Original subtitles

Analysis of the current situation.

The following part of the course we are about to begin addresses the second part

of our trading plan, the analysis of the market situation.

To do this, we will look at concepts and ideas that will help us determine the

trading bias in the short term.

These will put us in a position to make sound predictions about what the price

is most likely to do.

Let's get started.

Labels? No.

Context? Yes.

All the theory we can study about the Wyckoff method is essential learning if

want to master this approach and truly understand how the market moves.

But the Wyckoff method, or my way of understanding it, goes much further.

It's not just about the almost robotic labeling of a chart and leaving it at

that. At this point, we should already know what underlies each event, how

behaviors are generated, and how they are represented on the chart, the

psychology behind each one, etc.

But as I say, the method is much richer than that.

I say this because due to the very nature of the market, it is practically

impossible for two completely equal structures to exist.

For two exactly identical structures to occur, the same traders must be present

at both times, and what is even more unlikely, they should behave in the same

way both times. Let's face it, it's impossible.

Although it is true that we see textbook structures daily, which can very

closely resemble the classic examples, in most cases the market will develop

less conventional structures in which it is much more difficult to identify

these events.

Therefore, it is essential to look not for exact copies of these events, mainly

the end -of -trend events that make up Phase A, but to focus on the importance

of the action as a whole.

We will probably come across many charts in which we see the end of a trend

moment and the start of a sideways process.

but we might not be able to correctly identify those initial end of trend

events. In these circumstances, we might dispose of an asset and miss out on a

future trading opportunity, which would be a mistake.

As I say, the important thing is not whether we can precisely identify those

events that generate a change of character, but that the market has

generated this prior end of trend event that it is now moving sideways.

This is the key.

Look at the example.

we see that the final result was a bullish trend.

But what was the accumulation pattern like?

Well, certainly erratic.

Where should I establish the end of the trend events?

Which of those I mark is really the selling climax, the automatic rally, and

secondary test?

Honestly, I don't have the slightest idea.

And this is where the importance of really understanding what this Wyckoff

method is about lies.

What interests us is that the market was falling and has now stopped.

that it has gone from a bearish trend state to a sideways state where a cause

being built up.

This is the prevailing context.

From here, we need to decide the intensity of the signals that we are

determine the trading levels that we are going to take into account depending on

whether we want to trade long or short.

As we can see, this chart left several trading opportunities for going both

and short.

As we can see in these examples, Although these structures don't look

like the classic ones we have been studying, if we were to open a chart and

ourselves at the point that I have marked with an arrow, it would not be

unreasonable to assume that an accumulation process has been developing

It might be more or less difficult to identify the events of the methodology,

but we can objectively see that the price has been rejected at a certain

on several occasions, and that it has finally managed to break out and

itself above it.

This is the key.

If we really tried, we could probably label each and every one of the

but I repeat, this is not of prime importance.

What is important about the methodology is the underlying logic behind it.

For the price to rise, there must first be an accumulation, and for it to fall,

a distribution.

The way or manner in which these processes develop is not a significant

Here, we have another real example involving Bitcoin.

although somewhat more authentic than the other example seen previously.

Climaxes can raise doubts about how best to label them. As I say, the question

is not about labels, but about understanding the underlying events.

And what interests us is identifying the idea that a change of character has

taken place, that the market dynamic has changed from a bearish to a sideways

movement, from an environment where sellers were in control to one where

equilibrium has been restored.

and where we don't know where it will move next.

In the final part of the development of the structure, we see that for a long

time it is incapable of reaching the top, which in principle we would treat

sign that denotes weakness, as buyers cannot be strong enough to send the

to those high price levels.

And what suddenly happens? Well, a powerful bearish breakout develops, with

volume and a violent show of strength, which finally unbalances the price

upwards, confirming the pattern as a distribution structure.

This is the nature of the market.

When you think that the majority of the signs you see in the chart are bearish,

suddenly, a false breakout can occur that changes absolutely everything.

This is why the false breakout is the most important event that we should

look for in the market.

This approach requires a very open mind. It is enough to make your head spin.

But it is what it is.

Luckily, we do often see the classic structures.

But the continuous interaction between supply and demand means that these

processes can develop in an infinite number of ways and we have to be

to observe them.

Rather than thinking about labeling each and every price movement, we should

focus on trying to determine who is most likely to be in control of the market

according to the signs we observe and based on the theory we have studied.

We should start to be more aware of the forest as a whole rather than a

particular tree.