All language subtitles for Session 3 - Foundational Principles of Tape Reading with Roman Bogomazov

hello everyone today is october 22nd and
this is the last class

for series number one of the tape
reading course obviously you guys

are still gonna have seven sessions
ahead after this one uh including

gary fullett david weiss and william
radon so we'll

um

Definitely, we'll cover much more
material. This is just the beginning.

just the foundation.

Let's quickly look at what's ahead.

So, next week, at the same time,
Thursday, October 29th, at 3 to

5 p .m. Pacific, this is where Gary
Fuller will have his complimentary

session, his contribution to this
course.

and this is only available for those of
you who are obviously signed up for

series number one so all of you here
will be able to attend this session now

gary is a big friend of ours a big
friend of wakef analytics gary has

with us many times i taught with gary
many times as well you kind of have to

get into his style the way how he
presents the material

My suggestion to you is to concentrate
on the material itself. Do not, you

be caught up on the delivery of things,
okay? We want to pick up Gary's

mind. That's our goal number one. And
then, obviously, David Weiss. So this is

an immense treat for us, Wycoffians,
that David, you know, comes out like

and actually teaches a class. So
usually...

David conducts private sessions, as some
of you might know.

So this is a very unusual event. Please
note that it's only an hour and a half,

and this is just a limitation that David
had for us.

But it's going to be three sessions.

So during these three sessions, David
will be discussing a lot of the, you

what is necessary for him.

in tape reading so that's going to be
session number one and i'm talking about

this because we already been discussing
it with him and you know some of the

things you know he already said that
he's going to do session number two is

going to be devoted to the david weiss
wave and how that is being constructed

how that could be interpreted in tape
reading uh and then session number three

some exercises q a uh and everything
else So, for those of you who signed up

just for this series, for series number
one, start signing up for series number

two because I want to make sure that we
understand what kind of roster we're

going to have.

Okay. Well, with that, let's see what
we're going to do today. So, today,

I'm going to give you the homework. This
is going to be a self -review. I don't

want to spend a lot of time on that.

I went through all of your emails and
homework that you sent me. It seems to

that this material lends really well.

And actually, again, I want to thank
everybody for sending your feedback.

I am just overwhelmed with the
positivity of the feedback and, you

value that the first two classes, you
know.

brought to you in terms of your
understanding of the tape reading, how

be done, how systematically it should be
done, and then in terms of how you're

already applying this. Now, one of the
things that I need to mention right away

is that, as I always tell my students,
knowledge is not the skill. If you know

this material, it means literally
nothing.

I mean, like, nothing. Because if you're
going to go to the marketplace...

and you're not trained how to apply this
material you're really not gonna

benefit optimally you know from this
knowledge so my suggestion to you after

this class well first of all continue
with the whole class because your mind

will be habituating in this material and
that's what we want we want like months

and months and months and months of
habituation in this material that's

one secondly at home put on the chart
you have 30 minutes uh each

day and just practice i do not uh speak
well

with people who tell me that practicing
tapering or practicing trading does not

have the emotional benefit uh just
because i already instantly understand

they are how they approach trading and
this is not that type of trader that i

would like to work with The type of
trader that I usually work with and

who comes to Wyckoff Analytics and kind
of stick is somebody who grinds through

a lot of practice, grinds through a lot
of exercises.

And then they come out to the
marketplace and then they behave much

because the knowledge is there and the
skill is there. And then you could deal

with the emotionality of trading.

All right. Well.

Just a side note.

We're going to look into the PNF and
volume. This is probably one of my

ways to read the tape.

We'll do some exercises.

Not a lot today, but based on how
session number two went, I just want to

sure that all of the material that I
have today is given to you guys. So we

might actually stay a little bit more
than two hours, maybe two hours, 15

minutes, 30 minutes, depending.

Then we'll talk about the horizontal
volume.

This is something that is going to be in
the homework review. So bar by bar,

swing by swing, you just have to combine
both homeworks and you'll see that. I'm

going to talk about those practical
exercises. What is it that we do here in

Wyckoff Analytics?

At Wyckoff Analytics, how do we build
the skill of tapering with our students

and what exactly we do?

We'll look at the current market and
we'll try to apply tape reading there.

So quite a lot of interesting spots in
the market that we could be discussing

from the tape reading point of view. Q
&A session. Thank you for sending your

questions. We're definitely going to go
through those. And homework number

three, which will be due by the
beginning of series number two with

So in this one, I'm going to give you
almost right away.

Do not forget that all of you.

All of you guys in this series who
signed up are going to have a

session, and I believe that the webinar
link has been already sent out, so you

should have that.

This complimentary session is going to
be with Gary Fullett on tape reading

without timeframes. I am suspecting that
Gary is going to be talking about tape

reading using PNF and MOLLE.

All right, here is your homework number
three.

I want you to get this book, Studies in
Tape Reading by Rollotape, which was the

nickname for R .D. White of himself.

It's a classic on tape reading, and it
kind of goes through the basic

intermediate concepts, and you have
enough time, two weeks. This is not a

book. This is literally, and let me just
see, I have it in front of me.

well actually you know slightly under
200 pages 175 176 but it's a very quick

read um so i'm sure that in two weeks
time you could um you could manage to

read this and that's your main homework
so again the idea for you to go through

all of the three series all of the 10
sessions and kind of habituate in this

analysis in this knowledge first in the
skill development so do something extra

at home right you know put on the chart
and i'm going to show you today how

exactly i do that i mean literally how
exactly i do that um and then during the

you know 10 weeks practice practice you
know there is really no

substitutions for practice you go to the
marketplace and you're just being

distracted by your emotions and by the
market news everything else

you have to come prepared uh so and the
only way how to prepare yourself is just

to practice sharon is asking is this
book out of print actually no uh it

shouldn't be i have multiple versions of
this book um so when i bought it years

ago so i'm not sure whether you know
it's um okay francis and just bought it

amazon thank you for us yeah so go go to
amazon buy today

uh again very easy read uh but you know
you will be reading the words of the man

himself and that's what's important all
right so here is your self -review

homework for swing by swing analysis i
did put some of my notes here as you

could see under each reaction um you
know and i'm just following

uh the principles that we outlined in
the analysis in the comparative analysis

of the reactions and rallies uh in the
previous class now this is my homework i

didn't do it as good as some of you
because oh my gosh you guys are just so

great i'm so awesome so i'm gonna leave
this uh to yourself review all of those

charts here we go here we go so
something kind of like not extended

note here but uh everything is
understandable or should be

least with the reaction of going into
each reaction here and um what i also

to show is some examples of work that
you guys done so here's an example from

michael and uh please note that uh this
is you know slight specific slide

and then What I didn't do, and I think
that I should be incorporating this

for future sessions, and yes, I am
thinking about some future sessions in

on tape reading.

Actually, I have a very interesting idea
of what I want to do with that.

So I'll keep you informed. But
definitely we should be including effort

swing relative to the result and, you
know, those.

comparisons you know what are we going
to do comparing rallies to rallies you

know reactions to reactions so here's
one example here's another example this

from alex um so uh it's definitely a
good idea to put

you know the number in on the swings
then majority of you have done so and

obviously just going through the
analysis

Here's another example. This one is from
Mano. I always love Mano's work.

Mano is attending the practicum class
right now, so

Mano's slides are always very, very
informative and visually

appealing.

I like all of this.

Just take these examples from other
students, and I'm going to show...

some other examples throughout the
session um and adapt it you know because

as students help each other you know and
uh that's how it is uh at wyckoff

analytics in all of the classes so uh
definitely absolutely you know a good

here thank you uh another example for
mono this is on the rallies so just

wanted to give you both and you could
see that there is a comparison of the

effort and the result so therefore uh
you know definitely we should be

adopting this type of uh visualization
observation uh

into the swing analysis all right um

okay actually i think yeah so we're
gonna skip this case study this was not

supposed to happen let's uh jump into
the PNF and

volume and we're gonna start with the
higher time frame and even though I'm

saying a higher time frame I'm using
here Nasdaq 100 so the same

chart as we're studying as you might
have noticed all of our three sessions

trying to show you the same chart the
same period and show you

different ways of analyzing the same
chart. So here is the same NASDAQ 100 E

-minus futures for our chart.

For the PNF, it does matter a lot.

Look at the other detailed parameters of
the PNF. It's a traditional way of how

we construct the PNF chart.

The box size is 50 and then the reversal
is 3.

And for those of you who are not
familiar how to construct a PNF chart,

go to our YouTube channel, Wyckoff
Trading Method, find a couple of free

PNF sessions that Bruce Frazier
conducted for us and recorded for us,

they're available there for free.

And if you are more inclined to go into
the details as to how do I do the

horizontal counts, then...

obviously uh you know we have some on
-demand videos with bruce so those are

absolutely worthwhile exploring so what
do we look at here there are

different ways of how you could uh tape
read the chart using p and fn volume

so i'm going to go through different
layers of it so let's start with the

simplistic way of interpreting we're
going to look at the volume signature

and we're going to look at the price
signature and we're going to compare

the effort is doing and what the result
is doing so this is one layer of the

analysis so let's just go through this
really quickly we start the chart with

the uptrend and we're seeing that on
this column right here we have somewhat

the climactic phone

And usually after the climactic volume,
if we have enough momentum, we'll have

some kind of continuation where demand
signature will deteriorate, showing that

there is some kind of stopping action
that is possible and potential reaction

that is going to follow.

And we have exactly that.

The volume signature is still somewhat
high, so therefore still climactic, and

still there is an acceleration to the
upside, but we're seeing that demand

signature. is a little bit less and what
i love about the pnf just in general

when you put the pnf with volume is that
it shows us the cumulative

effect of the change in effort and the
cumulative effect of the change in the

result and uh in a way it is a much
better

much cleaner interpretation and easier
interpretation that you could make If

are having some troubles with
interpreting, let's say, vertical bar

reading and identifying specific
concepts there, I would suggest

a PNF chart that would combine several
bars into one

cumulatively and will show you
cumulative effort behind it. It's just

And obviously, just switching back and
forth, back and forth, you know, that's

what I want you to do.

Okay, so we're expecting a reaction
after this column, which seems to be

climactic, and we're saying that with
the deterioration of the demand, we're

vulnerable for the reaction.

That reaction comes, it doesn't really
commit to the downside on the first leg

down, which has some volume signature
behind it.

so that could be interpreted as a little
bit bullish but yet this is a change of

behavior that is suggestive of the
trading range environment after the

action and a change of behavior and here
we are we are in this trading range

right here so what happens next attempt
to go up no demand i attempt to go down

we are slightly diminishing the effort
here or somewhat the same

And yet we're just committing by two
columns. So not a big progress to the

downside. Our expectation is that we're
going to have a rally here. We're going

to have a much more dynamic rally than
the previous column of axis.

And therefore, we will try to retest at
some point the resistance.

Demand comes, it expands, and then the
rally expands and overcomes the previous

column. So you could right away kind of
like see how environment changes.

We are having some prelude to the
reaction, change of behavior on the

continuation down, and then change of
behavior, which suggests that, okay,

probably in a different environment than
the downtrend. It's done.

So now we're going to be in the uptrend.

All right, well, what's happening with
the uptrend?

Very good reaction, continuation,
suggesting that maybe we'll react again.

that reaction produces only one column
uh one zero that is below the support

level and then final push above the
resistance and that is on the increasing

demand signature and this is the high
demand signature on the attempts to go

after the change of behavior so uh we're
seeing here how

uh result relative to the previous rally
that was

overcoming some point of the resistance
there were quite a few questions how do

you actually define you know what would
be the analog what for the comparative

uh re you know purposes and you know you
have to think about what the result

is doing here result is uh trying to
overcome the resistance and commit to

upside when was the last time when it
when it happened in this significant way

it's probably here it's probably where
the price was actually going up

significantly so when we're looking at
the level of commitments above the

resistance we're seeing that there is
some kind of shortening of the thrust

above the resistance so we're saying
that the result is less while the effort

slightly increasing on those last you
know four up columns so we are

some kind of vulnerability

uh we're also seeing that the momentum
is decreasing so again we're vulnerable

to see some kind of reaction that
reaction comes and that reaction comes

increased supply signature so uh by
taking us back into a

below the resistance level that is
suggestive that on the increase of the

the duration of the trading range is
going to increase and we're still in

trading range and we still have to see
some kind of lowering of the volatility

before the price will start moving up
okay well let's see what happens next

there is no supply whatsoever i mean
some but you know in terms of

comparisons to the previous big changes
of character there's no supply there and

that is suggesting that the testing has
happened successfully

we observe the supply and now we're
going to rally and we are not just going

rally we're going to overcome these
highs and potentially we're going to hit

something you know some higher
objectives so where is that moment that

that there is a synchronicity between um
between the result

and the effort and i think i'm wrong
here this result should expand

So we're looking at this column and this
column is much better than the previous

three columns.

It overcomes all of them just by one.

So we're still vulnerable in terms of
the smaller trading range right here.

this is for the first time in the last
four columns where effort to the upside

is increasing and result is increasing.

But we're still somewhat vulnerable just
because we don't have a big commitment

to the upside.

We would prefer to see a more
substantial move up.

It doesn't mean that the reaction is
going to be severe or it's going to take

the previous flows. It just means that
supply might come and we need to make

some kind of judgment of that supply.

Well, supply actually comes in somewhat
more than before, but it creates a

higher low.

uh so there is some absorption of the
supply into that higher low and then the

next reaction also has a comparable
effort signature but the result is much

so bullish or bearish we're trying to
push the price down with the same effort

and yet we're producing lesser results
definitely bullish and from here now we

know that going forward this supply has
been absorbed we've seen it for the test

whatever supply has occurred here also
has been absorbed vertically and now we

are most likely going to be in the
sustained upfront so therefore shows

and i really like this bar compared to
the previous bar here and i call them

bars those are actually columns what do
we see here we've seen the expansion of

the result there is a little bit um i
think one or two

Boxes more but then look at the volume
signature the effort actually is

diminishing so on Smaller effort we are
committing above

the local resistance level and we are
expanding more We are

increasing the progress to the upside
bullish or bearish definitely bullish

why would it be bullish because the

There is lesser demand.

It requires lesser demand to push the
price up.

It's a function of deterioration of the
supply. Supply is exhausted, so a

smaller demand could push the price and
commit above and with more progression.

Definitely bullish access to the
confirmation of the continuation of the

move. Next bar is climactic. And even
though the price goes up, and has

another three attempts to go up we're
already a little bit concerned here just

because the progress above the
resistance is not that big but the

highest since this climactic stop in
action so therefore we

are on the lookout as to how momentum is
going to deteriorate uh in this picture

so uh reaction comes does not uh negate
all of the gains before and

supply is not as high as we've seen uh
in the previous instances where supply

actually came with more aggression so
that is suggestive of the continuation

again we're just looking at the momentum
could we overcome the resistance in the

meaningful way we do but uh look at how
we are again at

the high level of the supply that comes
in on the up bar This is a hidden

supply. And for a maturistic eye, naked
eye, it's very difficult to observe

because usually the tenet of technical
analysis is going to be all about volume

needs to confirm price action.

Well, at certain spots in the structure,
it does confirm price action. And in

others, it shows a disharmony between
the volume and price.

And usually when we go into deeper
studies, into deeper volume price

We're going to say that, in fact, when,
you know, the price, let's say, I'm

sorry, the volume loses its, you know,
intensity

or force behind it, behind the effort,
you know,

in technical analysis, that's going to
be a non -confirmation.

In Wyckoffian interpretation or tape
reading interpretation,

we would say if the price actually
commits to the upside like on this bar

less uh degree of the volume it's
actually confirming uh the price

so here we're seeing that uh on the
attempts to go up and shortening of the

thrust the volume signature increases
here's our volume for equation

for this so demand is increasing

And supply is increasing as well.

And usually that increase of the supply
signature means that we're going to

experience some kind of stopping action,
potential reversal, change of behavior,

and potential trading range. And in
fact, we are in the upsloping trading

right here.

So still, whatever selling is happening
into this high, it does not necessarily

have to stop the price from moving
further up.

In fact, what we are expecting after
these two bars are two things.

We are either expecting increase in the
volume signature. That would suggest

that more supply comes.

And usually that would happen on the
deterioration of the result, upward

And that would suggest that more supply
is stopping this upward move.

Or we're going to have...

in the volume signature and at the same
time where we're seeing both decrease in

supply and demand and that also should
happen on the diminished result both of

these cases will suggest some kind of
reaction after

this climactic search all right well

what do we see next all of these

bars are seeing diminishing volume
characteristics so demand is decreasing

we know that we are vulnerable right now
to produce that reaction uh before the

actual reaction what comes with another
bar with the increased supply

characteristics and shortening of the
thrust again so this bar defines the

timing if we want to see the
confirmation then a change of character

comes

as a change of behavior on increased
supply signature and that confirms that

are done with this uptrend as you could
see i could go on and on and on this

analysis column by column column by
column just thinking about what the

signature is doing and how the effort is
behaving relative to the price columns

as to how the price behaves and then
obviously you know just doing our

comparative observations and deductions
so what is happening next i'm going to

go a little bit faster all right so a
change of character column

a change of behavior column suggested
that we are done with this move now our

attention is on the continuation we kind
of want to define the bars and i'm

going to give you slightly different

layer here on tape reader we want to
follow how the downtrend

unfolds and we want to follow it with
the columns that have both

big results and also increase in effort

right so what are those columns so
change your behavior column that's

then we're seeing Next column where the
effort is increasing, column number two.

And if we would just say, okay, this is
our stop loss area.

This is how we would be thinking of
progression of this trade to the

And if the price starts showing us
commitment above, then we're going to

that the environment has changed.

So where is the next time when that
supply increases?

On column number three.

Okay, so let's put the stop loss here.

Next time when there is an increase, I'd
say column number five right here. I'm

sorry, four.

And then somewhere here, this defines
the new change of behavior relative

to what we've had before.

Now, there are certain signs before that
we could interpret in a very bullish

way. But this bar acts as a
confirmation, and I'm saying bar, but

column, confirmation of that reversal
from the downside.

Now the large bar here, where result
increases, effort increases, looks very

climactic. We're seeing the highest
supply signature on this chart just for

singular column. So it's evident here
that demand is present.

and obviously what needs to happen in
this type of cases where we're thinking

that this is climactic relative to the
like of you know contextual structure

maybe this is a spring or a shakeout we
need to see some kind of test that needs

to happen as a high low and on
diminished supply characteristics that

the attributes of the climactic action
that test and the climactic action will

be confirmed right here that's another
confirmation

a local breakout out of the climactic
low and the test and when we have that

then definitely that acts as a local
confirmation of the reversal and then a

more global confirmation when we are
overcoming uh the uh the high of the uh

loss commitment to the downside so
that's another way of how we could look

you know at tape reading here Continuing
on, we've seen that all

of the big columns had some kind of
increase in the volume

signature, except maybe for this one
right here. And then it concludes with,

again, somewhat of the climactic run and
climactic column relative to what we've

seen before just recently. And
especially when we would be thinking and

comparing. uh let's say the conclusion
of this right here on the final you know

extension of the volume signature um or
we could say okay well this is just the

last column so you you could be thinking
if i'm comparing buying climax i want

to compare it to buying climax as well
so where is the buying climax uh on the

prior moves to the upside either this
one or this one

and then definitely this one right here
and we're thinking what kind of trading

ranges do we have here so here is our
first trading range here's our

second trading range here is our third
trading range so in this example

example number three if we are comparing
it to the previous buying

climaxes let's say in this area right
here what kind of conclusions would you

make

i mean let's just kind of see a pop quiz
right here what kind of conclusions

would you make looking at buying climax
at point number three let's say over

the climactic action in point number two

brian

is saying longer trading range why is
that brian

is saying supply mat at higher high yes
so let's note that this is a slightly

higher high we'll come back to this
higher volume signature yes slightly

effort or somewhat the same that comes
from mike increased

supply so yes slightly more supply

more progression to the upside so we're

increasing

our result to the upside from hamid
greater change of behavior okay well we

still don't have that brian so we're
still on the buying climax um okay

longer run on number three yes so this
was a little bit

more extended larger spread yes
absolutely three uh is more bullish on

increased effort and result to the
upside from more fears okay in the top

longer uptrend acceleration spread is
greater uh broke previous resistance

so all of those are great answers so we
just want to notice the characteristics

of the analog and we just want to say
okay it looks like it behaves better

because it makes the new high and even
though it's a marginal new

high but it's a new high

It extends on the climactic run a little
bit better.

The reactions that come prior to that,
and we could definitely look and compare

the prior reactions, are probably
somewhat better. It was much more

rally, much more extended rally than
before.

So we are seeing better bullish
characteristics for the long -term

Having said this...

There is a little bit more increase of
the supply as we are looking at the

volume signature.

And again, that's comparable.

But with that slight increase of the
supply, we might be thinking, would we

a much larger change of behavior here,
something that Brian was mentioning, or

would it be the same, like a small
change of behavior?

And because of that slight increase of
the supply, we're thinking the change of

behavior in case number three is going
to be a little bit more.

If that increases, then the duration of
the trading range definitely will

increase. And again, you know, this is
just a very interesting concept because

usually we don't talk about time in
Wyckoff's methodology.

Only maybe in the relationship to, you
know, how long does it take for one

to unfold over another and so on and so
forth. We're seeing the elements of

buying and selling, you know, expand or
contract. And I

had some resistance from other educators
on the methodology about

the duration concept.

So duration was not discussed in
original lack of methodology.

But to me it's very clear that supply is
the driving force behind

everything.

If selling is increasing, then...

most definitely is going to take more
time to absorb that selling if supply is

not available then the price will be
running away from that spot so thinking

about how climax has concluded itself
and thinking about the expansion of the

change of behavior reaction that is
suggestive not necessarily the fact but

suggestive that the duration of the
trading range might increase and indeed

have that

Obviously, this whole area in phase A is
very deterministic area as to how

the whole trading range is going to
unfold.

I'm going to have a special on somewhat
of the advanced concepts, Wyckoff

concepts, you know, going to show you
guys, to those of you who are more

advanced students, probably we're going
to have some limitations, you know,

prerequisites on the entry.

You know, some of the...

most interesting advanced ideas that I'm
working on right now and one of them is

going to be that phase a how that
defines the buys duration of the trading

and the structure itself so we'll talk
about that in this case obviously quite

a lot again climactic action here

but look at the comparable effort
slightly more, but somewhat comparable

climactic effort. So that suggests a
stopping action.

And now we're thinking we're stopping
actually in the middle of this whole

formation, so definitely a bullish
development for the whole trading range.

And you could see, and a lot of you
throughout the years have been asking

Well, can you give us some kind of
shortcuts as to how do we define the

early on in the trading range,
especially in phase A?

Well, those smaller details like that,
you know, would bring you to the

conclusion that it's a continuation
reaccumulation trading range. And then

just need to go through the trading
range and see elements of confirmation.

What would those elements be here
looking on the chart?

well obviously just an ability of the
price to go over in phase b over the

resistance and stay there the ability of
the price to stay in the upper part

of the trading range in phase b is
actually quite bullish doesn't mean that

we're not going to have increase of the
supply and some kind of reaction that

should come next going into phase c but
we'll make a judgment of that later on

And as supply increases here, we're
seeing that we're creating a higher low.

And again, comparing it to, let's say,
previous big down movements, like right

here, again, it's a higher low on the
decreasing effort signature.

So how would we interpret that within
the structure of the trading range?

Less effort to put the price down, and
yet we're creating the higher low within

the body of the climactic bar.

um so therefore definitely bullish and
then after that a series of reactions

that are basically passing this supply
and there is nothing nothing there the

last attempt to increase that effort is
going to give us an element of timing

it just basically tells us that whatever
the last supply is available is

going to be

picked up by big entries and that last
supply pickup gives us the timing that

we're near the time of the reversal and
continuation to the upside and obviously

that could be also be seen through the
change of behavior type of columns where

volume signature increases dramatically
where the the column is committing

significantly above the resistance
cluster

in other ways of what we've seen before
and by the way just looking at the way

how the price commits to the upside
let's say this commitment right here or

commitment right here one or two which
one is more bullish one or two in terms

of the commitment above in a single
column definitely two and therefore with

that we are expecting some kind of more

bullish behavior on the for the rally so
that's our you know

wtc y cost trading course definition on
the character again something that you

know we've introduced you know here uh
you know in the course in the in

reflection course okay so another layer
and you could see different columns here

so what do they mean uh supply increase
demand increase and then a change of

behavior call so I literally would like
you, if you're not going to go into big

details of tape reading of the PNF and
volume, I want you to just concentrate

this concept. So this is a flashcard
concept for you.

Define the last increase in the demand
in the uptrend and the last commitment

up.

And then look when this type of action
is going to be reversed by the zero

column.

a column of zeros of o's on the
increasing volume signature as well

that suggests a change then again define
the last commitment

to the or attempt to commit to the
downside on the increase in supply

and for those of you who know the
material of wtc you know about

the significant bars right so also
somewhat of the proprietary

definition there but you know that all
of those bars are going to have

bodies where we see some kind of
commitment or attempt to commit and you

look for the for their volume signature
as well majority of them will be on the

expanded volume signature so we are
taking the same concept and applying it

columns right now so here's the last
attempt to go up oh to go down i'm sorry

maybe this one as well because it's
comparable in terms of the effort and

the next column is a change of behavior
column so from here on you know that

you're going to be in the uptrend until
the last attempt to go

up on the increased volume signature
relative to the previous columns is

to be reversed and it happens right here
exactly there so all of this time The

definition for your market environment
should be uptrend, just because we had a

change of behavior here.

So what happens next? Well, I kind of
shown this to you in these columns here,

right? So here are those columns to the
downside that are significant, and yet

they are being confirmed by the
increased cumulative volume.

So that suggests selling.

Once we change that behavior, this acts
as a confirmation, we are in the

confirmed uptrend. Obviously, I went
through this with you. This should be

dissected a little bit more because
there is a test here. There is a

behavior. There is a confirmation, a
breakout. Those are bullish

characteristics. You might be confirming
the uptrend much faster here.

But nevertheless, let's go further.

we're trying to reverse this bar right
now it happens here we're trying now to

reverse this bar it happens here and the
trading range you're going to have

those ups and downs and we've source
last time the price uh the effort

is on this bar it's being reversed on
this bar and then the volume signature

increases so everything is in line last
attempt to go down increase the volume

signature and obviously this is a huge
change of behavior

climactic action again demand is
increasing and then reversal if not on

then on the next one so different ways
of analyzing you

know the pnf columns and p and volume
bars highly effective

i would say even easier to interpret

uh then the vertical bar analysis we
just so used to the vertical right

at how the price behaves on the highs
and the lows on the extremes um and but

reality p and f is much cleaner version
of the price movement so please consider

that okay here i'm just putting uh those
changes of

character and this is the corvid
reaction into the march uh 21st low

and much 23rd change of behavior so look
at how pnf actually defines the range

much much better than on the vertical
right and then we're going into a spring

and a test and we see the increase in
the volume signature which suggests

again that the timing is now they are
picking up the latest supply and that

should start producing the moves up so a
change of behavior bar or column i'm

sorry keep repeating that and again you
know concentrate on the wtc material

where you find significant vertical bars
and think about that there is a

significant p and f columns and those p
and f columns you need to reverse right

so where are those columns to the upside
in nasdaq that needs to be reversed

there it is so moving the stop loss like
this is gonna provide you with

the path uh to through the whole uptrend
and then it's going to bring you to the

change of behavior which again happened
after the september 2nd high and look

how nicely you're taking the whole
uptrend and if you want to

be a little bit more precise you know in
your definitions

then you could say that this bar,
particular bar, is climactic.

And after this bar, we're going to be
looking for the signs of the

deterioration. First, you're going to
look at the change of behavior. It's not

that significant. That's just a
continuation.

But you could see how after this bar,
the momentum starts to decrease.

There is a question from one of you
asking to still...

talk about the momentum uh in tape
reading how do you kind of see the

change well pnf provides you with that
you know momentum definition

very clearly look at the columns how
they are expanding or

contracting and i mean the columns the
ones that actually have some kind of

increase in the demand

And we see the over -expansion here on
the climactic run, suggesting that we're

going to stop here. And then look at the
other columns that are following that

climactic run.

Momentum is clearly starting to
deteriorate, and all we are waiting for

the deterioration of the momentum is a
column like this.

What is this column? This is the column
where the volume is increasing, so

therefore... On the background of
deteriorating momentum, and what is

deteriorating momentum?

It's the deterioration of the demand.
It's lowering of the demand.

With that, on the background of that
demand deterioration, any type of

in the supply will produce stopping
action and then will

produce synchronicity between the
increased...

effort to the downside and increased
result to the downside so do we see that

here definitely this column acts as a
stop in action and then this column of

produces that change of behavior on
increased downward effort

and that's how we've seen that that this
trend with this

leg up is done

Our call on September 2nd actually was
right on the intraday as the price was

going down. The intensity with which we
could see it on the tape, on the

intraday tape, was just quite evident.

There is so much aggression in selling.
The price just drops down.

So there is no type of action like that
that we've seen before in the uptrend

for NASDAQ.

and that just is suggested first on the
intraday basis that we are done and then

once that change of behavior takes its
course and we see the vertical and the

pnf that just confirms it so okay

let's see some of the questions here
really quickly

Does a similar analysis apply to Renko,
Kagi, and Case charts, which are all

based on the specific minimum criteria
to have a reversal bar just like P and

So Iqbal is asking this question.

Well, first of all, I hope that David
Weiss is going to introduce some of the

Renko charts and work that he has, which
is outstanding. Now, Renko chart is

very unique because Renko chart is going
to have...

a definition of time so let's say oh i'm
sorry it's going to have a

specific definition of the distance that
the price has traveled and then it

might take different time element you
know to cover this uh you know this

specific area so we could get a lot of
information from ranger charts i'm

i'm not

a user of other charts like Kagi or
Keith, so you'll have to forgive me on

and just kind of refer to someone else,
but the PNF is probably the closest

to any type of chart that shows us the
cumulative effect of effort on the

result.

Francis said, it always seems easier
after the fact to read the chart. Always

challenge in the heat of the moment.

Yeah, and I absolutely agree with you,
Franz, that that's the case.

And even for myself, even now, what I'm
reading off the chart right now is

much harder than obviously when you look
at the chart and you're kind of like,

okay, yes, I see this in hindsight.

But at the same time, from the teaching
perspective,

the way how the students should be
taught, and I see how a lot of teachers

actually... teach it incorrectly not in
the correct sequence you know you have

to understand the concepts on the chart
that has a defined outcome in front of

you the charts that you know that were
accumulation or a distribution and then

you look for specific characteristics
you know that are going to be a

distributional or accumulational and The
key there is just to develop the skill

of observation and deduction, to start
noticing certain things with the known

bias as to what are you looking for.

So then the next step is going to be not
knowing the bias, not knowing the

timing, and then trying to define that
bias by the same characteristics,

bullish or bearish, that you have seen
before in the charts where you knew what

the bias is.

Our bias game that we have at Wyckoff
Analytics and that has been conducted

free, by the way, complimentary to
anybody, whether you are our student or

on our website and Twitter, that is the
next step. And then obviously the next

step after that is to go from practice
to the real world. And this would mean

that, you know, applying the tapering
techniques, you know, throughout your

creating.

So it seems that the latest bar on the
right seems like a bullish change of

character confirmation.

Yes, so confirmations actually came much
earlier than this bar itself.

Because this bar looks already a little
bit climactic relative to what we've

seen before.

So look at the volume signature compared
to the previous instances where we

tried to go up.

and you know a change of behavior as a
confirmation comes much much earlier we

have multiple attempts to commit to the
downside and we have expanding demand

signature on these two bars so these are
the two bars fronts that are acting

as a change of behavior so here's our
change of behavior to change of behavior

swing change of behavior to be change of
behavior swing

then the next bar like this that would
negate this bar right here or if it

creates some kind of structure and then
negates that structure this is where the

next change of behavior is going to
happen all right um four o 'clock uh

just see are there any other questions
how small of a time frame intraday can

you use this on from brad um this is a
great question we're just gonna go into

this bread so uh just second and jeremy
is asking what target tool do you use

for the intraday pnf chart there's a
trading view pro i have trading view pro

membership but it doesn't support
intraday pnf interesting okay i

use trading view a lot and i use stock
charts a lot so those are kind of like

the two primary software tools for me
and uh stock charts i use more for the

selection uh and swing analysis long
-term campaigns

great tool absolutely i would advise you
relative to the price that they have

absolutely uh you know worth it and
trading view is great

for my you know twin intraday trading
where you want to go into the intraday i

jeremy i believe i do have trading view
pro plus i would have to double check on

that i have the real -time data and i
think that allows me to also have the

uh i am sure that probably the pnf would
be also in real time actually i was

trading off pnf the other day and i
think that that was all in real time um

okay i find timing more challenging than
bias is that the usual phenomenon um

iqbal i think that um this is a
progression of your skill uh rather than

anything else so what I'm kind of
noticing in myself is the same thing.

When bias becomes more evident, you kind
of start seeing the bias earlier than,

let's say, Phase D. You start seeing it
in Phase C, then you start seeing it in

Phase D, and then you start seeing it in
Phase A even, and into the climactic

run.

But that takes years. That takes a lot
of practice.

uh if somebody would be asking me you
know how do you do this i would just say

okay well you have to do something like
what i've done uh practice for 25 years

discuss all of these concepts for 25
years and you might be common you know

something close to uh you know what we
do with the tape reading you know in our

classes but at the same time you guys
are fortunate because as much as i'm

exploring the market or somebody like
bruce explores the market we are willing

we are willingly sharing this material
with you. That should create a shortcut

for muse from 25 years, you know, just
going and contracting that amount of

time. So that could be just a way of
seeing you progress at all.

So that's not necessarily a bad thing.
That's just something to acknowledge, to

be aware, and then start thinking about
the next step. Once you nail the timing,

How do you define the character of the
next move? So for speculators at the

higher level, this is going to be the
most important thing because that goes

into the selection of how we actually
trade.

The X axis is a function of volatility
in P and F.

and not the time absolutely so there is
no time on the pnf does it also show the

momentum as well from gin and you know
we were just covering this a little bit

in you know if you kind of missed this
discussion so i'm looking at the columns

themselves and the extension of the
column so a sustainability of the move

going to define the long -term momentum
for you and then the short -term

momentum is going to be defined by the
uh you know pnf columns or the vertical

bars you could also see that in the
vertical bar analysis and here

we're seeing how that momentum is
starting to diminish in the contracting

know up columns and that is suggestive
and is being confirmed by the diminished

demand signature over the period
previous period that something is of

quality of the demand is happening
another trick really quickly that i want

give you on the momentum is that you
have to notice where momentum is

where they are stopping by because
usually when we're gonna have that

we're gonna have it into the body of the
last momentum and here we have exactly

that all right guys i'm gonna stop with
the questions and then let's just go to

the next bar uh next slide

And maybe we'll figure out the questions
later on.

Let's look at this question. Who was
asking this? I think...

Brett.

Yeah.

What about smaller time frame? So let's
go to even lower time frame.

So here is one minute.

constructing the pnf on one minute this
is nasdaq 100 e uh e -mini futures this

is the whole day on the pacific coast
from 6 30 to 1300 hours so this is

the full day on the pnf we're seeing
that this is a consolidating day

and usually you know whenever you have a
consolidation you want to

oscillate your trades right so you want
to oscillate the trade around the points

of the resistance and support and find
some kind of supporting you know

structures that are going to be bullish
at the support and bearish at the point

of the resistance and you could again
use effectively the whole idea

of the pnf and volume tape reading
interpretation my suggestion would be

to find some kind of

structures within the let's say a whole
day or if you're thinking about that

this is not like an intraday chart but
let's say this is daily instead of the

intraday and you're just looking at the
same you know type of chart you gonna

apply the same type of the idea find
smaller trading ranges define their bias

define the timing of when the price is
gonna leave Think about the character

with which the price is going to move.
Again, you know, this is a little bit

unusual for those of you who are new to
our material, so we discussed this in

WTC.

And think about, you know, in terms of
the timing, the

synchronicity between the effort and the
result. So let's just go through this a

little bit. This was supposed to be an
exercise.

so i'm going to be asking you some
questions guys so why don't we look at

first decline and we're seeing how the
supply signature uh the

volume signature is going down on this
three legs to the downside what does it

mean guys really quickly write it down
how would we interpret this okay while

we're saying shortening of the thrust
absolutely we could see the shortening

the thrust In the progression of the
down columns.

Stopping action. Absolutely. So stopping
action would be defined with the

climactic action.

Also would be defined with the climactic
run. And we've seen how that run is

unfolding.

Demand is overcoming supply, Jonathan.

Absolutely. On the shortening of the
thrust, we are observing that...

volume signature is still somewhat high
especially in the first two columns so

therefore demand is present but demand
is not necessarily

john as we could see stops the price
from moving further down so let's go

even deeper conclusion about that so
demand is increasing but not stopping

away if demand is There, but not
stopping

right away. What kind of conclusion
would we make from here?

Preliminary support from Leonardo.

Yes, that could be one of them. Lack of
big buys from Big Eggball.

Not necessarily Eggball, because we
could have big buys there and big

the same time, and sellers could be
still winning.

uh it still could be like this supply
still present brian is saying this is a

really good thought here at brian so
what would be the next conclusion supply

still present if supply is still present
at the area of the climactic action

then what conclusion would we make in
terms of let's say how the trading range

would develop testing action to follow
absolutely so we need a test Some of you

are saying that. Absolutely.

So, again, that goes into this whole
conceptualization

about, you know, availability of the
supply.

Demand is there, but it can't stop the
price from moving further down right

away. So supply is still strong, and
that brings us to the conclusion that,

we're going to have a stock in action,
but we're going to have some kind of

later on.

Okay, next question.

I like this type of pop quizzes, so
let's do that.

Comparing two areas and comparing two
columns of O's to the downside

and comparing what exactly happened with
the volume signature, would you say

that the second decline was more bullish
or more bearish?

almost everybody is saying more bullish
and for what reason would you say that

that decline is more bullish than
bearish

decreasing supply correct less supply

higher low correct less supply
diminution supply holding above the low

test ease of movement there is really
not a lot of ease of movement there we

not commit below

more demand we kind of don't see that
demand and i would be arguing that there

is more demand here at the climactic
action than at the test uh

distance traveled so distances left good
reduced supply signature supply

decrease uh effort and the result okay
uh local increase in supply can come in

below number one okay great shortening
of the thrust okay great so all of you

guys our correct or majority of your
correct okay next pop quiz

all right what does this column tell us

about the demand

demand

is present well demand is always present
but we need to recognize is it

increasing or decreasing so brian is
saying increase demand

overcoming yeah so we're committing
let's say above certain levels here and

could even take this next column as a
continuation so you might say that the

demand that came off this bottom is
actually committal it's a

causal demand that produced something

Demand overtakes local resistance sign
of strength rally increasing, increasing

change of behavior.

Good.

Change of behavior.

Big demand and result. Urgent demand. I
like that, Mano. So there is some

urgency. And urgency usually will come
at the beginning of the move.

If there is some kind of urgency, the
stop -loss placement should be right

that because usually that would identify
institutional presence, and

we know that institutions are going to
come into the position gradually, and

then if they are coming into that
position and the price drops to that

they're going to consume that supply
again.

That's how they function, and it takes
time for them to develop that.

So, absolutely correct answers. Change
of behavior. This is the largest column

to the upside that we have.

So, now we're thinking if this is a sign
of strength, let's go and find the

backing up action.

So, next pop quiz.

Next reaction down, and specifically
these two columns relative to the

two columns.

How would we make a judgment of those?
And specifically the last one.

What do we see on the last column down
where the volume actually increases and

therefore supplies increasing?

Why the price goes up after that?

More effort, less result, more demand.

Big effort with no result. Effort and
the result. Stopping action. One loss

no demand increasing.

uh has demand increasing okay lack of
supply reduced result absolutely so all

those are correct and when we also
contextualize that knowledge that

and the deduction that we have in tape
reading into the structure in the

construct of the wake of trading range
we would be thinking that uh you know we

are probably uh in the last point of the
support and now we could start add into

the positions or opening new positions
uh as we as the price starts going up

okay well let's say that we've gotten to
the position somewhere here we said

we're gonna buy on the breakout of that
last column and that's how you would be

trading uh using uh using the uh pnf
charts as it

unfolds you know the levels you put your
orders in and it just takes you in your

stop loss could be more aggressive here
and more conservative at the

lower level our target is going to be
you know the high of the trading range

this point there is not a lot of bullish
activity after this change of behavior

that we're seeing so for us we're still
going to be thinking that we are playing

some kind of counter trend here so in
this counter trend

Give me the timestamp of the column
which defines a

climactic stopping action.

And obviously after the point of entry.

So we are in this trade and we are
looking for the climactic bar.

this is one minute so just orient
yourself okay so a lot of you are saying

25 8 27 20 31 20 31 8 27

so yeah somewhere here where is it right
here climactic volume

and climactic run into the area of the

resistance it really is easy guys

In a lot of cases.

I mean, sometimes we just overcomplicate
knowledge.

That's what I see sometimes in myself
and sometimes in students as well.

We have to be much, much easier, more
mechanical in the way how we look at the

interpretation. And actually, I like how
our students now are just given a lot

of flashcard type of answers.

The volume starts to increase.

That's climactic. The column up.

is increasing in going into the
climactic run that's climactic behavior

happens in the area of the resistance
where the initial selling has taken

selling has come in so therefore we are
expecting

stop in action reversal change of
behavior potential trading range

again something that you know we've
developed for wtc here okay

next question do we see

um okay let me just go through this what
comes next next column has

still somewhat of a high demand so that
is suggestive of another

attempt to go up

how does this next attempt unfold

no demand no result

conclusion deduction out of that
reaction should follow

that reaction should start

with as a confirmation with the change
of behavior is this a change of behavior

column guys and why why is this a change
of behavior commits

below

okay so commits below the attempt to go
the last attempts to go up and

specifically above below this column
okay so what else um price spread

absolutely so we're seeing the expansion
of the reaction look at this column and

compare it to all of the columns that
are down columns in the this up move

so where do we see this we don't see
that a clear change of behavior uh let

see what else lodges down bar in the
uptrend a magnitude to increase volume

reverses multiple previous bars
overcomes the prior lows spread and

reversal all of you guys are correct

Great job.

Okay, so now I'm feeling better as a
teacher. You know, we're definitely

this material. Okay, next test.

What does this column mean?

And I'm going to ask more elusive
questions here because you're getting

so you should be getting this question.

What does this column mean to the
development of the, you

know, of what happens next?

Okay, I see some correct questions.

I'm sorry, answers.

Okay, great.

Look at that. The supply signature is
going down, right? So after the change

behavior, increase in the supply, we see
supply is decreasing.

But downsloping structure still suggests
weakness and suggests that we're going

to go into this area.

Next move down is very...

much climactic in nature we've seen
climactic action relative to

the down swing and this is something
that again i do not have time to cover

i think that we're going to cover this
this semester in w2c part two in the

practicum uh with more advanced students
we're going to deconstruct the swings

you know how they happen where momentum
happens how do they conclude themselves

you know what type of things might
happen in the different contexts and so

forth again for those of you who are
interested in that type of the material

know kind of like more white coffee and
material you know sign up for the wtc

series um okay climactic action suggests
what

what could we expect after the climax

Stopping action and some kind of trading
range. A change of behavior.

And look how nicely, you know, that
environment is being given to us.

Simple concepts, but yet so powerful.

Obviously, it takes time to understand
the concept in full, to understand

how to apply it, when to apply it, and,
you know, in which structural spot.

and how to interpret it because
climactic action could happen in a lot

right this is climactic too this is
climactic too you know the way how the

behaves we have the climax even right
here so you need to differentiate you

those concepts and contextualize them
okay next question

what is this

column

shows to you

okay

up thrust i can see that this is up
thrust but anything else more specific

big effort little reward so effort is
increasing

result is decreasing bullish or bearish
that's in the construct of the up thrust

definitely bearish okay a change of
character after that change of

behavior and then what about this column
i'm gonna go a little bit

faster here what does this mean

It is climactic, yeah, so selling
climax.

And selling climax would mean that we're
going to have some kind of trading

range. And you kind of go through the
day or through the chart like this, and

you start analyzing it like this, then
everything opens up, right? So you kind

of have to obviously have good
knowledge, good command of the

also the skill of observation.

In a lot of cases, I mean, the students
that come to us, I hate to say this, but

this is true.

The majority of them just lack good
observational skills.

And it's literally that, you know, we
have to teach them how to observe or

rather what to observe because the mind
is, you know, running around

and picking up different things.

And sometimes emotionality gives more
weight to certain...

observations than other observations.

And obviously that goes into the past
transference where you have some traits

where you analyze them in a specific way
and maybe you falsely were rewarded for

bad analysis or some kind of bad habits,
analytical habits were created.

So we have to reteach you guys how to
look at this stuff, how to look at the

chart, how to understand those concepts
and then obviously how to apply them.

Alright, the rest, this chart, this is
going to be your homework.

I want you to go through this chart. So
this is homework 3 -2.

I'm going to put it together. I want you
to go through this chart. This is

another day, a full day in the NASDAQ
100 E -mini and

just analyze it the same way.

I want you to see the structures
everywhere and to tape read those

with the conclusion of what's going to
be the next buy when it's happening you

know and what kind of potential
character of the move we're going to

right let's switch gears let's talk now
about horizontal volume and i already

see that i'm going to go to 5 30 so
definitely two and two and a half hours

this session okay so um it's kind of i
have a very funny

relationship with the um

horizontal volume and there are multiple
names you know for that market profile

volume profile horizontal volume there
are so many great people that

know this material much more in depth
than me but what I do is

obviously just put in that white coffee
and spin on this material so by the way

we had Damon Pavlados who last year

gave us such a great special on on the
volume profile he was

the one who created the volume profile
charts for think of swim so he's

a very knowledgeable guy i'm going to
show you the usage and trade in view

actually has you know different ways of
showing the volume profile there

is a fixed range so you could select a
specific period of time like i did here

and i'm saying show me the volume
profile which is the horizontal volume

on the side relative to this price
action only and for us it's very

because we are contextualizing
everything right so what am i looking at

looking at the decline and i'm looking
at the move up that's what i'm looking

here and what am i kind of like using
this for i'm using this for this

decline right here that comes next and
we'll go through this you could also

the session boy i'm going to show you uh
just later on and then i'm not sure

what the visible range is all right um

let's talk first about the definition
horizontal volume

what the heck is that and why is this
important to us you know in tape reading

the vertical volume signatures are going
to

refer to the price action that is
expanding or diminishing throughout a

time space right so we have a specific
time and

then we have that expansion throughout
the price so here's our price

this activity of the price we know that
a lot of volume came on this

bar but we don't necessarily know
exactly that volume came did it come at

beginning of the move right here or did
it come somewhere into the end of the

move and to us that is an important
knowledge because and an important

observation

Because we could make the deductions as
to, well, what exactly has happened and

where, let's say, selling has happened
and where demand came in.

And looking at this volume profile, we
see that the majority of the volume

signature on this bar came at the higher
price level. And most likely, we are

starting to assume that this is where
the initial selling has been on this

particular bar.

A lower increase in the volume signature
probably suggests some presence of the

demand because after that we see some
stop in action and then attempt to go

So that's how we want to use the
horizontal volume signature. We want to

understand the levels where the selling
comes and our expectation is that if the

selling has come here, next time the
price goes to this level, This is going

become some level of the resistance
because supply is going to have that

emotional memory and the sellers are
going to come at the same level and try

sell and stop the price action.

And whenever we have some kind of
reaction, we might actually go again

area where that selling has happened
before.

and where demand now picked it up so
demand should be present again and that

level should be significant level for
the duration let's say of the trading

range where uh the price is going to
interact with that level of the support

the resistance very useful information
but how we derive to that conclusion

obviously requires a little bit of the
finesse so now um i'm

using this in a very strange way i'm not
necessarily using it in the way of

well probably no probably the same way
what i want to notice on the horizontal

volume signature is levels of the supply
levels of the demand and i want to see

where those levels increase relative to
the previous levels so for instance if

we're looking at level number one and
level number two i know that the supply

has increased here I'm seeing this from
the construction of this horizontal bar.

Supply most definitely increased.

So as the price goes up from one level
to another, let's say from this area to

this area, I know that there's going to
be a higher probability that we're going

to have increase of the supply and
therefore some kind of stop in action

some kind of vulnerability.

Obviously, we need to contextualize this
in the trend action, right? But still,

that's valuable.

Okay, well, if that's the case, if I
know where supply is increasing

and where demand is increasing, could I
possibly construct

after I did my bar -by -bar tape
reading? So let's say

I am...

looking at this bar and i'm saying okay
effort is increasing and result is

increasing as well this is bearish uh
you know waiting for the confirmation

of the change of character bar change of
behavior bar so

could i right here or maybe here start
thinking uh that with the

targets that are going to come to the
lows through the previous lows i can

construct the movement of the price ah

for some reason he came to mind with
this art

he usually would have that pose it's a
significant pause because i want you

to think about this can we construct if
we know that

reversal has happened and if we have the
target zone and if we have the volume

the horizontal volume signature could we
construct potentially the character

with which the price is going to move or
rather the pathway of how the price

will move well yeah we can how would we
do that well let's say

that once the bias is defined by bar by
bar tapering and we're saying it down

we have the target we're going to start
looking at the volume signature and

we're going to say okay i want on the
way down define the points of where

potentially i could have increase of the
demand and that would be suggestive

that the price is going to stop
somewhere in that area all right

so where do we have let's say from here
uh first increase

in the demand signature well it comes
almost right away we we have kind of

a low demand and then here's the first
bar where demand slightly increases so

here around this area we might have a
little bit of a stop in action it's not

very significant demand so i'm not
expecting a big rally right here from

point and we kind of see how demand
actually deteriorates here we could see

from the vertical volume bars as well

Okay, so where is the next point where
demand is starting to increase and goes

to some kind of extreme?

It's this bar right here.

And we would be expecting some kind of
at least attempt to stop the price from

moving further up. Where is the next
time demand is going to do that?

Somewhere here.

So here becomes a demand zone.

where we would be expecting the price to
stop.

And we could confirm it just visually,
you know, with the support confirmation

from other areas.

And we see that the price has stopped
here before.

Our zone is a little bit more, so our
expectation that maybe we're going to

have, you know, demand present in this
whole zone. And look at how the price

reacts to the upside in the tail, demand
tail type of manner.

And then we have...

different intraday action right here
with multiple attempts to go up all of

are failing failure failure and then
continuation so knowing that i know that

my construct of the path way down is
going to be such that's going to be

reflective of the stopping actions based
on where demand occurs or increases

first to the downside small attempt to
go down then to the downside again let

take another color i don't like this so
first down

attempt to go up and then further down
and then another

attempt to go up and because demand in
this area right here is somewhat more

than here we probably would be expecting
a little bit better reaction and we do

have that reaction but

we're not necessarily seeing a strong
reaction so it's a weak reaction what

of conclusion could we make from that we
were expecting a better reaction and

we're kind of having a weaker reaction
still weak continuation so

probably our target is going to be
reached okay well if we're gonna go and

that target in what manner where is the
next time when we're gonna stop

okay well we see this increase in the
demand so somewhere here in these two

this is our next target where we're
gonna potentially stop so if

we're contemplating some kind of point
of entry right here and our next target

is here so let's say target one and then
maybe like target zero um then

once the price goes here and we see the
confirmation in the price behavior as

well a vertical volume signature
slightly increases over the previous bar

the result is decreasing relative to the
previous bar and it's in our target

zone based on that horizontal volume
signature perfect perfect and i know you

guys are going to say well it's in a
hindsight well you could practice this

practice this in the practicum class you
know constructing the pathway

That creates, you know, your
understanding of the character. So going

then why don't we do this?

From this level, we're going to expect
some kind of rally.

We don't feel, you know, a lot of supply
below this line. All of the supply is

at the top, mostly at the top.

So what would we be thinking where...

the rally would happen after this point
once demand is present well where is the

last time where supply has increased
right here would we would it be

logical if we the rally would happen
right to that point so you kind of could

see how again we are just one after
another swing we are

constructing the pathway of how
potentially its price could go.

And to me, you know, maybe that's not
necessarily a tape reading technique,

but this is still in line with the same
interpretation of the observations

that we're making based on the tape.

So another homework assignment, and
we're going to go forward just because

where we are in time.

i want you to look at this horizontal
volume signature and i want you to

the pathway of how the price should
travel based on this volume signature uh

obviously to the upside because we've
looked at this trading range this is an

uptrend that's coming right so from here
we're gonna go up but i want you

to figure out how how will we go up So,
please make

that your homework.

Okay, let's see some questions.

Kind of related to questions, is
horizontal volume associated with the

horizon? And the second one, should we
choose the time period covered in the

chart to analyze horizontal volume?

So, again, you... have different type of
volume profiles that you could put on

the chart so i would just read this
before you do the homework i have

here the time span for which we've
created this original volume signature

so therefore we are deciphering how the
price will go down here

for your homework this is the definition
of the whole price set

so from here you should be excuse me you
should be able to construct

this uh you could have the volume
signature uh horizontal volume signature

could be extracted for each session so
for instance on this slide this is a one

minute chart so when the sessions are
kind of defined in this light blue boxes

and each session has its own uh
horizontal volume signature so even when

session unfolds this volume signature is
going to change but this is going to

stay constant it's going to stay the
same because the uh the session it has

ended so you could extract a lot of
useful information as let's say you are

presently trading in this area right
here from something that has happened

before okay so what do i mean by that

Well, let's look at where the volume
came in bulk before, right? So volume

comes and we've seen from the vertical
that this is where the volume, you know,

kind of climactically comes into the end
of the move.

Actually, in the price structure, we see
how this is the true climactic action

where we've seen the stop in action and
then attempts to go up.

up thrust and then into the change of
behavior it has some kind of small

distributional characters behind it but
that defines a very important level for

us throughout the sessions next session
as we go down first right into the

overnight action we are encountering
some kind of resistance to go down

not a coincidence this is where

some weak demand came and then some
strong supply came and therefore this is

going to be a value zone for us as the
price comes back and from here we would

be expecting attempts to go up even when
us session opens up here's the us

session we still come into the same
place and our first assumption is going

be a rally our next assumption is still
going to be a rally

Actually, you know, a couple of trades
that I've conducted on that specific day

were just based on this concept.

Now, going into the next day where we
see finally failures to go up, we know

that this level is extremely important.

We know that it acts as a support.

So, any type of sign of weaknesses and
subsequent last point of supply as

rallies that are failing are going to be
considered bearish.

so here your bias is gonna change to
down and you're gonna

take this trait question what would be
the target for this trait

if

we have changed the bias

out the session based on how the price
now resides below the most

important volume or horizontal volume
signatures how would we define the

okay you guys are giving me the numbers
1900 okay

let's do that 1900 okay um 1900 19

800 okay

75 1900 so look at what has happened

before you're not gonna have this volume
signature it's not gonna be available

so you have to refer to prior sessions
where in the prior session

demand was increasing showing that there
was a pickup of shares there

here it is and then once you project it
where do we stop we stop in

exactly at that point and i would never
suggest that you

define you know the area just by one
number always kind of have the upper and

lower boundary but how useful is this
information and you could have the same

for the vertical bar chart

where this is the vertical chart, you
see the volume signature in a more

original way of how it unfolds, but
basically the data

is the same.

A lot of volume that comes in all three
sessions at this level. If we are going

to go down and change the behavior,
we're probably going to go into the area

where we had the stop in action before.

Okay, so let's look at some of the
questions.

I feel like I'm not having enough time
to go through all of this material

Okay, Sam is asking, will you be posting
the answer to the homework?

Yeah, of course.

Can you indicate range of volume profile
for the homework?

So are we talking about this slide?

I mean, yeah. So I'm taking all of this
data and that constructs

this volume profile.

So you should use that. Can we
anticipate a top being put in when there

climactic volume action from John?

Yeah, there's definitely those
instances, and I've shown you on the

let's say, momentum characteristics
start to deteriorate, and we don't

necessarily have a climactic signature
everywhere, right? So, for instance,

volume is diminished here, but price has
a little bit of the climactic run, so

only defined by the price and the
resistance level here, so in different

that could happen

the

horizontal bars seem to mark areas where
price comes back to again and again

could that be a tradable idea again here
we kind of identify that as a tradable

idea right here that's most recent price
action

start of the visible range on the slide
um okay so um so this is what is

called session volume right okay session
volume is just basically

the horizontal volume that is completely
devoted just to one session and in

your current session it's going to
change as the session unfolds but from

previous days obviously this is
something that is going to be constant

is not going to change

okay i

think that's it for all of those
questions um let's actually skip the

outlook for now uh let's talk about the
practical exercises this is important so

what can you do so for instance i have
stock charts

this is going to be the easiest thing to
do.

I don't necessarily, you know, would be

shying away from practicing on the
stocks that are well -known.

I think the key here is just to feel the
market as we go through it bar by bar.

So you could just take even a stock like
Tesla, and you know what's going to

happen. and obviously some other stocks
that you might not know uh what is going

to happen but setting up the chart
you're still going to know because you

to kind of like define what tape where
do you want to tape it right so for

instance i want to see 2019 so i would
start probably something

like this somewhere here and i would
first look at the whole structure

So I'm looking for increase of the
volume signature here.

And go to this select start date and end
date.

So here we are. Let me just take out the
relative.

And there, it's not going bar by bar.

Okay.

Volume signature is increasing. We're
expecting some kind of stop in climactic

action. right because we could be at the
end of the move we're not going to be

biased there so here's the change of
character bar by the way just to the

previous question selling climax does
not have to have the extreme volume

signature um this could be still a
preliminary supply we're looking for

some kind of test that's going to happen
but definitely the behavior changes

here and going bar by bar just start
interpreting those bars you can write

down which is even better but more
laborious obviously and you could also

just when you're feeling comfortable
with your tape reading just go bar by

and not even kind of you know making any
notes now i want to warn you that if

you're gonna not make notes a lot of the
knowledge and a lot of the skill

building is gonna go away and it's less
effective

uh than what you're doing when you're
analyzing this at least verbalize as you

tape read so smaller spread increased
volume signature i'm expecting some kind

of stopping action it came into the uh
into the gap area if it's going to

continue probably going to go to about
45 46 but definitely something else is

going on something different so here is
that initial reaction of that uh supply

that came on the previous bar uh but
it's holding uh so i wonder what kind of

reaction we're gonna have here would we
just overcome 42 really quickly we do so

then the next target is 45 still not uh
playable uh for us by any means

uh a bigger reaction comes on the same
effort as the previous down bar so maybe

something more meaningful in terms of
the reaction

no follow through to the downside so
still more bullish

okay and we're just continuing to the
upside and here i

might be thinking we're probably coming
out of some kind of oversold condition

so where could we possibly go maybe into
this area where there is some kind of

point of the resistance if the price
overcomes this area right here this will

extremely bullish so i will become are
very interested to see what kind of

reaction as a test we're going to have
just because of a lot of supply we could

develop a trading range instead of the
reaction and you know just combining

reading techniques with your structural
analysis that's what you want to do okay

so supply is being diminished but demand
is diminishing as well so we might as

well have some kind of

a little bit of a stopping action before
continuation it seems like there is no

follow -through to the downside which
suggests you know still uh attempts to

up some supplies coming in and we
definitely uh

lost that momentum off the low would we
overcome

52 again that would be a very bullish

thing to happen and we kind of do right
we kind of overcome

52 for a little bit but right away once
you have a change of behavior

and the swing is done what you want to
do is analyze the swing

so I would be thinking about all of the
swings to the upside prior

to that in the downtrend So definitely a
much better swing. I also would be

thinking about this swing up.

So this is more sustainable. This comes
up without a lot of increase

in the supply and on the diminishing
demand characteristics.

So there is some kind of ease of
movement built in into this rally.

That obviously suggests that there was a
lot of buying here on the way down.

that could be interpreted as a bullish
indication and after the change of

behavior with so much supply we're
expecting maybe some kind of trading

right here i would be looking to open
the positions somewhere in the trading

range all right so that's probably the
easiest way how you could practice and

believe me if you do 30 minutes per day
on this exercise alone your tape reading

skills will absolutely improve

uh in a month's time and if you would do
this for several years each day imagine

how uh you know skillful you will become
in identifying uh you know

specific changes and obviously when you
do that what you want to do is you want

to conduct some kind of you know trading
as well so for instance i would be

thinking that the trade here after the
initial move up and after initial

diminished supply characteristics and
the way how the structure unfolds and we

would be caught up in this for sure but
we also would be probably exiting a

little bit here so some of it will be
caught in this gap and some of it will

exited here but that's just a way of how
you could conduct your tape reading

exercises read the tape make deductions
as to what might happen

next and conduct your trading simulated
trading and then those simulated trades

those are the ones that you for sure
want to put into some kind of you know

annotation all right let's go to the
next section okay so

we have about 35 minutes or so uh let's
go through the q a and then if we have

time let's go to the market and you know
we'll conclude with some other

questions all right first question is
from mono um number

nine bar okay right here so we see the
diminished supply character

uh and we've seen commitment to the
downside why don't we call this an ease

movement we actually do so this is an
ease of movement bar and still bearish

That supply is still high, but
definitely, you know, that ease of

creates some kind of vulnerability in
the support area. So obviously, you

we want to acknowledge that.

Bar number nine is characterized in the
answer as a shortening of the thrust.

Are we talking about, Mano, are we
talking about the same?

I think that maybe we're talking about
the different, yeah, I think this

is a different chart.

Apologies, you know, if this is
different.

Okay. Alright, so on this subject of the
ease of movement, I thought that, you

know, again, a lot of people come to us
and they just don't know, they don't

correctly understand what the ease of
movement is.

Ease of movement is not this.

why not yeah why not this uh an ease of
movement

pop

quiz for those of you who are our
students okay should i give you a hint

look at that it's commitment what's the
intention the context of the intention

must overcome or commit.

Absolutely.

This is not an ease of movement.

But this is.

Because ease of movement suggests that
on more effort,

we have a continuation of the bias with
the commitments that come with that.

And whenever we have a significant bar
that does not reach a level of the

support, of the resistance, there is no
commitment above. So therefore, there is

no progression of the uptrend idea.

And therefore, it's not an easel
movement.

One of the ways of seeing this is
through this slide, which comes from the

course. This is Home Depot Weekly.

chart and look at how the volume
signature is just profiles a lot of

the bottom of the decline into the
trading range and then also there are

buys at the short term oversold
conditions that we see later on but

overall the volume signature diminishes
and supply is diminishing

and demand is diminishing so whenever

A novice trader comes and says, I don't
understand, how could

the price go up on the diminished
volume?

Isn't it one of the main tenets of the
technical analysis that volume needs to

confirm the price?

So if the price increases, volume needs
to increase.

All right, well, this is just kind of
like on the surface, and it's not at all

structural spots.

As I mentioned before, in some spots,
you definitely need to pay attention for

volume confirmation.

Well, for us, there is a volume
confirmation here.

It's all in the diminished supply
character.

As supply has been observed at the
specific spot on the way down in the

range on the short -term oversold
conditions, supply is in strong hands.

not being presented to the market.

So therefore, a smaller demand can push
the price up. That's number one.

Secondly, think about the diminishing
demand characteristics. Why would they

happen on the way up? Well,
institutions, and specifically CEOs,

bought where demand has increased
significantly multiple

times, let's say throughout the
structure.

Once bought,

CO does not want to do anything else.

CO is just staying in the trend.

And therefore, CO is inactive.

Again, this is something that we've kind
of corrected in the methodology. It

wasn't exactly like that.

You know, the understanding was not
fully there.

So if the CO is inactive, the volume
signature definitely is going to

go down. Demand is going to go down.

And we know supply is going to go down
because supply is in strong hands, in

hands of the CEO.

And that's all she wrote. That's the
whole thing.

I've introduced a very interesting
story, which I call the ice cream story,

students absolutely love it.

It's kind of like this heuristic story,
as we have quite

a few in the Wyckoff methodology, about
how we are selling ice cream.

retail and wholesale and how the demand
and supply changes with that and the

price changes as well.

So again, this is something in more
details for understanding. So I just

you guys to know that for those of you
who are interested, again, WTC course.

Supply decreasing, demand is decreasing
at the same time.

Nothing is being presented to the
market. That creates the vacuum for the

to start moving up.

Okay, next question comes from Michael.

Regarding number two, so bar number two.

Could you please address the following
bars? Oh, okay, so this is the homework

number two. All right.

Bars number 15, 21, and 26.

15, 21, and 26.

okay so let's identify the 15 21

and 26 all right

not sure whether they are correct
additionally I have question regarding

comparison itself how do I know to which
bar to compare

for instance 26 and 15

analog bars or the up down bar before
the one that i'm looking at okay so

just go through the first question first
bar number fifth uh okay i'm sorry 15

would be an up bar so here is this
volume signature so this is 15 yeah this

21 and 26.

okay so 15 we would be comparing to the
previous up bar which was 13.

the intention behind those two bars 13
and 15 is to overcome the resistance

was created by bar number four 13 if we
would look

previously had diminished effort and the
diminished

result so that shows some vulnerability
for the reaction that reaction happened

from number 14.

15 follows and has almost the same
effort slightly less so

effort is slightly less or the same as
the 13.

And then the result is better.

Why? Because the close is better based
on the spread itself. The close is

than the bar number 13.

So we would be thinking that there is
more of an ease of movement as how the

price moves.

I'm not sure what exactly I had for bar
number 15. And by the way, this is the

first... attempt you know to go through
this material kind of like more

systematically so i'm definitely going
to have some of the mistakes some of you

have sent this to me i've corrected
those already in some of the slides and

you know there could be some mistakes
but my interpretation right now is

something that you guys should be like
take note okay next one 21 so

21 has a slight increase in effort

effort is increasing relative to what
relative to the previous bar where we

a downward bar which was 16 and the
result is increasing so that creates

vulnerability for a reaction why
vulnerability and why not

a more meaningful reaction well look at
what

happened with bar number 21 relative to
bar number 20.

If we commit below the low of bar number
20, do we

have the close below the low of bar
number 20?

No, we don't.

So what does it mean?

It means that 21 shows that
vulnerability, but we're probably not

a meaningful reaction right there just
because there is no commitment below bar

number 20.

Now let's think about the analog bar for
bar number 21. What would be, guys, the

analog bar for bar number 21 at that
point?

So some of you are saying bar number 14.

We're just comparing it to bar number
14.

Some of you are saying bar number 5.

This is the correct answer.

Bar number 5 is the analog bar for bar
number 21.

Why?

Follow the move up volume first in the
reaction.

Similar spot.

same position similar volume change of
behavior yes think about the context

whenever we talk about analog bars yes
remember two rules we do want the same

type of price and volume signatures but
at the same time we want to understand

that they happen contextually at the
same structural spot which is what which

this case is a change of behavior Okay,
second question, which is more complex

and more advanced.

Looking at bar number 5 and bar number
21 and comparing these two bars,

would you say that bar number 21 is more

bullish or more bearish?

More bullish, you say. Okay.

Then the next logical question is why?

Why is this bar more bullish? Spread is
the same.

Close is somewhat the same. The bar has
kind of like the same tail.

Slightly more bullish due to the high
close of the range.

Somewhat the same. Less result. In which
way, Leonardo, there is less result?

Iqbal has the correct answer.

I mean, it has a correct answer.

Francis has a correct answer, and all of
you are there, you know, have correct

answers. Commitment.

Look at the last bar that precedes this
change of behavior of 5 and 21.

How do we commit to the downside? Could
we commit? You know, we are closing at

the low of this bar.

Here we are not closing at the low, at
the, you know, very low. We are closing

within the body. So the close at 21 is
marginally better than at

5.

So that suggests more bullishness. Okay,
well, let's extend our logic here and

our deductions. What does it mean for 21
being more bullish than 5?

What kind of deduction could we conclude
from that?

Less of the reaction, less of the
trading range duration.

Absolutely. So we are thinking what has
happened after 5, a trading range, and

we are thinking that after 21, this
trading range duration is going to be

Or shall our reaction be the same? Yeah.

absolutely okay second question uh well
26 so what is 26 uh 26 is on

slightly diminishing effort or somewhat
the same and we're having a better

result so we're still bullish here but
there are some climactic characteristics

to that one okay next question um how do
i know to which bar uh

compare it to so we are doing comparison
in two ways we're comparing

21 bar bar 21 to the previous down bar
which is 16.

this is just kind of in sequence of the
occurrence of the reactions or

reactionary bars and then we are
comparing 21 also to 5 just because of

context so context and this comparison
we are based

on down bars definition

of the bars themselves okay um bar
number 26 000 is climactic

look at the extension of the uh price
after deterioration of the momentum

uh so when it comes obviously at the
level of the resistance so we would be

expecting some kind of climactic start
in action there are no other indications

that this is the climactic bar it's kind
of like reminiscent of what we have

here

Or what we have right here.

Or what we have here.

Or what we have here.

Or here. All of those are climactic
bars.

Okay, let's go to the next question. And
again, thanks so much for asking

those. Alright, so this comes from
Hamid. And the

question is here.

What do you think about, what is the
question?

Okay, lack of demand suggesting markdown
rather than phase C.

Yes, and I kind of explained this in the
homework review.

So what is going on is, and that's
another question that we had, so I'm

going to address it right away on this
chart, and then we don't have to come

back to this.

Supply. increases and it's much more
than on this reaction here so supply is

actually decreasing but the result is
actually increasing you know if we take

this swing and compare it to this one
result is decreasing so what could we

we could say that there is less selling
and there is less buying at

the same time and only when the buying
starts to come in here more aggressively

and specifically this bar and this bar
So buying is increasing and

selling is decreasing at the same time.
So we know that the bias is changing

to bullish.

That was a relatively easy way to
interpret, you know, around this area

happening. This was a really good call.
A much more difficult analysis was

around this area. So let's look at that.

And I think that's what Hamid is asking
here.

Lack of demand, suggesting markdown
rather than phase C.

So lack of demand where?

Looking at the rallies, what is
happening with the demand?

Demand is diminishing, so effort to the
upside is diminishing as well. What is

the result?

We can't really jump higher than those
points of the resistance,

right? And all of them are low highs.

So, definitely demand is deteriorating.
And on the last rally, that is the

smallest rally of them all, effort
increases dramatically and result

dramatically. So, we are trying to push
up with more force and we are meeting

more resistance.

Bullish or bearish?

Definitely bearish. Suggest a
continuation.

So, my take on that situation was...

a much clearer picture was right here
when the price started to fail and move

down and specifically this break uh was
suggested that okay we're still gonna go

down so this was the time of the
correction you know to correct that

okay next question okay how many do you
have to tell me where is the question

because i couldn't find it

we don't have a question here then let's
just move on green yeah

which one this one this one

this one

okay both okay

so i'm just gonna take the lower ones uh
major sign of strength so we are

looking at our r8 r7 major sign of
strength and expecting trading range

lack of supply they may suggest markup
um okay um

so we don't you know this bar right here
uh that kind of was a very interesting

bar uh because it's a change of care of
behavior bar and it suggests trading

range but think about the asset that we
are in right so this is a nasdaq 100.

and off the uh covered low uh nasdaq was

outperforming so therefore think that
our performance suggests shorter

for the trading range and slightly
different structure this is an upsloping

structure right here or two changes uh
two trading ranges one above another

whereas s p was actually doing this
right so much

more defined

trading range action so that's what
happens here and then the second

getting close to the bind climax hinted
the lack of demand and increased

inconsistent supply days so again we
don't have to have

a well -defined climactic bar we could
have a well -defined climactic

run which in this case this is the
expansion of the swing relative to what

seen before right so all of those swings
or just some late swings the volume

signature is not that telling i would be
probably thinking that this defines

stop in action better this defines stop
in action better but on the way up

nothing really until we start seeing a
little bit of the volume signature here

let me just do this okay so where is it
at so somewhere

here here and then here so on that

we could start saying that okay we're
seeing some supply and when for the

time supply comes any type of break
below the last two bars that's your

That's your guess here that, you know,
the change of behavior is happening.

Actually, exactly how it happened on the
intraday basis, I remember, I think we

were recording, you know, it actually
was on Wednesday.

Yeah, so that change of behavior was so
evident on the intraday and then on the

daily part.

So sometimes climactic actions are
there. We anticipate in them.

and we have to have certain levels
through which the price should go down

then we would say yeah we have reversed
the climactic uh the last climactic bar

but in some cases we might actually not
have a lot of confirmation and the

change of behavior bar will be the one
that will give you that determination of

the climax okay next one this comes from
kevin and

i'm suspecting that maybe something i
wrote incorrectly here okay so bar

26 this bar really uh threw me uh for a
look 26.

all right so the same type of bar that
we discussed before i do not understand

how barnum 26 could be interpreted as
climactic of subsequent bars i can see

this would be climactic but at the time
of this bar i thought it would be an

ease of movement bar with the decreasing
volume and greater results is the

interpretation coming contextually
because it's not at the beginning of the

rally so yes we are going into
acceleration here all right and then

and then final acceleration and i'm not
necessarily expecting here for um

you know for all of us to interpret this
as a climactic bar i think maybe there

is some kind of you know in hindsight
type of bias where we already seen you

know what has happened But this looks a
little bit climactic in terms of how

momentum increases after a period of
inactivity around the resistance.

And that happens on the diminishing
demand characteristics.

Those are usually the types of price
actions where we are seeing some kind of

stopping action.

So, for instance, a bar like this.

The volume signature is diminishing, so
there is an ease of movement there.

lack of a lack of extension here

and that is suggestive of the stopping
action same here you've seen that the

volume signature diminishes and yet
momentum is up so we are thinking that

the resistance that should be close to
the climax and obviously after the fact

and I think that's important to
recognize it necessarily you know

if we don't recognize it at the moment
when it happened to recognize it after

how would we recognize it after
expansion of the reaction relative to

reactions that we've seen prior to that
an attempt to re -test and a failure of

that and specifically you know a more uh
substantial change of behavior bar and

much more substantial change of behavior

Okay, a series of questions. Let's go
through them one by one.

At almost the end of minute 27 in the
second video in tape reading, you

mentioned that there is a global
decrease in supply halfway through Phase

a local increase in supply in the second
half as the index gets close to Phase

C. Can you please help me understand how
to differentiate between local and

global supply and why it's important to
differentiate between the two sure so

usually we would be thinking that the
accumulation schematic in terms

of the supply presence is going to be
drawn like this where

we're going to have quite a lot of
volume signature and increase of the

in phase a into the stopping action and
then Going into phase B, we're going

to have an exhaustion by supply and

demand at the same time. And that's why
the volume signature in phase B is

diminishing. And then once the price
does not go anywhere, the last weak

are going to start selling and giving up
their positions.

A second point of capitulation, or we
call this a second point of fear, and a

second point of capitulation. Again,
this is a WTC material.

You know, this is kind of like more
proprietary things of how we're thinking

about how the structure unfolds and how
the effort interacts with the result in

the trading range, specifically in their
accumulation.

So we're looking for those second points
of fear, second point of capitulation.

where its first one is capitulation into
the climactic action that increases the

supply signature just because they
provide that supply to the market and

of that increase the volume signature
will start going up relative to phase b

but still will be lower than phase a so
we kind of have a very peculiar way

of looking at the supply signature where
into phase b we see the diminished

supply characteristics and then increase
of the supply so locally from

phase b to phase c and i call this

locally supply is increasing but

globally which means throughout the
whole trading range or specifically from

phase a to phase c

supply is diminishing and again i'm not
going to go into a deep explanation of

why this happens although i gave you
kind of like a answer on the surface of

uh you could again you know for those of
you who are new to this material

obviously go to wtc and just you know
there we would discuss it in a lot of

detail next question comes from kent in
trying to confirm a mechanical

assessment

to specifying bias and interpretation of
the bars based on the slides 11 and 12

from session number one uh notes showing
bar patterns i thought i would be able

to construct if then statements such as
if the context is advancing or

declining and the volume is increasing
or decreasing plus spread is increasing

or decreasing then the bias should be
interpreted like this so yes we kind of

have that i gave you um in session
number one you know that type of

the bars uh with the context you know uh
with the background of the context um

now you have to be a little bit more
specific

where that those you know
interpretations come this appears to

uptrends and downtrends but for example
in exercise number four um

okay does a third category of trading
range sideways needs to be

considered very good idea and very good
thought so the way how i

look at the trading range is the trading
range is constructed with up and down

swings so my interpretation of the bars
will be based on those up and down

swings and therefore the context here
would be defined by the either upswing

or a downswing so that's kind of like
the way how i'm doing this but you're

of pushing my thinking into the more
global uh interpretation of the

as you said uptrend downtrend and
trading range so can't very good you

here so let me look into that and maybe
in the subsequent session or in some

more advanced sessions like, you know,
with the practicum, I could bring this,

you know, to our attention.

And another question from Kent. On a
similar point, are the interpretations

influenced by Tom Williams and his
volume spread analysis work? Found

from him at search related to this
topic.

to be frank guys i did not have a chance
to connect to tom williams when he was

alive i kind of deeply regret that um
now looking

how tom was gone um you know hank is
gone um dick arms was

gone you know around the same time so
just three brilliant minds on volume

uh and bike of work uh were gone very
very fast.

So I do have Tom's book.

I found that, you know, reading the
book, it was a little bit laborious

for me just because of the writing style
that he has.

So I didn't really, you know, conclude
reading the whole book.

And I know that a lot of the VSA work
came from there and was

popularized by Trade Guider, I believe.

And they have a specific software on
that, which I looked at and didn't

necessarily like it as much as I would
want.

The softwares have this way of
interpreting

everything linearly. So it was
constructed by the engineers, and

there's very present linear thinking
right there.

which does not contextualize too much,
you know, the signals that we have. So

therefore, I kind of dismissed it, you
know, for me personally.

And my concentration with my tape
reading was basically primarily in the

five years and just building the skill
just based on chart reading and just

going through tons of charts and
interpreting them over and over and over

um actually david wise was asking the
other day when we were discussing the

curriculum and we were going through the
chart and he's like well your tapering

is really good where did you learn tape
reading and i kind of started thinking

where did i learn the tape reading i
mean like to the level of where i am

now and i must confess that it was not

a single place where i would
overwhelmingly

learn tape reading it actually came more
from teaching the material you know

throughout the classes in the last you
know 10 years where you'll put a chart

in front of you and you have to make
sense out of it so in a way I'm almost

self -taught not necessarily on the
basics which I picked up obviously

multiple sources you know from Hank from
ggu classes you know from reading the

works of the likes of tom williams and
david wise you know uh going through

of the sessions with gary fullett uh you
know the ones that we've conducted like

you know three four years ago and so on
so forth but predominantly like 95 of

the work on tape reading was done uh
with the chart nobody like literally

told me or told me what to do it's
always kind of intuitive thinking about

the chart develops and for those of you
who are students you kind of see that in

me i'm bringing a lot of my own concepts
that i quote unquote discovered on my

own but the foundation obviously still
you know you're taking the foundation

from golden gate you combine it with you
know tom williams david weiss and

then you create some kind of your hybrid
approach.

At this level, I mean, if you understand
this material well, and

for advanced students, not for the
beginners and intermediate students, and

very, you know, frank about this
discussion about your level, where you

For the beginners, I usually suggest,
read as many books as possible.

technical analysis in general and like
specifically for intermediate students I

always say do not read anything on
technical analysis read everything on

and then for advanced students my
suggestion is very simple do not read

stop you have enough knowledge if you're
truly at the advanced level there is no

knowledge that you need anymore what you
need is skill So therefore, for

advanced traders, the only book that you
should be reading is the chart.

And I adopted this principle for myself
for the last 10 years. And I've just

been going through tons of charts and
going through a lot of tape reading. And

that's how, you know, I've developed
this skill.

So therefore, I mean, big kudos to Tom
Williams, you know, for sparkling.

such a movement that he created in
England and in Europe

with his PSA work go check out check out
his book go check out you know

some of the people who became students
of his you

know and now they teach so I would
definitely check out that work but the

foundational systematic work on tape
reading, I would just, you know, use a

course like this, go to David Wise, go
to Gary Fullett, Gary Dayton as well,

know, those type of traders and
Wycoffians that could contextualize

VSA signals with, you know, the correct
Wycoffian interpretation.

All right, next question comes from
Graham, and I think we answered this

question, so let me just double check.

the funny thing that i noticed during
this homework is where the swings are

marked up as you have they kind of look
like candles when can we can

then work with each candle by treating
each swing as a candle and then analyze

them bar by bar absolutely and that's
what a lot of you guys have done with

homework right so you define the whole
rally as one candle

And then you look at the next candle of
the advanced and you're saying, you

know, how am I comparing candle number
one to candle number two?

Or you could just say swing number one
to swing number two, and that would be

obviously correct.

On the last page of the homework, the
first swing down is quite slow and

and down swing is less duration but
sharper. So this is the 2018 low. When

comparing the two volumes...

uh cumulatively the first one is higher
and the second one is lower which would

take precedence so this is a question
about the precedent over effort and the

results what is more important is the
diminished effort or the increased

important in that case and we just went
through that right so we said that into

that low of 2018 december low we're
going to have

decreasing effort and increased result
less selling

less buying and that produces more

results so still bearish and whenever we
come out of it it's on the next rally

at the beginning of the rally we see how
demand goes up and we see how supply

still low so therefore the bias is going
to be changed to bullish at the

beginning of that rally okay uh ed is
asking in case you are not covering the

topic of momentum in uh tape reading uh
please could you at least include the

principles and points in the slide and
this topic was stated to to be covered

previously so we went through the
momentum signature before on the

slide so ed in a way i'm kind of was
answering that question to you i saw

you said thank you i think you know at
some point but i thought i'm gonna you

know approach this from a different
perspective and this is the perspective

of um you know from a trading
perspective this is an actual trade that

conducted on this day uh and this is a
very frustrating trade uh because um it

was kind of funny bruce and i were
working on the market report and i'm

to bruce i'm in this trade you want to
kind of like on the side trade together

so the entry was great you know after
the character change of the

reaction and after initial sign of
strength before the bias you know was

determined in the asian and london
european session as bullish

inability of the price to go down sign
of strength this has still some

volatility suggested

And then up to this point, you know, I'm
busy, I'm not available.

And then I'm available, so I'm putting
on the trade. I don't think Bruce will

appreciate this.

I'm available to trade when we were
doing the market report, but that's how

is. You know, I'm trading through some
meetings as well, so obviously quite a

lot of distractions there.

So my idea was that this higher low is
going to be a higher low relative to the

next reaction, which is going to be
phase C.

so again analytically that was just the
spot on day and then i determined

the area of the target uh right here
that was from the previous day that was

necessarily from this day and i asked
bruce could you just give me the pnf

of this so he calculates really quickly
and just says uh it's going to be around

1940 and i've calculated two additional
bars so

So what happens next?

And I think I've shown you this trait in
the previous class, but the point here

is about momentum and how to correctly
use this momentum.

As we go into this structure, momentum
deteriorates. We could see this

shortening of the thrust, look at the
texture of the spread, right?

It's different from what we've seen
before. So my conclusion here is that

going to have a reaction.

Not only that, I've concluded that we're
going to have a sharp reaction down.

Not only that, I've concluded that we're
going to go into the base of this

trading range, which was upsloping at
that point.

So my technique on the stop losses is
not about necessarily the support level

itself, but determining where momentum
has occurred

before.

This is where momentum was accelerating
because there was some buying behind it.

It's at those places where you need to
place your stop loss.

And I was just distracted a little bit.

So the stop loss should have been here.

And I moved it slightly below this
concluding momentum, which was a buying

climax.

Here's the whole range.

You could do it like that as well.

And therefore...

it got me out on this last tip so very
frustrating execution with what seems to

be like spot on analysis um so in those
trades are going to happen like this

continuing with this trade look at how
momentum starts to increase but not

really there yet it's right here where
the highest momentum is and then we have

a deterioration of the momentum whenever
we have that there is a specific

sequence that i use and uh again in the
practical will will deconstruct the

whole thing uh you know exactly where we
would be getting out so somewhere here

for the most efficient active all right
but great question on the momentum there

and definitely something that is not
really discussed um in tape reading

per se uh just because you know we
usually look at the effort and the

momentum is the character of the move
and therefore important to us. So in the

practicum, we discuss that.

From Arvind, my major problem is
identifying analog swings, particularly

upswings. Once identified, it's easier
to follow up the plan of price, volume,

texture for analysis and deductive
purposes.

I would find it useful if you included
some of these basics into WTC2, which is

the practicum.

and included identification of analogs
instead and or in addition to the bias

game so in practicum we dissect the bias
game in such details uh

just because it's a very important
exercise just for you to know guys for

of you who are not attending the
practical um uh arvin so yeah absolutely

could uh you know bring this material to
your attention so questions like that

obviously are appropriate to ask in the
practicum so let's do this why don't you

send me an email again you know with
this question just to remind me and then

we'll we'll go from there uh dave uh
send more of the

observation with which i want to
conclude this final third session of the

number one david saying My analysis
takes a long time

as I think about everything and re
-watch parts of the video.

Dave, the way to go, right? To re -watch
and make notes. To see if I'm thinking

along the appropriate lines. I feel my
observations are far quicker and easier

than my deductions.

Knowing the questions to ask is easy
enough.

But then, how to properly configure the
answers together in such a way that we

delineate a clear picture appears to be
a challenge.

So, one comment on that.

What a great awareness of self that Dave
was showing here.

And you should develop that type of
awareness for your analysis and

And this is kind of like a much further
step down the road in the development as

a trader to recognize something like
this and be okay admitting this type of

things. In a lot of cases, I see how the
ego gets in the way of a student and

there is no progress just because, well,
no, I'm okay, I'm great, my

observations are great, my deductions
are great.

Take a step back and ask yourself a
question.

Why is that with all of those great
things, you are not consistent, you

are not profitable, or some other
mistakes that I'm making?

So, and obviously those students who
have been with me for quite some time,

guys know that I'm just, you know,
straightforward, right to the

point, right to the truth. And I'm not
talking about you.

just you guys in terms of pointing to
your mistakes.

I'm showing all of my mistakes easily
because I know that the progress of a

trader, or my personal progress as a
trader, we only could be made through

the most hurtful truth possible.

So we have to identify what is it that
is not working in our analysis, trading,

execution, and so on and so forth.

Okay, on the note of the observations
and deductions.

So I think that observations just
generally are much harder because

people just don't know what to look for.

So Dave, kudos to you for knowing what
to look for.

In terms of the deductions, I always
thought that it's a little bit easier,

maybe because I come from the background
where maybe it was kind

of a common place to go through logic,
you know, and just to argue the logic.

So to me, it may become a little bit
easier, but I could definitely see how

thinking about what kind of deductions
we should be making.

also could produce some kind of
challenge.

So let me think about this a little bit
more. And in the practicum classes, I'm

obviously going to pay more attention as
to what kind of sequence of deductions

we can conclude.

And maybe we could create an algorithm
not only for observations, but for

deductions as well. So kind of like a
framework, a pathway.

We definitely have that for
observations.

But the deductions is something more
challenging, so we'll do that.

And lastly,

I absolutely love this. I'm feeling
confident, though, that with practice I

get the hang of it. It feels like it
requires an intuitive knack that is

developed through experience. What a
great thought, Dave, and thank you so

And this is what I want to have as a
thought.

in the last moments of this series
practice is essential

it's crucial it's undeniably valuable
and

i want to ask everybody in this class if
you guys are going to come to me and

you're just going to say like okay well
um i got the material i want to improve

but you're not practicing

I'm probably going to look at you and
your efforts as kind of like not being

the place of understanding of what needs
to happen in order for you to progress.

And I would be forcing you to practice.

And if you have enough motivation to
advance your skills and practice

each week, each day, whatever is
available to you in any given...

I would highly recommend that process of
practice.

Establish it. Establish the parameters
of practice. Be very systematic in the

way how you approach this.

Or, as I say sometimes, as life unfolds,
find the

ways of less resistance to create
exercises around practicing the tape

reading. And that should most definitely
help you out and improve your

observational skills and deductive
reasoning.

All right. And with that, guys, I want
to say thank you. It was a blast.

Wow. What a great three sessions. It's
probably, you know, and maybe just

because I finally felt like I could
teach this material. It took quite a lot

time for me to feel.

not just comfortable but to feel you
know having the command of the material

hopefully it felt throughout all of the
three sessions i can't say enough about

the upcoming session so for those of you
who have signed up just for series

number one you have to continue you have
to go and experience gary fuller

experience david weiser's thoughts and
william is also a brilliant uh tape

reader um so uh with with that i'm
looking forward to the upcoming sessions

looking forward to seeing you in series
number two uh and um on thursday with

gary uh don't forget that's gonna be
next thursday at 3 p .m all of you

signed up so uh just definitely uh
continue with your studies habituate in

this knowledge and habituation means you
know if you can't do this by yourself

come to a class like this come to a
class to my classes come to gary's

to come to uh david's private sessions
you know and just go through all the

practice multiple times um all right
guys great session um i love what we did

uh you know was the whole thing and i'll
see you on october 29th and then

subsequently on november 5th and david
and i will start over

thank you so much and happy trading bye