Original subtitles

During the development of the movements, profiles are generated and two very

common ways to graphically observe the trend and lateralization behavior are

P and B patterns.

These patterns will alert us to the stop of the previous trend movement as well

as the new lateralization context.

These two types of profiles show the same behavior, but in both directions.

First, in the downward trend zone, the price moves with a certain fluidity.

developing the trend movement until it meets traders willing to trade in the

opposite direction.

At this point, an equilibrium range begins to develop, a zone of high

participation that produces the profile bell.

The key to identifying this initial context is that as long as the price is

within the trend movement, we should only be looking to trade in favor of

direction, and once the new range context is established and confirmed

value generation,

we should move from there to range trading.

These examples, and all those we will see in this module, deal with session

profiles in different time frames, although the principles are equally

applicable to all types of profiles.

The p -type profile is characteristic of upward trending movements and is

representative of future distribution and reaccumulation structures.

This type of profile suggests strength on the part of buyers who have been able

to push the price up with relative ease until reaching a point where sellers

begin to appear.

It consists of two parts. The first part where the upward imbalance is observed

and a second part where the market begins a rotation process that creates a

range. This is important to keep in mind because if such a process occurs in

reverse, first a rotation, then a bearish trend, visually we will still

-type profile with the big difference that it will be difficult to trade.

It is important to know that a longer -term uptrend will be composed of

of these profiles in its internal development.

In this case, they will simply be reaccumulative structures that create

continuous uptrend.

Here, we see two examples that highlight this causistry, where first the range

and then the trend movement occurs.

The trading dynamic is always the same as long as the price remains in the

we will use extreme trading and when the trend starts we will try to join the

movement.

The problem with this type of inverted pattern where the imbalance is to the

right is that if we already see the full profile it is because we have arrived

too late and at that point the most likely thing is that the price will

a new equilibrium zone as the most immediate action.

This means that if the trend movement has already developed, identifying the

pattern is no longer useful for trading.

On the contrary, if we have a theoretical P pattern with the imbalance

left, we will be able to take advantage of the subsequent trend movement, which

may be up or down.

Therefore, our focus should always be on finding the exact moment when the

imbalance occurs and then assessing whether the breakout will be accepted or

rejected.

As mentioned above, We can also use these types of profiles to set a longer

-term context and apply a multiple time frame trade.

For example, if we are already in the middle of a trend movement, once we have

the range at the top, it might be convenient to go down a few time frames

look for a trade opportunity.

We could look at the profile on the weekly chart and move down to some

minute charts.

The power of determining the context of the upper time frame is that at that

point we already know we are on the right side of the market.

Another more unusual price action that can also leave a P -shaped profile is a

failed breakout at the bottom, which would be responsible for the development

the lower part of the profile.

This price action in the form of a shakeout or bearish trap that brings the

price back to the inside of the previous range indicates great underlying

strength. This is a failed discovery where the price has attempted to leave

equilibrium zone.

but has been rejected to trade at lower prices, so implicitly, if the market

consensus does not believe the true value of the asset is lower, it is most

likely that it will now attempt to move higher.

Identifying this type of action is very useful for us, as it again provides a

clear context where our directional bias should be sideways.

Therefore, the most prudent thing to do after observing this signal would be to

look for buying opportunities next.

We have seen some of the most common and useful representations that we can

identify on P -shaped profiles.

Of course, these are just a few examples, as the market can represent

axon in an infinite number of ways.

The key is to implicitly analyze what each of these profiles is suggesting to

based on the price axon that has taken place for its development based on this,

determine the appropriate directional bias, and apply the most appropriate

strategy.

As we have already mentioned, The conventional profile indicates strength

market has had enough capacity to push the price higher.

The context here will always be until something substantial changes to favor

continuation of the movement, at least in the first instance, due to the

principle of continuity of the market, where we agree that it is most likely to

continue moving in the previous direction until an event important

reverse the trend occurs.

The inverted shape profile suggests the opposite.

we have the range at the beginning of the profile and not at the end, so the

trend movement is bearish.

Continuing with the above premise, the most likely scenario now is that the

market will develop a new range after seeing the bearish impulse, and that

will be followed by a new bearish move.

At least initially, this should be the premise for the continuity principle,

which of course should be actively assessed in real time to identify early

warnings of a possible change in sentiment.

Finally, The profile that leaves a P -shape with a bump at the bottom

suggests underlying strength.

As we have discussed, if the market refuses to move in one direction, it

most likely move in the opposite direction.