Original subtitles

Proportionality of Movements Any issue that involves a certain amount of

subjectivity provides a constant source of doubt for Wyckoff method craters.

This aspect of proportionality is one such issue.

This part of the course will address how we should properly evaluate price

actions based on the time the distance consumed by the current movement

to previous movements to try to determine whether they are in harmony.

This will help us decide what to expect next. On this occasion, When we talk

about proportionality, it has nothing to do with the proportionality of the

phases, where theoretically phase B should last longer than phases A and C.

In this case, I am referring to the variables of time and projection,

specifically, the time consumed and the distance covered in relative terms by

the movements in order to validate these.

The key is relativity, the comparison between the current and previous

movements.

This problem tends to arise almost exclusively when it comes to analyzing

anatomy of a correction with respect to its previous momentum.

More specifically, with regard to the Wyckoff method, it usually occurs when

looking for the test after the breakout movement.

Let's look at the chart in the example.

Should we assume that the BUEC or test after the bullish break has ended there

and accepted as valid?

As we already know, in the market, anything is possible.

So, this might well be the case.

But the fact that it can occur doesn't mean that it's normal. And our advantage

also lies in looking for those behaviors that appear more regularly in the

market.

But if we analyze the appearance of the previous movement, both the time and the

distance traveled seem to be greater.

Let's look in particular at the corrective movement.

As we can see, from the highs to the lows, the two behaviors are totally

different. The lower one, which is the one we should take as a reference,

travels a greater horizontal and vertical distance.

That is, it has greater depth in terms of price and longer duration in terms of

time.

Meanwhile, the potential test after bullish break travels very little

both in price and in time.

As I said, sometimes we will see that a small and brief test like the one in the

example will be the genuine BUEC that will confirm the structure as an

accumulation and will start the imbalance that sends the price out of

especially in assets that denote a lot of underlying strength.

But in the vast majority of cases, this will not happen, and the market will

take a longer time to develop this type of behavior.

And as we see in the final outcome, this principle of proportionality was

fulfilled, with the market continuing to develop the corrective movement before

initiating the subsequent upward imbalance.

This example is especially interesting as it almost exactly matches the

horizontal and vertical distance traveled.

I personally think this is a coincidence, but hey, maybe there is a

behavior in which these movements are respected.

I'll leave this analysis and investigation to you.

We should not necessarily look for the exact same proportionality in time and

price. We already know that, due to the dynamic nature of the market, the same

concept may be represented in a different way.

If the correction is not comparable in terms of projection, because it does not

go back the same distance in terms of price, it should at least be comparable

terms of time.

This would also indicate a certain harmonious behavior.

It may not cover the same vertical distance, but our flexible mindset

enable us to see this action also as proportional, having covered a

horizontal distance.

We do not need to expect it to be exactly, mathematically the same.

As with many other concepts, we need to apply logic and common sense to our

assessments and analysis.

and a very useful recommendation to ensure we apply this logic is to never

the analysis.

If you have any doubts about whether the correction is proportional enough, it

most likely is not, so hold out.

This is the key.

It should be visually significant enough so that you don't have to think too

much about it. From a trading point of view, we should use this concept so we

don't enter the market early in this context.

If we see that the market may have developed that test, that we were

after the breakout.

If it raises doubts because it seems too brief and not especially harmonious,

instead of immediately entering the market, we should wait for a little more

time to be consumed so we can determine the proportionality with respect to

previous movements.