All language subtitles for 1. How to predict sound scenarios

How to predict sound scenarios.

Once we are clear about the market
context and we know the type of strategy

we are going to try to execute and we
have identified the location where we

wait for the entry trigger, it is time
to predict the scenario.

This section has to do with the how and
covers all the reasoning from the moment

we determine the context and identify
the trading zones and levels until the

moment we enter the market, at which
point we will begin to apply position

management techniques which we will look
at later on.

Thanks to the roadmap that the
methodology offers us, the basis for

sound scenarios is that we should only
try to predict a single movement and

never anything beyond that.

This means that if we see that the
market is in the middle of building the

during phase B, we shouldn't even
consider any type of scenario because we

know what is actually being built.

There are many traders who, when looking
at a chart like the one in the example,

would at that precise moment suggest
that the most likely scenario is a

redistribution. How is this possible?
The only explanation is that they have

absolutely no idea what they are doing.

It's not Wyckoff.

A trader who really understands the
fundamentals of the methodology would

predict such a scenario.

At most, they would accept the
possibility that the price might break

the highs of the structure, but they
would just as easily accept the

that it could break through the lows. In
other words, There is no point in

trying to predict a scenario of this
type.

And the worst thing is not the
prediction of a potential upthrust

The worst thing is that it is
automatically assumed that after the

price is going to break the structure
below.

It is going to carry out the test after
the real breakout, and it is going to

develop a new bearish movement
confirming the entire structure as a

redistribution. This is a good example
of what you should never do.

The why has to do with the reasoning
that we discussed at the beginning of

course on the adaptive market hypothesis
in which different types of

participants coexist all with different
needs, valuations, and capacities.

All this leads to an environment of high
uncertainty in the market, almost to

the point of randomness. So predicting
this type of scenario without any

foundation makes no sense whatsoever.

As we have already commented, and
applying this logic to what concerns us

With respect to market movements and the
development of structures, we should

always take into account these two
aspects when predicting sound scenarios.

We don't know the intention of the
traders who are supporting the current

and we don't know if the traders with
greater capacity might suddenly

and cause the market sentiment to shift.

Let's imagine that the market, for
whatever reason, listens to that analyst

predicted that hypothetical scenario and
makes an initial movement to the top of

the structure to interact with the
liquidity zone.

No one can know what will happen there.

What if an accumulation cause has been
built and it effectively breaks upwards

out of the structure?

We can't possibly know.

Technical analysis in general, and the
Wyckoff method in particular, is a

reactive approach.

Therefore, we cannot make decisions
without having previously seen what is

happening in the market.

Before it happens, that trader in this
example is already suggesting that the

market is going to confirm the upthrust
at that point and send the price

downwards. Based on what?

As I say, approaching scenarios in this
way has nothing to do with a correct

application of the Wyckoff method.

And in this position, we face the same
problem.

Why would the market break out of the
structure and generate the test that

lead to the downtrend?

Perhaps the shorter -term traders who
were supporting the last bearish move

used that liquidity zone to close their
positions and exit the market.

At that point, the downward pressure has
eased and the market's reaction will

most likely be to go up due to the lack
of interest on the part of those traders

to continue pushing downwards.

Why would this be the only possible
scenario?

And note, I am questioning this after
having seen the bearish movement, which

would make even more sense because the
roadmap at that point would already

suggest the appearance of an upthrust
and a sign of significant weakness that

has managed to break the structure at
the bottom.

But even so, we must never only look at
it from one perspective.

We must continue to actively assess the
behavior of the market to see if the

signs continue to favor our scenario.

The problem is that the analysts who
predicted this scenario did so at a

where they had absolutely no basis for
doing so.

That is the difference. As I say, if we
are at that point after having seen the

false breakout at the top and the
downward movement, the predicted

would have been the right one.

But it doesn't end there. The worst
thing I have ever come across is

like this.

Right at the same point, somewhere in
phase B, some traders would already

that the market is going to develop an
upthrust plus a sign of weakness that

will take the price to the lows of the
structure, from where it will develop a

spring and then a sign of strength which
will lead to a real breakout of the

structure and will be followed by a test
and bullish continuation out of the

range. Come on, this is complete
nonsense.

I hope that these examples have shown
what you should absolutely never do.

The Wyckoff method, with its analysis of
the context and its roadmap, forces us

to predict sound scenarios about the
next movement, never beyond.

Based on what the price has been doing,
we can assess the probability of a

certain movement developing
subsequently.

And when that movement ends, we will be
in a position to predict the next one,

and so on, without ever getting ahead of
ourselves.

We don't want to try to guess anything,
but rather to react quickly.

Only when the price is in a position of
potential spring, and this is confirmed

by our analysis, we will predict the
scenario of a possible upward movement

takes the price to the opposite end of
the structure, and if it breaks out,

better.

And only when this movement develops in
the way we expect it to, can we then

predict the next correction back to the
level of the broken structure, and wait

for the break and retest that will give
us confirmation.

And when we are in a potential BUEC
situation, if the signs continue to be

our favor, we can then predict the
subsequent trend movement outside the

but only at that precise moment and not
before, at least not with enough

assurances.

This is the dynamic we should follow.
It's not about inventing anything.

It is simply about following and
evaluating the price action and volume

time. to determine what the next
movement is most likely to be.

The why is simple, and the reasoning is
found again in the underlying logic of

the adaptability of the markets. We do
not know the intentions of the traders

that are supporting the current
movement, nor do we know if traders with

capacity might intervene at any moment.