Original subtitles

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.