All language subtitles for Session 8

Hello everyone, today is Tuesday,
October 29th, and this is our

session, actually session number 807.

Today we're going to have a treat
because today we're going to have a

presentation by Teresa.

Teresa is one of the content
contributors that work with me on a

some other content contributors that we
have, either bloggers or just content

contributors. She's behind the bias
game, you know, initial selection of the

stocks that we look through and that we
analyze.

You know, she's also behind some other
projects, and specifically, you know,

Teresa is in charge of our Twitter.

So if you're on Twitter and...

You've seen like a big, big splash of
activities in the last six months or so.

That's Teresa's work. And for us, what's
important with Twitter is just to

develop educational tools, not just
something that, you know, we're just

tweaking out stuff, but to have
educational process on Twitter as well.

game works tremendously well there.
Okay.

So I'm excited about that. Teresa is
going to talk about the process.

And, you know, I just conducted the
Trusted Process special

in June. It feels, you know, like it was
yesterday.

And I have received so much feedback
from you guys on that

and how important it is and essential,
how it is the last piece in your

process. a trading education, but also,
you know, the only piece that you really

need, you know, just to build up the
process.

I'm currently building up the processes
for different type of trading for some

of the clients that I have.

Those are institutional clients and my
own processes, you know, for different

accounts.

So it's going to be interesting to
listen to Teresa because as I was

with her on her process, I've realized
this would be such a great

segue for us and the bridge into the
next assignment,

which we will discuss next week more.

But one of the homeworks for next week
is going to be show us our process.

So send me your emails.

Describe your process and let's just go
through that.

And then as a homework, we could
establish some of the elements of the

I'll think about, you know, what
exactly.

So, you know, practicum is always a
little bit experimental just because you

guys are more advanced with your
knowledge. So we could do that type of

So I'm extremely, extremely excited to
have Teresa here and just to listen to

her presentation.

and to see how she's going through the
process.

Then, as usual, we're going to do the
buy scheme, anatomy of the trade. We

the new stock to look at, some Q &As,
market update, and we have another

exercise on the selection, on the
selection in non -correlated groups.

In the announcements, November special
is going to start

next week.

Yes, next week. We're starting on the
7th.

And I definitely am looking forward to
that because what we've done with John

in October special was more kind of like
the next step to what I'm going to

be doing in November.

So in a way, it should be flip -flopped,
but that's okay. You know, John has

done such a tremendous job explaining

the basics of scanning,

the basic of how you construct syntax,
the logic as to why we

would be thinking about certain things,
and he gave us five or six scans that

were discussed in the class, which was
awesome.

So for those of you guys who did not
have a chance to attempt, consider

that

those videos on demand or attend the
November special and then follow

up with the October special. One way or
another, that's going to be helpful.

So what are we going to discuss in
November?

Momentum.

Such a huge piece of information that is
visually very hard

to find.

Sometimes it's very obvious when the
price moves very, very fast.

But how do you recognize the momentum
that develops slowly when

the price still has a lot of reactions
and so on and so forth? So that's going

to be a very interesting material.

It's going to be also intertwined
together with the presence of

We're going to be looking into how
actually everything starts with the

by institutions to get into this
position, to start the absorption

So once they made that intent clear,
they are present in the market space and

they are starting to buy.

That creates the absorption that stops
the price from moving further down.

Because of that stopping action, that's
when we start seeing momentum, which is

the short -term momentum, start to
flatten out.

And these two concepts of volume as an
institutional presence and what it

does to the structure, which is
reflected in the change of the momentum,

the place that we want to concentrate
on. Also, I'm going to show you a lot of

tricks with the regular momentum
indicators, like rate of change, which

favorite momentum indicator.

And we'll compare those also with...

I'm not sure if I'm gonna go deep into
the comparison with RSI or MACD,

but I think that we have to look into
the PPI and just to see

what's the value there.

And you guys who are familiar probably
already know the answer to that.

And then we're also gonna put all of
that into the structure.

So we're going to look into the
structure from the perspective of

momentum and volume signatures.

We want to... These momentum and volume
tools help us out to identify

specific phases.

So kind of like in -depth material,
exactly the way how I like it. And I

that the group is going to be...

such like we have here you know kind of
like inquisitive minds are speaking the

same language talking the same ideas and
exploring together so that's the

november special all right with this let
me find teresa

okay

hi

teresa how you doing

Hello, Roman. How are you? Hello,
everybody.

Good. I'm changing the screen to you.

I'm very excited to be here.

Yes. I'm extremely pleased that you can
make it, and thank you so much, because

I know how difficult it is for you,
Teresa, in Europe.

So definitely a different time zone. So
thank you for being here.

And again, Teresa, just to reiterate,
thank you for all of the

Twitter bias games and all that stuff.
It's a lot of fun to create together and

just to follow.

And as you know, Practicum is all about
the bias game as a homework.

So everybody comments on that. Everybody
loves that. So thank you.

No, thank you. Thank you for the for the
introduction and for this opportunity

about talking about the process, which
is amazing.

Hopefully in a short time, I have around
15 minutes. Right.

So I will be able to.

It's 15 minutes that I have around.

So just just go with this, you know, 15,
20 minutes and then some Q &A

from the audience and we'll see where
it's going to take us.

Wonderful. So as I was thinking about
what I was going

to talk to to you today, I thought, as I
mentioned to you, Roman, that it would

be a good idea.

to start by giving it a bit of context
and explaining briefly what

the process so far that I have developed
has meant for me and the benefits that

I have seen so far.

So I have created a couple of slides
before showing the main document, the

pillar of what the process is for me
right now, which is the Excel

that I will show you in a bit.

So far, I can say that the process for
me

has come to bridge the gap between, on
one side, the knowledge and the

skill, the theory, and on the other
side, the practice of the hands -on

trading routine, the job as a trader.

And that was the first realization once
I started creating this structure.

of the process.

Secondly, having that structure,
developing that structure has increased,

increasing actually my self -awareness
about my thinking.

It pushes me to think about my decisions
and why I made them in a way

that I probably wouldn't have done if
that structure was not created.

Thirdly, and possibly this sounds a bit
strange, but I'll try to

explain because I realized for me, this
structure, the process of creating the

process, if that makes sense, acts as a
proxy accountability partner.

What do I mean by that?

When you have an accountability partner,
you have to come to her.

and explain which milestones you have
met at which

particular times in order to meet the
goals that you want to achieve and that

you are committed to.

For me, the spreadsheet that I'm going
to show

you is sort of that accountability
partner because I have to do

certain things.

give certain inputs at certain times in
order to be a bit closer to my goal of

becoming the best trader I can be. And
without that, I'm not any closer to my

goal. So I hope you guys understand the
analogy here, because for me, definitely

works this way and have experienced this
since I

started.

Last but not least, the fact that I have
started creating a structure

around my trading, my decisions, is
allowing me to draw conclusions.

And these conclusions are about my
tendencies and the mistakes I'm

realizing that I'm making.

And most of all, how to improve.

One of the main things about all this is
that the mistakes are always huge

opportunities to learn and improve.

And without that structure, I wouldn't
have been able to spot those

opportunities to improve.

So the next thing we are going to move
on to is

the template of this.

excel spreadsheet that i'm going to to
show you today and this is the pillar of

that is around which um the development
of my process

is um is um circling around right now um

and it acts as a one -stop shop for all
the key processes steps and that brings

a lot of clarity to where I'm at right
now and where I'm going.

So in the document I'm going to show
you, and the reason why I say it's one

-stop shop for all the key steps, I have
a tab for watch list, a

tab for open trades management and very
simple journaling, a tab for post

analysis, which is critical and
variance, which I'm not really digging

at the moment, but I will in the future.

And then I have personalized the
template, adding a couple of tabs that

right now are critical, which are the
tab of the brainstorm about

improvements in my process as a whole,
not just this particular document, but

trading plan and the process as a whole.

the snapshot of where I am with the P &L
tab.

Obviously, the document I'm going to
show you right now is not a finished

product by any means and probably will
never be.

And it's a constant work in progress.

But hopefully we'll show you guys the
benefits of having something similar,

developing something similar, because
for me, it's been a game changer.

And I want, before I move on, I want to
clarify that the templates I'm going to

show you now are based on Roman's
trusted process webinars

templates, the ones that he gave during
that webinar.

So without further ado, let's move on
to, just bear with me for a second.

I'm going to find this.

Okay, hopefully I'll have the pointers
so that you can see it clearly.

So this is the document and as you see
the first

tab is the general watchlist tab.

Before I had three different tabs and
now I have

decided to only use one. Why? Because

One thing I have to mention is that I am
specializing at this point. I'm

focusing in the universe of the FTSE 100
stocks, which means in practice that

every single week I go through the same
universe of stocks.

So I realized that having a long term,
short term and

weight waiting list.

for even longer term candidates that are
not yet ready, was bringing a lot of

noise and unnecessary struggle into the
process. So I just decided

to have a simple, very simple watch list
tab.

And in here, I put the candidates that
during my visual analysis through a

chart, I realized that could be
potential candidates to have a look at.

for entries during that following week.

And if you see here the way I
differentiate which ones belong to the

original short term or swing trades or

campaign candidates, it's just by
setting a color. The ones in blue are

that before I used to put in the
campaign watch list. And now.

In the journal watch list, I can just
differentiate them by color.

So having a simple list with this coding
is working fine for me. And then I just

give a status. So if there is any
candidate that I like that week, but I

feel is ready or is not going to be
ready that week for either a swing or

campaign for that week, then I can just
put a wait for me to be constantly

having a look at it. And then once I
put.

watched more closely are because they
are getting, you know, more ready to

on, in my opinion.

And then we have here, as in the
template that Romain gave during the

different elements about the structure,
the relative performance and an

institutional presence that you can see
here and that I have moved on into the

other tab. So I think we can move on to
the next tab.

which is the tab where I have any stock
that at any given time I

have traded.

So this is a snapshot or the data
warehouse of this document.

So any stock that I have had a position,
no matter how

long or short, is in here. The ones
obviously that appear in the status as

closed is because they have already been
closed.

basically. And what this tab adds is the
tactics.

So because these stocks have already
been traded, I would include here very

critical information as the point of
entry, the initial stop loss, the

and then risk and reward, the ratio, and
the size

of my trade, plus some additional
comments about

the entry mostly.

So once I have entered the information
here and I have entered a trade,

I would go on into this tab because this
is the one that works as a mini

journaling. And this is when I was
referring to the the accountability

partner. I was mostly referring to this
part because.

For me, it's a very binary situation.
It's either every single day I come here

and I do what I have to do and put the
input of what I feel has happened

with my thoughts during that day or I
don't. Either I do

what I'm supposed to or I don't. So
either I get closer to my objective of

becoming better or I don't.

In this tab, the main part is all the
inputs that I do every single

day that have to do mostly with the
volume spread

analysis, the movement of the price and
the movement of the

stop losses that I indicate in a
different color in red.

And sometimes even.

My own personal comments about how I
feel the trade might not be going in the

same way I feel that my stop loss might
be hit sooner than I expected.

Here, just for to keep it smoother and
to have everything in the main critical

information in one place.

As Roman suggested in his template, I
maintain for every single stock, the

of entry, stop loss, target, risk
reward, and the action which is entering

stock.

Once the positions are closed,

then I move on to the post -analysis
tab.

And in this one, really,

I bring on the same critical information
that we saw at the beginning, plus all

the information of mini journaling that
I have been doing for every single day

until the trade is finished and it hits
my stop loss.

And then that's when I move on to the
main part of this tab, which is here,

is the comments.

And the comments have to do with how I
feel the trade

went.

How did I manage it?

Was my stop loss too tight?

Did I move it correctly?

Did I enter where I was supposed to?
It's not very detailed, but detailed

for me to always be able to come here in
the future and know.

what I thought at the time, the lessons,
and that's the most important part,

the lessons that I thought this trade
taught me. Because then with this

information, I can go back to the charts
and look at it in more detail and learn

from my mistakes. So this part of the
comments and lessons here in the post

-analysis is critical.

In the original

template in terms of the process.

There is also a little section which is

critical and I haven't yet ventured into
it because the way I'm building

this structure is almost on layers.

So I need to feel very comfortable with
one aspect of what I'm

working on so that it becomes second
nature.

It becomes part of my habit.

And then I move on to doing the same
thing with the next aspect in the

So that's why I haven't yet entered into
this part. But basically, this is very,

very I think it will be very useful
because there are different critical

of every single trade that we have to
analyze the bias, the timing.

The very mysterious character with which
price moves.

The point of, sorry, that was my alarm.

Excuse me. The point of entry, initial
stop loss and exit.

Obviously, by the time we analyze our
trades, we know, post -analyze,

we know how we did in every single one
of this.

And then we would be able to.

Calculate a rate in percentage of
variance of how many of these aspects

do correctly, as opposed to the total
number of the aspects

that we need to ideally do perfectly
well, which is which will give us 100

percent.

But anyway, I haven't yet been through
in this part.

But I thought it was interesting to
mention it.

The two following tabs I included
because I think they are very

essential for me at the point in the

development of my structure that I find
myself in.

So right now I'm constantly questioning
what I could do

better.

What is it that I need to change?

What is it that isn't necessarily
difficult?

How can I smooth my process?

How can I save time? How can I be more
efficient in the whole process as a

whole? And I write here the things that
I think would

improve the process as a whole and give
the reason why at the time when I

thought about it and the status.

So, for example, very recently I have
added, well, I need to add a scanning

my process.

How am I going to do it? I need to
develop that. But definitely it's an

improvement. And I think to be aware, I
need to be aware of it.

And the same thing with changing my
watch list or how I do the journaling. I

started doing it in Word and it was
unnecessarily tedious. And I thought.

it makes more sense for me to bring that
essential part into what I'm doing in

this document and have the critical, the
most critical information in this one

stock show that I was talking about.

Then things like how I annotate my stock
charts,

my charts and stock charts, I put it
here as well. So this has to do with the

process as a whole, but because.

This spreadsheet is such a pillar for
what I'm building. I included it here.

And then obviously the P &L right now,
because

to me right now, it's very important to
see what my tendencies are.

What are my most common mistakes?

I need to know where my trading is at
this time.

The way I see this is it's a very simple
personal warehouse of my trades where

I have very relevant information that is
going to

allow me to draw conclusions and dig
deeper into what I need to improve.

And here, for example, the conclusions I
am focusing and seeing right

now. What can I see about the way my
trades are closing?

Am I wrong too many times on the bias or
am

I stopped out because my stop loss is
too tight? Am I not living in a

wiggle room?

So and this cannot be inferred sometimes
from, you know, all this quantitative

information that we have been.

So for me, while this is very simple and
I intend to build a lot more on it,

already it's proven to be very useful.

I think I've passed my time, but I
wouldn't want to finish

without reiterating how

critical for me It has been to start

creating this structure.

And hopefully, though this has been a
very short presentation, but hopefully I

would have been able to communicate to
you the benefits that for me it

has had. And hopefully it will have the
same benefits for you when you do

it. And if you haven't done.

the Trusted Process webinar, I would
finish by encouraging you to do so.

If you have a process and you want to
take your process to the next level, it

would be very useful. And definitely, if
you don't have a process, you need to

build it, and that's the way to go.

And I think probably I should leave it
here, not to take too much time.

All right, Teresa. Well, fantastic
presentation, first of all.

Secondly, a very impressive P &L. Thank
you for showing and sharing this.

Thank you.

So as kind of like you were going
through the process,

two questions that I wanted to ask you.
And feel free, guys, to leave any

comments or questions for Teresa. This
would be the time to do that.

Two questions that I have, Teresa, is...

What are the most common mistakes that
you have

seen after you have built the process
and started implementing it? And by

common mistakes, I mean either
analytical mistakes or

executional mistakes.

That's question number one.

And then the question number two, in a
more general sense, I know that you

mentioned quite a few benefits, but if
you would take one benefit where you

have seen just the progress leaps and
bounds, like beyond of anything that

you've expected, what would that be?

Okay. So the first question,

What I have noticed is that I

think to be quite good at respecting

my stop losses.

So it's never a situation where my
tendencies make me want to not respect

stop losses or move them, giving myself
too much wiggle room.

If the trade goes against me or anything
like that, I realized I'm quite

methodical with that.

And what I see is that when I'm right,
many times

I get stopped out before I should,
possibly because

of not leaving too much space, moving
the stop loss and not leaving too much

space for my winner to run.

and I don't get stopped out on my
initial stop loss.

I mean, in this trade, that had only
happened 17 more times, I think,

which is my losses are

controlled, but I think my winners are
not optimized. I think that is what I

would say as a general.

That's a general conclusion. When you
say that your winners are not optimized,

are you saying that you're not taking as
much profit as the trend gives you?

Yes. So you are getting out of the
position earlier than you should.

Yes. Okay.

So let's kind of concentrate on this. I
think this could be a little bit of a

learning process here in the class, just
kind of like to show what we would do

in a private session, right?

So the next question, obviously, here,
guys, would be, well, how do we fix

And how do we fix that using the process
that you've already established? So if

the goal is to figure out how to stay in
winning positions longer, how

would your process change in order to
reflect that?

That was the next step, by the way,
Teresa, right? Because once you collect

information with more trades and with
more data just going through the process

multiple times, then the next step would
be you see the problem, right? You

identify the mistakes and then build in
the process, the mechanism, the

tools that would correct that mistake.

I would have to dig a little bit deeper
into how to correct

that mistake.

The reason why I'm talking about this is
because

I mentioned to you guys that I got
really serious about the process going

into summer.

I've hired actually a coach who has a
degree in the

process building.

I mean, like literally a specialist on
the process, how to build the process.

And he was walking me through the whole
thing. So one of the last things, you

know, on a higher level, that he was
saying that the process

should be built in such way.

that would identify your mistakes very
easily.

You will kind of see either the
commonality among the mistakes and you

easily identify that common trait or
something that will be kind

of like out of the norm, an outlier,
some kind of behavior that you could see

the process.

And the next step in the process is...
to

obviously think about what that mistake
is.

So for instance, Teresa is saying, okay,
I need some time to think about this.

If we would quickly brainstorm this
right now, Teresa, and I would say, we

probably have to figure out what, we
know what the mistake is, right? So not

staying in the winning position for a
long time. I think that we need some

of analytical kind of based to why this
happens, right?

You know, in those positions where you
haven't stayed, what was the trigger

closed out the position, right?
Sometimes it was, sorry.

The observation that you make, right?

So some technical trigger, what is it?

Sometimes it has been an executional
mistake because I entered.

a trade thinking, okay, this is a
campaign trade.

And then when I changed the stop loss,
the minute I saw profits, I started

moving the stop loss, but more as a
swing. As a swing stop loss. Okay, so

see how we are from just knowing what
the mistake is. Now we're going into

okay, well, there are some elements to
this mistake.

So what are those?

I'm thinking my first intention is to
have this as a campaign stock.

Therefore, there is a lot of causality
that I see. There is this and that.

And then we switch to

the swing.

Probably we're seeing something that
kind of triggers that behavior, Teresa.

Possibly and possibly also the mental
aspect of it. I'm

just brainstorming. Like I said, I need
to dig deeper.

But the aspect of thinking I'm already
in profit. Let me.

make sure I can profit.

And it can be something unconscious, and
that's why I'm saying, okay, this is

just... Yeah, and I'm really grateful
that you can discuss this with me right

now in front of the class, you know,
because obviously when in the private

session, you know, we could dig a little
bit deeper as to like psychologically

what that is and kind of speculate on
that, you know,

so there is some kind of protectionism.

turns on at that point.

Possibly, just trying to find something
that makes sense, because obviously it's

an executional mistake, if you want to
call it, but very

possibly also the source could just be
something of a mental nature.

Could be. Could be. Yeah. So I'm
thinking maybe kind of like another tab

dissecting those mistakes. So let me
think about this and, you know, we'll

definitely.

And this is where self -awareness comes
into play, where I was saying about the

benefits, because all this is making me
reassess my

decisions and really think deeper, not
just.

on the level of the execution or the
analysis, but also from the point of

of the emotional aspect of it.

So it's quite an enlightening process.

Right.

Okay, well, guys, let me just see what
kind of comments we have here or any

questions that you guys have.

Great workflow. Thank you, Teresa, for
sharing this.

Oh, this comes from Alessia.

Hi, Alessio. Target analysis might be
helpful.

And, you know, you could definitely
include the targets, and Teresa has the

targets here. The risk -reward is based
on the targets as well.

That's good.

We thank you, too. Teresa, how much time
do you invest building in your process

so far from France?

I started slowly.

by the end of July.

So I was not taking many trades.

It was more about creating this
structure, feeling comfortable with

step that I was taking and then building
on

that and making it a habit.

So it's been bit by bit.

But so far I have been since doing this
way since August.

It's quite recent, but a game changer.
That was your second

question, Roman.

If there was one thing... What is the
global change that it produced?

Awareness. Awareness of...

Of my mistakes, but not just of my
mistakes, of how I do things.

To have a clear picture, because if you
don't have a structure, it's very

difficult to know what you're doing
well, what you're not doing well.

You have an idea, it's a feeling, it's a
perception, but you do not know.

So this brings clarity, awareness.

It's not a feeling, it's not a thought.

And I have always loved to have data and
analyze

the data to get conclusions.

So for me, this is awesome because now I
don't have to

rely on perceptions of what I think I'm
doing right or wrong. I just draw

conclusions.

Well, this is terrific, Teresa.

Thank you again for this presentation.

Thank you. My pleasure.

And thank you for staying so late and
presenting in class.

Some quick comment from Eric. I had a
similar issue. The only way I could deal

with fear of being wrong after I'm in
profit, fear of giving back profits is

to... treat part of the position as a
swing and take early profits and leave

main position alone and perhaps add to
it later, usually at the point I would

get stopped out by moving my original
stop loss too early.

I think this is a very sensible solution
to the, you know, kind of like that

campaign swing. I kind of do that as
well. Sometimes, you know, I start the

campaign position.

accumulate, accumulate, accumulate, and
then I see we're in an extremely

overbought condition, like, you know,
that sun power that, guys, we were going

through. So on that buying climax, you
know, I was selling into that.

And I was so excited selling that I sold
literally almost all of my position,

left just, you know, about 5 % of it.

So...

You could definitely do that and then
keep some, and then if this is a

find another place to add to the
position. So I really like that comment.

Thank you. Eric is asking, when do you
start selling this spreadsheet?

Okay, well, the easiest way, Eric, to
get this spreadsheet is probably just to

take the...

June special, which is the trusted
process, all of the spreadsheets are

available to you, you know, from that
special. That's number one.

But we could definitely, you know, ask
Teresa if there would be any opportunity

to share maybe like a pro forma, you
know, a blank copy.

I'm more than happy, yes, of course. I'm
more than happy to share with anybody

interested. Sounds great. I could post
it on the class

page.

That's absolutely fine.

And another question here, and this is
probably more for me, could we

crowdsource process information and
create a master process from Simon?

So trust the process was kind of like
that first step, you know, to create

master process. And then to...

Make it available to you guys for
individualization, so meaning

doing something what Teresa has done.

And Teresa has been working on this for
a long time.

I've been only partially involved in
this, just kind of like slightly

questions here and there, some sessions
that we had.

But as you could see, Teresa has
taken...

what I call a performer and has created
something of her own.

And this is where the benefit comes
because a lot of these fields might be

different for you guys, right? So you
might create it in a different way.

So as I've mentioned to you before, we
are in the last

stages of launching the new website.

I'm kind of excited about this because
we've been working on this for a long

time.

We cannot have all of the features that
we want there.

So after the launch, we're going to
start working on some of the

tools, triggering tools. One of them is
going to be the process itself.

So we're basically going to take this
type of the performer.

And I kind of wanted to test it during
this class, but I think that we're just

going to introduce it in this class.
We're going to talk about this. We're

to do maybe a couple of homeworks with
this.

But then starting from January, there's
going to be two homeworks in the

practical. There's going to be a bias
game, and there's going to be a process

game.

And the process game is going to be...

Kind of like a class accountability
where you guys are going to do your

homework like Teresa does.

I do the same thing. I have the same
kind of spreadsheet right now,

especially for something

where you have

a lot of decision -making. You have to
have that.

So one of the thoughts that I have is to
actually build it on the website.

Because I think it's going to be easier
and then you guys could store all of

your journaling results and we could put
the charting in there as well.

Kind of like make it a complete package.

How long it's going to take? I don't
know. Probably 2020.

Just kind of like...

looking at how the website was going.

But it's something very exciting. So
it's something that I still feel that

still developing as a community. So
let's just work on this in the next

and this semester too.

And Teresa, you know, this is just a
great step for us, you know, to start

engaging ourselves in the process.

So thank you again.

Great.

All right. I'm sorry, say again.

I'm happy to contribute any way I can. I
mean, I'm more than happy to share

whatever I can for all of us to benefit.

Absolutely. And I think that let's keep
in mind that we

could expand this presentation and maybe
to make it at a

larger forum, maybe like a student forum
type of thing.

This is the next big conference for us.

on the agendas or something like that.

I think it would be very valuable.

All right. Well, a lot of thank yous,
Teresa, from the guys, from the

I'm very pleased that they saw benefit
in this.

Thank you, guys.

Thank you so much, Teresa.

Thank you, Roman.

All right.

All right, guys.

That was a treat.

Let me switch this screen.

Okay.

All right, you should be able to see my
screen now.

Let's see where was time, 4 o 'clock.

Okay, great.

Let's start with the question.

Okay, this question comes from Dimitri.

What is the difference and how can we
distinguish between bullish feathering

action versus a not so bullish weak
laborious

rally?

Example of what I'm trying to describe
is the recent high highs and high lows

S &P with what seems like low
diminishing volume.

kind of a little bit out of the context,
but only because we know how the chart

is, right Mitri?

Obviously we would want to see the whole
structure, because we wanna see the

lags that are coming before that.

And looking at this reaction, this
reaction, kind of gauging as to what

supply we have, and what's going on. And
actually, in actuality, this is what we

should be doing.

do it properly so let me just put on the
chart really quick

here we are

and let's quickly revisit the definition
of the feather so with the

feather we want to have some kind of you
know final strength or significant

rally and then we want to have a deep
reaction

And that dip reaction is going to be on
increased supply signature.

And here we would usually be thinking
this is a trading range, like a backing

trading range.

Well, if the volume signature is going
to keep increasing, it would suggest

presence of the demand and absorption.

If absorption happens really fast here,
the next action by the price

It's going to be to come back to the
resistance and then to rest for some

around that resistance and don't go
down.

That's an element of strength. That's an
element of absorption.

And instead of the trading range, we're
actually getting this

absorption pattern that has a very
strong continuation.

Well, let me kind of show you examples
of this. Why am I saying kind of?

Well, because this is going to be very
interesting. And the first example is

right in front of your eyes.

You see it, guys?

Where is it?

If you see this type of absorption right
in front of you on the screen, tell me.

Again, we're looking for a very strong
rally, supply coming in,

absorption on the way up, and we're
spending a lot of time horizontally.

Major is asking, right now?

Well, yeah.

Here is this rally. It's just a
different, it's the same structure. It's

different, you know, timeframe, right?
So it's a huge structure.

And we're seeing some kind of supply.
Well, supply we're probably seeing more,

like I want to say that we want to see
supply somewhere here in that

you know, in the next rally.

But on the much, much larger scale, look
at how horizontally we're just

spending the time.

after this huge momentum rally.

So they bought in, COO bought in,

and then no real supply, no

real supply, no real supply, higher
highs, higher lows, and such a

condensed structure.

What happens?

After, you know, the structure
condenses. Obviously, expansion.

And expansion probably in the bias of
the previous institutional momentum,

was to the upside, not to the downside.

So I'm expecting, you know, quite a
significant rally from here.

Okay.

Another great example I love showing
about this concept.

of how supply is being observed that way
is an apple,

and it happens on the sign of strength
right here.

And the reason why I remember this is
because that was a mistake, a trading

mistake that I made. So, you know, after
the analysis, you know, it kind of

installed in my head that, you know,
this could be one of those scenarios. So

phase C.

And then we have a sign of strength with
the local climactic action, which goes

into small distributional range.

And then we see the increase in the
volume signature and an increase in the

supply.

The price goes down and that produces a
change of character. And we instantly

thinking this is a change of character
for the back and up action trading

Just because supply has increased a lot,
We're thinking that there should be a

retest of that, which comes later.

But when they retest, supply is so low
that

we are realizing that, you know, this
was not just increase of the supply.

That was also increase of the demand,
and demand observed, you know, a

predominant portion of the supply.

And with that, we are probably not going
to go into a trading range.

If absorption is going to be successful
and it's going to take some time, supply

is going to be so low that the price
will just drift up to the point

of the resistance and then we'll have a
momentum breakout.

In a way, that's what the price is doing
right now in the bigger markets because

the price is drifting up.

in the upsloping structure like it did
in 1999 before the big run -up in the

technology.

The weight on the news, still the
tariffs, still the Brexit,

still other Fed as the big known

that is being expected to behave in a
certain way.

So therefore, we have a bullish bias.

but we are waiting.

And once that wait is over, oh boy,
we're going to run away. And then

if that falls into the first quarter,
when the rally actually is underway,

about the money managers.

They're coming in into the new year.

2019 is done for them. They could be in
double digits for their P &L.

But now they have to match that
performance with the new year.

And how could you do that? You have to
quickly, quickly load up or have the

positions already in place that are
favorable for that type of advance. So

could be a potential buying spree in the
first quarter.

So here's that pattern.

Increase of the supply and then feather.

where supply and demand is diminishing,
supply has been observed, and then the

next bind is going to be on the momentum
up, on the breakout.

How is it different from, let's say, the
rally that has slow momentum or

slowing momentum?

Well, we could see it even from here.
Here is your rate of change. This is 21

for a month.

we could see how the trading structure,
you know, creates buying waves, right?

So there is this first buying wave,
second buying wave, third,

and then, you know, fourth, fifth, you
know, and

we kind of see that with time, the
momentum starts to fade. So for

In this instance, momentum is not
overcoming the previous high, so we know

this rally is weak and most likely we're
going to have some kind of reaction.

For instance, this part right here has
the divergence, so we're kind of seeing

that momentum is there, but not as
strong as before.

So we're expecting some kind of reaction
from here.

So those would be the moments where we
would say that in this

portion of the rally, there is a
conclusion to the demand presence.

This is the time when demand is starting
to go down and become of poor quality.

And that would be the main difference
between the feather and

the rally that is moving.

Let's say poorly.

I think, Mitri, I would insist on
another question rather.

So instead of thinking about the feather
and a poor rally,

I would be thinking about this in a
slightly different way. I would be

thinking about a poor rally.

And I also would be thinking about low
supply rally.

Both are gonna have the same character
where supply is gonna go down.

Both are gonna have the character of the
price structure where the price will go

up.

In the poor rally,

we usually will see intent to fall.

We will usually not see the commitment.

Whereas in the low supply rally, this is
actually just an ease of movement.

And with ease of movement, we always
will have the picture where the volume

going lower.

In our case, supply is lowering, and yet
the result is actually increasing and

making commitments above.

Why does this process happen?

Well,

the main thing here to think about is
that

institutions are providing...

aggressive spots for absorption where
they might have some

increased liquidity and they're coming
in and picking up whatever supply is

left.

And because of volatility, they have a
chance to pick up a significant portion

of the available supply in the market at
that time.

They've done it here on the way down
into the...

november december as well and we see
this from the volume signature how it

increased so they bought in somewhere
here they were buying on the way up

i would say probably up to maybe like
here still high volume

signature and then this looks like the
demand was not that great and look at

this portion of the rally it's the least
dynamic portion of the rally. So we

know that everything was done here. So
momentum only kept us

somewhere up to here, up to this moment.

This is where exactly in the November
special, I'll show you this simple trick

with the momentum.

How to define where reaction is going to
fall.

You usually want to see where momentum

At least the big portion of it, you
know, the aggressive portion of it ends.

This basically will tell you that, you
know, this is where institutions started

to say, okay, well, I'm at fair value.

Why am I at fair value here? Well,
because of this guy right here.

This is where they thought that, you
know, this was the fair value, oversold,

and then coming back.

So what are they going to do at the fair
value?

They're going to start buying.

They're going to say, we bought enough.

There is enough momentum to carry the
trend up. If the price comes back to

level, we're going to buy again. Price
comes back, and they're buying again.

Price comes back on more liquidity,
provides them with more opportunity.

They're observing this supply.

Price creates another liquidity
opportunity, which is smaller, and then

easier to observe again.

So what is happening here is we are
traveling up, and I

would be predicting that unless we have
some news, let's say

we have news on tariffs or

Brexit or Fed that are bullish

news. On bullish news, we will have big
bars.

But then on other days, we're probably
going to be traveling like this, at

in the first portion of the trend. I'm
actually expecting that after the kind

like a global breakout, not localized
breakouts for specific indices, but like

whenever we are, let's say, maybe like 2
% above, 3 % above on the majority of

the indices, the price is probably going
to go like this.

Just like small increments.

And what this process is showing us,
it's kind of like that, you know,

feathering up.

But at the same time, what happens
behind this process is that there is

absorption on the way up.

And they are still buying.

But they will be buying less and less
because their positions are already so

big.

non -evolvability of the supply that was
observed here and then again in

different spots.

It just creates that environment where
the prices are going up, and as they go

up, there is more pressure for money
managers to be fully invested. I mean,

conversations that I have for 2020 with
the institutional investors are

basically oriented around tactics.

if the market is going to outperform
significantly in the first portion of

how are they going to match that?

So it's a very interesting dilemma for
them at this point of time.

All right. Well, hopefully that was
helpful. I don't know whether, you know,

Mitri, I was answering directly your
question.

Mitri's comment.

I guess with all of the discussions
about synchronicity versus result, I'm

trying to make sense of what to think.

When there is not synchronicity, this
explanation helped. I will rewatch it to

solidify. I think, Mitri, the main idea
that I always tell students

about the ease of movement or a poor
rally or a feather is look at

what the price is doing.

Look at the actual commitment.

Identify those points of resistance, not
just on the local level, but a little

bit on the more global, and see if that
type of rally with poor ecologists could

overcome that resistance.

And that would be probably 80 % of the
solution right there.

Okay, great.

Okay, let's look at the bias game.

Okay, guys, can you excuse me for a
second?

I need to step out. But meanwhile, look
at this work done by Simon. I just want

you to kind of guys see what kind of
analysis Simon was doing here.

All right, thank you, guys.

Okay, so first of all, I really like how
Simon analyzes a

lot of the significant bars, and there
is all this label into the bars.

So that looks really great.

Also, Simon, I'm really liking how
you're segmenting the chart.

And I was wondering what...

how do you segment this based on what?

So that would be very interesting. I
would be thinking segments based on the

price action. Yeah, that's what I was
thinking. I was thinking segments that

have specific

common textures elements, right? So for
instance, I could definitely see how

this segment had a lot of momentum,
right? We could see this in the reaction

as well.

Then we definitely in a different
segment right here where reactions

are a little bit different, although
both of them look similar.

in the terms of the structure how the
structure develops with the higher highs

higher lows in the reactions as well and
then definitely a speculative run then

um okay segment four probably would

have also you know sub segments a lot of
volatility very high volatility uh and

then low volatility in phase b and then
yeah i would agree this was segment

number five

It's interesting that I have asked you
guys in the class last time

to give me your bias, and everyone said
accumulation.

So it's interesting to come back to that
thought.

What was the main reason why, from the
first

glance, that looked like an
accumulation, guys?

Can you identify that thought? Can we
come back to that thought and kind of

dwell on that a little bit and analyze
it? I mean, what were we seeing one week

ago in the bias game?

And while you're thinking about this,
let's go through some of the questions

here. So for this trading range and a
smaller trading range in the

reaccumulation, I found it difficult
identifying the phases if the chart

unfolded in real time.

In real time, I'd label it as per below,
but if I had a historical chart, I'd

label it differently, as I'd label it
backwards, identifying phase B, then C,

then B, and then finally A. How would
you approach this?

Obviously, in real time, because that's
what's interesting.

Right away, let's identify everything
first on the daily.

The fact that the price overcomes.

The points of resistance suggest that
this is a sign of strength, and then a

retest suggests a backing up action.

So therefore, the previous low to that
is going to be phase C.

The two points in phase B are going to
be the high and the low,

and then bind climax, automatic
reaction, secondary test.

Yeah, I would probably be thinking that
this was what it is.

But phase B here is not necessarily the
largest phase, which I don't like.

You could be thinking that this is a
small distributional range and then your

phase A kind of stuff here.

So that way your B expands a little bit.
That probably would be appropriate.

Having said this, I would really... uh
look into the intraday picture

of this trading range and i'm sure that
we would have found more volatility we

would find the structure here structure
here structure in the middle um and

together you know that might be a more
comprehensive trading range for us

there is less supply at b24

compared to b23

Does this mean price won't have any
issues moving up past this level at the

rally?

Okay, so this section right here.

Or supply has been exhausted, indicating
a successful test where price can now

be marked down.

Well, interesting. Okay, so we're
looking at the supply here at B23 and

comparing it to B23.

Oh, Simon, I'm saying B27 to B26, okay.
So let's retake this, okay.

B26 to B27, okay, got it.

So this, and then this, right?

Is that what it is, Simon?

This too?

Okay, so.

First of all, it's great when we are
finding the analog bars.

We could probably think about this also
being an analog bar, kind of like a

rally and then a doji type of bar.

This could be the same.

In a way, this is also the same bar.

more way extended, but it has the same
principle.

So we'll come back to this bar.

So you could definitely identify those
and it starts all right here. So you

of see all of these bars are having what
they're having increased supply

signature and then there is some kind of
reaction.

Increased supply signature and then a
reaction.

So this is just a stop in action.

increase supply signature, they are
selling into it. So just based even on

you could say, okay, well, they sold at
24, then they sold twice at

22, and then they started selling even
at the lower prices. And then on the way

down, you could even like think about,
let's say area like this.

So they are selling at this point.

It's the value zone of where they are
selling.

So the highest value zone where they
sell, and then they go lower and they

selling here, here, and then here.

Here's your next selling value zone.

So you would be thinking that every time
the price tries to

go up, it meets some kind of resistance.

And just based on that

resistance where you know that there is
some selling, you could make a

determination for the bias.

And obviously you see the selling in the
way how the price behaves on those bars

that Simon identified for us. And then
how the volume signature also confirms

the presence of supply.

And then you put two together, supply is
present, the price went up into the

buying climax, tried to do this again,
failed.

tried to do this again, failed, and then
the failures started to happen at the

lower level.

So the price did not even come back to
the previous level where it wasn't

counting resistance before.

That's a weakness by itself. So then we
have to look into this area as our

final determination here.

Okay, well, what do we see?

Again, this rally.

has this volume signature.

This rally is ending up in this volume
signature.

This rally ends up with this, and then
this rally ends up with this.

So there is, again, the same pattern
where a supply is present.

We don't even have to think about by how
much supply increases, although on the

last rally, we could say that supply
increased somewhat.

relative to what we've seen here
definitely a very exciting

bar to the upside and i think that in a
way and together with

how maybe uh in a way volatility
diminishes it kind of shows this cup and

pattern with the local higher highs
higher lows um you know gives us a

suggestion on the decreasing volume
signature that, you know, this is going

be a reaccumulation and we're going to
see higher prices.

Well, again, whenever you look at the
chart like that, that's the first

impression that you're going to get. And
I think that last week's answers in

this class shown us that the first look
at this stock could be very deceiving.

And usually we kind of go into our
memory bank.

And we based our first bias on that
memory bank.

And that's what we saw.

But I'm so pleased to see that
throughout the homework, a lot of you

changed your view.

And a lot of you have said, I have
thought about this, I analyzed, and like

Simon is showing to us here, there is an
analytical process as how he does this,

right? So bar by bar, segment by
segment.

And by the way, Simon was very, very
consistent throughout this whole

in his bias game because the process was
there, the process of how he was

analyzing it.

I want you guys to keep a tally on how
many...

hits and misses you have for the bias
game.

Last cycle when we did that, it was very
revealing for those of you who were

there in that cycle, you know, you guys
saw the benefit.

You kind of, and I told you at that
time, whatever the rate is for your bias

game, that's probably your actual real
no BS

type of

look at where you are knowledge -wise
and skill -wise.

And then this could be a very truthful
answer to you as to

whether you need improvement or not and
where improvement is needed.

So please don't overlook this. This is
very important.

Look into that rate.

Email me. You don't have to email me,
but... If you email me, I want to know.

I want to know what this is.

Okay. Well, let's quickly answer the
last question and go to the next

section of the bias game. This is a
significant bar to the

upside when we're assessing if price
commits above the last commitment to the

downside, which was here.

I assume this...

Okay, so I forgot, Simon, what was that?

Last LCD?

Last commitment down?

Yeah?

Last commitment to the downside. Okay,
so new acronym here.

I assume this loss commitment to the
downside is a significant bar.

Additionally, which significant bar, A,
B, or C to the downside are we using for

price to commit above?

We usually would be looking for the
close that would be

kind of like open and committing below
the loss commitment, the

loss support.

So this close is below.

the low of the previous bar, so we see
the progression of the commitment to the

downside.

Here, this is our support.

We don't have the close below.

We have the close actually above.

So therefore, you kind of have a dilemma
here.

Do you wait until the reversal of this
bar right here?

But we wouldn't be even thinking

about opening the position here, we only
would be thinking about the reversal in

terms of this is a buying climax, this
is an automatic reaction, we are waiting

for the secondary test.

This bar is a reversal bar. It does
reverse this last bar

to the downside.

But even though this is a significant
bar, it doesn't commit below, which

basically shows you demand is coming in
and there is some strength, you can

expect the rally.

Anything above the high of this bar, I
still would be considering kind of like

semi -reversal.

And then at the close of this bar, most
likely I would be saying, yeah, the

reversal has happened just because of
how multiple closes were reversed, four

last closes were reversed on a single
bar. That bar shows a lot of momentum.

Is it the most recent significant bar we
use? Yes, absolutely.

The last significant bar that we want to
use.

B23.

Commit below which bar?

B23. It doesn't commit below any
significant bars.

The closest is above.

All right.

Great. Thank you, Simon.

Let's go to the solution.

So this was advanced micro devices in
year

1997.

When you look at how the price unfolded
structurally, it kind

of makes a lot of sense.

Climactic run, very well defined.

Change of character.

Suggestions still reaccumulation at this
point.

There is really not a lot of structural
damage that we see here.

It's what comes next.

Deterioration of the demand.

And then we have some kind of ease of
movements where we're creating smaller

minor sign of weaknesses.

And then we definitely see a lot of
supply coming in on those volume spikes.

And even though this bar looks so
bullish, what do we accomplish?

Do we overcome the previous points of
the resistance?

Only local points of the resistance.

And then look at, after the commitment,
what the price does.

If we were thinking that this is a sign
of strength rally, and this is

specifically a sign of strength bar,
then what's the next action?

Well, indeed, we could have some testing
action.

Like think about a gap and then a test
in action after the gap or a big price

movement and then the test in action
after that was the continuation.

Well, here we could expect that maybe
for the first initial four or five days.

But then after that, as the price falls
through the whole body of this bullish

bar, we should be alerted.

to what is going on or what is not going
on. This is not how the price would

behave necessarily in phase D.

There would be a demand that would push
the price up and

there is none.

So the price just falls down.

Non -availability of the demand just
tells the story.

Okay, next bias game.

This is where you guys... Is that the

chart? Okay, yes, this is the chart.

This is where you guys are kind of like
on the cutting edge.

So Twitter doesn't know this chart yet.

And you have...

You have a heads up as to what's coming.

So let's think about this for a second.

I want you to give me the answer. What
do you think the bias is here?

I want you to write it down.

First answer is in.

All right guys, I just want your first
impression.

Don't think about it too much.

Write it down.

If I have to ask you,

You know, and you have to give me the
answer. Give me the answer.

Okay.

I'm just going to read those through.

Just keep going, keep going.

All right.

So we have...

One, two, three, four.

One, two, three, four.

Okay, so we are about, for those who
answered, we're about 50 -50 on the

redistribution and accumulation. So I
think that this is more in line of where

we are, just generally as a group and as
a class, like 50 -50.

And then we're kind of going through the
mistakes, learning the mistakes.

All right, guys. Well, this is your next
bias game. This is your next homework.

So you can find the answer on Twitter on

Friday, or you could just wait until the
next week, and we'll go through this

chart.

All right, next question.

Let me just look at the time.

Actually, let's come back to this. This
is going to take some time.

Let's quickly go through the market
update.

So really nothing here of big
significance. We are waiting for the

Fed for tomorrow to see if they're going
to cut the rates again. If they do,

most likely it's going to be 25 basis
points.

That's kind of like the consensus that
probably will propel

the market higher on the liquidity
availability.

And that should be good for oil as well.

This should be probably not as good for
gold. So I'm expecting gold to have some

kind of short -term decline.

We'll have to see about that.

VIX is staying still in the low part, so
there is no

danger so far.

We have not seen this since mid of
September.

And then Bitcoin, it's a very
interesting conversation now with the

Bitcoin. What does it really mean? What
technically happens?

So what did happen? We have a gap, and
now we are in a test.

So it's almost we are in the same
position as on that bias game where we

big, big positive news move up, and now
we are testing.

So think about the two scenarios here.
The most favorable bullish scenario.

is going to be a testing at this level,
not giving up any ground, and then

continuing to the upside.

That would be extremely bullish.

And then bearish would be just little by
little coming down and

eating up all of the gains that were
produced by these two days.

And that would be extremely bearish. And
we would see a continuation.

And I want...

to you guys to think about the Bitcoin
from the perspective of the trend,

because technically we're still in the
downtrend. So we had a reaction on a lot

of volume into the resistance.

We still have not overcome the previous
points of the resistance and not even

the one that where we have seen a lot of
selling. So the bias is still to the

downside technically.

and we just need to see how the test is
gonna develop.

Okay, let's come back to questions
later.

Let's look at the anatomy of the trade,
trade desk.

From Sean, I thought that was very
interesting. Sean was looking at two

of how, and let me see if Sean is here.
Sean is not here.

How the price ends its movement.

um in the swing so look at this
distribution look at this distributional

look at this distributional top so
that's what i'm kind of thinking sean

looking at and then the breakouts out of
those and how they're you know

different in a way so uh yeah let's look
at this um a little bit you know with

more details i love this analogy

Sean, because we are starting with this
stop in action that has the same type of

characteristics where the volume
signature expands and we are going into

overbought condition in the price cycle.

This one looked kind of similar as well.
Okay, and then we are going into the

trading range. We have that in all three
instances.

Out of the upthrust action in all three,
we have a sign of weakness.

And that sign of weakness is going to be
always on the increased volume

signature. And it's going to have that
type of bar that's going to be

like big spread expansion.

And also, we're going to start
committing to the downside in some way,

form below the different type of
supports like this.

like this, like this.

So they are similar.

Now what are the differences?

Let's eliminate this one right away
because as we're making a plate

lower low on the spring right here,
we're continuing to the upside.

So this looks more like a whole pattern
of the reaccumulation rather than a

smaller distributional top and then a
reaction to the downside so we're only

realistically looking at two and now
with both what do we see let's look at

first one so a lot of volume comes in
supply comes in reaction continuation

look at what happens next there is a
diminished volatility characteristics on

the way down volume is diminishing price
stabilizes and then reacts to the

upside and goes into the oversold

What do we see here in the second
example?

Increased supply signature and then
diminishing volatility characteristics,

stabilization of the price, and with the
retest, some momentum

coming in.

We see it also on the rate of change.

And suggestion here is what? Is that...

if this is the analog we're probably
going to do something like this

like this think about the market also in
general think about the leadership of

the market i mean this could be an
interesting spot but having said this i

that we need to discuss the actual you
know tactics here um you know are we in

the correct timing zone right now for
this particular stock

Ronnie was looking at TTD and he was

taking some counts here.

So this is one point reversal.

Is this a $2 box size, Ronnie?

Is this what, oh, Ronnie's not here.

I think so.

Two box size, one point reversal, yes.

62, 243 as an LPS, 179, and we are
hitting

that. Okay, great.

So PNF is showing us that maybe we have
some counts that were hit. I would be

taking the counts here, conservative
counts from the top up thrust up to this

point where supply has occurred.

So that would be the first one that I
would take.

And then this second count, I could
segment it, taking this count first and

extending it to this one, and then
including this one. So three segments,

two, and three.

Well, what I like about this reaction is

kind of the way where it lands.

Again, something that we will be
discussing

during the November special.

This will be the material for us.

If we look at the momentum, we're seeing
deterioration in the momentum signature

in the last, what, about six months or
so.

We have potential breakout here, and
that's why this is very attractive.

This is also attractive because we
recognize, and think about this, I

this whole price history.

Think about the price cycle, where we
are in the price cycle for this stock.

This was an IPO, original accumulation,
initial momentum up,

and then we go through a prolonged
consolidation.

smaller consolidations, distributional
overbought top here

as well.

And then this one right here.

So we are at this spot in the price
cycle. We are at the point where we

are touching a long -term oversold
condition.

And what would be those type of
characteristics that we would see during

this type of era, especially the first
times where

the price touches the Morgan average.

Look at the momentum, deterioration in
the momentum signature.

And then we go into somewhat of the
oversold condition.

And then we recover from that.

As momentum comes in, and then we are
producing a more meaningful sign of

strength, backing up action, and off we
go.

So I wonder what could happen here.
Would we go up right away,

and momentum would just carry us up, or
would we be thinking about some kind of

formation? And I think that's what we
need to figure out as a class.

You also could look at the relative
strength, right? So quite defined out

performance on both of the legs,
oversold,

oversold.

So we also need a signal like this.

All right, so with that,

And I'm not going to launch the poll.

So give it to me, you know, just based
on all of this

analysis that we have. And by the way,
let me just bring it up so that you

see the final price that we had today.

Okay.

So let's just vote and write it down.
What would you do?

Would you enter a position here?

Would you do nothing?

Those are the only two choices that we
have just because we don't have the

position yet.

So what do you guys think?

And we'll just go with that based on the
vote.

Okay.

All right, interesting. Okay, so we have
two type of

proposals. We have a proposal which kind
of dominates here. To do nothing.

And then also to open a swing position.

I'd be thinking also to open a swing
position.

I'm looking at this and I'm looking at
the way how the price,

how the volume and the momentum starts
to interact and this is something what

we're going to do in the November
special.

The price starts to move a little bit
better to the upside.

Would you say that there is more
momentum let's say on this rally than on

previous attempts to rally, like this
one, this one, this attempt right here,

yeah, for sure, this is where momentum
has increased. Even on this rally right

here, we see how the spread is actually
acting much better.

And then we see that in the momentum
signature.

And then with the new rally, again, off
the moving average, with

the increasing demand characteristics,
momentum is there.

So the volume that comes in

identifies the change in effort to the

upside, so it's increasing, not a lot
yet, and that produces two things.

We definitely have a change of
character, so this downswing is done.

And we could expect some kind of attempt
to rally. Where would we be rallying?

Very natural place for us, 270, 280.

That would be your swing trade.

I would take that.

I would not necessarily make it my main
position, but at the same time, I also

would be thinking, this is, on the price
cycle, is so favorable as a place.

We are basically here.

So what is the argument here for us not
to open the position?

Is it because of this kind of like a big
move to the downside?

But then what do we actually see there?
Do we see a distribution on this move to

the downside?

Is the stock being distributed?

So I don't see necessarily a lot of the
distribution. They sold in right here.

The price stayed horizontally. They sold
in right here. The price went up. So

that was absorbed.

Then the next time where the volume
influences the price is here.

So there was some selling at this top.
And that's why I think that the price is

going to encounter some resistance right
here.

But then after that, there's some
capitulation here, there's limited

capitulation here.

But all of this, this looks more like
buying.

And the actual selling was here and
here.

Something that influenced the reaction.

But on the way down, when you look at
how the price moves, this is

very laborious.

And then, up movement is a little bit
better and that is being reflected in

momentum so for those of you who said uh
a swing trade how would you

uh tactically manage this trade where
would you be coming in on the last part

or maybe in a different way

last bar okay why don't we do this for
those of you who said this is a

swing trade let's keep a track of this
that uh this was an open position right

here i'm going to assume the stop loss
is going to be just below 180 although

this is such a big stop loss another way
of entering this position is just on

the breakout local breakout this would
be a good place to enter you only have

see if you're going to overcome this bar
right here so you obviously want a huge

ball like you know maybe like eight
seven percent rise you know a bar like

a ball like that um that actually you
know produces you know a potential uh

momentum and you want to get before

this bar unfolds. So I think that if you
are considering swing position, you

know, Teresa at the beginning of this
class was talking about this intention

have a campaign stock and then turning
into a swing position.

Lately, I've been doing the opposite.
I've been doing like from swing to

campaign type of moves.

Why? Because there are some
opportunistic places where The market

type of value, and if the price is going
to go even higher from here, then this

is a very interesting opportunity. You
don't want to miss this.

But the way how you play it safely, you
open a swing position first, and then if

the price behaves the correct way, then
you keep it as a campaign.

So we can do that.

And for those of you who said do
nothing, I think it's still a prudent

just to do nothing.

You know, you feel that you don't have
any actions to take here, which is

totally fine. You are protecting your
capital.

But we'll see how the swing trade, you
know, how this particular swing trade

might unfold.

All right, some comments.

Increased effort on the second to last
bar with no commitment.

above its analog.

Yeah, I was just looking at this, Mitri,
so at this, right?

So we're looking at those two bars where
supply is actually increasing.

That's why we have the tail here.

Now the tail creates a higher high,
which is great because we're testing,

We're testing, we're going higher, and
we're testing. We are going into this

right here.

And this is where those tests of the
supply are gonna come.

And it came and then the next day supply
is very mediocre.

So that's actually a good sign.

Supply might come push the price back to
the moving average and then consolidate

a little bit more.

That would create more compression and
the move up might be.

much faster um but also i mean like
there's really nothing that happened

after the fly has come in so um we just
have to see it's not like what happened

here right so it's different

price could encounter resistance

at price area in mid -may supply bar mid
-may supply bar

okay

Yeah, well, we are right here, right?
This trading range was in that bar

So I think that we are trying to
overcome this right now, right here.

Okay, can you speak to the second last
bar? We had the bigger volume signature

compared to the last local high and no
commitment above that level. So I think

we've covered that, Eric.

All right, great.

Okay. Well, we have one swing position
and we have a long

campaign position that is not open.

This is where we are with the trade
there.

All right.

Thank you, guys. This is great.

I know where we are with that. Okay, so
let's come back to questions. We have 30

minutes.

All right, the question from Simon.

What volume signature should you be
looking for in the distribution phase?

For accumulation, we seek to see a
reduction in volume supply signature

phase A to C to indicate that supply has
been observed reduced.

For distribution, what volume signature
are we looking for to indicate that

distribution is complete and price is
ready to mark down?

I have some schools of thought, but not
sure which is correct. We check for the

emergence of the supply at the top,
swing highs.

Therefore, we want to see an increase in
volume to indicate that there is so

much supply that price will inevitably
go down.

This would be enforced if we saw lower
highs and lower lows being created on

increased volume.

We check for the reduction of the
supply.

We'd be wanting to see a decrease in
volume to indicate that supply has

been distributed.

Markdown.

Or at the swing tops, do we seek to a
certain amount of demand as opposed to

emerging supply?

That's what we're looking to assist us
that demand is exhausted and price

recommend markdown.

Both of these scenarios right here are
possible.

Usually, when we are thinking about the
distribution, we have to think about the

market participants and at what spots
they will be selling.

Therefore, different structures are
being created because of those

but there are some commonalities.

Into this trend, we would be expecting
that the value investor is going to be

selling. taking some profits or closing
out the position.

So supply will naturally increase.

In the stocks that were leadership
stocks, the

structure of the initial distribution
could take the shape of the uptrending

structure.

And then we could have some kind of more
common, more typical change of

character that will be associated with
the emergence of the supply where uh

institutional trend followers or
momentum traders will be giving out uh

giving up their positions and that would
increase the supply and then as we can

see in value here they're picking this
up and that would create another

structure and then this structure we
could see that maybe co is done

And just because of its own weight, the
volume signature might go down and

by its own weight, the price will start
dropping up and then the volume is going

to start increasing on capitulations by
later hands.

So there are quite a few variations as
to how distribution could unfold.

The key is just to recognize the
presence.

of the distributional hands and usually
you will see this it will be hidden from

you in the volume signature and how the
price behaves buying climax will be

associated with that increase in the
volume signature that will look very

bullish price is advancing and the
volume is expanding so naturally

from the conventional ta we're going to
say that

Volume increase confirms the price
increase.

But that's not going to be so for the
last climactic run when we see

the same character of the increase of
the price and increase of the volume

signature.

So this type of action in this type of
context would define the initial selling

by the value investors.

And then throughout the structure, you
know, if let's say distribution has

happened by the CO in the first part of
the range, then it could become very

dull. And we kind of see this from a lot
of the distributional patterns that are

apex.

where there is an active distribution by
institutions in phase A and early phase

B, and then they go away because they
don't have any position.

As they go away, price drifts in
uncertainty and then goes

down. And as the price goes down, that's
when the final capitulation happens.

What we need to do is to recognize this
type of behavior and then think

opportunistically as to how to take
advantage of this. For instance, when we

recognize that the value investors were
selling into the strength, we could take

a trade on the change of character.

When we see that COO is inactive, we
would be...

anticipating the continuation of the
trade to the downside, and we would act

opportunistically as well.

What would be examples of such behavior?

Let's start with the first one, where we
are seeing some

value selling into the context of the
uptrend.

and into the overbought condition.

So we see a lot of the bullish
characteristics where the price spread

and the price travels up, but behind
that volume signature, we already can

observe that some supply is coming in
and it's stopping the price from moving

aggressively up at this point.

So our point here is to capture

The first change of character that's
going to have the momentum

That was my hedge trade in gold. So I'm
campaigning gold from these levels.

But I hedge right here.

And then there's going to be a period of
inactivity.

And here it is. So the price kind of
goes into the apex formation.

And hopefully we're going to have that
continuation.

I'm already in this position
anticipating.

you know, that short hedge.

I still have long GLD. I'm long GLD.

I did not buy any stocks. I just bought
the ETF, the index.

So this is just the way of campaigning
and trying to figure out how to

keep your equity curve for that position
much flatter during the times when you

have... a reaction in the campaign like
this um so it's long -term investment

uh combined together with uh short -term
trading so that would be

an example like this um another example
where you know this inactivity by

institutions are very evident was right
here and was right here in the bitcoin

Inactivity, inactivity, and then that
leads to the capitulation because there

no money to be made when the price does
not do anything, so institutions will

try to get out, and as they are getting
out and capitulating, that would produce

the momentum.

All right.

In WTC, did you not tell us that we can
only confirm distribution in phase D and

not earlier from ARVIN?

ARVIN, not necessarily that we would
confirm distribution only

in phase D.

Sometimes distribution will become more
evident in earlier stages if

specific formation unfolds. So think
about...

a hypodermic structure, right, where we
have a lot of speculation on the way up.

By the virtue of speculation itself, you
know, we would be thinking that

this is an extreme behavior, an extreme
overbought behavior, so we probably

would have the urgency to sell pretty
quick. So we would be on the lookout for

this type of structures and how market
participants behave.

If we see something like this, we would
be thinking that

we don't necessarily have to even
confirm that we are in phase D.

In the hypodermic formation, we could be
in phase B or we could be in phase C

and already be thinking that this is
going to be a distribution.

In another TPU family formation where we
have

initial move to the downside that is
significant that it's up all of the

of the last swing and then the price
goes into the type of apex formation

we would see the urgency by institutions
to sell

and they would be done at this point
they would be out

the volume signature would increase so
significantly and they would sell on the

way down.

The value would be found by weak hands,
and they would be biased, and that's

what would produce that first volatility
to the upside.

But then after that, COO is going to be
inactive, and as COO inactive, nothing's

going to happen.

That's going to trigger ITFs to see the
deterioration in

absolute performance and in relative
performance.

which will lead them to unloading of
that position.

That will produce a move to the downside
on the increased volume signature.

And because of that volume increase,
momentum is going to increase to the

downside. So therefore, it's kind of the
same way how the distribution unfolds.

We really just have to figure out the
top part, right? The bias and the

The timing is much easier because we
could use synchronicity. We could use

timing on phases.

We could use structural things where we
see the commitments to the downside and

less commitments to the upside. We could
think about the structure in terms of

the events as well.

So there are quite a few ways to think
about distribution.

But in some cases it will be more
evident even in phase A that this is not

reaccumulation but a distribution by the
way how the price behaves in phase A.

And in some instances it's only until
phase D that we would have to wait.

Okay, interesting, Francis saying beyond
mean. Okay, let's see.

That was on my list of stocks to look at
today.

Here you go Yeah,

so this area right here, I would
probably even just try to look at Do

that not put on yeah here we go

Well, I think it's gonna be an
interesting stock of

a year from now.

Why? Because, well, there is a lot of
interest that we see in the stock, and

there was a lot of speculation, so
that's going to be a speculative stock.

But for now, we are not interested at
all. For now, this is not an

stock. For now, it's only opportunistic
to the downside if you're looking to

short the stock.

And this is actually a really good
opportunity to short because... The

is just unwinding on the downside and
all of those players

that were getting into the stock,
they're slowly getting out.

How were they getting out?

Value investors were getting out here,
here, here,

and here.

And then they were done.

The only other time when they occur on
the same and was here.

Here.

This is a late capitulation and I would
be expecting that there's gonna be some

kind of more general capitulation from
here as well.

Please note that once they sold into the
strength, you know, and Franz, thank

you for this example because that's
exactly what I was describing.

Right, so.

selling as value investors, and then
being inactive,

and then pushing the selling again, and
that's what produces this. This was a

really good short.

This was a really good short right here,
then here again.

I was not looking at this.

That was a very easy short, just the
whole story.

This looks like a cannabis stock, like
ACB.

Let's look at cannabis stocks.

Yeah,

I was trying to get in into those stocks
and I was trying to do it

right here.

Well, you guys know because we were
trying to do that.

Yeah, and that was just...

not there. So we would be thinking that
the value, I mean, somebody who

was buying before probably getting out
somewhere here.

And then inactivity, inactivity, yeah, a
mistake

right there.

We'll have to think about that.

I think it's just because of the large
structure in general. Those large

structures are much, much harder to
think through.

Okay.

All right, let's see what else we have
left.

It was, I think, one or two more
questions. Okay, so from Ronnie.

Log scale versus non -log regarding
change of character when looking at

Reason I ask is that sometimes when
looking at charts in a non -log scale,

seems to be a change of character is not
a change of character. And when

switching to log scale, is there a rule
of thumb to when to use it? It's

kind of interesting because I was
discussing this today with somebody.

Okay, so let me just think about this
talk. I'll just come back to our trade

view.

Okay, so let's put it,

you know, so let's look at the change of
character,

right? So where are the changes of
character here? The change of character

here, here, and then here.

So obviously the price goes up, right,
from $20 to 280.

So the percent change.

is so different. Here, this is a 100 %
change.

The same travel on the chart itself is
only 20 bucks

on 260, which is what?

About maybe what?

Less than 5 % or something like that.

So it's a different scale based on the
percent.

And obviously, that would produce some
kind of hesitation if you're looking at

the changes of character this way.

Having said so,

you know, you could do this.

You could be thinking like, okay, let me
just look at the change of character

from a different perspective. I want to
look at it.

and just to figure out what was the
impact here. So from 65 to about 40, so

that's $20, so minus 30%. So this first
change of character, which is the

significant change of character, you
kind of understand what kind of

into the deep oversold condition you
might have.

When you go to the next change of
character,

you can analyze it the same way.

You could be thinking here, okay, what
is this type of change of character

relative to this one?

Let's say just price -wise, 160 to 100,
that's about 30 % as well.

So what is different then?

Nothing, right? So you're kind of
thinking that this is probably okay.

Now, this latest change of character
that we have had from 280 to 180, and

again, it kind of feels that this is
minus 30 % or close to that. So there is

really nothing yet that has changed
drastically.

Then you want to compare, obviously,
each changes of character to what kind

supply signature and what kind of
texture we have here and what came

So looks somewhat similar.

Okay.

Okay, Ronnie. So the rule of thumb is
when you look at the changes of

character is probably start with any
chart that you use and then go into more

detail and look at the changes of
character in each of the reaccumulation

compare those.

Compare those on the percent basis.

Compare those on the volume signature
basis. Compare those also on textual

characteristics. How is the spread
behaving relative to what we've seen

What kind of development we have after
those changes of character? I think it

would be very telling.

Okay, and I believe there is one more
question, and then after that we're

to stop.

Okay, I've watched the WTC webinars and
I'm still a little confused regarding a

change of behavior and a change of
character.

My definition of the above are as
follows. Change of behavior in the

the uptrend. This is when the reaction
behaves differently to previous reaction

in the prior uptrend. Increased price
spread, deeper reaction magnitude.

Correct.

Change of character in the context of
the uptrend. This is when we observe the

structural change.

For instance, price moves from the
uptrend with the change of character

confirmed only when the secondary test
is observed.

Correct again.

Question. In the above bias games,
during your explanation, you advised of

changes of character and changes of
behavior as per chart annotation.

I thought change of character annotation
was the change of behavior.

as this is the reaction and will not be
observed in the prior uptrend.

Traditionally, we've not observed a
secondary chance to confirm a change of

character. Okay, yeah, I understand the
question.

And I kind of use it sometimes
intermittently, but here I think it was

because I was identifying a change of
behavior and I was talking about the

change of character.

A change of character is going to be a
structural change.

That's the main thing to remember.

So again, how does change of character
came about a

change of behavior?

So Hank in our GGU classes talked about
a change of

behavior.

This is not necessarily the acronym that
he used. He was just talking about the

change of behavior. And when I talked to
him about this concept, he usually

would talk about change of behavior in
late phase B.

It's in late phase B where you have,
let's say in the accumulation, the

that are going to show different
characteristics like momentum increase,

demand increase.

And that would be considered a change of
behavior from what he could have

observed in the trading range before.

The change of character, the concept
that...

was intermittently used with the change
of behavior.

And there was no really like a very good
determination as to, you know, what one

is and how they are both different.

So change of character was very easy to
kind of nail in the sense because

change of character suggests that we
have different type of characters

with which the price moves.

A downtrend, a consolidation, an up
move.

And they usually, those environments or
characters

are going to change as we go in into
different environments.

So we needed to identify behind the
change of character terminology

that changes the structure.

And it was not a change of behavior. It
was not a single rally.

it had to be confirmed by some

kind of test.

So therefore, we had an automatic rally
and secondary test

as a structure of the change of
character process itself.

This is a true change of character.
Having said this, on the automatic

are gonna have a change of behavior.

Why would we have a change of behavior
on this rally? Well, spread is

increasing.

Volume is increasing.

Demand is increasing.

We might have some gaps to the upside
and so on and so forth.

Those are elements of the change of
behavior.

Instead of selling, now they are buying.

But if they are buying, has it changed
the structure itself?

We might have situations where some
buying are not necessarily going to

a change of character.

It just produces a temporary change of
behavior that later fails.

So we really need to see the
confirmation where the secondary test

the price goes up instead of failing.

And that's the biggest distinction here.

looking at here, right, in terms of the
changes of behavior and changes of

character. So we have very obvious
change of character here.

Why? Because all of the previous
reactions are smaller, so therefore a

character where we are going down, we
are going up, trying to retest, and we

can't. That kind of identifies phase A
in this range right here.

But then we could say that a change of
behavior is happening here on this

rally. Instead of each rally producing
the new high, this upthrust rally

is not. And that's a change of behavior.

And then another change of behavior,
instead of going and producing more kind

like stable reaction, we actually have a
reaction where we have a lot of supply.

So that changes the whole outlook for us
on the whole thing. And it's not

structural yet. We would have to have
this and then a very weak rally and the

continuation to say that this was a
change of character.

Instead, we have a change of behavior,
and yet we are seeing a move

to the upside here.

Okay.

Eric is saying, and I like this, I
understood that the change of behavior

like a warning that potentially lead to
a change of character. So in a way, yes,

we could say that, let's say, a sign of
strength rally is going to have a change

of behavior characteristics, but it's
only after the backing up action and

confirmation that the price actually is
going up. This is where we are going to

have an actual confirmation that the
structure has changed.

from a non -trending environment to now
a trending environment.

And that's your change of character.

Change of character is this.

Change of behavior is the rally. Change
of behavior is the reaction.

Okay, good. I like those simple
questions where we have to think deeply

why this is the concept and how it
unfolds.

All right, guys, so a homework for us.

Obviously, the anatomy of the trade.

So for those of you who are in the swing
trade, in the trade TTD, make sure

that you analyze the trade.

Send me your analysis.

For those of you who are not in this
trade, well, just keep observing it.

And then, obviously, a bias game.

This is the slide.

This is the trading range that we look
at. We are 50 -50 as a class on the

redistribution or accumulation.

Go through this.

And what I kind of want to see is you
guys, like with Simon,

start creating the process as to how do
you analyze the bias.

I've given you the process in WTC.

where I ask you to go through the bar
analysis, through the swing analysis,

through the price structural analysis,
and through the market participants

analysis, kind of like the Wyckoff
story.

So try to engage yourself in that
process where you're thinking about

all of those elements.

And let's see where it's going to bring
us.

All right, guys.

I think that's it. Let's look at the
last talk, last request, and then we'll

adjourn.

Okay.

Again, look at the whole story, right?
Don't look at just what happened

just recently.

So obviously, you know, kind of the same
idea here, right? As we were

talking about the TTT, but slightly
different.

Why is it slightly different?

Okay, so we see here it touched with the
moving average.

We kind of are thinking about this
place, but the way how the price behaves

you know, somewhat different.

So we could see that this

is a little bit dramatic move to the
downside. There are some elements of the

stop in action, but the way how the
price moved down is somewhat different.

Let me go back here.

Look again at TTD.

How does the price move? Is there a lot
of aggression to sell on the way down?

Just one bar maybe in the middle,
nothing else.

For the cyber arc, it's a little bit
different.

Look at how much selling we have here.

Selling, selling, some pickup here.

But what kind of rallies do we have?

This is very mediocre.

And we are kind of trying to be below
the long -term moving average.

So I'm not sure if this is similar to
TTT, unless it

starts proving that it could go up.

So I would be on the lookout.

There's definitely some value selling
into this trend, and then you have this

unwind by the trend followers.

I would need to see some kind of more
confirmation, like a really good bar.

although I like how the momentum is
starting to trend out actually

yeah so more selling here less

selling here what was being sold only
here this is demand holding up

actually if we're gonna have a ball like
this that's gonna be an interesting an

interesting point of view let's look at
the log

and see how that looks.

So it's such a huge causality that we
have had in the stock for quite some

So that requires some time to unwind. I
would be thinking that even though this

was a very significant reaccumulation,

We are probably just, you know, still in
the much kind of like larger

uptrend, this short term weakness.

I mean, if it's going to fail, then
that's it. We are done with the price

But if it's going to try to continue
going up, then we could be still in this

larger cycle here. So we need to figure
out the conditions here.

Are they going to be more bullish or are
they going to be continuously bearish?

Momentum will have to break out because
out of those short -term conditions,

again, we're going to look into this in
the November special.

Like right here, you want to see that
breakout.

Here, breakout.

So if we have a breakout on that type of
bar, that could be, you know, a pro

position with expectations that the
price could go up. But I would

here I would definitely wait.

All right. Okay, guys.

Why don't we stop here?

Why don't we stop here?

Yes, good session. I liked it too.
There's a lot of information that we

through. kind of a lot of spots that we
thought about, you know, in kind

of like a deep way from different
angles.

So keep inquiring, keep being
inquisitive, send the questions, you

the charts, think about the charts,
think about what kind of questions you

about the charts. The more questions we
go through, the more knowledge we

accumulate. So the better we are as a
community.

All right, guys, thank you so much. I'll
see you next Tuesday.

Bye -bye.