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Scenarios of one or two movements.

Depending on the current location of the price, our scenarios will be made up of

one or two movements until we reach the trading level, where we will look for

the entry trigger.

When predicting scenarios where we only need one movement to happen, the price

will already be aligned with our plan, so we just need to wait for a simple

action that will drive the price towards the trading zone.

Meanwhile, scenarios of two or more movements will appear in those

which the price is not yet in a position where we can immediately look for the

entry trigger.

We will need to see that the price first develops a certain action until it

positions itself in favor of the trading level so that once there, we can

predict the scenario involving the movement that we would need to see for

reach the trading zone.

We are now going to look at some examples of all the trading zones that

previously studied.

so that we are really clear about the logic behind each of them let's start

trading zone number one in which the price is in the middle of developing a

trend our strategy here will be to apply the concept of a reversal movement in

this context and applying this strategy we are simply going to wait for a one

movement scenario we have previously seen the downward impulse movement and

since we know that markets move in waves of impulses and corrections The key

here will be to wait for the market to develop the correction upwards so we can

start looking for the entry trigger immediately, applying the concept of a

reversal movement.

The appearance of the SOW bar, which confirms the reversal, puts us in a

position to wait for a potential bearish movement subsequently.

This is the context and roadmap when applying this strategy.

I personally consider it a somewhat risky strategy to trade directly after

appearance of the renewal without waiting for anything else.

but it can be useful in a high -speed context.

Looking at trading zone number two, when we are in the middle of the development

of a trend, if we want to apply the fast pattern strategy, the predicted

scenario will involve one or two movements depending on where we are.

If we find ourselves in this first situation, where we have already seen an

initial bearish price reaction, we simply need a single upward movement

takes the price to our trading zone, where we would expect to look for the

trigger. In this case, we would wait for a false breakout at that previous high

to take place before considering entering short.

This is the one movement scenario.

If you think that you won't be in front of the screen when that potential

movement occurs, my recommendation is that you set an alert right in that zone

so that it will notify you if the price finally reaches it.

And this is the two movement scenario.

Same situation, same strategy to apply.

but at an earlier moment in which that first bearish movement has not yet

developed. If right at that moment we want to apply this strategy, to reach

trading zone, the price would first have to make some kind of downward movement

to confirm the highest pivot.

And then we would wait for the bullish movement that would penetrate the

liquidity zone of the newly created pivot.

This is the dynamic.

But be cautious.

These are just scenarios.

This is our job as analysts.

But the market will do what it wants.

Sometimes this scenario will be accurate, but on many other occasions,

There will be times when the price simply continues with the bearish

that point and we won't find any opportunity to trade.

But be aware that this doesn't end here.

We could still consider a more complex scenario made up of three movements. The

first and second movements would be responsible for generating the pivot.

while the third would visit the trading zone created and provide us with an

opportunity to enter the market there.

This is really what we should work on, the ability to generate multiple

scenarios and for the market to confirm which of them will be executed.

The problem is that if we are not aware of all the possibilities, we will not be

able to take advantage of the one that finally appears.

With respect to trading zones 3 and 4, where the strategy to be applied

false breakouts, The approach would be the same and will depend on the current

situation of the price.

In this situation, since the trading zones will have already been previously

identified, we will only need to predict a scenario with a single movement.

This is the one that will interact with the trading zone to generate the false

breakout. As with the previous case, if you can't be present, consider the

possibility of setting alert when the price reaches the trading zones.

so that you can analyze the subsequent reaction and perhaps take some kind of

action. In essence, this context of looking for potential phase B and C

breakouts is exactly the same as the one we just saw in which we applied the

strategy involving false breakouts and fast patterns.

And we will look at it again later.

But the dynamic is always the same.

If the pivot has already been generated, the market is going to need to develop

one or two movements depending on where the price is.

to reach the trading zone.

If the market is in the middle of developing the phase D trend movement

see the false breakout, we can consider several scenarios.

The first is that it will continue the bullish movement and reach the highs of

the structure without stopping, which would not offer us any trading

opportunity. Another scenario would involve waiting for it to go back to the

base of the structure where it would develop the spring test.

And the third scenario would be to wait for some type of horizontal

consolidation with no correction to the lows before generating the second part

of the bullish movement up to the highs.

Of the three possible scenarios, only the second and third would leave us with

trading opportunity.

Here we see an example of what the spring test scenario could be.

As we can see, from the starting point, we simply need a movement that takes the

price from the trading zone, where we could look for the entry trigger and the

confirmation of the spring test.

Before it develops, we need to visualize what we expect it to do so we can

confirm one scenario or another.

This is a very powerful exercise which will ensure we are prepared for any of

the predicted scenarios.

For the example of a horizontal consolidation, said consolidation could

with the development of a complete structure or by means of a fast pattern

the type that we have already looked at.

In any case, in both scenarios, we are going to need a low pivot to be

where we can then look for the subsequent false breakout.

Therefore, the scenario to be considered here would have at least three

movements, the first two for the generation of the pivot and a third

for the false breakout at the liquidity zone.

In this case, it develops a small reaccumulation structure where we can

easily identify its lower limit and where the two pivots also coincide.

and we can clearly see how a subsequent false breakout at the liquidity zone

causes the continuation of the upward movement to the upper end of the

structure.

Again, this is the key to predicting sound scenarios.

Based on the context and the roadmap, we project the various possibilities in

which the market could offer us an opportunity.

If we see that the market is right at the moment of the breakout, and if all

signs suggest that the structure is highly likely to be in accumulation,

We should follow the roadmap in line with this idea.

And at that point, the closest trading zone will be the level of the creek or

resistance. But be careful.

To reach that level, the price needs to develop two movements, two key actions.

One, on the hand of the breakout, and on the other hand, the movement that acts

as a test after the breakout.

The key here is that we want to buy, due to the context.

But the price is not in an attractive trading zone since it is moving towards

key zone and we don't know what might happen there.

This is why I never recommend you trade at breakouts.

Therefore, in this case, we should look for a two -movement scenario.

In the first, we would position ourselves in favor of the trading level

second movement would generate a visit to this level where we should assess the

interaction between the participants to decide on a possible entry.

Continuing with the development of the accumulation structure, at the point at

which the market has developed the bullish breakout, the methodology's

suggests that the most likely outcome is a visit to the resistance level of the

broken structure, which we would now consider a support level.

At that point, using this roadmap as a basis of being already positioned in

favor of the trading level, our scenario would only consist of a single movement

if what we are looking for is a simple test on the level of the structure.

As we know, this could just be a false breakout, upthrust, after which the

would re -enter the equilibrium zone.

But initially, we should be directionally biased towards an uptrend,

seeing that the false breakout at the bottom of the range and breakout

of the uptrend meet the ideal characteristics.

But as you already know, the market could behave in some other way. For

it could develop a new minor structure at that point, or some type of fast

pattern. This is exactly the same as the scenario proposed previously.

The dynamic is always the same. Since we do not know how the market will move,

we predict the situations that are most likely appear and that give us the most

confidence. For this alternative scenario to the simple test, we should

wait for the creation of the pivot and the false breakout of this pivot, which

would comprise a minimum of three movements from the high of the bullish

breakout. This would be for a rapidly developing horizontal consolidation

scenario. We could still allow for the possibility of the full development of a

minor structure.

In essence, nothing changes.

We would also need that first movement that generates the selling climax.

Subsequently, the second movement would be formed by the AR and all the

subsequent sideways movements before the development of a potential spring,

which would be the third movement.

Regardless of whether the consolidation is fast or slow, it will always be made

up of the same basic elements, the generation of the first pivot and its

breakout, whether with a longer or shorter duration.

On this occasion, we see that what he finally develops is a fast pattern with

false breakout at two previous pivots, which would confer greater strength to

the scenario.

And finally, now in the middle of the development of the trend, we can apply

same concepts once again. In other words, wait for the generation of a

its subsequent false breakout.

As you can see, the fundamental element is always the false breakout.

We have insisted on this point throughout the course because there is

that this behavior offers us an advantage.

And as I always say, if you carry out the simple exercise of analyzing any

chart, you will see that practically every impulse movement originates from a

prior false breakout.

The market obviously will not always follow our predicted scenarios.

We will often find that we have to change our sentiment based on how the

moves. The key is to continuously analyze the reaction of participants as

information reaches the market.