
with the supply and therefore the price

might stop.

And then as the price goes further up,
you keep doing this.

You keep thinking, okay, where is the
next level where supply has emerged?

and was able to move the price in a
meaningful way.

Here, here, here, here.

Kind of like the same information,

excuse me, here,

here, here, and here,

here, here, and here.

This is how quickly I've constructed
this horizontal volume signature.

We kind of could see that from the
vertical.

And when you don't have the horizontal
volume signature, that's what you should

do.

Just think about those levels.

And think about the price movement.

of how the price is gonna move.

Could be from support here,

could overcome this level. If it does,
it's gonna retest it

and then move to the next level, retest
it, move to the next level. When supply

is gonna start diminishing, it's gonna
move in a different way, in a different

character.

So I know that a lot of you

still having some problems mentally
adopting

the terminology of the character of the
move.

Because there is not enough definitions
there that I gave you guys.

Methodology does not necessarily, you
know, talks a lot about the character of

the next move, but this is something
that I want to develop as a knowledge

then as a skill.

for our community because a lot of this
will help to define

your selection.

If you have, let's say, 10 stocks and
you only can open five positions and all

of the 10 stocks you think that will go
up, which ones do you select?

Obviously, momentum characteristics
might come to mind first.

long -term causality for the long -term
investors, and so on and so forth.

But regardless whether you are a swing
trader or a long -term investor,

you would be thinking, how would the
price move?

Would it move in the accelerated way?

Would it have a lot of supply ahead of
it?

Where is the most beneficial place for
me to... have some

kind of of a swing trade so for instance
if we know that there's going to be

a resistance somewhere here and then
here then is this a good

place for a swing trade or maybe where
supply is going to

diminish maybe in this area a swing
trade would be better and we kind of see

it from the way how the price moves
right so more distance where supply is

less available um you know and maybe
even a better movement although momentum

here you know is slightly better than
let's say here but definitely not here

so that's why

So analyzing potential character of the
move is important because you're

creating a much more efficient trade and
you're extracting more profits. And at

your level, guys, you know, you should
be thinking about those things. And even

if you don't apply it, you should still
think about this. Please do.

Because these are very important
concepts, you know. And even if you,

look at the stock before you open a
position and When you go through the

analysis and you look at, let's say, at
the causality, you do the PNF, think

about extra question there.

How would the price move?

Would it move quickly?

Would it move with some kind of
laborious move, grinding move, because

available there? Would that benefit your
portfolio if the speed, the velocity

with which the money is made is lower?

Or would you rather have a selection
that has that kind of like explosiveness

behind it?

All right.

Let's do this one more time.

Here's another exercise.

A trading range as well.

So let's talk about the bias here.

Let's...

let's figure out the bias first what do
you think uh the bias is for this latest

trading range guys

All right, guys, let's see what you're
saying, okay.

All right, so more than half of you are
saying that

this is redistribution or distribution.

All right, so let's go through the bias.

Here's our bias game.

A range right here, and we're seeing how
that fails.

Interestingly enough, a spring type of,
situation going into the sign of

strength up thrust and it's being
resolved as an failed up thrust attempt

commit temporarily and then failure
right away on the way down we have a lot

of supply that's coming in so the bias
is definitely to the downside on

the climactic action we've seen a lot of
buying

behind this bar.

So the open was with the gap down and
then throughout the whole day there was

big rally that was unfolding.

So that suggests that there is a
presence of the demand.

We want to see what kind of demand we
have. Would it take us where?

To which level could we come? So we are
coming first to

just an intermediate resistance level.

And look at how we are not coming down.

So that's a very interesting thing. So
somewhere here we're thinking

that only one day the price went down so
low and then it recovered

so quickly.

So there is definitely some demand
behind this bar because of how

quickly the price has recovered and also
look at the test.

The secondary tests are so high above
the actual selling climax low, and

that's on the background of diminishing
supply characteristic.

And then after that, after the test, the
price still creates an upthrust.

So this is a lot of bullish activity
that is happening. And I would say

that at this point,

we still would be anticipating the
retest of the previous low.

And that retest would either confirm

or this

bias is to be failed on this reaction.

And this is something that you and I,
we've been discussing about the bias

The key is to have the correct bias by
the end of the chart.

So let's say that I'm not sure about
this rally.

It looks bullish.

This looks bullish. The tests look
bullish.

The up thrust look bullish.

But before that, there was a very
distinct downward movement, down

bias.

So what do we do?

Well, we say.

I see bullish characteristics, but I'm
not sure whether it's bullish.

So I want either to confirm or I want
this bias to fail.

How would we confirm that bias? Again,
we've talked about the character of the

move. So what is going to be the
character of the move?

Into the climactic action, we see a lot
of momentum to the downside. We see

velocity increase.

We see supply increase.

We see a result to the downside
increasing substantially.

What is the character of the next
reaction?

We are not making the new lower low. We
are making a higher low. Result is

diminishing. We are diminishing the
momentum, diminishing velocity compared

the previous move to the downside. As we
see how the down spread on

average.

has diminished characteristics.

So we understand that the selling has

deteriorated on this reaction, therefore
confirming a bullish bias

that we found on the way up.

And if we are not confident, if we still
think

that the bias is to the downside,

then we would be

looking for the signs of confirmation of
that bias, right? So whatever bias you

have, you either confirm or you deny
that bias.

So here we're saying, okay, going into
the reaction, the character is bullish,

volume is diminishing, high, low.

momentum is diminishing, and we're just
retesting the low that we had before.

We're not committing significantly to
the downside.

Okay, let's either confirm that or deny
again. The next rally does

not have a lot of effort behind it, so
we're kind of expecting that it's

probably going to fail.

At the same time, as we look on the way
how the price moves, to the upside,

it's actually very encouraging because
all of our reactions to the upside were

not very volatile reactions.

So that also tells us that in this case,
we are

observing both demand diminution and
supply diminution, but yet the price is

going up with somewhat limited result.

Well, two thoughts that come to my mind.

just on that first of all we're
expecting a reaction and then we want to

what kind of character of the reaction
we're going to have and then secondly we

are probably in phase b why well because
this is the place where there's going

to be exhaustion by both demand and
supply why is that

well because of this action right here
this is a um

of two big efforts.

One is demand, and behind it is some
value buying.

And one is supply, and behind it a very
strong force.

Capitulation, general capitulation,
based on

fear.

Both are extremely strong.

The value buying is strong because there
is a lot of force behind it. There is a

lot of intention and intelligent thought
behind that buying, whereas general

capitulation is almost always a herd
mentality.

This is where more primal thinking
exists, and we are trying just to dump

stock at any cost.

Okay, so we kind of...

Thinking, yeah, we're in phase B.

This rally looks a little bit more
bullish than bearish.

But because of the limited result, we're
expecting a reaction.

We want to see what kind of reaction
we're going to have. Would it confirm or

deny our bias to the upside?

We are temporarily committing below.

commitment comes on even lower supply
signature.

So that is suggestive of the spring.

Usually that type of spring with supply
coming in, we need some kind of retest

that comes on the next low, and we see
that this is a higher low, supply

diminishes again, and we are able to
recover from that.

So I would say that this is an
accumulation bias.

Confirmation of that would be overcome
in 98.

And here, with the accumulation bias,
we're thinking, okay, well, how would

price go up?

So we're thinking tests in phase A, test
in phase B, and then test in phase

C. So we are going into phase D. We're
going to have some kind of sign of

strength.

We are having somewhat of an apex
formation. So a sign of strength does

have to overcome 108.

It could really only overcome the
downsloping line and just to have

that sign of strength into 2008.

So we're expecting a move like this into
2008, perhaps,

and then some kind of backing up action,
sign of strength backing up action.

Okay, could we confirm that?

with the volume, with the horizontal
volume.

All right, so we are seeing that supply
increases here, here, and then

definitely here. So this is our major
zone where supply would increase.

So probably 106, 108 is that zone where
we would be expecting the price first to

go into some kind of maybe even minus
sign of strength.

or out of the apex formation, you know,
we could say that this could be a sign

of strength backing up action.

And this is where supply might come, you
know, in a significant way. So we'll

have to see what kind of reaction we're
going to see here.

The reaction probably to where?

Where demand started to increase?

Maybe to 100, something like that.

So 106, 108, 100.

So this is where supply is going to be
the most.

And then after that, because supply has
increased, we need to test.

Some kind of test.

And then after that, we're going to jump
above 108, 100, and

probably would come to this area right
here.

So 122 and 116, something like that.

And look how supply is diminishing
throughout these two bars.

So this movement here should be very
easy. So we should have some kind of

momentum increase in this area.

And then only here we should have some
kind of hesitation.

with let's say the move to 116 again and
then again smaller

supply so something like that so we
would be expecting this type of action

well what is valuable from this
information

well first of all gives us an
understanding

about the character with which the price
is going to move. So it's still going

to have some interesting spots where we
are going to have some vulnerability,

especially here.

This is where we're expecting supply to
come in a meaningful way for the first

time.

Because of this absorption of the
supply, maybe this area right here is

going to be as problematic.

Also,

you know decrease of the supply in this
area right here uh is suggestive of the

momentum move uh in this area between
108 and 116.

so just to summarize you know and to
kind of think is in terms of like okay

what what what else could we extract
from here if this is the path

i could construct the whole trade

And this is just approximation. So I'm
constructing an approximate path for my

trade. One of the issues that I have
with my current trade and, you know, a

commonality of my mistakes is all in the
add -ons. How do I add to the

profitable position?

Well, it seems like we could define the
tactics and, you know, tactical

scenarios as to where we would be adding
to the position.

I think that anything that we add in
this zone right here would be okay

this is the zone of point of no return.

I think that this point here could be
also favorable as an add -on because

this could be the lowest low as supply
has increased.

I also think that before this level
right here, we could add another

And here the strategy should be highly
leveraged

plus short

term.

Why is that? Well, because if momentum
is going to increase in the shortest

period of time, we're going to cover the
more distance.

And then let's say after that right
here, there could be also a good

that we could expect on the way to the
upside as supply might be diminishing.

So anything really after the first
backing up action is quite favorable for

a swing trade.

This is a favorable long -term trade as
well.

So I would be thinking on...

how to actually play that.

Another possibility here is just to
think about this possible supply

itself as a potential hedge.

So you could, let's say, sell premiums,
sell call premium.

Or you could just open a short -term
directional put position.

kind of like is possible in this area.

So you're trying to find the way how to
optimize your trading in this way

and how to extract the majority of the
money and to create the most

efficient trading path.

All right, well, let's see what's gonna
happen.

All right, so here is the price data.

Let's see.

how correct we were we said that our
first stop in action is going to be

somewhere in this area right here and

we are

yes

so we are going so one oh uh what is it
one oh ten one oh ten

And here is 115, 110, and 102.

Okay.

All right. So we are kind of
overshooting this area with the bind

climax conclusion with the small
distributional range that leads to this

reaction that has an increase of the
supply. So that's probably that.

major sign of strength that we've talked
about. We thought that maybe it's not

going to have overcoming of 110. It
actually went higher to 115

up to this area. So overcame this high,
so that was a mistake.

Then we said that this supply is going
to have that reaction into

this area, into 100.

And we are there.

Okay, great. Then we set that out of the
backing up action.

We're going to break to the upside first
because of this increase of the supply.

We're going to have some kind of test.

And then we're going to, because supply
is so low here, diminishes so

drastically, we're probably expecting
the momentum move here.

And it happens out of the feather.

on earnings, and we have that
acceleration.

So think about, again, that information
that we were looking for as we looked

at, you know, horizontal volume.

We were expecting a sign of strength,
and we said supply is going to come, so

could actually sell short -term puts, or
we could, you know, sell, I'm sorry,

buy short -term puts or sell calls here.

a hedge to our main position so we could
extract some money here we could

extract some money from the premium as
the price still recovers to those levels

you could do both and then you could add
to the position here on the lower low

lowest of them all here then you could
add somewhere here so

add add

And then we said anything here is going
to be favorable for us to initiate the

position. So three major points where we
could open a position before the

acceleration. And then we said that
supply might come at around 122, 120.

We didn't really see a lot of supply at
120,

122 that has produced.

some kind of meaningful reaction.

But we definitely see increase of the
supply in this area.

It just has been vertically absorbed.

And that's such an interesting
indication of the bullish scenario where

price is, the volume is showing to you,
you're gonna have some supply here,

increase of the supply.

It did happen.

But then when, again, I'm gonna repeat
myself.

When supply increases, the tendency for
students to think that this is bearish

right away, not true.

Why? Well, because there are two ways of
how supply can resolve itself through

the absorption.

And current market, current rally is
kind of a really good example of that

vertical absorption.

And then we could also have horizontal
absorption as well.

Or some kind of reaction.

There is no reaction here. The test is
successful, and we said that with

diminished supply signature, this could
be an area for a good swing trade.

But this we wanted to avoid. This was
the point of vulnerability. We knew that

supply is going to increase right here.

Is it valuable?

And if we're thinking about the
character this way, and we're thinking

the trade, then we might compare
possible trades that we have on the

And we can say, in this stock, I would
rather participate in this area,

let's say, than stay in the position in
this area right here.

Unless you're a long -term investor, and
you started getting in somewhere here,

then, you know, you would be thinking,
okay, how do I actually protect my

position? Could I hedge here?

You know, could I have some puts? Could
I have, you know, sell some calls? Could

I maybe sell a pair, spread, you know,

maybe sell highly correlated stock to
this one, which is

underperforming?

All right, where are we? Five o 'clock.

All right, questions, comments. Let's
see. How did you deduce the higher low

104 in that it would only react to 104
before continuing up?

Is it on this one chart, Simon? Is it on
this chart?

Okay, so one of four and then react to
one of four, right?

So I think that when you look at the
reactions, you're basically looking

demand would start to increase. So let's
say that you had this stop in action in

the supply, you're thinking on the
horizontal volume, okay, when is the

time when demand would increase if we
would have a reaction, if the price

go down? Well, somewhere here.

So that was it.

But I don't recall 104 here.

What were we talking about 104?

Yeah, we said that we're going to have a
move to 108.

It overcame it to 115.

Then we said that we're going to come
back probably to around this area. So

100 and then...

I think it came back to right about that
time.

Well, if the stopping action in the
actual structure does not appeal to you

with this type of technique, then think
about at least the

character with which the price can move
once it overcomes specific levels of the

supply, right? So, for instance, this
momentum move, this deterioration of the

supply, So these are the spots where the
price is going to move really fast, and

you could have an edge here, and we
could kind of see that, that this edge

has been persistent in this move.

So this is from about 100 to 150, about
50 % return

in six months.

All right, great.

Let me see. I wanted to cement this a
little bit more.

Okay, so here's a choice, guys.

We can do either one exercise on the
bias, or we're going to do the exercise

on the horizontal volume.

So which one would you prefer?

Going once, going twice.

Interesting. Everybody's saying
horizontal volume.

Okay.

Fascinating use of horizontal price
volume. Hope you had a wonderful

Thanksgiving. Thank you, Sharon. Yes.

Yeah, I had a really good Thanksgiving.

Thank you, guys.

I hope you had a really good
Thanksgiving as well.

All right. So let's go to stock charts.

And what I thought that we might do is
take any stock.

and then just to go through what we
could possibly extract the information

as how the price could potentially move,
you know,

and use it as a horizontal volume
signature. Okay, so which stock would

to discuss, guys?

You can just give me the symbol.

A trade desk is good. Okay. Yeah.

Let's look at this.

So look at where we are. This is the
horizontal volume signature. And let me

just get rid of this.

Let's leave the momentum on. Let's get
rid of the relative.

Okay. So this is the whole data for this
stock that we have over three

years of data.

And this is the horizontal volume
signature on the last day, on the last

of this chart.

If I were to, let's say, look at the
initial trading range that we have here,

that volume signature is going to
change.

Because now, it has less data and the
less data it

has uh the more change we're gonna see
okay

so let's just say that before the
breakout and this is where

the usage of this particular technique
is going to be limited so for instance

i'm looking at this ipo uh and i'm
thinking okay well Is this bullish? Is

bearish? It looks bullish, right? So
there is some kind of decreased

You know, we are seeing that in the
volume signature as well. We're seeing

in the spread.

We're seeing higher lows.

We're seeing some kind of apex
formation.

So the only usage that we could possibly
have in this picture is

the levels of the resistance in this
formation with the levels of the

So we could be thinking that if we
overcome this supply right here, which

so abundant, we're kind of seeing that
trading range, right? So these are the

boundaries where supply is increasing
and demand is increasing.

If we overcome that level, look at the
next one. Supply is so low in

comparison to the previous level. If we
only would overcome that, we would be in

a great shape.

So supply is somewhere here, supply is
somewhere here, supply is somewhere

So every time there is an attempt to
overcome, supply is coming in. So supply

could be seen in this bar, in this bar
right here, somewhere here in these

in these bars.

And then it's hard to see this volume
signature button in this bar right here.

So this is where supply resides. This is
where they're selling into the

strength. But every time they sell into
this level, what happens? We have more

and more muted reaction, more and more
bullish reaction, where from high

volatility, we go to the low volatility.

And that confirms the bullish scenario.

And look at how the price now resides at
this level that we needed to test.

So from here, the only conclusion that
we could extract from the horizontal

volume signature is that if we are going
to have a break to the upside, it's

going to have some kind of momentum
behind it because there is no supply

it at all.

And we would be looking for some kind of
run -up and then a climactic action.

That's what we would be looking for.

Okay, well, let's see.

how that changes, and I want you to see
how the picture changes as the price,

you know, starts moving. On the last bar
here, we have some supply coming in.

Why? Well, supply tail, volume
increases, and we know that this price

has that supply, so we're expecting, you
know, some kind of supply come in and

stop in action.

This is a really good bar for us as the
test bar as well.

We've tried to go up, still some supply
is available, but we're not going down

that much.

Excuse me, guys. So I would say that as
the price comes back to 32,

there are multiple options to open this
position.

Kind of trade it. So here is this bar.

Suggest what supply has come and there
is no more selling.

If there is no more selling, you know,
you could actually think

that there is going to be a continuation
and this is actually a really good bar

to open the position.

Here is that continuation and look at
how everything changes in the profile.

The price.

goes above uh everything below it kind
of stays the same because now the volume

on this bar does not influence
everything that is below

next bar have some supply and that's why
we have this

uh red supply um column here horizontal
column to appear

okay supply looks to be you know
substantial

And here is one of the mistakes that is
very common in students'

work. So, for instance, everything is
identified correctly.

Bias, timing, and even the character, we
might be saying that there might be

some acceleration right here. But then
supply comes like this, and students are

saying, well, the rally is done because
supply has come.

Not true.

What do we do here?

Supply increases.

Two options.

Absorption, you know, whether vertical
or horizontal, or we're going to have

some kind of reaction.

What do we see on this bar itself?

Did we close below the previous low?

No, we didn't. So even though the effort
has increased,

we did not have the progression to the
downside, at least here.

So we would be keeping this position.

And if the price would have, again, some
kind of rebound, this could potentially

be another way to enter this position or
to accumulate more.

And obviously we want something of like
what we've had here, the bar that's

going to cover the whole body.

Okay, something like this where through
the intraday we could definitely enter

on the way up to 33, 34, 35.

Okay, here we probably would be just
staying in this position. We've come up,

you know, multiple times into this
position and there's no reversal yet.

There's some kind of gap in that
suggests that maybe we're, you know,

close to the Indian action.

But this could be also a little bit of a
runaway gap as well.

Again, gap where we do have small
supply, but it's not really that big.

So we kind of see that the character
that we were thinking is going to happen

availability of the supply would lead to
the momentum move.

And again, I want to quote our mentor, R
.G. Wyckoff himself,

judge the market by its own action.

You can judge how the price will be
going up from this moment if

you understand how supply is being
present in this particular

structure, at this particular price
level.

All right, well, something more
significant here, and I'm not going to

bar, guys. You know, this is a different
type of exercise.

Let's just kind of like go to the next
formation. So this looks climactic. This

is probably where we would be thinking,
okay, at least we're going to get out of

some of the size that we have, some of
the, you know,

part of the position.

Here we would be expecting maybe a stop
in action, that climactic action, and

this was a very nice rise, less than a
month, and we are traveling about, what,

about 40 % or so, or even more, yeah,
not 40, so

30 to 40, yeah, 33, about 30%. Okay, so

let's look at the next trading range,
because that's what we want.

Okay, so something like this, right? So
we are looking at the next range and

we are thinking, okay, what could happen
here?

There is not a lot of selling that is
going on.

We look at the horizontal volume
profile. We're seeing that this is,

of like the level that we were sitting
in here and supplies at the resistance,

and we just need to overcome that.

in order for us to have what kind of
supply? Well, maybe just a small supply

somewhere here on the way out. But then
after that, we don't see a lot of

supply. So that's our expectation,
again, that we're going to have some

move to the upside.

Selling is very, you know, not present.
So we still probably rely on some kind

of momentum move.

right here, maybe of the same quality,
of the same distance, maybe of the same

character, maybe slightly different, but

probably it's gonna overcome this high,
most likely, just

because there's not enough selling here,
and this could be another good short

-term swing trade.

Okay, let's just.

see where we would get in into the
position. So all of these last four bars

actually quite acceptable for opening
the position.

This is definitely a really good
confirmation bar.

It has some supply signature behind it.
And again, we kind of expect that at

this level. Why? Because of this supply
right here. Then our next goal is going

to see, you know, in 42, we're going to
have something more substantial.

Really good bar next time.

It just shows that supply has come in.
It was not excessive, and it was

observed. So could be an add -on right
here.

Okay, so supply is still present, and
please note that how it came to 42.

had that supply tail so supply is is
there we could have maybe like a smaller

reaction here um unless you know we just
vertically are absorbing the supply

that came on right on this bar and these
are acting as the test bars if we

overcome 42 you could add to the
position here as well

okay so that reaction happens

We would not expect this reaction to go
below, let's say, 37 .5, 37.

Okay, and that's a jump most likely on
earnings.

Again, here we are thinking, what do we
do here? Most likely we're just closing

the majority of the position. This was a
big run, and it suggests a lot of the

supply that has come.

Once we have some kind of done bar, Here
we're going to have the supply

signature on the horizontal level.

We would be thinking, you know, we're
going to have the reaction where we

become. So I would still allow the
volume signature to develop a little bit

more.

And here it is. So here's that supply
that came at this level.

All right, and as we go through the
trading range, you kind of could see how

volume starts to persist more in this
area than, let's say, in

this area or in this area right here.

So there is more participation by

institutions.

And we're probably observing some kind
of potential attempt to...

At least that was the thought at that
time.

And what do we need to do in order for
us to overcome this level?

Well, we definitely need to overcome 54,
56. We need to overcome the supply.

Supply is still present.

But once we do that, then we could have
a favorable continuation.

If the price goes to 56 54 and then
comes back that will become

you know very bearish okay so here

is the uh sprint scenario uh is
unfolding um this was i believe actual

that i had all right and this was very
interesting because the

move to the upside kind of has

The same characteristics as the previous
moves, maybe not as strong as you would

expect. So that was a little bit of a
suspect, but momentum is showing that

there is some buying behind it.

So we're still going with this scenario.

And the only decision here, would we be
selling into the climactic action?

We're thinking that this is a sign of
strength, backing up action.

is gonna be somewhere here.

So unless backing up action support
fails, then

we would get out.

If there's gonna be a continuation, then
we would add on.

Okay.

Looks very favorable.

Again, not that we could use the volume
profile here a lot, but we are

definitely in the know that between 57
and 47,

there is a lot of both supply and
demand. So if the price is to come back

this level, the action here is going to
have a lot of momentum just because of

how shares have been exchanged in this
area.

I'm gonna go bar by bar here.

So again, favorable, kind of feeling
like I'm reliving this trade again.

Still favorable.

Momentum is diminishing and that becomes
a little bit of the concern.

And now we have the formation here that
needs to resolve itself to the upside.

If it goes below 60,

That starts to jeopardize the whole
structure a little bit. You still might

thinking, well, I could be in the
backing up formation.

So it needs to rebound off 60 and
definitely don't have something like

this, like a bar that commits below some
support or the bar that commits below

the local support.

We don't want to see that. And
especially if the bar is going to have

of supply signature.

And I believe that we were pre -earnings
here.

This was also pre -earnings, actually
earnings right here.

And we kind of, let me give you the
history of this.

Earnings, earnings,

earnings, and then earnings somewhere
here, expectation,

right?

All right, let's see what happens.

Here it is.

That's the bar.

That's what caused me to think about
closing this position.

And that was pre -earnings.

I don't know exactly, you know,

how it came about. It's just that I look
at that and...

it looked like there was more supply
than I wanted. It looked like the

was not there. And that is during the
pre -earnings. So we are not having a

demand from institutions like we had
here, like we had here.

We're having more of a picture like
this, where we go nowhere pre -earnings.

And then we have this type of bar that
is suggestive that maybe we're done.

So at least scale out some before
earnings if the stock is behaving this

There are other better ways of how the
stock could behave.

If that was not enough, then there is
the second bar.

That is kind of giving you an indication
that supply is there, supply is

increasing. If we're going to have on
earnings some kind of negative reaction,

then where would we go? We probably
would just jump somewhere here or here.

So here is our target one, here is our
target two.

So this is the way how, you know, this
could be helpful.

The horizontal volume could be helpful.

So, one and then two. So

somewhere here between 50 and 42.

It makes sense, you know, this support
level a lot. It makes sense for the

oversold here.

It's kind of like the next level where
we had some demand.

So let's see what happens.

We are dropping on the earnings reaction
right into the 50 zone.

And that is that logical zone where we
had some demand

before it came.

Demand actually came on this bar, and
this is where a lot of the

has happened, also right here in this
area.

And just a side note on that.

I think that we should follow the advice
of Wyckoff himself.

And I keep repeating this phrase.

Judge the market by its own action. It's
always as if Wyckoff was saying that

all of the information is given to you
already as to the way how the price,

the price will do and how it will do so.

So in this example, we are seeing this
reaccumulation pattern.

And in some instances, we would probably
say that

reaccumulation happened from phase A to
phase C?

Not necessarily.

Sometimes reaccumulation could happen in
phase A, phase B, and then nothing

happens in phase C.

Sometimes phase C is more important.

So we really have to think non -linearly
about how accumulation or distribution

happens. It could happen in so many
ways.

And so many different stories that could
have, you know, be created, you

know, as a wake -up story.

All right.

Well, let's see what happens next really
quick.

All right. So we're still going down. We
go to that, you know, next level. Look

at the horizontal volume, how the
profile changes. We still have this

5545 as.

you know, an area to overcome.

Either way, this is the highest OEM
signature in this area.

If we're going to go up, we want to be
buyers.

If we're going to go lower, we want to
be sellers.

This could be just an oversold condition
and could go up and this could be a

sign of weakness and then LPSY.

What is the best to figure it out?

Wait, wait for the test.

Okay, definitely a test. Right on this
bar, you kind of could see that the

temporarily committed to the downside
and then quickly rebound up.

We see that the momentum is increasing
and improving.

Volume is improving, so there is some
kind of synchronicity with which the the

effort comes and the price moves up.

This could be the beginning of the next
move.

Now, because of the supply, we might
have more retesting. So we might have

consolidation in this area. So we're not
immediately attracted to this, although

momentum behaves really well. For the
long -term investor, you could consider

this even in phase B, because you're not
that concerned about the stop losses.

And that's why the short -term swing
trader would rather wait.

The long -term will just have like a
small partial position at this point.

Okay, really good development here.

This is the synchronicity bar, and we
are on the momentum close to the zero

line.

for the second time. So this is where we
could start moving up in a better way.

So this is where the swing traders might
come.

This is where the long -term investors
could potentially add to the position.

Another day where we could potentially
add.

So this day suggests some supplies
present, but we kind of know this from

know, this red bar that we had before
and multiple other red bars in this

We know that supply is coming in, but
look at how on that supply, incoming

supply, the price actually is holding up
nicely.

So unless more supply comes, then it
could, you know, dominate the price to

downside. Otherwise, it will try to
overcome.

There's not a lot of momentum here on
the latest rally, so we should

be a little bit cautious, but you kind
of see how we're approaching this. We're

scaling in carefully.

Yeah, so not necessarily the best price
action here.

So anything above, let's say, 51 would
be a really good call to the upside.

This type of move also suggested that
maybe there's gonna be an attempt to 45

a retest.

Okay, good bar here.

Really good bar here.

If it breaks to the upside, we could add
more.

Again, supply is less.

So there is some kind of absorption that
is going on here.

Again, I wonder if this is a bullish
case scenario and then we're seeing some

kind of

attempt to shake out at the end or we're
gonna have like more of the explosive

move. So let me just show you the bars
that we've talked about.

Okay, so long term investor, short term,
long term, another add on and possibly

as we overcome this level somewhere
here.

If the shake out happens, I think that
our conviction is too strong so we can't

get out of this position.

Okay, so break out on the upside.

That's another way to add here, and then
we should wait.

And here, what's important is now we
could use some horizontal volume

So we know that there is a lot of supply
here, but then after that, diminished

supply, diminished supply.

So maybe some increase here.

We would be expecting an increase right
here on this volume signature.

we just need to overcome this area of 52
and a half where there's a lot of

supply. And then after that, relatively
quickly we should come to

the high of 56, 57 and most likely this
time we're gonna overcome it again like

we did here, like we've done here, like
we've done here. So just overcoming it

and then Again, we need to see what kind
of supply we're going to have at which

point. So at this point, we don't know
because we don't have the horizontal

volume signature above 67.

Let's see.

Okay. I wonder if this is that shakeout.

Here we go. So very interesting bar
right here.

What would we do, right?

Let's say for the long -term investor,
this is of least.

uh concerns why because we have this
volume signature and

then this is the supply that comes in
plus it has a tail it tried to spring

and it's sprung below phase below now it
kind of makes a lot

of sense that probably it's like this
it's not a sign of weakness because we

would want the commitment below this
level And the way how it acts, it's more

sprainy rather than a sign of weakness.

Again, the volume signature.

No momentum to the downside, at least
that much.

So we need some kind of confirmation.

If we're going to have some kind of
confirmation here, I think this is

add -on for a long -term investor.

And then as we overcome 52, this could
be another add -on.

for a swing trader.

And if we're swing traders, and let's
say that we are two units of risk into

the position, how do we deal with this?

Well, if our convection level still is
high, then we need to see some kind of

test of the last bar.

Would we have a more bullish bar next?

If we do, then could we get in?

Could we jump into this?

And then could we overcome this supply
level? Because remember what comes next.

Momentum comes next.

All right. Let's see what happens.

Good bar.

There is no continuation to the
downside.

Volume comes.

There is not enough to put it above the
previous bar high.

But it's enough not to produce, you
know, that type of selling. So let's see

what happens next.

Not a favorable bar does not, you know,
negate, you know, our

bias. We would need to be closing maybe
below 43.

Okay. Also not the greatest of the bars,
but again, it just kind of keeps us in

this position.

And here I would be doubting the whole
bullish case.

And here maybe even just considering
scaling out of this long -term swing,

sorry, swing position. Long -term still
we would stay on.

Yeah, a swing position here probably
would be closed.

But the move to the downside has those
bullish characteristics, right? So it

that.

Tail, tail, and look at the spread.

It's not that impressive.

And it still looks like a spring and
then a low, low test

on the diminished supply.

All right, well, probably swing will be
gone here.

Even on bullish characteristics, I don't
think that we would be able to hold on

to those two units.

But the long term, still pretty much in
the position.

Favorable bar, most favorable bar, swing
trader might come back.

You know, if you have the mental
capacity to come back to the trade,

after you lost, then this could be a
potentially really good trade.

So the key here was, again, a little bit
too early on the swing if we're

thinking that this is phase B.

expecting some kind of shakeout after
this type of character move.

Maybe not coming in on this bar would be
also a solution where, you know, the

breakout is not confirmed.

And then I still would prefer to get out
of the, you know, train that is

kind of like going down and then to re
-enter here.

It's just a better entry, much cleaner
entry. I know that, you know, you're

taking the loss there.

You could potentially go through this
whole formation and then find that place

again and just add.

But if I'm adding, I'm definitely adding
above of what I have. I want my

positions to become profitable first.

But if you don't have the position,
okay, your assumption is phase C.

Confirmation.

And then again, we were talking about
the volume.

Where is supplies increasing? Here. And
then after that, decrease of supply,

increase of the momentum.

So you could add on this bar.

Test. A couple of tests.

You could add on this bar on the
intraday picture. Now it becomes...

More apparent that it was face see it
was kind of like a spring action now.

We're in the sign of strength We are not
hitting the resistance yet.

So all of these bars are going to be
okay to add All of those actually this

one as well so this whole move from 43
to 50 you could literally add each

dollar

some kind of supply.

Well, let's see what happens really
quick because we're already at 530.

Okay, I move to the upside. We overcame
that supply and then we were expecting

some kind of reaction, right?

And then a continuation on the momentum.
That did not happen this way.

So what is going on here? Let's say
somewhere here.

Okay, so here we're thinking a sign of
strength, and it's interesting that

this bar should contain a lot of
horizontal volume signature, but

it comes more as the demand rather than
supply.

So this is actually an interesting but
good sign, I would interpret it like

that.

Happens on the momentum, so that's great
too.

And then we're still going into the area
that has some demand behind it.

The next one, 42,

47.

So long -term investor would stay in.
Short -term, a swing trader might

getting out somewhere here.

and that would be a very short -oriented
swing trade,

still profitable.

All right, so here, we're still kind of
like in this area, in this area of the

demand and the supply, but again, once
we get out of this, that's when we're

gonna have that acceleration, which
happens.

And these are all four or five bars that
could get you back into this position.

Earnings. And here is that momentum that
comes in.

And, you know, the supply that has been
residing in this area

had multiple times to be observed.

Here and slightly here.

Then there was some supply around this
area right here, here, some here, and

then before it went up.

So all of this has been affirmation
where a supply

that came before occurred again on the
earnings and required this much time to

be observed in order for the price to
start moving up again. And it only moved

on the excitement.

It only moved on that earnings report.

So it had to be some kind of catalyst to
move the price like that.

All right, guys.

Well, as you could see, obviously, we
need to train our eye to see those

We need to train our minds to understand
the concepts behind this type of tools.

We need to understand the benefits of
these tools, how we can use them.

what kind of edge we can create, and
definitely something that is not

necessarily highly intuitive.

You have to spend time with this.

And again, I'm not insisting on you
using the horizontal volume signature,

am extremely insistent on...

you understanding the concept and seeing
this concept on the vertical volume bar

chart and kind of expecting that you're
going to have areas of the resistance

and support based on the availability of
the supply and the demand in certain

periods you know at certain prices so
and we kind of gone through this

multiple times today so hopefully it
landed well hopefully you guys seen the

benefit of this, and next time you're
analyzing the chart, think about these

concepts. Think about how you could
extract the supply -demand

presence information from the vertical
bar, and then project

that into the future of your analysis,
and that would be very helpful.

All right, guys. Well, with that, we're
done for today. We have...

Two more sessions, so I would like to
start thinking about the questions for

last session on the 17th, session number
15.

Send me those, send me those with
charts, and I will start creating a

for us to go on that day.

Could be questions about the methodology
in general, could be questions about

the market, specific stocks, could be
questions about specific concepts, ideas

that we discuss here.

or in references to our past exercises.

All right, guys. Well, with that, I will
either see you tomorrow at WMD or I

will see you next Tuesday.

Thank you and bye -bye.