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How far to the left of the chart should we look back?

Sometimes, we find ourselves having to look to the left of the chart to see

reference in the price history, especially when we want to identify old

zones that could serve as potential targets.

How far back is it reasonable to look? How many bars or days?

Unfortunately, there is no objective answer to this.

Again, we need to apply common sense and think of the rationale behind the

market behavior.

If our objective is to identify a structure that reveals to us an area of

equilibrium that might attract the price back one more, based on auction theory,

we must be clear that market conditions are ever -changing.

Therefore, the older the reversal, the less importance it now has, having

potentially lost its ability to attract the price.

The likelihood is that the conditions of the market today differ greatly from

the conditions of the same market weeks, months, or years ago.

The ranges that we work with under the approach of the Wyckoff method are

equilibrium zones, where the price valuations of the participants are all

similar and where the slight differences give rise to sideways movements or

uptrends and downtrends generating the range.

When market conditions change, the price leaves the congestion zone and a new

search for value begins.

New participants to trade with.

Equilibrium will be restored when the valuations of all the participants more

less converge once again, and this new zone will most likely coincide with an

old trading zone, where the conditions at the time were very similar to the

current ones.

What happens when a lot of time has passed and the conditions are not

the current ones? Well, those old zones will cease to be valid for this purpose,

and the market will need to generate a new zone with no previous reference

point. From a trading perspective, we should not take into account these very

old zones in our analyses and scenario forecasts, and simply focus on the

current behavior and on the principles offered by the methodology to detect

the market context has changed.

Looking at the chart shown in this slide, let's imagine that the market

an accumulation in 2023 and launches upwards.

Our aim here would be to look for the structure that was developed two years

ago. There is not much to interpret here.

It is a logical objective.

Not too much time has passed, and it is the first zone of sideways movement that

we would see higher up.

Would we look at the structure even further up?

From my point of view, that wouldn't make much sense.

I don't think expecting the market conditions to be similar to those seen

years ago is the correct approach.

And what if the price shoots downward, leaving a redistribution structure?

This would be a somewhat more ambiguous scenario.

since the last structure that we see below the current price is from seven

ago.

Personally, I would make that target the end point, but I would actively manage

the position so that the moment I notice that the effect of the cause has been

covered and that price is unlikely to move much further, I would close my

positions.

Don't think of the number of years in absolute terms.

It is simply an example and will vary depending on the time frame which you

using to analyze the trade -in.

This example could be valid for a very long -term trade if, on the other hand,

you are a day trader. We could be talking about days or weeks instead of

It is clearly very subjective.

The key takeaway is that the recent structures are more important than the

ones.