Original subtitles

Proactive Position Management We have now reached the final section of the

course. In this module, we are going to use all the concepts we have looked at

so far to establish the entry, the stop loss, and the take profit with examples

at each of our trading zones.

The key to proactive position management is that, because we know the market is

dynamic and conditions change, control can continually swing from one side to

another. And we don't want to be in the market when it could turn against us.

Moreover, we must continually adapt to new behaviors that are generated once we

are in position.

Let's start in a situation in which we are in trading zone number one, in which

we can see that there is some momentum inside a trend and we are looking for a

basic correction before entering.

The drawback of this sort of trade is that we would not wait for the

of a fast pattern that generates the reversal and might give rise to the

continuation of the trend movement.

but rather we would enter the market immediately after observing the change

character that is generated in the short term, due to the concept of a reversal

movement.

Therefore, the fact that this type of trade doesn't involve waiting for at

one fast pattern means it is more likely, in a way, to be adopted by an

aggressive trader rather than a conservative one.

Analyzing the chart, what we observe is that the market has developed a

structure further up, which may not necessarily be textbook in its shape,

the end it has generated a strong bearish momentum.

This is the key.

You may not have been able to trade the distribution structure due to its

erratic behavior, but after seeing the impulse movement, you now know that the

context is bearish.

The impulse movement is clearly being accompanied by an increase in volume,

which suggests that there is harmony in this movement.

And, at the same time, we see that the bullish movement, which in principle we

should treat as a correction, carries low and declining volume, just as we

expect, which means that at an overall level, this behavior comprised of a

bearish momentum and bullish correction denotes maximum harmony.

We also see that the price reaches the upper end of the dynamic that we have

drawn using the linear regression tool, that is, in the trading zones at the

extreme of the dynamic.

This point is important because, as we know, in trend trading, when we are

looking for a basic correction, there is no pre -established trading zone since

we are looking for the trigger after the reversal of the movement.

Therefore, it should be mandatory that in this context, the price should at

least reach this extreme of the dynamic before considering an entry.

Another input in favor of the bearish scenario would be the break of the last

bullish dynamic corresponding to this correction.

And finally, we have the appearance of that large candlestick showing bearish

intent that breaks through the low of several bullish candlesticks.

denoting a strong participation of sellers.

At that point, we already have everything we need and it is time to

orders. In this case, we would establish a short entry order below the low of

the trigger candlestick using a sell stop.

With respect to the stop loss, we could place it either at the high of the

trigger candlestick or, depending on the scenario, above the behavior as a

whole.

With respect to profit taking, The first liquidity zone we identify is at the

previous lowest point, which is the extreme of the bearish momentum.

Therefore, in that area we should do some kind of management. Since there is

enough distance for the price to travel, I would take a portion of the profits

and protect the stop at break -even.

As we can see, the trade developed in our favor and the second take profit

should have been taken after the appearance of that first volume peak,

would have a tidy final profit.

And what would happen now with that new upward movement?

It would seem that we are in the same situation as before.

So should we expect a bearish continuation?

Well, there are several things we need to analyze here.

If we adapt the regression channel to the new levels, we again see that the

price would be at the extreme, in exactly the same position as in the

trade. In addition, It also coincides with that axis line that would identify

old support at the end of the bearish momentum, which could now act as a

resistance level, and that indicates that the trend is following a normal

of behavior.

These would be the major inputs in favor of the bearish scenario.

But what inputs do we have against this scenario?

To begin with, and most importantly, this asset is the S &P 500 in a two

time frame.

and that climatic volume that we saw corresponds to the opening of the

We previously commented that this moment is quite delicate due to the high

volatility. The recommendation was to wait at least 30 minutes before

considering a trading approach.

With this logic in mind, we would not have already taken the position.

As well as this, we need to also ask ourselves if it is possible that the

of the cause has already been covered.

In other words, If we have seen a large enough movement in one direction after

the development of a structure, the market may need more fuel to continue

moving. In other words, it might need another cause before moving forward.

If you look at the chart, the distribution structure doesn't really

much of an influence given where the price is.

Therefore, the idea of a continuation of the bearish scenario should have been

discarded. and what happened next is that this movement was indeed exhausted

a new structure developed.

In this case, said cause was an accumulation which generated a

bullish effect.

See how much volatility is generated after the opening of the session?

With sharp up and down movements, leaving long wicks at both ends, and how

there more genuine movements begin to develop.

It is certainly a behavior that we should avoid at all costs.

Let's now look at trading zone number two, in which we are looking for a major

correction within the trend.

Here is another bearish example, in a situation very similar to that of the

previous example.

Again, at precise moment we are looking at we should be clear that the context

is bearish because it is determined by the distribution, and that the roadmap

tells us to expect a continuation of the trend movement until we see signs that

the control of the market may be changing.

Once we are clear that what we want to do is sell, we have to look for a

zone higher up where we should wait for the price.

In this case, we wait for the appearance of a maximum pivot that will give us a

liquidity zone.

If the price were to reach that level, we would find ourselves in a confluence

zone since it would also reach the end of the bearish dynamic, which again we

have been able to identify by drawing a regression channel.

This would be our main scenario.

As additional inputs that favor going short, we can see the emergence of a

candlestick showing bearish intent and how the market subsequently starts to

move sideways, indicating an acceptance by the participants to trade at these

new price levels.

Subsequently, the price continues to fall, thus confirming that all this

that has appeared has bearish sentiment.

Another possible scenario is that the market does not generate a false

at that pivot point that we have identified and that the downward

continues immediately.

In that case, our roadmap would involve waiting once again for the generation of

another pivot and its subsequent false breakout before joining in the bearish

movement. And finally, another possibility is that control of the

change and the price could reverse with a great deal of bullish intent.

This would be the alternative scenario, the bullish one.

Our task here is simply to wait for the price to confirm the expected scenario.

Let's take a closer look at this alternative bullish scenario.

It may not happen in any case, but we must be prepared for any situation.

At what point, if the bullish reversal occurs, would we be willing to consider

going long? Well, at that point where we are at least above the last bearish

candlestick, which we identified as having extremely high volume.

Right at that moment, we could already say that the volume is in our favor and

therefore determine that control is bullish.

In addition, Waiting for a test in that area would coincide with the highs of

the previous structure, so this confluence of levels would identify a

probability trading zone.

But look, what finally happens is the main scenario.

The false breakout of that liquidity zone and a sign of weakness with the

closing at the lower end of the last bullish candlestick that would establish

control, and which also closes below the bullish dynamic that we have identified

by drawing a new regression channel.

In terms of analyzing the law of effort versus result with respect to movements,

we can see that the pattern impulses and corrections is harmonious, both in

price and volume.

Increased volume on impulse bearish movements and decreased volume on

bullish movements.

At that point, there are already a large number of inputs in favor of the

scenario. So, we launch the orders on the market.

In this case, as with the previous example, It would be the sell stop order

the breakout of the low of the trigger candlestick, placing the stop loss on

other side of the behavior as a whole since the difference between the high of

the trigger candlestick and the high of the entire scenario is minimal.

So, we could choose to establish just one stop loss.

And with respect to profit taking, we identify the liquidity zone below and

establish our first partial take profit there.

If the price reaches that point, automatically protect the position by

the stop loss to not lose money.

The position advances and generates that new liquidity zone.

Initially, we did not have a second clear objective, so we are going to

the behavior of the market and we would use that new zone to close the rest of

the position.

If we feel confident in this trade, we could leave a small part of the position

open and let it run from there.

And finally, the whole movement developed in our favor.

Had we left a small part of the position open, it would have been closed in the

appearance of the climatic volume.

At that point, the bearish run has already been long enough to suggest that

has been definitely exhausted.

And surprisingly, the market continued to slide.

It even left another opportunity in that new upthrust.

This is a good example that illustrates how our assumptions matter little to the

market. We might think that the movement is already quite overextended, and yet

it may still continue to move in that direction, as has happened here.

We might think that the distribution pattern has no effect left and be

completely wrong.

We don't care.

What interests us is that we properly manage our position and always favor the

behaviors that are most likely to happen.

In this case, and under these premises, That last false breakout would not have

been taken after seeing that the movement was extended enough that it

offer us the necessary guarantees.

It is a different matter if, at that point, we were to observe the

of a slower structure.

There things changed because implicitly that structure could suggest that a new

cause is being generated in favor of the same direction.

We would have to analyze this structure individually.

The basic premise regarding trend trading is that the market will continue

move in that direction until an opposite cause is generated that can reverse the

sentiment. But that doesn't mean that the anatomy of the trend can't offer us

more or less confidence, and a very overextended trend is not something we

to see if we want to trade in that direction, because the further the price

moves in one direction, the sooner it is likely to reverse.

That's why it's generally best to avoid joining a trend that visually seems

extended.

Early in the trend, it may be a good idea to enter the market looking for a

simple reversal of the movement. As it progresses, it is better to wait for a

larger correction in the form of a fast structure, and then in more advanced

stages of the trend, the ideal thing would be to wait for the development of

more complex schemes, fully developed reaccumulation, and redistribution

structures.

Let's look now at trading zone number three, trading at the extremes in phase

In this case, we start from a situation in which we have already identified the

three events that stopped the previous trend, which for this example are the

selling climax, the automatic rally, and the secondary test.

From this point on, we know that liquidity zones are created at the

the structure.

Since the previous trend is bearish, I would personally only recommend trading

in this direction because there is most likely still a certain downward

imbalance. And even in this context, we should expect the structure that is

developing to become a redistribution rather than an accumulation.

As I say, we are biased by the direction of the previous trend.

With this in mind then, our main scenario would involve the price

top of the structure and generating a false breakout there.

The key here is that we should only consider trading this scenario.

The market could continue to fluctuate within the range or go visit the lower

end. But at this point in the development of the structure, the most

approach would be to look for a false breakout at the upper extreme.

And right at that moment the false breakout could occur, though personally

have my doubts.

To begin with, the bearish candlestick that would serve as an entry trigger

not denote all the bearish intention that we would expect it to, since its

closing price is in the middle third of the previous bullish candlestick.

We can also see that up to now it has been unable to break the bullish dynamic

that would establish control of the last movement.

In other words, although it is true that this position could be taken, it would

involve greater risk since not all the inputs are aligned in this direction.

Therefore, it would be a trade for a more aggressive trader.

A more conservative profile would wait for the break of said dynamic and would

look for the development of the false breakout test of the trading zone.

And if the entry trigger appears there, they might consider going short.

This would be our main scenario.

What other outcomes could there be?

Well, a scenario in which a long bearish movement develops without any type of

test, which we should look to trade in if we see the generation and false

breakout of a new pivot.

And another alternative bullish scenario, which would be based on the

of the structure at its upper extreme, which would activate the bullish roadmap

and all this behavior would be seen as fast accumulation structure.

The continuation of this potential bullish scenario we already know would

involve first looking for the test after a successful breakout and from there

executing a trade in the upward continuation movement.

This is what it means to carry out proactive management, to continuously

the performance of the market and assess the different options that are

presented to us.

Based on all this information, launch our scenarios and wait to see which one

confirmed by the market.

And here we see that finally the market confirmed the test after the false

breakout scenario.

At this point, the opportunity fills us with greater confidence.

The last bullish trend has already been broken and the candlestick showing

bearish intent closes below the last bullish one, so the short -term bullish

control would also be in red.

Waiting for this type of behavior to happen is ideal when the first

doesn't fill us with a lot of confidence.

This trade would therefore be suitable for a more conservative trader.

Reviewing the operational checklist, the context and roadmap are in our favor.

We are in the trading zone.

We have an impulse movement in our direction, which we identify in the

bearish reaction after the upthrust, which is also the movement that manages

break the bullish dynamic.

We don't see any bullish dynamic impulse movement that denotes much strength.

The bullish false breakout took place at the very edge of the structure and was

significant enough, and the proportionality of the phases seem

should be confident that the trade will be successful.

With respect to the location of orders, the entry would be a stop -type order at

the breakout of the low.

We could use the two stop -loss locations, a more aggressive one just

pivot that generates the trigger candlestick, or a more conservative one

the very edge of the structure.

Meanwhile, regarding the reward, the most ambitious target would be that the

price manages to reach the opposite end of the structure.

But if you look closely, right in the middle of the range we have identified

another minor liquidity zone, which should also be taken into account.

In other words, when it is reached, we could do some kind of management, either

simply protect our position or take a partial profit.

Why would we consider only the opposite extreme as the most ambitious target?

Couldn't this false breakout actually be the test event in Phase C that

generates the complete imbalance of the structure?

Well, of course, we can do whatever we like.

But my reasoning is that, in a structure that is already confirmed, that is to

say, where it is obvious that a change of character has occurred, in which we

have gone from a bearish trend state to a sideways one, the likelihood is that

the price will spend some time building the subsequent cost.

Therefore, the most likely to occur at this point, if the market reaches the

lower end, is that it will find new demand that will generate a subsequent

reversal until finally the agents consider that this equilibrium no longer

represents the fair value of the asset at which point it will generate the

definitive false breakout that will unbalance the price but if you are not

about it you can always leave a small part of the position in case it turns

that this false breakout is actually going to generate the definitive

of the structure

And here we see how it reaches the bottom of the structure and bounces

again. Careful, because this could be the false breakout that generates the

definitive imbalance, in which case we would find ourselves in trading zone

number 4, reverse trading looking for the phase C test event.

If you remember, how do we confirm a potential spring?

We saw at the beginning how the two minimum inputs that we are going to

from the price before we start treating this behavior as a potential spring is

firstly, that it re -enters the range, and secondly, that it does so with good

candlesticks, showing bullish strength.

In this example, at the end of the last bullish candlestick, we could assume

these two requirements have been fulfilled.

But as happened before, the trigger appears before the break of the bearish

momentum, so this already means it is a riskier type of trade, one for a more

aggressive profile.

Moreover, another input that would undermine our confidence is that the

pattern of volume decrease doesn't appear throughout the entire development

the range, although it can be seen in the first part.

Although it is true that the last candlestick is already above the last

bearish candlestick, the first bullish candlestick that appeared did not denote

great strength as it closed in the middle third of the bearish one.

So we have another sign that doesn't denote all the aggressiveness that we

ideally like to see.

In general terms, the number of inputs from our checklist in our favor is low.

Despite this, if we were still looking to buy, we would use a buy stop at the

break of the bullish candlestick, with a stop loss that could be placed at two

levels, below the low of the bullish candlestick and below the whole

In terms of the take profit, the false breakout presents us, in general terms,

with three targets that we should take into account when making decisions

depending on our trader profile.

The minimum objective we want to see of a false breakout is a visit to the

nearest trading level. The intermediate objective will be the opposite end of

the structure, and if we are observing this event in phase C, it will give rise

to a real breakout and subsequent trend development outside the range.

So the most ambitious objective will be to take advantage of this effect and go

looking for an old trading zone that is in the distant past of the current

structure.

In this example, we would have several locations.

In the first place, we would take profits when reaching the first

zone, and the second part would be left in case the price reaches the high of

the structure, where we would find two areas relatively close to each other and

which, at an aggregate level, represent an important supply zone.

And since we could be seeing the start of the definitive imbalance of the

structure, we should probably leave a small portion of the position in case

accumulation is confirmed and the market takes off looking for prices higher up.

An alternative scenario would be to favor a real bearish breakout, for which

already know that we would look for a certain reaction to appear at the lows

the structure that would prevent the price from effectively re -entering the

range.

At this point, we already have a better understanding of the situation, and the

bullish scenario looks more likely since the bearish dynamic has been broken,

which is an important sign of that there is intent from the buyers, and

ultimately this might be confirmation of a spring.

At this point, we can put forward our hypotheses and predict our scenarios.

The roadmap here is bullish.

Therefore, there are several ways in which the market could develop a bullish

continuation.

It could go higher straight away with no consolidation, in which case we would

miss the chance to take advantage of that potential movement.

Another option is that it develops a horizontal consolidation at some point.

And the other option in the bullish scenario would be to wait for the spring

test on the lower part of the structure.

These would be the three bullish scenarios.

And the alternative scenario would be the bearish one, which would become

apparent if at some point we were to see the bearish breakout of the structure.

What would happen if scenario number one were to eventually unfold and the price

goes straight up?

We would miss the chance to take advantage of this movement, but that's

Because if this happens, we would have more opportunities to try to take

advantage of the next one.

And in that case, we already know that these opportunities would reside in

waiting for the test after the bullets breakout in anticipation of higher

prices.

How will we act if consolidation scenario number two develops?

Well, our scenario here would be to wait for the creation and false breakout of

a possible pivot before looking for the entry.

And with scenario number three?

Well, simply wait for a correction to the trading zone at the bottom of the

structure and there look for a behavior that allows us to confirm the spring

test.

This is the key. This is our task.

To put forward all the possible hypotheses and let the market decide,

advantage that we will be ready and waiting to trade depending on what

occurs.

And as we see, of all the possible scenarios, the market appears to be

developing the search for the spring test scenario.

How did we confirm the spring test?

We established that we can confirm the point of the spring test at the moment

when the price breaks the previous high generated in the spring.

That would be the point at which the behavior would offer a greater guarantee

success. But we can also make use of the concept of movement reversal if we want

to look for early confirmation, for which we would wait for the appearance

good bullish candlestick whose price closes above the last big bearish

candlestick.

Which is exactly what is happening here.

In the potential spring test behavior, the price reaches the minimum of the

structure and generates a candlestick with strong bullish intent that breaks

highs of several bearish candlesticks. So we could initially accept this as

confirmation of said test and it would set us up with an opportunity to enter.

In addition, during the development of said test, a pivot was generated which

the price subsequently broke through, filling us with even more confidence

that particular trigger.

At that point, the number of inputs in favor of the scenario increases.

so we could now give the green light to the trade.

As always, we would place the buy order at the breakout of the low and we could

establish two stops, either below the trigger candlestick or below the lowest

point of the entire scenario.

Another option would be to place the stop loss below the low of the spring,

that would be too far away, so I would discard this alternative.

In terms of taking profits, During the last development, the price has

a new liquidity zone, so some form of position management should be taken

What I would do here, given the closeness of that zone, would be to

change the stop to break even and not take any profit, which I would initially

allow to run until the supply zone at the top of the structure is reached.

As with the previous entry at the spring, a small part of the position

allowed to run on in case the accumulation pattern is successful, and

and manages to break out upwards.

An important point regarding the spring and the spring test.

If, after these behaviors, the price starts to move quickly with candlesticks

denoting strength, it will most likely reach the top of the structure without

much difficulty.

But if, on the contrary, we start to see an unclear price action, it is most

likely that we will see at least one more test before the price goes up. We

even see a new false breakout.

If we have seen a potential spring or spring test and we have entered the

and the price does not begin to move quickly in our favor, it is best to

our exposure, adjust the stop loss, or directly abandon the position.

The key, again, is to preserve our capital, and if we have enough signals

suggest our stop loss is likely to be reached, we should reduce risk as soon

possible. This is what proactive position management is all about.

It involves identifying new trading zones that are being created so we can

modify our take profits accordingly and also being alert to possible changes in

sentiment so we can modify our stop loss.

Finally, what happens is that the market is unbalanced upwards and in this

context we would now find ourselves in trading zone number five, continuation

strategy within the range in phase D.

The zone to look for trades here encompasses the entire interior of the

The only opportunity that the market would have offered us in the upper part

the structure were the price generated a pivot and a subsequent false breakout.

The trade would be of a high quality, if it were not for the fact that it occurs

in a very high part of the structure.

The problem is that if we enter there, we are too close to the large liquidity

zone established at highs, so there would be very little room for proper

management.

It is true that our context and roadmap suggest that it is highly probable that

the accumulation pattern will continue to develop, and therefore that the

breakout of said zone will be a real one.

This is something that our analysis and scenario planning may suggest, but it is

not something that will always happen, and in any case, if we are correct in

analysis, there will be more opportunities later on to enter the

advantage of the movement that has yet to be generated.

So at that point, the main scenario would be to wait for the price to

effectively break out of the structure upwards.

Once broken, we would propose different alternatives in favor of the bullish

scenario, the main one being to favor the test after the breakout, for which

should see certain acceptance of the movement with candlesticks that indicate

lack of intent.

Meanwhile, another scenario, as we know, would be to see a new false breakout in

the liquidity zone that manages to shift control of the market again, and makes

the price re -enter the range, in which case the bearish roadmap would be

activated. And here we see how the opportunity we are waiting for appeared.

The main bullish scenario involving two movements materialized and just before

the zone it even generated a small pivot, then on which there was a false

breakout before the bullish candlestick appeared.

At this point in the trading zone where we would be looking for the breakout

test, there is no need to wait for the creation and false breakout of a new

pivot. If we see that the price arrives with some loss of momentum, denoting a

lack of interest, we could look directly for the entry trigger.

On the other hand, if the movement that is going to develop the test arrives

with certain momentum, then it would be advisable to wait for the appearance of

some pattern that would show the loss of momentum.

At that point, we can see several inputs in favor of the scenario, so it is the

type of trade that should fill us with the greatest confidence.

At that point, We have already seen the spring at the lows of the structure, the

sign of strength that has traveled across the entire range and that has

broken out the structure above.

We do not have any strong movement against. The impulses and corrections

be in harmony, and there is proportionality between the movements.

So we are now in a position to confirm the breakout with the non -reentry into

the range and the appearance of the entry trigger on the trading zone that

denotes strong intent in our direction.

Because of all these factors, we could take the trade.

The entry order would be located at the high of the trigger candlestick.

The stop loss would be placed below the low of the behavior as a whole.

And in terms of profits, at the break of the previous high, we could place our

first take profit or simply manage the position and let the rest of the

run on until we see signs that suggest that a change in market control is

possible.

In the end, the market seems to have confirmed the accumulation since it

continued its upward development satisfactorily.

From that point on, we would find ourselves in trading zone number 7,

continuation of the trend in phase E, where we would look for the creation of

pivots and subsequent false breakouts before entering the market in the

direction of the imbalance.

And as always, we should keep in mind a potential alternative scenario in the

opposite direction, at the point where the price is.

what would we need to see it do in order to discard the bullish idea and begin

to consider the possibility of selling?

Well, it would at least need to re -enter the previous structure again.

At that time, all the test price action could be treated as a major false

breakout of the structure, which would activate the bearish scenario.

Where the roadmap would now suggest that we wait for a test on the high part,

which would send the price down through the entire structure until it reaches at

least the low end of the range.

Remember, we always propose different ways in which the scenario can be

represented in the main direction, and also another hypothesis that

the scenario in the opposite direction in case our analysis is incorrect or an

unexpected imbalance occurs in the market that causes a shift in control.

Just a small point about this alternative scenario.

You might think that it would be much more beneficial to try to take advantage

of the alternative bearish scenario in the event that a re -entry below the

previous high occurs.

in what I have identified as trading zone 1.

At that point, we might already have an even smaller minor distribution

structure, right?

The problem with this approach is that objectively we would still be above the

structure, and technically until the actual re -entry to the range occurs, we

shouldn't start to consider said alternative scenario, even if we see

of a potential distribution pattern.

Don't forget this term, potential.

Also, Remember that the market loves to send false signals.

Just be clear that our point of no return will be if the price re -enters

range. From that point on, we would have a better guarantee of considering an

opportunity to sell in that case. The trading zone on which we should wait for

the price is number two.

But beware.

Even if the price has re -entered the range, all is not lost.

This example shows exactly that.

Let's imagine that we find ourselves in this situation.

a potential test after a bullish breakout.

Although it is true that the bearish movement has arrived with a lot of

momentum, the price subsequently develops a fast pattern and even a false

breakout. In addition to a bullish trigger candlestick that denotes a lot

strength, so, aside from the fact that the last dynamic was not broken either,

suppose we decide to enter with at least part of the position so we place our

orders.

And it turns out that the market activates the entry order for us and it

again, also reaching our stop loss, as a result of which we would take a loss.

At that point, the market has re -entered the range long enough to

there is a change in bias and propose the test after a breakout of the trading

zone scenario.

That would now be our main scenario.

And look what happens.

It has penetrated beyond our trading zone, but again found enough demand to

aggressively push the price even beyond the level.

That's why I always say that each market action must be confirmed or disproved

by the subsequent price action.

The action we were trying to confirm at that point was the false breakout.

And how do we confirm this? Well, after seeing a test in the trading zone, a

test that preferably denotes a lack of intent to continue rising.

And what finally happens is that this scenario does not occur and therefore

false breakout action is rejected.

This is proactive scenario management.

And now what do we have?

Well, we are now in the opposite direction, in the same situation as at

beginning trying to confirm the upward movement through a test on the trading

zone.

That would be our main scenario now.

On the other hand, to activate the alternative bearish scenario again, we

need to see the price drop below the zone and re -enter the range again.

And there might be the confirmation that we were looking for with that precise

test on the trading zone and the appearance of a large bullish

We could certainly now execute the trade with greater assurances.

The only negative aspect is that the trigger candlestick travels a long

distance, so our stop loss will be further away.

This is not a big problem in terms of potential profitability.

because if we are right about our scenario, the structure should still

the effect of the accumulation.

In the end, the price moved upwards, and from that point, we would find

ourselves in the middle of the uptrend, where we would look for the creation of

pivots and their subsequent false breakouts before entering the market in

direction of least resistance.

This final example deals with the strategy of trading during the

a trend.

Imagine the price has just broken out of an accumulation structure.

What scenarios can we foresee?

The context at that point we already know is bullish.

Therefore, our main hypotheses should be aligned in that direction, with an

alternative hypothesis based on the opposite direction, in this case,

Therefore, three potential scenarios come to mind.

The first that the price will develop a test of the trading zone to confirm the

bullish breakout.

The second, that it won't go down to the trading level and that it will develop

some form of horizontal consolidation pattern.

The third, that the upward imbalance will continue with no pause at all.

And the fourth and final scenario, the alternative one, that the price will re

-enter the range sharply and that last behavior will end up as a potential

bullish false breakout or upthrust.

As we can see, the price continued to rise even more.

and therefore developed in line with our third scenario.

At this point, the possibility of the bearish alternative scenario is becoming

less likely due to the distance the price has already traveled.

Therefore, the scenario we should prioritize would be some type of

or minor reaccumulation structure before the price continues in the direction of

the bullish imbalance.

Finally, the predicted scenario seems to have materialized. The generation of a

pivot plus its false breakout.

supported by a strong bullish candlestick that would serve as an entry

On top of that, we are at the edge of the bullish momentum.

We see that there is some proportionality between the impulse

corrections. The volume follows a harmonious pattern.

We are supported by a strong bullish movement and there is no bearish

going against it, and the potential spring event is, as we would hope to see

with the trigger candlestick closing above the trading level, and in the top

third of the last big bearish candlestick.

While it is true that the last bearish momentum has not yet been broken, this

trade certainly offers a high probability of success.

It is about analyzing the inputs for and against, and being objective.

The fact that the dynamic has not yet broken seems to be the only input

our scenario.

My point of view here is that we have enough signs in our favor to execute the

trade with some reassurance.

If, in any case, this particular input gives us a greater confidence, we can

wait for that break in momentum to happen before assessing how to enter.

Regarding the orders, the entry level will be as always at the break of the

bullish candlestick. The stop loss would be located below the minimum of the

entire scenario and in terms of targets if we find ourselves taking advantage of

an uptrend.

A more ambitious target would be to identify the most immediate structure to

left above the price.

As intermediate targets, my recommendation is that we take some type

profit in the liquidity zones or trading levels in which we find ourselves to

ensure we don't miss out of a potential profit if the market reverses.

If we don't have a reference structure we can use, we would have to employ the

other methods that allow us to detect whether there is increased participation

from the opposite side such as the evidence provided by climatic

the development of a structure that goes against our interests.

The market developed upwards and reached the first two suggested trading zones,

the liquidity zone and the previous structure.

From there, and if we think that the effect of the cause might already have

exhausted, we should use appearance of climatic volumes as early clues that

indicates a possible shift in the market.

In this case, we can see that several extremely high volumes have developed in

that area, the one marked on the chart being especially striking since it

indicates a huge divergence between effort versus result.

This is a candlestick with a narrow range and a closing price far below the

highs, so that peak in volume could signal a major entry of sellers.

This is reason enough to carry out a more aggressive form of position

management, either placing the stop loss closer to the current price or

immediately closing the position.

And now we have reached the final part of the module.

We have looked at examples for accumulation patterns, but we know that

equally valid for distribution structures.

Absolutely nothing changes except the direction of the position.

The crucial thing to remember is that we always have several options.

Our job is to consider all the possible scenarios that come to mind, and after

that it's up to the market to confirm which one will, if any, be executed.

and to be fully alert to scenario management so we can activate one or the

as appropriate.

We have used all these examples to put into practice one of the most important

lessons, which is to determine when our predicted scenario is no longer valid

and what we would need to see the price do in order to activate the opposite

scenario. Remember that each market action must be confirmed or disproved by

subsequent price action.

This will help us at all times to maintain a flexible mindset.

Finally, my ultimate goal has been to teach you to read the market in real

to open your mind and to be able to suggest different scenarios with

probabilities depending on the current market situation, all with the sole

purpose of knowing at all times what you are going to do based on how the price

is behaving.

To do this, you have a trading checklist that will help you focus on looking for

the most decisive signs.