All language subtitles for Session 15-WTC (Apr 15, 2019)

Hello, everyone. Today is April 15th,
and this is our last session of the

Wyckoff Trading Course. As you can see,
I don't have a lot of announcements, no

comments. The only two announcements
that I have is about upcoming events

or upcoming classes that I think that
you should take.

So our first free session.

of the Wyckoff Trading Practicum course
is going to be conducted on April 23rd.

It's Tuesday from 3 to 5 .30 p .m.
Pacific. So time -wise, it's going to be

same two and a half hours.

The price for that is $5 .98.

For the Practicum alumni, the price is
$3

.98.

So that's the pricing.

First session, as I mentioned, on
Tuesday, April the 23rd.

Second announcement, and it goes to
everyone, and I've already instructed my

team to put everybody on the receiving
end of the

weekly links, weekly webinar links for
the

WMD sessions, Wyckoff Market Discussion.

So for three sessions, I'm giving you a
free access to this class.

You will probably not be able to get the
recording,

so you'll have to attend live.

But maybe I'll figure something out, so
I'll have to see.

But this is just an offer that is going
to become kind of like a more or

less...

consistent offer from us at the end of
each cycle.

So for the next three sessions, just
come to WMD, check it out.

You could submit the charts that you
want me and Bruce to go through and just

kind of get a sense for the class, what
it's about.

And it's definitely a different vibe and
a different class, a different content

and so on and so forth.

Okay, you don't have to do anything
about that.

Just if you don't receive an email from
us with the webinar links on a weekly

basis, usually those come on Tuesday,
then definitely contact me.

And if you have any questions about the
product income, also let me know.

Okay, today we're going to conclude with
the homework review,

the homework that we did for the
comparative analysis.

And then we're going to talk about the
Wyckoff Trading Plant Performer. This is

the performer that I'm going to show you
as a step, as a process step as to what

needs to be done when we are going
through the selection, when we are

stocks and then, you know, what it
should lead us. You know, what are the

there?

We're going to go through the case study
for the Wyckoff Trading Plant

Performer. And then I'm going to give
you homework.

You thought that this is the last class
and we're done with homeworks. Well,

definitely not.

So the homework is going to be for those
of you who's going to sign up for the

Wyckoff Practical course.

And even if you don't sign up, why don't
you do it?

Wyckoff Visual Backtesting. So based on
the Wyckoff Trading Plan Performa that

I'm going to give you today, guys, I
want you to use it.

in your back testing.

And then before today and the April
30th, this is when

we're going to discuss your results,
your homework results.

You're going to have, what, about two
weeks.

So I think that's a sufficient amount of
time, you know, for this type of

homework, which is going to be somewhat
extensive.

So we want in the second session to look
at the results. I want you to, and I'll

send you the messages, you know, for
those of you who have registered as to

we're going to do, how the results
should be presented. So it's going to be

little bit more like, you know,
presentation style.

And then obviously the homework just
then up for the practical.

Okay, great.

Now let's do a really quick review of
the homework, and I want to save us some

time at the end of this session, if we
can, to address any of the questions

maybe have not come to me via email,
maybe something that is still on your

after everything that we're going to go
through today, you know, some of the

questions that we received today. And if
there is something that is left, then

definitely let's address this.

And we're going to start with the
homework review. So I've given you four

individual stocks plus Q's as a market
proxy.

And I've asked you to identify a stock
leadership leader

that could potentially outperform all of
the stocks.

So let's just go through that.

Okay, and here are all of the four
stocks.

I'm not going to go through them
individually. I'm just kind of going to

analyze. Well, actually, I should
because it's going to show the market.

so let's just do this.

So what we see here before the trading
range, even before that,

we're seeing a lot of the strength on
the way up, and that defines

a prior leadership.

Prior leadership is all about CEO being
in this stock and

CEO is not getting out.

We see that maybe there is some profit
taking on the climactic action, but

into the, which is being shown here, a
flash crash of 2010,

May 6.

So we don't see any selling going into
that.

So no selling.

So just the bias.

Bias as a reaccumulation.

And then we just want to confirm this
bias. And we definitely do.

We see how the stock is stronger,
stronger.

Maybe less, well, depending on how we're
gonna view this, we could do this. So

stronger, stronger, stronger, and then
weaker.

And look at where the weakness comes.

Most likely, this is our phase C.

All right, we could probably identify it
like that.

And then the minus sign of strength.

minor backing up action, and now we are
outperforming again.

So strength on the reaction, not
necessarily, well yeah,

strength again here, almost a double
top, we're not reaching the top

here, so strength here.

So there is a prior leadership, there is
a strength throughout the structure.

There is

definitely the structure that we like.

The way coffee and structure, we
understand the timing of this structure.

So that all suggests to us that not only
the stock will go up, most likely it

will outperform the market.

So that would have been a good choice.

Okay, so then the stock went up after
this, 77%.

You know, I am just, because these
slides have been created a long time

just was taking the percent on the move
from one date to another, from the

low, I think, to the high at that time.

So it went up 77%. Whereas the market
actually only went up, or at least Q's,

went up 32%. Now, so we could talk
about, you know, the... beta, you know,

how this moves relative to how the
market moves. That's definitely a very

important point.

But at the same time, you know, when you
see what institutions are doing

by using comparative relative strength
tools, and you see that

they're holding on to their supply and
not presenting it to the market

throughout either an uptrend or
consolidation.

that suggests that there's gonna be a
continuation.

And most likely, this stock is gonna
outperform the market.

And that's exactly what has happened.

Stock number two was very interesting
and a lot of you guys kind of indicated

your solutions that this is the stock to
pick.

And I would say that yes, definitely
there is a lot of elements of strength

here. Not necessarily on the way up. We
actually see that maybe on the way up,

the latest move is not that aggressive

as the move for the market. So we are
seeing some weakness going into the top.

And then we're seeing some

weakness as we go to the downside. So
weaker.

Weaker, weaker, weaker, stronger.

So this first element of strength is
kind of very interesting. It happens in

what retrospectively we obviously would
label as phase C.

So in phase C, we have some kind of
strength that comes. And then look what

happens next.

Relative to the previous high, the price
advances very rapidly.

So strength again.

The reaction is flat and much better
than the

market's reaction.

So strength again. So we see three
spots, three

significant highs and tops that are
giving us some indication that

now are interested in this stock.

And also the way how...

momentum and the velocity has increased
on the way up, and then the reaction is

so flat, suggests that most likely
momentum is going to continue.

And I'm thinking that this is probably
earnings.

So that could define that pre -earnings
momentum, could define how the earnings

are going to be biased.

And also pre -earnings reaction also
could do the same thing.

Everything is strong and flat,
suggesting that we're going to have a

continuation. Now, the biggest question
is, well, the stock is definitely

outperforming. Strength, strength.

So we have this quite an interesting

accumulation on the way up.

So, no worries, Cameron.

So, accumulation on the way up. We don't
see it on the way down without the

volume signature, and I don't see
anything very drastic on the way down.

more on the way up, so there is some
kind of urgency to accumulate this

position. So, this looks like definitely
an outperformer.

The only problem with this stock is that
it has already advanced quite

significantly off the lows. From 175, we
get to 300,

so that's about 60 % or so.

Whereas, let's say, stock number one
that we looked at was not like that.

It's still in the trading range.

So stock number two was also a really
good selection. Let's look at the

This was Priceline.

And we're seeing that, look how this
move right here, this rally, 76

% instead of 13 % by the market.

So quite an outperformance, quite an
urgency to get into this position as

as possible.

And after that price line, after this
point, still went up 70%. So the first

stock, I believe it was CMG Chipotle,
went up 77%. This stock went up 70%. And

believe me, I would take any of them.

There is really – would not be a big
complaint for me if, let's say, I

pick a price line that goes up 70 % in
the same period of time over Chipotle.

It's just – really not that important.

Okay, let's look at the third one. Well,
the third stock is in the downtrend,

and we are seeing that maybe this whole
move off was kind of like an area of

redistribution from the previous move
down.

Obviously, there is a lot of
underperformance here. I'm not going to

through this, but all of this here is
weakness.

There is not a single point where the
stock is outperforming the market,

maybe only on the flash crash itself
just because it's just such an extreme

oversold condition.

So would we be interested in a stock
like this in the market that is either

trading horizontally or we see some
leadership that is already trying to

out? Well, most certainly not.

But it doesn't mean that the stock
cannot travel.

Think about the oversold condition that
the stock is in right now on

this chart.

So we kind of have an oversold condition
here and then maybe another oversold

condition. If the market is going to go
up, the market has such a gravity that

it's going to push.

The majority of the stock with it is
going to take it with it.

So we could expect some kind of rally
from here. If we define the timing of

market as the appropriate time to have
some kind of momentum rally, where

momentum for the market is going to
increase, what are we anticipating with

momentum increase?

We anticipate that a lot of institutions

gonna come to the market and they're
gonna see some value and they're gonna

start buying.

That buying is gonna produce a buying
wave that's gonna see a lot of

volume signature, excuse me, and price
movement.

So that price movement might be much
better than the previous rally.

So we might be also thinking the same
way for this stock.

that the next rally is probably going to
be better than the previous rally than

this one but it's still within the
confines of the downtrend idea

it is still within maybe the confines of
a trading range where we could

observe that this rally was maybe a
change of character and this uh move to

downside was a climactic action and we
are most likely where We are most likely

in phase B at this point. So the rally,
aggressive rally, let's say into maybe

an upthrust situation is possible.

And you might be thinking here, okay,
well, is there going to be a swing trade

of some sort? Yeah.

So from, let's say, 45 to about 60,
that's about 30%.

So that's your potential high
probability short -term swing trade.

But when you think about this candidate
against the first two,

would you really go for this one?

I mean, even if it's going to go, let's
say, to the highs here, obviously,

percentage -wise, it could be the same
percent.

But I'm not sure if you're going to feel
comfortable being so contrarian among

the selection stocks.

you know, where you have very, very high
probability selection candidates.

Okay, let's see what this stock is.

Research in motion.

And even though, yes, there are no signs
here, it still moved 60

% to $70. So to this line right here.

So you can imagine if you were in the
swing trade, that would be, first of

a good swing trade. That's number one.

Secondly,

just the logic that we had for the trade
into the up thrust high, that

would work out really nicely.

And that would be a really quick move.

So it's possible, but yet not
preferable. Not something that

we would prefer to see. Okay,

last one.

Okay, so this one is kind of the most
interesting one for different reasons.

Let's just go through this really
quickly.

So we have an outperformance on the last
rally to the upside.

Definitely the stock is outperforming
the market, so strength.

Then on the flash crash, we don't have
that kind of like a general

that we have in the market on that
particular day.

So that's great.

That also is an element of strength.

They don't want to sell it on a flash
crash.

If anything, they want to keep it so
there's no volatility.

By this stock, we wouldn't even know
that the flash crash has happened.

And then outperformance throughout

all of this

outperforming.

and then weakness, and then weakness.

So think about the whole story here.

We have a prior leadership on the way
up.

So CEO does what?

Holds supply.

CEO does not present supply to the
market.

And then we see that on the flash crash,
no selling.

By the seal.

And then throughout this whole picture
right here, there's no selling, really.

It's all strength, strength, strength.

Throughout, maybe there is some small
pockets of weakness, and then we go into

the pocket of weakness.

So I wonder if you guys remember this.

We kind of started this when we were
going through the...

comparative analysis.

Where for the stock that is exhibiting
the prior leadership and strength

throughout this whole trading range
could we find a short -term weakness at

which structural spot or maybe like
which potential phase could we see that?

Do you guys remember?

Yeah, phase C.

That's correct.

So potentially we could say, okay, is
this a potential phase C?

Well, let's go through some of the
elements here.

So we could say that our first test is
going to be in

phase A, somewhere here.

Our second test is going to be...

in phase b so probably some way here we
have like intermediate test right here

on the way up this is more in the
structure of the move to the upside so

test and then third test when we look at
the point of fear

we probably would be confused here
because we would be thinking that the

point of fear is obviously on the change
of character itself

And then the second point of fear should
be into phase

C, if we're identifying it as phase C.
But the previous reaction also catches

our eye.

The spread is increasing there,
suggesting more of the selling, and that

to the lower high, a failure to reach
the previous high, and then leads to a

lower low.

So definitely this is... where the
selling has started so we could either

of this as the beginning of the selling
and this is just a continuation

um or we could be thinking that the
second point of fear uh is

still on the latest reaction just
because it has created the lower low so

about the weekends for them

to see their stock going below the
support is gonna be very worrisome.

And they're gonna give up their
position.

So that kind of presents that second
point of fear.

But I must say that it's definitely not
as clear.

And I would be thinking that this
previous reaction could be phase C as

So if that would be the case, how would
we trade this?

Let's see if we're thinking this way.

A, B, and C. How would we trade that? We
probably would get into this position

on this bar right here.

This would be the bar that overcomes the
point of local resistance

after the test at the support area.

So a test.

breakout above this resistance right
here and we would be actually okay going

you know the first two days into this
and then this type of failure in the

half of the trading range that's what
would you know stop us

and most likely we would be thinking
about exit not

necessarily where our stop loss would
be. So our stop loss is going to be

somewhere here.

We're probably thinking of an exit after
the failure somewhere in this

neighborhood.

If we're late to that, something in this
neighborhood right here.

We don't necessarily want to participate
in the potential sign of weakness.

So that trade could be closed like that.

Having said this,

there is something very interesting that
is happening with the analysis between

these two reactions, number one and
number two.

Look at how on the reaction number one,
as I've mentioned, we

see the increase in the downward spread.

So that suggests that there is some
selling behind it.

With that increase in selling, we would
have an expectation

that this would

increase the downward result.

And it does kind of like suggest
characteristically that there is some

selling. But does it really, really,
really produces the result that we want?

Because if this is phase C in the
distribution, then what should happen

We should have a major sign of weakness
in phase D, and then an

LPSY that's going to come to the point
of the resistance that acted before as

the support.

And we obviously don't see that. We
don't see the commitment to the downside

that the major sign of weakness should
produce.

We don't also see that rally, if
anything, it's too aggressive, comes

the previous high.

So that doesn't look like an LPSY rally
either.

So we don't see the increase in the
downward result. And that suggests, if

anything, we see a decrease.

And that suggests a bullish bias.

That also suggests, in long term, that
also suggests this failure right here.

It suggests that the short -term picture
is bearish.

And this is where a lot of these
students and traders kind of, you know,

confused about what's going on.

Because some of the elements are showing
that we are in a bearish bias, at least

for now, with all of those failures.

and yet that the long -term structure
supports a bullish bias.

So it's in those situations where you
have to think in terms of how

characteristically the next reaction is
going to unfold and what kind of result

that reaction is going to have. So let's
look at that.

Again, I'm going to take reaction number
one, reaction number two.

So thinking about reaction number two,
we're thinking about, let's say, a

downspread.

And we're probably seeing that on the
way down in the first reaction, we have

quite a few big, large downspreads.

On the way down in the second reaction,
we see the

largest spread

at the beginning of the move and then
closer to the

end and usually what it tells us whereas
look at all of this

so

usually it tells us that there is some

selling

and then there is potentially some line

off the bottom.

So this would suggest that we could be
in phase C.

Now the only thing that we would be
looking for is some kind of

And that confirmation should come as,
first, price should return into the

trading range.

It should be above, price should be
above resistance

that acted before as a support, this
line right here.

Third, if this is, phase c and the
spring and

it looks like yeah maybe it is there's
only one commitment to the downside one

progressive close to the downside so uh
if this is phase c plus the spring

then we definitely need to see some kind
of test which is viable

and plus we need to see some kind of
local breakout. So something like this

where it tests, and then when it goes
up, this breakout right here,

this local breakout as we've, you know,
as I've shown this to you on the

previous charts, it's a buyable
breakout. So we could buy on the

test. We could buy the breakout itself.

We could also buy any type of sign of
strength bar.

on the way up, and then we would wait
for the sign of strength

rally, and then we would wait for the
backing up action.

So these are the conditions for a trade
here, just based

on the analysis that we have, based on
the analysis that this is a potential

leadership stock.

Kind of probably the same type of
leadership stock as stock number one and

number two that we've looked at. Not
stock number three, but the first two.

Now, the biggest question that I have
for you guys about this stock is, what

you guys think?

Is this stock going to outperform all
other stocks?

Or at least stock number one and stock
number three?

We already know that stock number one
and stock number two. We already know

stock number three

is not going to give us a

lot of room.

And so the only question that we have
remaining is, We

know that this stock went 77%. This one
plus 70%.

This one plus 60%. Again, we are looking
more into the

structural analysis and comparative
strength analysis. These are the

first two stocks that are definitely
catching our attention.

But we said that stock number four is
bullish.

Long term.

It's just very short term.

So do you think that stock number four
could potentially outperform stock

one and stock number two?

Okay, and I see some answers coming in.
So let's keep it rolling. Let's keep it

rolling. So what do you guys think?

Okay, so we have one no.

We have one yes.

Who else?

Give me more answers to work with.

Okay, another yes.

Okay, guys, pulling out the information
out of you today for some reason should

be very fast and quick. You know, this
is just a very simple question. Do you

think that the stock number four might
potentially outperform stock number one

and stock number two? So for those of
you who have answered yes.

Why do you think stock number four could
potentially outperform Write

it down

Okay,

maybe a couple more answers Before

we go to the solution.

Philip is saying, bigger volatility
hints CEO participation and the length

the trading range may hint bigger move.

Now, as you're saying, leadership stock
in the reaccumulation.

Yeah, leadership stock in the
reaccumulation. The first two stocks are

reaccumulation and also leadership.

Bigger volatility.

Hence the CO participation.

If anything, it's probably that CO was
actually already in this position,

maybe got something on the way down,
maybe got something on the way down, and

what do you think CO is doing here?

CO is going to be inactive at this
point, and this inactivity, that's what

brings the price down.

So it's not that the COO is extremely
active.

A point of liquidity for the COO
probably wasn't a change of character

than somewhere else.

And again, remember where the COO is
buying in the accumulation when the

goes down?

Selling climax, automatic rally.

These are the first initial.

spots where CO is extremely active, on
the way down, on the way up.

That's what produces a change of
behavior, and then that leads to the

character, to the structural change of
character.

Think about where CO buys in the
reaccumulation.

Change of character happens as a profit
taken by some institutions.

That provides liquidity.

And that's where COO will be active.

So if COO was active here, maybe here,
COO most likely is inactive

further down the road. And that's what
brings the price to the support level

takes it down. And then the COO becomes
active again if this is a true spring at

the bottom of phase C.

Okay, let's look at the result first and
then we'll discuss.

So this was Lululemon, and indeed this
was spring number two. After that,

until the same date, the price went up a
staggering

182%. So think about

all of these four stocks.

And at that time of the market history,
think about the leadership that these

four stocks potentially have had. Stock
number three, Research in Motion.

This is the stock that has been a leader
for years and years before iPhone came

out. And then it became a laggard and
has been in the downtrend.

So the only move here that we could
anticipate a swing move and we don't

necessarily want to participate in that
so stock number three is just out of the

question we just don't want to do
anything unless we are highly

know with with that position and you
know we're looking um you know to trade

stock in general stock number one was a
really good stock for us uh

chipotle and uh we are definitely would
be in this position

And this is the momentum leadership
stock at that time.

It's on IBD 50 list.

You know, you could hear about this
stock at different classes, conferences,

so on and so forth.

Stock number two, Priceline, is also a
momentum leader of that time.

So we definitely would be interested in
this stock as well.

Stock number four, Lulu.

Is this the momentum leadership stock at
that point of time? Yes, absolutely.

So a leader as well.

So think about how institutions are
treating leadership.

They always want to be in the leadership
stocks.

So what happens here with all of them?

Okay, so the first stock, we see that
the Chipotle does not have a lot of

great points for institutions to get
into this position.

Maybe there is some value after the
earnings on the change of character, and

they get in there.

Maybe there is some value in the short
-term oversold condition, some short

-term weakness, and they get in and face
C.

Priceline.

is a different animal.

We might have some buying on the way
down, like all of this

and some of the flash crash.

And then we definitely have some buying
on the way up, all of that.

This is where the buying by institutions
is happening.

Lululemon is also a leadership stock.

So where would they be buying this
stock?

Well, obviously on the way down, so
somewhere here, I think maybe somewhere

here, and then somewhere here as well.

This lowest point right here represents
the short -term oversold

condition, short -term value, and short
-term

liquidity.

So everything's short -term. But I want
you to compare this

to where the first two stocks are.

And if you would be thinking about
comparison of, let's say,

where we are relative to the previous
low, right? So for instance,

if we're taking a significant market
low, so let's say it's somewhere here.

this is the low and we would compare
where the price is relative to that low

this is what we get for lulu then do

the same for price line okay so this is
where we are for

price line okay do the same for chipotle
and this is going to be insane one two

three four five one two three four five
so i think this law right here

so this is the low and this is where we
are okay

so here's the question and this is the
question that i want you to kind of

cement in your head

if we

consider all three stocks cmg

Priceline and Lulu are

kind of like equal and equal,

quote unquote, equal leadership
opportunity.

Then the question that we have here is
which stock

has more value

at this point of time?

What do you guys think?

If these three stocks are all equal in
their leadership momentum

characteristics, which stock has more
value for institutions at this point of

time, thinking about that all three has
a bias to the upside we know that

all three are gonna go up all three
might potentially outperform the market

but which one out of those three has the
most value to

the institutions what do you guys think
write it down

Yeah, so stock number four, Lulu.

Just because it's so undervalued.

It's oversold.

It's undervalued.

And it has some liquidity right on the
point of entry right there.

All of those points. But predominantly,
it just, again, like think about maybe

like. three stocks that are starting at
the same point of price and time. And

then stock number one does this, stock
number two does this, and stock number

three does this.

If this next scenario is going to unfold
as all of those three

are still going to go up just because
the overall trend is up,

then they're going to go for the stock
that is going to be undervalued.

In their minds, it has more potential if
the price still is going to go up.

It could have more potential to go up
because they will be

evaluating all three stocks against each
other, all three leaderships against

each other, and they're going to say
that the price line has extended already

off the lows so much.

and we got in into that position.

Chipotle just did not produce a lot of
points of entry for us just because it's

such an outperformer. But Lulu had this
short -term undervalued

spot, and we want to go there because we
know that Lulu is definitely going to

still be a leadership, and it's going to
catch up with other stocks.

So this percent that Lulu has made.

plus 182%, that's just catching up with
Priceline and Chipotle, the

momentum leadership at that point of
time.

So a very interesting kind of like point
on the way how

laggards that are in the leadership
groups or

uh you know for the stock that has
leadership momentum characteristics

really quickly uh come back to that
leadership and actually start

okay uh some questions

but has the lulu really a

strong strength indicators as stock
number one from philip Well, Philip, we

went through this, right? So, strength
on the way up, strength in the trading

range, weakness into phase B. So, yes,
it does have strong

leadership characteristics as well as
stock number

one and as well as price line on the way
up. So, all three of them have elements

of strength.

doesn't it then mean that we should
choose stocks with less intense strength

indicators? Because if it does, it
obviously advances more, thus it becomes

interesting to the CEO.

Okay, let me rephrase the question just
for all of us to understand it.

So the question is, if the stock has
been advancing already so much, wouldn't

be more...

interested in a stock that has strength
characteristics and then some short

-term weakness.

Yes, and that's the whole point of this
discussion, Philip, that when you see

the leadership stock having short -term
underperformance and you're still

concluding that the long -term bias is
to the upside.

this short -term weakness might be just
an opportunity for the stock to

rebound from.

And we should definitely look into that.

Okay, great.

We're done with this exercise.

So as your graduation homework, you
could just go through this

by yourself and just kind of...

Okay, now I should say I'm getting into
this talk early in phase C.

Test pays if you are right on the bias.

Yeah, and we've talked about the way how
we would get in into the position.

When we're gonna have an example of the
spring, you know, I'll talk about that a

little bit more.

Okay, let's talk about Wyckoff trading
plan pro forma.

So why do I say performer?

Well, because this is something that you
still need to work on your

own after the course.

And you need to figure out the way how
you would like your

analysis to flow.

It could be a different flow than what I
have here.

And I've shown to you the process,
right? We've talked about

The process of selection, where we go
and identify the leadership first. Well,

we go and do the market analysis first,
define what the market is doing. That's

number one.

Secondly, we go and we define the
leadership, whether in the sector or

group.

And then we go to the stocks level. And
only after that.

we go into the price structural
analysis.

Let me bring this example again.

A lot of students have asked me a
question.

Should I do on my weekly, during my
weekly selection process, should I do

price structural analysis first?

So my quick question to that as a reply
goes like this.

What's the size of your universe that
you look at?

Because if you look only, let's say, on
a weekly basis at 50 stocks that you

follow religiously, then those 50 stocks
are

not a big deal to go through on a weekly
basis once a week. And then maybe even

just to look at them once a day.

But if you have, let's say, 500 stocks
to go through, or maybe a couple of

thousands of stocks, Or maybe if you're
a technical analyst and you go through,

let's say, 4 ,000 to 5 ,000, or in some
cases the whole market of, let's say, 8

,000 instruments or so, then it becomes
a little bit more difficult.

Also, think about that funnel that we
have created, that selection funnel,

starts with the market.

then goes to the sectors, then goes to
the groups, then goes to the stocks, and

then we go into the Wyckoff analysis.

Think about this as kind of like an
easier route to get

to the stocks that are most interesting
to you.

And obviously the way how you can create
that scan that brings you to this

point. or a filter that brings you to
this point, that's going to be really

crucial. And this is a subject of
itself.

But again, if you have a large number of
stocks to look at on a weekly basis,

price structural analysis is not going
to be the first thing that you want to

look at.

The first thing you're still going to
start with is a market filter.

What is the market doing at this point
of time?

What is the long -term, intermediate,
and short -term trends?

And I've shown you guys last time as to
how we would define that.

We would look at the last secular low,
which was in 2009.

And then from there, we would look at
the market that we have.

So 2015, 2016.

18, 19.

Something like that. And we would say
that, yes, long term, up, intermediate,

trading range.

Short term, up.

And that would be the definition of the
market.

If we have a trading range, we would do
a phase analysis. So we are probably

somewhere in phase D if we are bullish.

And we are...

we could be potentially in phase C, but
I just don't even see this, so I'm not

even gonna talk about this. So we are
talking about either phase D, or could

be potentially talking about maybe like
phase B, and also does not make sense,

so yeah.

So the latest rally acts as a sign of
strength.

It's either a minor sign of strength or
a major sign of strength.

So both of those are going to be in
Phase D.

Okay. What are the best trading
opportunities right now based on the

context? This is a very important
question.

Think about this.

Each market conditions are going to give
us specific opportunities.

What was the opportunity off the bottom?

It was in the stocks that had a lot of
momentum.

In the stocks...

that maybe had characteristics where the
structure has been developed,

volatility has increased in October,
December period, and the stock

was making higher low to the lower low
of the market. So the stock was stronger

at this point of time.

So even though volatility has increased,
but it produced higher low, so

indicates stronger stocks, and

Causality is already down.

Finished.

These are the stocks that we would be
looking for at the bottom or in January,

even early February. These are the
stocks.

What are the stocks that we would be
looking for right now?

We are in this formation.

So what are the stocks?

What are the candidates that we would be
looking for?

Well, we know that the next move is
going to be to the downside.

It's just how it is.

It's either going to be a meaningful
reaction into probably the upsloping

resistance, and it's going to develop as
kind of like a trading range.

we might potentially have 2016 analog
where we go up and then we kind

of rest at the top here.

And then we go higher from here. So
that's a possibility as well. So think

if we do that in both scenarios, this
definitely will be phase C.

And then we are definitely in phase D
currently.

So this type of thinking, current market
conditions, what kind of opportunities

we have here. So we might have an
opportunity to the downside. This is

bear sentiment could short -term provide
a lot of liquidity, quick moves.

So we would be looking for maybe even
not necessarily shorting a specific

but maybe have some hedge against the
market.

And that hedge might not be very
substantial.

to cover some of the losses that we
might have within the long -term

Having said this, any type of
reaccumulation pattern right here would

that long -term campaign positions could
be of interest to us,

and we would go and identify those.

Okay, so what's next?

We understand what the market is, what
it's doing, where it is, you know, what

kind of opportunities we should be
looking at.

So then after that, we would start our
scanning for our performance or

underperformance.

And as we've done this in the previous
class, and thank you for your emails. A

lot of you emailed and said that, you
know, that was really helpful just to go

through the process and maybe even to
see how you do it live.

on stock charts and so on and so forth.
So it's great.

And we would do the same thing.

We would either look at the sectors or
maybe we will not look at the sectors.

Maybe we'll look into the groups right
away.

And from the group level, we'll identify
those two things that we've talked

about last time, leadership and
rotation.

Then once we have that and we go to the
stock level, this is where the watch

list first starts to be formulated.

Okay, so maybe this watch list is going
to have, you know, at the end of it,

maybe like 50 stocks, maybe 100 stocks.

Those are going to be of interest to
you.

Okay, so, and by the way, this type of
analysis right here should be very quick

because it could be automized, you know,
visually you could be doing this,

you know, quite fast.

Market is going to take also a quick
session for you to go through.

Why? Well, because the long -term
picture does not change a lot.

The intermediate picture does not change
a lot. And then the short -term

picture, you'll be able to analyze
pretty quick.

So then once you have this 50 to 100
stocks, let's say, then you go into the

price structural analysis.

This is where you want to be slower and
more deliberate in your analysis.

And obviously, you're looking for the
timing.

Phase C, phase D. Bias is already going
to be somewhat determined, but you would

need to double check on that.

But you're looking for that timing.

Identification of phase C.

Third test, second point of fear,
specific volume signature.

Confirmation. The price returns into the
trading range and then starts making

higher highs, higher lows.

Like of events associated with phase C.
Last point of support, sprain or

shakeout.

And those are obviously bullet points.

Behind each statement here, behind each
line, there is a system that

we've created.

How do we identify a second point of
fear? Well, we have to find the first

and compare them. How do we identify
test number three? We have to understand

phases. How do we identify volume
signature?

We need to understand how

going into phase C, the volume signature
must behave, you know, and more

preferable behavior of that and so on
and so forth.

Phase D, a change of character that is
structurally being created by the sign

strength rally and the backing up
action.

Do we have that?

What's the confirmation? A resumption of
the uptrend out of the backing up

action. Like of events, last point of
support, sign of strength bar, sign of

strength rally.

Backing up action.

Okay, so we understand the structure
right now. And our list, our watch list

might actually decrease.

So now we might be looking maybe at like
20 to maybe like 50 stocks.

The next step is going to be even more
deliberate for us.

We have to get more detailed.

Because if the goal is to have maybe
like five positions,

then we need to still

condense our universe to that number.

So we definitely want to look at the
supply and demand, volume and price,

and the result.

And there, this is where, in this
analysis, this is where we're going to

confirming the bias, we're going to be
confirming the timing, and we are going

to be confirming the character with
which the price is going to move.

So if you have 20 stocks and you just do
that thorough analysis with 20 stocks,

that should take a long time.

So this deal should be potentially kind
of like

average time that you're going to spend
on this. And this is going to be a lot

of time.

that you will devote.

And it's the most important part of your
analysis because it's so close to your

final selection.

And once you do this, then you're
probably going to have maybe like five

10 stocks that are going to go to your
daily

execution watch list.

And this is the list that we've talked
about last time that you have on a daily

basis in front of you.

And each day, either before the session
starts or maybe right after it starts,

and most definitely before the session
ends where a lot of the trading

are being made either by institutions or
by yourselves.

This is when we're going to look into
this list and we're going to go through

this five to ten stocks really quickly,
let's say on stock charts.

Put the symbol in and look what the
price has done. Look what the volume has

done. You already have all of those
scenarios outlined in your head. So in

reality, you don't need a solution at
that point of time.

You need data to make a correct
executional mistake.

I'm sorry, the correct executional step.

You're basically saying, okay, my watch
list is saying, that if the price is

going to close favorably next day or
during the week, and it's going to show

significant bar that breaks to the
upside out of, let's say, a short -term

pattern, then I'm going to buy.

So you really don't get emotional when
you know that one of the scenarios is

going to be like this, and if that
happens, then you act.

If it doesn't happen, let's say that a
stock on your watch list,

actually fails, well, then what you want
to do is just, first of all, take that

stock off the list. That's number one.

Secondly, put it into the bucket of
stocks that you want to follow

post -analyze them to see where the
mistake was.

And that post -analysis has some kind
of, well, it's

going to have a lot of value for you.

as you start adjusting your analysis and
that's going to be extremely extremely

helpful okay so then once you have that
watch list what you do next is you

start creating your uh tactics as to

different scenarios and i don't have
scenarios here i should add those and

then secondly what are your um

Executional tactics.

Where do you get in into the position?

And obviously we want to get in on all
of the like of buy points.

Sprint number three.

Test of sprint number two or a shakeout.

Or a test of the shakeout.

Lot of point of support.

Kind of strength bar.

Back and up action or a breakout out of
the back and up action. So all of those

are going to be our potential points of
entry, stop loss, original placement,

and then the movement, and then the
exit.

Where would we want to exit this trade?

Okay, so that's the performer for the
trading plan.

This is something that I want you to
take.

and to think about and add something of
your own. You could take this path,

but then let's say in phase C, you might
say like, okay, I'm gonna add something

more to this.

I'm gonna add maybe that phase C is
gonna have specific volume

I'm looking only for phase C that has
diminishing supply signature and not

increasing supply signatures, something
like this, and so on and so forth. You

might say, like, okay, I'm not going to
look at the sectors. I'm only going to

look at the industry groups and stocks.

So make it your own.

You know, look at how you're trading
currently, and then think about the ways

on how you could potentially adjust this
performer, you know, to your trading.

Okay, well, let's go into a case study.

Okay, I think we're doing okay on time.

Okay, case study, Apple, Q's.

So we definitely would be thinking about
the market here.

So we're discussing the second filter,
but in reality, filter number one, the

market. So we would be thinking about
long -term picture.

And this is 2011.

So think about the structure of the
market where we were.

The 2009 low was the secular low. So the
market went up. So we are in the long

-term uptrend.

Intermediate trend.

What is the intermediate trend at this
point? Or at any point on this chart?

The trading range.

like the one that we have right now.

And the short term, it just depends on
where we look, right? So right here, we

would be thinking about what is the last
swing?

Well, the last swing was to the upside.
Was it reversed?

Actually, on the last bar, yeah, we see
that reversal. So we're expecting some

kind of maybe a higher low here with the
bullish bias.

Okay, so we're done with the market.

Next thing that we do is we want to make
sure that we are getting the stocks

that are going to outperform the market.

So looking at this trading range in
Apple, we're seeing how

a spring with one commitment to the
downside reverses and

produces the rally that is much, much
stronger.

then the markets rally. The markets
rally only comes to the previous high

stops, whereas the previous high for the
stock has been taken out, and the

stock has advanced from that point quite
considerably.

So a lot of strength on the way up.

Is there a strength on the way down, on
the next reaction?

Well, the stock is making a higher low,
and the market is making a lower low.

Definitely the stock.

is stronger and much stronger so we are
attracted to this pattern why because

there is a sequence of buying on the way
up and not selling on the way

down and we see that on this market
volatility to the downside the stock is

being bought on the downside as well
think about the market volatility what

had just recently in december january

And then think about the stocks that are
outperforming right now.

They are usually the stocks that during
that market volatility are going to

create some kind of short -term oversold
condition.

But it's going to outperform the market
in general.

It's going to tell you that
outperformance is going to tell you

not heavily selling this stock and they
still buying the stock when the

opportunity presents itself.

Now also think about something else.
Think about the way how the CEO gets

this position.

And this volume signature is actually a
Q's, so we can't use it for Apple, I

believe.

Actually, no, this is not true.

Looking at the volume signature, most
definitely this is not the market's

signature.

This is Apple.

Yeah, definitely. This is the volume
spike. I remember that volume spike.

Okay, so look at how supply comes in.

So supply increases, but yet we're
holding on to the higher low.

So there is some buying on the way up.
We see this from the volume signature.

see the buying on the way down as well.

So that kind of confirms that.

strength after strength and a sweet spot
definition, where institutions

are extremely active in this area.

And then what do they do next?

They just become inactive. They bought
in into this position, then what do they

do?

Oh, we're just going to go and rest.

We're just going to go and maybe buy
something else.

We're just not interested in the stock
at this point of time. So what does the

stock do? It's just there.

There's nothing going on. There's
nothing happening.

And then suddenly weak hands might get
it up.

Mean reversion trade works out at the
top. The market still produces that

definition that...

short term mean reversion trade should
work because we are in the trading range

look at how mean reversion trades work
so nicely this is a big um

well even from here nice move nice move

nice move nice move nice move

and again nice move up to here nice move
here

here and it's all

mean reversion trade until we get into
the trend and they start trading mean

reversion as a trend, right? So they
would be thinking going up and down. So

these are the spots in the trend where
we gonna sell and where we gonna buy.

That's a whole mean reversion concept.

And they would be so successful during
this time because it's during the

consolidation that mean reversion trade
works so nicely.

it defines the oversold, overbought
conditions almost ideally.

Just because the price consolidates
between the support and the resistance.

And usually those type of trading
environments create those opportunities.

But amateur traders do not trade it like
that.

I mean, traders are usually more
directional. They go to the excitement.

They go to that something in the news
because we as people

are attracted to an information like
this. Oh, somebody has made a lot of

in Bitcoin.

I should trade Bitcoin.

Then when that attention shifts and by
the time you open an account and you

start trading, you kind of catch
yourself.

um in the last move to the upside you
are excited and then it just you know

turns on you so um in this case

we see how institutions have bought in
on the way up how they were buying on

way down then they became inactive then
they might potentially have bought on

the way down again and then again they
become

inactive and nothing is happening after
that.

COO is inactive.

But what it does, you know, all of this
buying, there is an absorption on the

way up, there is an absorption on the
way down, absorption on the way down, so

lot of the supply has been consumed by
the COO.

And they found the spots where they
found both value and liquidity.

Those are different ways of how they got
there on the way up and on the way

down, but they got there.

And then after that, they're like, okay,
we have enough of the position.

Because we're not going to provide this
supply to the markets, the price should

not go down considerably. And if it does
go below the support like with Lulu

that we see, like a spring, then they're
going to be extremely active at this

spot because it creates that value
again. They're going to buy in.

That's going to increase the momentum.

All of the systems are going to be
triggered.

And then the next wave of buying is
going to unfold.

And it repeats over and over and over
again. The market is the collection

of visual representations of our
behaviors.

And as everything in life...

We are small and they are big.

And by we, I mean retail traders, and by
they, I mean institutions.

They behave in a specific way.

They have certain rules as to how they
need to behave.

We have, you know, retail traders, when
we come to the market, retail traders do

not have rules.

Retail traders do not have systems.

Nothing is built in.

So therefore, in general, retail
traders' behavior

is somewhat predictable, correctable,
but predictable.

That's why we are in this class, because
we want to correct that behavior.

And then institutional behavior is also
predictable, just because we know what

they need.

in terms of the value and the liquidity.

We know how to identify their steps,
their presence on the chart.

And therefore, we just want to go with
them alone for the ride.

That's the whole idea.

Okay.

Okay, so strength, strength, strength,
strength again,

strength.

and then weakness.

Again, we are in a situation in this
whole rally of strength.

We're in a situation where we have the
leadership on the rally,

leadership throughout this first half of
the trading range, two -thirds of the

trading range, and then weakness into
potential what? Maybe potential phase C.

If this is phase C, then this would be
the timing, and it seems like for the

market at that time, This is an attempt
to spring, failed spring.

So potential phase C, sign of strength,
backing up action.

A little bit too much supply here, so we
need some kind of test,

which creates an apex, suggests a
continuation to the upside.

So phase C, so we are in phase D. This
is a good point for us to be in the

position to buy.

Okay, so once we are done with the
relative comparative analysis,

We go to the next one, price structural
analysis. Well, this is a different

structure, same stock, different
structure.

Let's look at how the structure
develops.

We've talked about this chart.

Horizontal structure here after a
potential change of character would

that we would need to wait for the sign
of strength in the backing up action in

order for us to open this position.

We probably would be too late.

So the downsloping structure works much
better.

Here it is.

And then look what happens. A sign of
strength actually commits to the upside

and has two progressive closes up. And
then it comes to the support level

and that before is the resistance and
balances up.

So a lot of points of entry right here.

I think it would be really hard for us
to find the points of entry on the way

with an exception of the gap day itself
because

it's a significant bar day.

Look at the true range of that day.

And if the day would look like this and
at the end of the day, you're going to

say, am I a bar here or not?

So your answer should be yes.

You might wait for some tests within the
next two days or so, and look at the

tests. They are not coming down, so you
could buy on the tests as well.

Still a really good spot here to enter
the position.

The second entry would be here, the
third one here.

So that would be the sequence, and then
obviously after this, we want to see

maybe another bar like this, so this
would be point of entry number four.

okay oh why do i have filter number two
here oh yeah this is not correct

this needs to be corrected and here

as well okay apologies for this
something is not right

although we do look at yeah so we do
look at

They're both price structural analysis
and comparative analysis. So Apple, this

is, again, different time frame, 2001,
2003.

A lot of strength as the market still
travels down.

So that tells us that this is potential
leadership in the future.

We definitely want to consider this
stock, and we need to understand the

structure.

And the structure is such that going
into late 2002, 2003,

we're seeing how the price just

stays at the level of the support,
doesn't go up, doesn't go down.

And it seems like all of the indications
of strength that suggested that there

is a buying on the way down, there is a
buying on the way up, buying on the way

down, buying on the way up.

buying on the way down.

With all of that, they are already in
the position.

If CO is in the position, what happens
here with the CO?

CO is inactive.

Why is CO inactive?

Because the CO has accumulated the
position in the stock.

accumulation by the CEO has been shown
to us, visualized for us on the

comparative basis.

We see that from the strength on each
rally and on each reaction.

And then the CEO is just saying, I've
got this position in my belt that, you

know, I don't need anything else. What
I'm going to do, though, is I'm going to

go to the other stocks.

And I'm going to buy those stocks
instead of Apple at this time. And

the market is starting to go up here
because other stocks are being bought

they are starting to outperform on a
relative comparative basis.

They are outperforming Apple.

And then only when there is some kind of
urgency that starts to occur

or maybe a penetration of the support.

that creates that short -term panic and
the ceo is attracted to the stock at

that point of time because of the
liquidity only then we would go in into

position other than that we're just
waiting we might have some trades like

here that are going to be losing trades
a loss but that doesn't mean that

we shouldn't be waiting for the true
timing right here And it's going to be

distinguishable.

Okay, let's see what else. Okay,
something that I

maybe alluded to but have not talked
about.

Do you guys know that you don't need a
lot of the stuff that I taught you

throughout this 15 weeks?

That you literally can just trade the
structure and have... just price

structural trading rules and be okay.

So what are those?

Well, usually when somebody studies
Wyckoff method, you

usually study, let's say something that
was created by the SMI

and you could, let me just go here and

show you. So on our website, you could,
You could look it up.

This is the article under the Wyckoff
Primer right here.

By the way, we have it in Spanish and in
Chinese, so if you're interested in

those two languages, you could
definitely read those.

This is the article that was written for
the chart school at StockCharts.

They've commissioned us to create this
article for them as part of the content.

a package that we were creating for
them. So this is what we wrote.

All of the schematics, you know, we've
developed ourselves here.

And then stock charts just took the
leadership of that.

Yeah, so this is the schematic that I
created for them.

Interesting that some of this is kind of
bringing some of the discussions at

this point.

Although I don't see anything in the
schematic.

Yeah, that should be okay.

All of them should be okay. Oh, yeah.

Sign of weakness in phase B. Yeah, but
it's a minus sign of weakness.

I think.

Yeah, interesting.

Okay. All right. Well, let's look at
this. So nine buying, nine selling

Buying tests. Let's go through the
buying tests.

What do we need to see here? So this was
an SMI's attempt to kind of put

everything together into some rule
-based steps, trading plan, and, you

on and so forth.

So what do we need?

for the nine buying tests to
materialize. The first test,

the downside price objective has been
accomplished, and that information you

extract from the P &L. So for instance,
if you had a downtrend, and then you

have what appears to be an accumulation,
then you want to make sure that your

calculation of the causality, which is
distributional causality,

comes as a target into the area where
the new trading range is being formed.

So that's our test number one.

It just basically gives you an idea that
the

target has been reached and that we are
done with this

downtrend then you want to look for the
evidence of that completion and uh

the evidence of the climactic run and
phase a all right so we are looking for

preliminary support selling climax
automatic rally secondary test

so that's number one number two uh

then we're looking for

Bullish activity, volume increases on
rallies and volume decreasing

on the reactions.

So what this describes effectively is a
change of behavior, not a change of

character.

Downward stride broken, so we want to
see this break.

So number three is going to be somewhere
in phase B.

And then the

break of the trend right here, number

four.

Number five and number six, higher
highs, higher lows.

So this one could be in different
positions. And this is where

I'm kind of realizing.

as I go through those and as I'm
preparing sessions for students that I

use all of those. Some of them, they do
make sense, but there are so many

variations on how it could happen. It
cannot be universally true.

We could have higher highs, higher lows
in phase B, but it doesn't mean that

this is the timing to get into the
position.

So I'm usually... kind of like not using
those.

But you could think of it as maybe like
a sign of strength backing up action

where you have a higher high and higher
low.

So that type of thinking could be
beneficial.

Number seven, stock is stronger than the
market.

Okay, well, we just went through the
comparative relative analysis.

And then base forming, which is
basically a causality.

We want to understand that there is
sufficient causality.

And one of the thoughts about the
causality that I have, guys, is why do

need the big causality?

What's the understanding on our part of
the causality?

What do you guys think?

Why do you need, why bigger cause is
better?

Can you answer this question? Can you
write down your answers?

So, and I'm going to answer right away.
So, the bigger the cause,

the larger the effect.

Okay, so that's going to be the most
common answer to this question.

What else could we possibly be looking
for in the bigger, larger formation?

Now, let's just say sufficient
absorption of supply by strong hands.

And that's so true. Think about two
examples of causality.

Two examples of cause.

This and this.

One is small, one is big.

So think about supply.

If supply is the same, so let's say
supply zero and supply zero

here is the same level of supply, then
think about how

quickly all of this supply needs to be
observed by the CO in order

to push the price up.

Could it be done? Maybe it cannot be
done. Maybe that absorption is just

to be partial.

Partial absorption.

Whereas in this case, there might be
more complete

absorption of the supply.

by the CEO.

And if there is more absorption, more
complete absorption of the supply, then

what should it bring us to?

Better trend?

Better sustainable trend?

And this is something, you know, those
small nuances like this, right?

Where concept, that is so conventional
concept.

Yeah, the bigger the cause, the bigger
the upside, the bigger the effect.

You kind of have to think about these
concepts from a different perspective.

In a lot of ways, we're taught to be
thinking about the outcome itself,

right? The bigger the cause, the bigger
the result.

But if we would look into more the
underlying reasons of...

Why? Why would the trend be bigger?

In reality, it's all about the behavior
by the CEO, by the institutional

type of the CEO.

If they have more time to observe the
supply, it might take more time for the

price to fluctuate in the trading range.

But essentially, at the end of such
accumulation in the institutions, the

will have a much larger holding.

And therefore, if they're going to hold
on to this, that supply is not going to

be presented to the market for quite
some time and is going to confirm the

sustainability of that trend.

And also, that's going to influence the
character of the trend as well.

the way how reactions are going to
develop, the way how stepping stone

ranges are going to develop, and so on
and so forth.

So there are quite a few things that we
need to think through more thoroughly

rather than rely on more conventional
statements like, yeah, the larger the

cause, the bigger the effect. That's
understandable.

Okay, number nine.

Estimated profit potential, again, you
know, we're talking about the causality,

so we could estimate that.

So cause, number nine.

Base form, number eight.

Stock is stronger, somewhere here,
strength, number seven.

And so on and so forth. So number five
and number six.

Okay, so here is this whole plan, you
know, that

they wanted, you know, their students to
have, and by

them I mean SMI.

And obviously it has become a part of
the methodology.

This is not my favorite part.

I do not teach that.

But, you know, I've extracted maybe kind
of like the best practices here.

just based on the price structural
analysis, the way how the price

unfolds. So look at this.

Test number one, three tests that you
have to go through, structural tests,

you can trade without the volume
signature whatsoever.

You can trade also without indication of
the relative and comparative strength

if you don't care about the performance.

If you just care about the bias, that's
what you can do.

Break of the trend.

Test number one.

Test number two.

Major sign of strength.

And this is something that you will have
to be able to identify or to learn how

to do this.

It's the rally of the lows in phase C
that travels through the whole trading

range, overcomes the resistance cluster
that was created by the highs in phases

A and B, that commits progressively.

to the upside and allows the price to
stay above the resistance cluster and

then pulls back, backs up exactly to
that cluster and then

resumes the previous trend, which is to
the upside.

That's the definition of the sign of
strength.

Characteristics of the sign of strength.

Increasing spread, increasing volume
signature.

Those are characteristics. Those are not
definitional traits.

Okay, so let's come back here.

Test number two, a major sign of
strength. So kind of easy in our case

we still have test number three. So it's
not like we're going to come in on a

sign of strength rally and open the
position.

A good example of this concept and how
it could fail could be this rally right

here in October, November.

There is a close above the resistance,
and then there is a failure back into

the trading range, and then a second
failure, a breakout below the local

trading range that we see here.

So what we need to see from the major
sign of strength and then subsequent

backing up action is an ability not only
to commit to the upside, but to commit

in the specific way, to have the ability
to stay above that, and see how

different this upthrust and this sign of
strength are.

In the sign of strength, the price stays
up.

a lot of time above the resistance.

In the upthrust, the price goes up,
stays there a little bit for a couple of

days and then falls back.

It just can't stay there because sellers
are attracted to this

price and they want to sell as fast as
they can.

Here, there are fewer sellers and if
there are some, there is some absorption

even at this high level.

What we need to see in the backing up
action is their ability to pull back and

then resume the uptrend.

And that would be test number three.

And see how easy it is with just the
price structural rules.

Break of the trend, we are done with the
downtrend.

Then we're going through the trading
range and we're kind of like not

until the point of the rally.

Until the point of the rally.

And then we're saying, well, obviously
we need to have a proper backing up

action after that.

Failure, not failure.

And we need to wait for a reversed
reaction, a reversal here in

the backing up action. That's when we
are coming in.

And that's a high probability point of
entry for us.

And you could just trade.

I mean, think about how valuable that is
as one idea that you could trade over

and over and over and over again. And
there are so many stocks that are always

going to be at the spot, either to the
upside or to the downside.

You don't need phase C.

Phase C is something for maybe more
advanced students

that are going to be

determined to initiate a proposition in
phase C.

If you don't have time for this, look
for the characteristics of the sign of

strength and the backing up action and
trade that.

And believe me, your rate of return is
going to be, not the rate of return,

win to loss ratio is going to be so
favorable.

In a lot of cases, when you abide in
phase C, you will be faced with a

where you will have to close a position
just because it was

a short -term reaccumulation type of
texture that

brought you a short -term bias to the
upside.

You got into this position, and then it
reversed, and it failed around the

resistance because supply still came in,
and you have to close.

So if you're willing to go through this
type of trade, which I do, and I could

show you some of those, I'm okay with
this type of trading.

But in my case, I'm doing this each day.

So for those of you who don't have time,
the best high probability spot is

always going to be after the backing up
action.

And if you think about where the backing
up action happens relative to the whole

trend you might be saying like oh my
gosh the stock went up like 20 to 50

percent up into the backing up action do
you know how valuable that is as a

sign that the stock can travel so much
and now it's in the consolidation and

might continue its move to the upside
you might be actually before the

distribution

You might be just experiencing the first
10 % of the move or maybe even 5 % of

the move.

And you still have so much ahead of you.
But think about where you're coming in.

A high probability identification point
of entry.

So think about that type of strategy.

Okay, what's next?

Quarter to five.

Okay, we've talked about the effort and
the result.

So different characteristics, how
absorption happens, how supply levels

behaving. So in this case, in 2008,
2009, Apple, we've seen a lot of

accumulation on the way down and in
phase A.

Just a lot of buying. And then, so all
of this.

Buy, buy, buy, buy on the way up, buy on
the way down, buy on the test, buy on

the way up, buy on the way down.

And then some occasional buying like
this one, this one, this one, then

this one right here.

And there is smaller buying. We see this
from the consistency of the demand.

Let me just put everything on the chart.

Okay, this.

I think this, this, this.

So look at how the value zone is being
constructed.

This is the value zone, institutional
value zone.

And they are buying at all of those
spots, but the most aggressive buying is

obviously in phase A and early phase B.

So supply is always crucial because it

gives us an understanding of what CO
actually is doing.

If supply is still available, our
question is, is CO absorbing that supply

CO is inactive?

If CO is inactive,

most likely we're going to have the
continuation to the downside. If CO is

actively absorbing, then not only we
might have accumulation bias coming out

this formation, we also might have some
kind of leadership characteristics.

I mean, the way how the CO was buying
this stock at this time, and think about

in 2009 what the stock represents at
that time.

This is the hottest stock in the market.

it still has in the pipeline so many
products that are going to come out

the next five years or so.

The cash, the revenue is just being
accumulated at the very fast pace.

So obviously, there is a lot of value

on the way down, and there is a lot of
liquidity.

And we see that.

both from the way how the downtrend has
developed and also from the way how the

volume signature behaves.

So therefore, the most aggressive buying
is going to be at that spot.

They don't mind going through the
consolidation, and it's not our goal to

through the consolidation.

Our goal is to understand the motives
behind the

composite operator behaviors.

and identify the timing when that motive
is going to become more of the reality,

where the trend is going to start to
emerge.

And that obviously happens in phases C
and D in this element here.

Okay, well, that's the supply.

What about the demand?

Well, in a lot of cases, demand is going
to show up as in demand either

on the way down

urgent demand on the way up.

And that urgency, again, defines the
timing for us.

This is the stock that has a lot of
interest by institutions,

and that interest is now.

It's not on the way down where it is,
but the timing is not there.

It's not necessarily maybe like on no
volume type

of rallies that we have. We don't see
that institutional urgency.

But when you see something like this,
where the price just goes up so quickly

and the volume signature is so high, and
you might be thinking, yes,

supply is there. Absolutely, supply is
there.

What happens afterwards?

What is the test? And the test is that
we're still going up.

So that suggests a bias to the upside.

There are more buyers, and obviously
there are still institutional buyers, on

the second bar that are still coming in
and buying.

So there is no test after the first bar.

There are still some buyers even after
the second big bar, and they're still

buying on the way up.

There are fewer of them, but still there
are some bias. They are late bias, but

they're confirming the overall bias.

So that type of demand we definitely
need to identify and to see that

as a timing tool and also as a potential
leadership tool.

When we think about this urgent demand,
we always say timing. But think about...

Why? What is the reason for this urgency
and such a huge size to

be in this position?

Well, most likely they know something
that we don't, and they're looking at

talk as a potential leadership for quite
some time. So that's what's happening.

All right, guys.

Homework. Again, homework is going to be
optional.

That's number one.

Secondly, you know, this is going to be
for the practicum students.

But even those of you who are not going
to take the practicum, I would really,

really highly recommend that you do this
homework.

It's the final homework that I usually
have, you know, in between two courses,

just because there is some window there
before the next course starts. So we

want to use that.

But it's a very useful exercise. All of
the students who have done this

exercise, they kind of felt the
practicality

of all of the concepts that we've talked
about.

And that's a very important feeling that
you have to gain in order for you to

feel more confident with the methodology
and how you apply it in your trading.

So what is the homework?

Okay, so the assignment is just to use
Biogen.

or any other stock, I really don't care,
to backtest the WACO trading plan.

So what you do is you go to the pro
forma plan

and you start applying all of the
filters and all of the

execution steps one by one with all of
the trading ranges

that you can find in Biogen. And then...

As you identify a trade, then you put it
into some kind of spreadsheet

where you have the number of trades,
what was the pattern, trade date, what

the price, what was the original stop
loss, how did the stop loss work out,

was the gain and the loss, and when did
you exit this position.

The question usually comes here is,
could we use a hypothetical portfolio?

Yeah, go ahead.

Use maybe like 100K, and you could just
have another P &L here,

column, and just create that.

Or don't use that. Just identify the
gains and losses in terms of the

points that you collect. That's the
simplest way. I don't want to

the stats that you're collecting.

But definitely mention the market
direction, analysis of the comparative

relative outperformance, your labeling,
so you have to label each of the trading

range where you originate the trade,
your points of interest, top loss, and

where you exited.

And I want you to have these stats, and
also I want you to have charts.

Charts. with some kind of trades that
you've originated and you're showing

trades on that chart.

Maybe you're showing some trades that
have failed and maybe you're showing

losing trade.

That's also quite acceptable and needed
for us to understand how you did this

work.

Philip is asking, so go candle by
candle, analyze like that?

You could do that, but even at this
point, and, you know, I've

asked you guys to kind of trust me with
this education,

and we are at the last session, so we
can talk about this, you know, more

freely.

Okay, so here is the whole history of
Biogen.

So how can you do this?

You obviously would know the history of
the stock, but it doesn't really matter.

What matters is through this work, I
want you to create a convincing

strategy, a mental convincing strategy
by going through all of the possible

trading ranges, whether they are on a
daily, weekly, or monthly basis.

And then...

originating the trades and those you
know in those trading ranges

looking for finding the way how

you know the trade would be originated
and as

you do that put in some notes around

all of this

So let me just do the first one, and
then I'll leave the rest to you.

So for instance, I'm looking at the
first trading range right here in 94,

Obviously, I will have to do what?
First, I will have to look at the

Secondly, I'll have to see, is there any
comparative strength

at this point of time that I could
identify?

And where would it occur?

So maybe it wouldn't occur here. Maybe
it would occur on the sign of strength

instead. And we see how the momentum
actually plays out so nicely here,

suggesting that institutions are finally
buying.

So my points of entry might be after
that and not necessarily before. It all

depends on where the comparative
strength came.

And I'm not that familiar with that
particular region of this thought.

price okay so after that we are in the
backing up action how do we buy this we

buy it on the reversal we buy it on the
breakout these are the two points of

entry for us and then we are just
staying in

the trend until what until some kind of
uh buying climax conditions probably

somewhere here on this volume spike and
on this

clearly overbought condition that we
see.

So this could be our point of exit, at
least the first one. So let's say that

have two positions, so exit number one.

Exit number two, we would be looking for
some kind of change of character and

then a secondary test.

we're seeing here a smaller trading
range and then the up thrust so we still

would be in this position until probably
either this point or this point right

here so this is our exit this is our
exit okay so exit number two and hit

three and then just create a table where
you have you

know all of those dates for for entries
or point of entry

Stop loss, exit, P &L, and so on and so
forth. And just conduct

those trades like this.

Don't overcomplicate this.

Take this information, put it in. Take
this information, put it in.

Calculate the P &L.

That's your job.

But you have to do this in a very
qualitative way.

You have to label the trading range.

You have to think about the market. You
have to think about the comparative

strength.

Then you have to think about tactics.
Where do you go in? Where do you go out?

And then you need records.

And that's your homework.

The goal is not necessarily to know
what's coming and to define

that bias.

If that would be the goal, I would give
you the exercise where you don't know

what stock that is. You already know
what stock that is.

What else can you do? Well, you can do
what Philip has suggested, and you can

say, okay, well, for instance, in this
trading range, I see a

lot of activity, and let's say

maybe somewhere here.

you know, start analyzing the trading
range. What do we see here? Well, we're

seeing a climactic action that resolved
in another run here.

Then we're seeing a change of character
maybe, and so on and so forth. I don't

want to do this all for you. And then
you could, as Philip suggested, go bar

bar. And stock charts can allow you to
do this. Look at how I'm doing this

now, bar by bar.

And you can, define your points of
entry.

This would be really good, right?

Like, what do you do here on this bar?

How do you react to that?

So this type of situations you can't
foresee, even if you know that the price

going to go up.

I mean, what's your rationale? What's
your logic here of staying in the

position? You have to think this
through.

And that's why this exercise is so
valuable when you go bar by bar.

But if you don't have time to do that,
then just do it in the way how we did

this in the classroom.

Okay.

So that's that.

Questions, comments about the homework?

Five o 'clock. Okay, great.

So we have 30 minutes.

Looking at the market for each trade,
Philip is asking,

Well, you kind of have to go through the
trading plan, right? So each time you

initiate a trade, what do you do?

You compare your analysis to your
trading plan, right? Because

you don't want to create the variance
between your execution and your actual

rules. So therefore, market is part of
deciding

what kind of trade is available.

and going in the direction with the
market. So, yes, this is the first step

always.

All right. Well, today is the last
session, and we don't have a lot of

questions.

Usually we would have so many questions,
like the whole class would be devoted

to those questions. So I think maybe
because we were addressing those

throughout all of the sessions, and it
kind of allowed us not to accumulate a

lot of.

So I think that, you know, next 30
minutes we could actually do all of

Okay, three questions here. First one is
from Abdulaziz.

Distribution, redistribution schematics.
So I think in the last class we've

talked about this, but I don't have a
redistribution schematics per se like

drawn, but I will draw this to you. And
the biggest question is about labeling.

How do we?

label this. Okay, so let's start with
the distributional labeling.

Buying climax, automatic reaction,
secondary test, phase A,

defines the trading range, phase B,

optros of the distribution in C, with
the test, which

is LPSY, last point of supply, sign of
weakness, which is a major sign of

weakness.

LPS wire rally.

Move to the downside. So now here we are
going into the redistribution. How

would we label that?

Selling climax.

And this is going to be in the
redistribution.

Intermediate selling climax. So it's not
terminal.

Automatic rally.

Secondary test.

Phase A.

Definition of the range.

Phase B, upthrust of the distribution or
LPSY,

major sign of weakness, LPSY.

Continuation to the downside.

Now let's look at the accumulation.

Because this is accumulation, this is
going to be terminal cell in climax.

automatic rally, secondary test,
definition of phase A,

and

definition of the non -trending
environment.

in their accumulation.

All of the definitions and so on and so
forth.

So what's the difference here for the
redistribution?

We are going to have the intermediate
selling climax instead of the terminal

selling climax.

But then the rest is going to be
somewhat the same.

The start of the trading range is going
to be labeled the same way as an

accumulation. We're going to have a
change of character in the automatic

secondary test of the test, local test
of the climactic action.

We're going to go through phase B. We're
still going to have up thrust there.

We're still going to have secondary
tests at the level of the support. We're

still going to have minor.

sign of weaknesses at the level of the
support as well.

And then up thrust or LPSY, major sign
of weakness, something that is

common for the distribution as well.

And then off we go to the downside.

So that's the only thing that, you know,
we could potentially have

as our labeling. Now, having said this,
there might be some other variations as

to how redistribution could happen we
could have something like this where the

price maybe like uh slopes to the upside
like this

and then goes down and then continues to
the

downside so those type of uh structural
differences are definitely gonna

exist, but the label in itself is still
going to remain the same, right? Phase

C, phase B, phase D.

So that's the key, is that conceptually,
we're still going to be doing the same

thing, but there's going to be quite a

few variations on the theme.

Okay, let's go to the next question.

Okay, this one comes from Philip.

As a beginner trader, how do I start? If
I want to use 1 % risk rule,

then from the prices of the stock, it
looks like I would have to put around 10

,000 in my account.

Is this the only way or should?

Or how should I approach this problem?
So the key in this question, Philip, is

this. How should I approach this
problem?

So one of the things that I really,
really want you to think about,

as you're a beginner, is to create some

kind of practice.

that leads to consistent result.

Consistent results.

And Philip, I'm not joking here at all.
This is actually, you and I would

get into the private session. This is
exactly what I would tell you.

If you're a beginner, don't put the
money into the

into trading right away.

The first step is still going to be to
practice to the point where you have

consistent results.

What are the consistent results?

Well, for instance, you do some
simulation.

And then let's say maybe your goal on
the simulator go through at least, let's

say, 100 trades.

And if

your results are showing that, let's
say, more than 50 %

results are winners,

then proceed to the next step.

If not, practice more.

And until you get to that level where on
the simulator,

You can identify the bias correctly.

You can identify the timing of the
trade. You can enter the trade correctly

then execute the trade correctly.

And 50 % of the time you're making
money, then definitely go to the next

So Philip is asking, simulation means
something as our current homework or a

practice account. You could use both
either. There are quite a few

that you could purchase as a software.

I actually use a couple. You could just
even use the stock charts, the one like

I've showed you, candle by candle, as
you said, right? So that's so useful.

Sometimes what I do is, let's say, my
wife would watch some kind of show,

and then I would be just kind of using
my iPad and

leisurely. As I watch the show, but
leisurely just concentrate on the chart

well and go bar by bar.

I'm just kind of going through the
thinking process of how do I analyze,

I enter, how do I react to those gap
days, and so on and so forth.

So any type of simulators that you could
use, those are useful.

Even if you know the history of the
stock, you don't know bar by bar what's

going to happen.

Second step.

Once you're done with the first one,
second step is going to be put a limited

amount into your account.

And then use the smallest size

for your initial

trading. So for instance, if your
ultimate goal,

is to use, let's say, 3 % risk per
position,

then I want you to divide this

into, let's say, different portions, so
maybe like a quarter,

or maybe even less so, maybe like

20 % of this 3 % risk per position.

So what would it be? For instance, 0
.6%, maybe to

be better, like 0 .5 % of equity. So
this is your 0 .5 %

of equity per position that you want to
use.

And then just work with this and show
again to yourself that in

a three to six months period you can
produce consistent

results if you

do this then go to step number three and
then trade full full size

now there is a step number zero

to that and so

Step number zero, knowledge,

skill.

And obviously I'm putting the semantics
here for our products, but you could use

any other products.

If you could go through this as a
process, I think it's going to be very

valuable. Knowledge, skill, execution.

Execution are gonna be all of those
steps. So step number one, two, three.

And then mental execution.

So mental execution, I would not worry
for now. This is something that is gonna

be required after the technical portion
of your trading is unconscious.

And when you are not thinking about your
analysis too much and it just happens

naturally, a lot of the bad behaviors
that you have in

trading and in life in general are going
to become more visible because they

will become the single point of
frustration, distraction, losses,

poor execution, and so on and so forth.
And you will be...

kind of screaming inside saying that I
got to deal with this because my

is good.

I went through all of the drill skills.

I've shown myself that I could produce
consistently and then the mental portion

of the execution is the only thing that
takes me down.

So then come to me and I'll give you a
different scenario, a different plan as

to how to work with your mental.

So it's a process, right? I don't want
you to jump right away into this and

experience some losses.

Build up your confidence gradually.

Don't allow yourself to jump into the
water and then have it

kind of negative emotional experience
and then decide to like quit uh quit

wyckoff uh quit thinking about your
financial independence and so on so

okay next question is somewhat uh i
think no something different i

have been swing trading stocks and i
realized that the more i trade the more

mistakes i make okay so right away we we
see some

mental landscape from Jung here.

Therefore, I'm thinking of swing trade
for a longer period of time to reduce my

frequency of trades.

By the way, both kind of like do not
have anything to do with each other,

two statements. You can still make
mistakes in your swing trading based on

analysis and not on the frequency of
trades.

I could see the logic here because
usually when you go to a longer time

you are dealing with fewer trades that
you have to conduct.

If you're dealing with fewer trades,
therefore you're going to reduce the

of mistakes that you make.

But having said this, I still would
concentrate a little bit of the more I

trade, the more mistakes I make.

So what are those mistakes?

This is the more interesting question to
me, not in terms of the timeframe.

What are the typical mistakes that you
do in your swing trading currently?

And the reason why I want to know this
is because you go to a longer timeframe,

you might be making the same mistake.

And the mistake, the example of this
could be, theoretically, for instance,

make your analysis, you define the bias,
and then...

Maybe the bias was defined incorrectly.

You get into the position, the stock
moves against you, you don't close the

position, and then you lose money.

That's kind of like a very amateuristic
mistake that you could make still,

right? So defining the scope of

mistakes. is extremely important at this
point of time. We need to understand

what mistakes you're making.

I would like to know if there is a
systematic way, methodology of screening

a winning stock that has been chosen by
the CEO so that I could get in early in

phase C and D and follow the trails of
the CEO. Also, since it is a swing trade

for weeks and months, how do I handle
the trade when the winning stock is in

out of sector rotation?

In short, how do I detect a stock early
from thousands of stocks in the universe

that is under the campaign of the COO
and swing trade this stock with the WTC

class knowledge and is able to handle it
when the stock is in and out of

rotation. Okay, so we are 15 after.

I think we still have time.

Okay, I'm going to show you an example.

okay so let me just show you this

look at this stock what do you guys see
let me just put the price here

of the fmp

the size okay here we

are exiling semi -conducting stock um as
we go

through a downtrend short -term
downtrend in the market

and then we start to recover right so
we're thinking sign of weakness

or a shakeout

This is the bar that changes that
perspective, right? So we know at

this bar that we overcame a shakeout,
there was a test, and now

we have a breakout, which is the local
breakout right here.

So let's say that this is the day when
we're going to look at stocks.

Okay.

Let me just decrease.

the size here and just increase the yes
great okay

so what is this date january 4th so on
january 4th we're gonna

go through our market and then look
january 4th was friday january 7th is

so you have the weekend here to make
that decision about what you're gonna do

you're thinking this way

Sign of weakness or a shakeout?

Well, maybe I don't know at this point.
Maybe I don't have that strong

conviction level.

So what do you do?

Well, still, you recognize that this is
an oversold condition. And even in the

rally that we might have, let's say a
bear rally, that might come to this

point, then do this, something like
this.

During this time, there will be some
stocks that will outperform.

So you want to find them. How do you
find them? Well, you're looking for the

strength. That's number one. You look
for the causality.

And then you want to look at the supply
and demand.

and you want to look at the structure,
obviously.

Okay, so Xylem is some of the, one of
the stocks that was, at this spot,

definitely outperforming the market,
right? So look at how it's

From this low, we have the stock that is
maybe slightly

outperforming. Definitely outperforming
on the way down.

Look at how the market creates a lower
low. The stock is creating a higher low,

so that's a strength. So that's already
a sweet spot.

Then again, outperforms during the time
when the market is just consolidating.

And then look at the reaction, another
higher low, another point of strength,

another sweet spot.

So what do institutions do? They
accumulate on the way up. They don't

sell on the way down.

They want to buy on the way down.

So therefore, on this day, January 4th,
this is the

stock that is going to go into our watch
list based on what? Based on the

structure, which I've discussed this.

Causality. Is there enough causality
here for a swing trade?

Yeah, absolutely.

I mean, like, look at this one -year
cause.

So this is definitely something that
would go on up for quite some time.

Okay, so it's great.

Supply and demand.

Well, we see how supply is diminishing
into the reactions. I'm not going to go

through this whole analysis, so you can
do this by yourself. Check.

Structure. Well, we're thinking that
probably phase, and look at the

apex formation. So phase C is probably
somewhere here, minus sign of strength,

major sign of strength.

LPSY, LPS, I'm sorry.

and then a backing up action.

And we are in phase D here. If we're in
phase D, what's going to come next? E.

Structure is there.

So we are making a bet here that the
market

might have both scenarios, both bearish
and bullish scenario.

and we want to pick up the stock that is
showing that relative comparative

outperformance, and we want to make sure
that the stock has causality, that it

has the appropriate structure and the
timing is now, and that it has that

-demand signature that is favorable for
not just the buyers, not just the

timing, but also the way how the stock
is going to perform after that.

And we have all of those.

And that's your swing strategy.

So how do you find those stocks?

Well, we went through this in the last
class, right?

So I've shown to you guys how, like on
stock charts, I might use, for instance,

you know, scooters. I might use, you
know, especially top up, right? So,

look at this stock. Look at this stock.

Let me just find maybe just one.

That I like.

Okay, so let's look at this one.

Look at this stock.

What is this? Entertainment, Viacom.
Okay.

Look at the attempts to stop right away.
Look at the structure.

This is the latest structure.

And it seems like whenever the price
went down, it recovered really quickly.

Went down, recovered really quickly.
What is it?

Those are elements of buying, right,
even here. Went down, recovered really

quickly. So the value zone somewhere
here, and I'm just doing the analysis,

right? There's a momentum buying here,
momentum buying here, so that's all

great. We just overcame the center line
here. That's also great.

There's not a lot of supply here. That's
also awesome.

A lot of it was here. Now there is
nothing.

And then we are having higher highs,
higher lows, most likely in phase D

already. You could extend C like this.

And then it's all about tactics. Where
is the point of entry?

And this is more maybe of the campaign
stock because it might go up and going

consolidate for some time like it did
here.

That could be a possibility.

So Xilinx was a much better candidate
because it was already in the

reaccumulation zone and you can define a
lot of the...

swing characteristics like this.

One of the things that I want to ask you
to do for those of you in your career,

I'm just kind of like asking, we have
quite a lot of on -demand products.

And one of them is actually a swing
trading using the Wyckoff method, which

conducted multiple times. Usually in
December, I either do a swing workshop

or... Intraday workshop.

This year workshop is going to be
slightly different.

Last year I've combined both intraday
and swing.

This one is going to be somewhat
different.

And you could just purchase this. This
is like seven and a half hours of

material.

And we go through all of those things in
more detailed way.

All right.

Let's go to the next question.

Okay, this one is from Doug, and this is
just based on the homework that we had.

The question here on slide number five,
stock number two.

Last slide, market bar is up. How do you
determine if the trading range is

sloping or horizontal? Using the
horizontal range, it seems to indicate.

We are in phase D while using the
upsloping trading range. Price has

within the range and indicates on the
right side a possible phase C is

Differentiating the two scenarios
determine if the stock is in the sweet

enter a trade.

Okay, so let's just address the question
of this.

How do we determine if the trading range
is upsloping or horizontal?

Okay, so I was thinking a lot about this
question.

And the reason why is because usually
it's kind of hard sometimes to define

that slope.

In some instances, I see that students
would just be looking at uptrend and

they would label it like this, like
selling climax, automatic rally,

test, upthrust, secondary test, and then
some kind of upthrust here.

No, no, no.

This is not how we're going to do this.
First of all, there should be some kind

of understanding of the slope, right,
that's going to happen. So, for

if you're going to have like 45 -degree
slope, then most likely it's an

uptrend. It's not a consolidation.

But if you have a lesser than, you know,
45 -degree slope, then this could

produce a question. Do we have an
upsloping structure?

The second and more important...

of how we should be looking at the
upsloping or downsloping trading ranges

that every time we have a higher high,
and by the way, I should have put here

another high here.

So this was the actual buying climax.

So if we have a higher high, and then
the price comes back into the trading

range significantly, meaning that it
retraces you know, a significant

portion of the previous reaction.

It retraces a significant portion of the
previous reaction.

It retraces a significant portion of the
previous reaction.

Then we are still in the trading range
because the action here

is, for the price, is to come back to
almost the level of the support that

was defined before.

and therefore we're still in the trading
range.

How to define up slope, slope

and trading range, okay.

So that kind of is becoming the key for
me in the way how I explain this

concept, and Doug, hopefully, you know,
that's helpful.

And for now, this is the only thing that
I can tell you. So those two things.

You have to look at the, well, actually
three.

So first, degree of the slope.

Secondly, there should be, you know, a
similar texture

as to the price and the volume

characteristics right so when we look at
all of this moves up reactions moves up

reaction they kind of look the same
right so it's not necessarily a

type of price action it's the same we
could see in the market here one price

texture where the price goes up where
the up spread is increasing and then a

completely different price and volume
structure and texture you know when it

goes into the trading range so we want
to capture that similarity in the

And then the third one, obviously, is
that, you know, how does the price comes

back, the actual structure?

So those are the three things that I can
think about at this point of time,

Doug. I don't think that at this time I
can, you know, bring you something else

on this.

Okay.

Okay.

And a question, I think three questions
from Lee. Okay, and then there are a

couple of questions here that you guys
have, so I'll try to address all of

those. Okay, 530.

Okay, so what do we have here?

Question number one, on March 11th, time
stop loss

was mentioned. The time stop loss for
Apple is about two to two and a half

months.

Okay, I'm not sure what it means.

Okay, so maybe this, time stop loss.

Okay, what I meant by that, okay, let me
just finish the question. However,

there are stocks in the trading range
which are as long as few years, like

Selgen. If we had entered the position
early in the trading range green line in

phase B of Selgen, so let's say here.

Shall we exit those positions within
three months? Is there any guideline or

rule of thumb for the time stop loss?

Two different ways of how we look at the
stop losses.

So one of the things that we discuss in
the practical class, and

this is going to be a big portion, we're
probably going to spend like three

sessions just on stop losses.

And we're gonna talk about the price
stop loss, we're gonna talk about the

stop loss, and we're gonna talk about
volatility stop loss.

And those are three different stop
losses.

And we're gonna work with all of them.
And the time stop loss is just basically

gonna define for us not the time when we
get out if the position does not go our

way. but it's going to define more of
the kind of like the levels of where

the stop loss is going to be based on.

So for instance, the price stop loss
could be at one support level, and then

time stop loss is going to be at the
lower price level.

So if the price just violates the price
stop loss and then recovers, we do not

close this position.

but if the price, let's say, commits
below the time stop loss, we would call

this a catastrophic stop loss, like
Wyckoff did, and we would get out of the

position. This will become more clear
during the practicum, but I think what,

Lee, you're referring here is more of
the stop loss rule, where in a lot of

cases, for instance, if you got in into
the position right here, and then the

price does not go your way, you close
out this position.

And you use time as a factor, as the
timing to get out of this position

it's not working out.

So that's just a technique. That's not
necessarily the stop loss, time stop

by itself.

But this is just a technique where a
time used as the,

you know, point at which you're saying,
okay, I'm closing that position.

And this is a good example.

of how we might be just using that.

But it's a bad example here with
Celgene, because if we would be thinking

the structure, we would be thinking that
this is probably a secondary test in B.

And therefore, we would know that the
price is still gonna consolidate for

time.

Okay, well Lee, hopefully that's
understandable.

Okay, second question. In Celgene graph,
assuming we had antitheposition in

phase C of the green line, of the
trading range.

Shall we exit our position at the close
of bar number one based

on your teaching and previous classes?
We shall exit at bar number one if we

consider the black line trading range.

It might be an up thrust or down and the
down bar number one is kind of

significant bar and reopen position at
point number two and point number three.

Other points of entry chances between P
and 1 are ignored. In this case, will

there be any reasons not to exit the
position at bar number 1 as it's already

E for green line?

Okay, yeah, definitely there would be
some reason not to close out this

position, right? So what do we think
here?

We're thinking that this is a secondary
test in phase B, and then we're going to

have a retest of the high.

in phase B again.

And then after that, and in this case,
this is an attempt to go up, it does not

up thrust, it's up thrust only in the
local trading range. And then after

we should go and find phase C.

So phase C here is more horizontal phase
C. It's just a variation on phase C.

So if we open the position right here,
then we should experience a major sign

strength in the backing up action.

If we are long -term investors, opening
the position

in phase B does not end with the
characteristics of the major sign

of strength.

We do not have to close that position.

We're only going to close this position
on bar number one if we are swing

traders.

So this is the swing trade.

Close your position.

If we are in the long -term trade,

then we hold this position.

And then we add more, we add more to the
long -term position. And then we, as

you describe it here, Lee, we open new
positions for a swing position.

And that's how we should approach this.

Because for a swing trader, the key is
going to be to capture the major swing.

The swing between phase C and the major
sign of strength is going to be exactly

that. It's that rally.

The next swing trade is going to be
after the backing up action into the

swing.

So therefore, your exit on bar number
one for a swing trade is perfectly fine.

You have all of the characteristics to
exit it.

especially above the resistance, and you
can re -enter that swing again.

If you're a long -term trader, then
there is no reason to exit. You can

out a little bit. You can decrease your
size, your risk, but not necessarily.

Okay, ooh, two more questions. Okay,
well, let's see if we could cover this

really quick.

Question number three, why don't we open
a position at the close of bar number

three?

Okay, right here.

Oh, right here, this is the bar.

Okay.

Even if it did commit above bar number
one, number two, we would be able to get

into the position as the bar of the bar
number three did go up slightly higher

and so on and so forth. Okay, yes, I
would agree here.

So I probably have not noticed this bar
just because of how the chart is.

but yes, you're right. There is a
reversal right here. That would be your

and this would be your stop loss. You
still would be in this position, and you

would be able to add to the position
right here.

Yeah, so a good catch. I just did not
see it.

Number four, if I remember correctly,
you did mention before there is a tool

that we could, can allow us to know more
accurate information about the supply

and demand instead of deducing what the
volume bar.

which is quite misleading sometimes.

Is there such a tool? Could you please
introduce the tool to us?

I probably would, and I don't remember
exactly in which context we mentioned

this, but I probably was talking about
the up and down volume.

So, and this is something that I'll have
to show you in the practical. In the

practical, we'll talk about horizontal
volume.

And by the way, I'm arranging for a
special, maybe in June, July, for us to

through on horizontal

volume signature or on market profile.

But I do talk about that in the
practicum, so I'll show you an example

Okay, so I think that's it. There are a
couple more questions that

I'll address and then we'll stop.

One comes from Sarah Way.

You mentioned that in the price gap up
or down,

is actually buying or selling stocks
overnight. Would the volume generated

during the overnights be reflected?

The quick answer to that, Sarah, is no.

Would it affect our volume analysis if
the overnight volume is not recorded?

Yes and no, because we still would be
aware that there was a volume

signature that overnight that drove us
to this gap

and i'll show you on the example and
that's what we have to be aware about

there was some buying institutional
buying overnight and then we will be

a judgment of the daily spread in the
volume signature for that daily spread

that's where our what our analysis
predominantly will be based on

Okay, let me just then find it on a

chart for you.

Okay, so here is this gap, actually
multiple gaps here, great.

Okay, so overnight gap. So here it is.
What do you think is happening in this

overnight gap?

So institutions are selling, right?
Maybe there are some news. There's some

that came out.

What do you think is happening in this
gap? Yeah, so they're selling, and

how the price moves.

Now, we don't know that volume signature
in the gap.

We can extract it, by the way. You can
go and find the

softwares, like, for instance,

TradingView actually, I use TradingView
so I could look at the aftermarket

data on TradingView.

So you could look at how the price
moved, you could look at the volume

now. Is this gonna be a really good
identification of

the buyers?

Well, your bias is going to be based on
the momentum in this case. It always is

on earnings or on the events like this.

So it's definitely going to be in the
direction of what has happened prior,

institutions have done overnight, and
then how everything develops in the

morning.

Could we just use the volume signature
that we have?

Yes, absolutely.

Think about what happens on these two
days where there is a gap.

We are developing a climactic run to the
downside on the climactic

volume.

What kind of action does this suggest?

Stopping action, selling climax.

And we have all of the characteristics
of the climactic action.

This acts more as a secondary test here.

So here is our support line.

different support lines and resistance
lines that we could create.

Look at the second example.

Kind of the same thing.

Climactic action. In this case, we're
probably thinking that we are, okay,

so initial phase A, B, and we're
thinking, could we

be in phase C here?

or maybe it's a much larger formation,
and what we have is more of the

weekly. On the weekly, maybe it will
look differently. So look at the weekly,

and you might say, okay, well, what if
this is the area of the selling climax?

This is the area of the automatic rally.

Then what we have here is kind of like a

secondary test in phase B type of
action.

So we might be inclined here to do what
kind of trading? And this is, again,

something that we do in practicum a lot.

We think about all of these scenarios,
right?

Because through thinking, we develop
logic that becomes a habit for

us in the way how we think and how we
approach the market. So we're thinking

here, it's either secondary testing B or
it could be C.

In both cases, we're going to have some
kind of rally, and this bar kind of

shows that there is some demand.

So we could have maybe like a swing
trade up to this point, and maybe

this is a high -low, who knows, maybe
there's going to be some kind of

So on the daily, coming back to the
daily chart, okay, so our entry pro,

going to be either here or at the close
here, or maybe on the reaction.

And we're thinking that this is a...

like a very risky trade uh not a lot of
potential so again not necessarily

would be my favorite trade out of this
place but possible so how would we do

it okay so let's say that this is our
point of entry this is our stop loss our

target is slightly above 50 so maybe
like 52 somewhere on this bar

where the selling has started

So that's the goal.

And we don't even have a really good,
you know, let's say if

our risk is smaller. So what is this? 40
and 32, so maybe like three bucks.

Three bucks of a risk for what?

40 to 50 for $10 of profit.

Okay, acceptable, right? So we have 10
to three.

which is basically three to one about.

Okay, well, let's go and do it bar by
bar. Okay, so how are we feeling? Yeah,

that's good, but the spread is
diminishing, and it goes into the

here, and the volume signature is still
high, so some supply. So let's see how

it's going to be absorbed.

Oh, okay, I don't know what happened
here.

Okay, so we don't see that absorption,
so I would be extremely concerned here.

as the price overcame. So there is no
like reason for us to do trades like

You already kind of could see where it's
going with all of that.

Okay, let's continue.

And this is that part of the simulator
that I was talking about.

Who was asking that question?

I think either Phillip or Nilesh was
asking this question.

Could we like use the simulator?

And you see how the price fails.

So if we had this as a potential smaller
sign of strength, then we definitely

don't want that failure to go and then
fail again in a more meaningful way. So

we would be completely out, and this
would be just a break -even trade for us

right here.

And definitely we would need to
establish some more definitive rules as

we get out of this.

Okay.

And as we got out, the price actually
comes back.

Okay, well, I think that we need a
little bit more time to think about

this trade would develop.

I'm just a little bit in a rush right
now.

But that would be the logic in terms of
the scenarios as to what do we expect to

happen. And obviously, one of the things
here is just the spread is diminishing,

supply is diminishing as well. So I need
to be a little bit more attentive to

those details.

Okay, second question.

Stock charts by default and back.

By default, add back.

they distributed dividends to the price.
To remove the dividends from the price,

we need to add underscore to the symbol.
Is it necessary for us to remove the

dividends from the stock price?

Now, I definitely like it without the
dividend. So as

you could see, I don't have any
underscores.

So this would be a different picture
here.

or should be a different picture,
although it looks the same, right? So

underscore and then the symbol. So try
it with some other stocks and you will

see the difference.

But basically, you know, you could see
that here, for instance, unadjusted

and then adjusted. Well, I guess I'm

looking at the adjusted, right?

So I always look only at the symbol. I
know that with the underscore, obviously

you get a different picture, but still,
my preference is just to use the regular

symbols.

Okay, I think that's it.

Will we discuss...

figure charts in practicum.

I read Wyckoff books and it seems like
important part of the method or is it

obsolete? No, it's not obsolete.

It's probably considered obsolete by
many technical analysts or they just

cannot find the quantitative evidence
with the point and figure that it works

consistently. That's what it is.

Now, the reason why it might not work
consistently for them is because

they just use it incorrectly.

I'm just curious where.

Oh, okay. Here's that failure.

Yes. Okay, it didn't even go to 50.

Do we discuss that in the

practicum? No, there is no reason to
because you could go to our on -demand

products and we have part number one
with Bruce on the PNF, almost eight

Part number two, most recently
constructed last year,

I believe.

So you have about 15 to 16 hours of
material on the PNF.

Also, if you go to our YouTube channel,
you will find there a

lot of, well, not a lot, but you will
find

on the PNF.

Last presentation that Hank gave at Best
of Wyckoff and his last presentation

period.

After this presentation, it was on
Saturday. Next Saturday, he passed away.

And then two 30 -minute intros to the
PNF by

Bruce.

So you could definitely start with this,
and then you could...

you know, switch to the products that we
have. And those are great products. So

I would just, there is no reason to go
through the PNF. I mean, obviously I

mentioned it here and there, but you
could just buy it there.

All right, guys, let's stop here.

Let's kind of conclude our whole course.
So last session, last

five minutes, last...

comments, and so on and so forth. First
of all, I enjoyed this group a lot.

Each group is so unique, and it's
obviously being comprised of the people

are in this group and how they are and
how passionate they are about all this

stuff, and what kind of questions
they're going to answer.

And I'm always curious, what kind of
group am I going to get for the next

So I really enjoyed it.

being with you and developing the
material together with you. As you could

I'm developing material as I teach this.

And somebody sent me this wonderful
quote that I'm going to read to you.

It kind of states a different thing that
I want to say, but I'm going to

translate this in a different way.

Teachers,

change lives, but students change
teachers.

And this is so true.

Because every time I have some kind of
connection with one of you or

with a group of you, I feel that the
questions, the

anxieties, the happiness that you bring
to me in your emails and our

conversations, they change me.

They change the way how I teach. They
change the way how I look at the

Because any type of question that I
don't know the answer to, and there are

definitely a lot of those questions,
like even today, to some of the

said, I have to look into this.

So they develop me. They change me. So I
am in the state of appreciation

to what you've done through this course
for me.

I know it might come a little bit as
kind of like an unusual thing, but thank

you, guys. I appreciate it.

I appreciate that you pushed me to
develop myself better as a trader, as an

analyst, as a teacher.

Having said this, I hope that whatever
you received in this course is valuable.

And you've indicated to me many times
how valuable the material is, how you

the market better right now.

I'm extremely happy for you.

If you're still in that space of where
you are happy about the course, this is

good time to write a testimonial and
send it to me.

And we don't show the names of the
students for your testimonials, only

initials, so don't worry about that.

And we usually just collect the
testimonials, and then we're working on

website right now, so once it's going to
come up, we're going to post those

there. So if you have...

anything to say about the course or the
way how I teach, please do so. I would

be happy to receive that.

Also, I want to receive some kind of
feedback that you think is going to be

constructive feedback on how to improve
the course.

I'm all ears. I want to hear that, and I
have a lot of ideas how to do this

myself, but I want that feedback from
students.

Don't shy away from shooting me an email
and just say, Ramon, listen, what about

this idea?

Have you thought about that? And so on
and so forth. Or maybe like, I want to

suggest this as kind of like a potential
improvement to the course.

All of those are extremely valuable and
I'm extremely open to receiving those

type of emails as well.

The most important thing for you right
now, guys, is going to be what do you do

next?

You spent 15 sessions, 15 weeks working
on this material.

If you're going to stop, most likely
you're going to have a big drop in

knowledge because it's going to just go
away from you.

And then you're going to try to kind of
catch up.

So the most inexpensive way to continue
your education of Wyckoff methodology is

just go to our YouTube channel, watch
the recordings there.

Go to the course again.

And do it again by yourself.

Just go through the course by yourself.

Identify each week as one lesson.

And then do the homeworks again and
think about the homeworks and so on and

forth. And then find a way how to build
your skill.

If you don't have time for this and you
want a more structured environment, then

come back to us.

Because if you are going to be in a
structured environment, let's say in the

practicum or WMD classes, and by the
way, again,

you know, I'm giving you options to
attend free sessions here, four free

sessions. You know, do at least that.
Orient yourself as to what's the next

step. But one thing, do me a favor.

One thing, do not stop.

learning this stuff because it's too
complex there are too many things and

have to stay honest and there are so
many wonderful stories

that our students have that have taken
this course before that have taken the

practicum that they have taken other
classes and after a year year and a half

they've incorporated this and installed
this as a habit the way how they think

about the markets And the story goes
like this, and this is all true. I'm

kind of paraphrasing. A student emails
me, and he says, thank you for this

course.

After having a couple of trades based on
the way how now I understand the market

after the course, we were able to
remodel the kitchen.

And now the email goes like this.

Thank you for the course. I was able
to...

pay for my son's college education with
the trades that I made during the

course. Another email, thank you for the
course.

I made so much money on this particular
trade. My husband has

established a grant at the university of

his alma mater.

Those type of emails.

give us a sense of what kind of value we
bring

to people.

And obviously it goes just beyond of
like the money, you know, the way of how

people think, you know, the emotions
that come to that are extremely

And also what's important, and I'm
developing a lot and a lot of this, is

community.

You know, it's so hard to trade on your
own. It's so hard to be disciplined.

It's so hard to create the system and
follow the system on your own.

You know, not every person can do that.

I have problems with this. So my life is
all systems. You know, I built systems

for everything.

Even like, you know, for my...

physical exercises or anything like
this. I need accountability.

So if you're a person like that, if you
need more knowledge, if you need more

skill, come back to us.

We have something that goes beyond just
the material of the lack

of training course.

And other than that, just stay in touch.

Shoot me an email here and there.
Obviously, as you know, sometimes I

reply right away.

Sometimes I might send you to some
classes.

to answer specific questions. It's all
about filtering, you know, through the

inquiries that I have.

But let me know how your progress is
going.

Let me know what are the plans, you
know, for your trading.

I'm curious about this. Maybe something
that I could suggest and so on and so

forth. So just stay in touch.

All right, guys. That's it for the...
For this class, that's it for this whole

course. Again, I really appreciate all
of you.

I appreciate you being here. I
appreciate you signing up. I appreciate

the comments, questions, and everything
that you've done for this course.

You've done something that is going to
improve the course for the next cycles,

and new people are going to be grateful
to you that you've done that.

So I appreciate that. Thank you guys so
much.

and I'll see you in the practicum, or
just shoot me an email. Thank you, guys,

and bye -bye.