1
00:00:00,140 --> 00:00:01,920
Analysis of the current situation.

2
00:00:02,280 --> 00:00:06,880
The following part of the course we are
about to begin addresses the second part

3
00:00:06,880 --> 00:00:10,140
of our trading plan, the analysis of the
market situation.

4
00:00:10,880 --> 00:00:15,280
To do this, we will look at concepts and
ideas that will help us determine the

5
00:00:15,280 --> 00:00:16,780
trading bias in the short term.

6
00:00:17,200 --> 00:00:21,260
These will put us in a position to make
sound predictions about what the price

7
00:00:21,260 --> 00:00:22,480
is most likely to do.

8
00:00:23,040 --> 00:00:24,040
Let's get started.

9
00:00:24,840 --> 00:00:25,980
Labels? No.

10
00:00:26,600 --> 00:00:27,960
Context? Yes.

11
00:00:28,970 --> 00:00:33,170
All the theory we can study about the
Wyckoff method is essential learning if

12
00:00:33,170 --> 00:00:36,830
want to master this approach and truly
understand how the market moves.

13
00:00:37,130 --> 00:00:41,110
But the Wyckoff method, or my way of
understanding it, goes much further.

14
00:00:41,610 --> 00:00:45,490
It's not just about the almost robotic
labeling of a chart and leaving it at

15
00:00:45,490 --> 00:00:49,970
that. At this point, we should already
know what underlies each event, how

16
00:00:49,970 --> 00:00:53,850
behaviors are generated, and how they
are represented on the chart, the

17
00:00:53,850 --> 00:00:55,910
psychology behind each one, etc.

18
00:00:56,230 --> 00:00:59,620
But as I say, the method is much richer
than that.

19
00:01:00,080 --> 00:01:04,160
I say this because due to the very
nature of the market, it is practically

20
00:01:04,160 --> 00:01:07,200
impossible for two completely equal
structures to exist.

21
00:01:07,860 --> 00:01:13,140
For two exactly identical structures to
occur, the same traders must be present

22
00:01:13,140 --> 00:01:17,860
at both times, and what is even more
unlikely, they should behave in the same

23
00:01:17,860 --> 00:01:20,940
way both times. Let's face it, it's
impossible.

24
00:01:21,780 --> 00:01:26,290
Although it is true that we see textbook
structures daily, which can very

25
00:01:26,290 --> 00:01:30,670
closely resemble the classic examples,
in most cases the market will develop

26
00:01:30,670 --> 00:01:34,790
less conventional structures in which it
is much more difficult to identify

27
00:01:34,790 --> 00:01:35,790
these events.

28
00:01:35,850 --> 00:01:41,090
Therefore, it is essential to look not
for exact copies of these events, mainly

29
00:01:41,090 --> 00:01:45,590
the end -of -trend events that make up
Phase A, but to focus on the importance

30
00:01:45,590 --> 00:01:47,050
of the action as a whole.

31
00:01:47,550 --> 00:01:51,710
We will probably come across many charts
in which we see the end of a trend

32
00:01:51,710 --> 00:01:54,210
moment and the start of a sideways
process.

33
00:01:54,730 --> 00:01:58,470
but we might not be able to correctly
identify those initial end of trend

34
00:01:58,470 --> 00:02:03,730
events. In these circumstances, we might
dispose of an asset and miss out on a

35
00:02:03,730 --> 00:02:06,230
future trading opportunity, which would
be a mistake.

36
00:02:06,650 --> 00:02:11,210
As I say, the important thing is not
whether we can precisely identify those

37
00:02:11,210 --> 00:02:14,970
events that generate a change of
character, but that the market has

38
00:02:14,970 --> 00:02:19,490
generated this prior end of trend event
that it is now moving sideways.

39
00:02:20,030 --> 00:02:21,030
This is the key.

40
00:02:21,750 --> 00:02:22,850
Look at the example.

41
00:02:23,440 --> 00:02:25,940
we see that the final result was a
bullish trend.

42
00:02:26,200 --> 00:02:28,640
But what was the accumulation pattern
like?

43
00:02:28,840 --> 00:02:30,080
Well, certainly erratic.

44
00:02:30,320 --> 00:02:32,700
Where should I establish the end of the
trend events?

45
00:02:33,040 --> 00:02:38,120
Which of those I mark is really the
selling climax, the automatic rally, and

46
00:02:38,120 --> 00:02:39,120
secondary test?

47
00:02:39,300 --> 00:02:41,620
Honestly, I don't have the slightest
idea.

48
00:02:42,040 --> 00:02:45,840
And this is where the importance of
really understanding what this Wyckoff

49
00:02:45,840 --> 00:02:47,100
method is about lies.

50
00:02:48,080 --> 00:02:52,360
What interests us is that the market was
falling and has now stopped.

51
00:02:52,880 --> 00:02:57,720
that it has gone from a bearish trend
state to a sideways state where a cause

52
00:02:57,720 --> 00:02:58,720
being built up.

53
00:02:58,960 --> 00:03:00,940
This is the prevailing context.

54
00:03:01,540 --> 00:03:06,400
From here, we need to decide the
intensity of the signals that we are

55
00:03:06,400 --> 00:03:10,640
determine the trading levels that we are
going to take into account depending on

56
00:03:10,640 --> 00:03:12,700
whether we want to trade long or short.

57
00:03:13,280 --> 00:03:18,020
As we can see, this chart left several
trading opportunities for going both

58
00:03:18,020 --> 00:03:19,020
and short.

59
00:03:19,100 --> 00:03:22,880
As we can see in these examples,
Although these structures don't look

60
00:03:22,880 --> 00:03:27,460
like the classic ones we have been
studying, if we were to open a chart and

61
00:03:27,460 --> 00:03:31,000
ourselves at the point that I have
marked with an arrow, it would not be

62
00:03:31,000 --> 00:03:35,260
unreasonable to assume that an
accumulation process has been developing

63
00:03:35,780 --> 00:03:39,860
It might be more or less difficult to
identify the events of the methodology,

64
00:03:40,120 --> 00:03:44,520
but we can objectively see that the
price has been rejected at a certain

65
00:03:44,520 --> 00:03:49,640
on several occasions, and that it has
finally managed to break out and

66
00:03:49,640 --> 00:03:50,900
itself above it.

67
00:03:51,230 --> 00:03:52,230
This is the key.

68
00:03:52,530 --> 00:03:56,510
If we really tried, we could probably
label each and every one of the

69
00:03:56,730 --> 00:03:59,630
but I repeat, this is not of prime
importance.

70
00:04:00,150 --> 00:04:04,470
What is important about the methodology
is the underlying logic behind it.

71
00:04:04,690 --> 00:04:09,570
For the price to rise, there must first
be an accumulation, and for it to fall,

72
00:04:09,710 --> 00:04:10,710
a distribution.

73
00:04:10,990 --> 00:04:15,770
The way or manner in which these
processes develop is not a significant

74
00:04:16,610 --> 00:04:19,490
Here, we have another real example
involving Bitcoin.

75
00:04:20,089 --> 00:04:23,630
although somewhat more authentic than
the other example seen previously.

76
00:04:24,550 --> 00:04:29,250
Climaxes can raise doubts about how best
to label them. As I say, the question

77
00:04:29,250 --> 00:04:33,070
is not about labels, but about
understanding the underlying events.

78
00:04:33,450 --> 00:04:38,170
And what interests us is identifying the
idea that a change of character has

79
00:04:38,170 --> 00:04:42,810
taken place, that the market dynamic has
changed from a bearish to a sideways

80
00:04:42,810 --> 00:04:46,870
movement, from an environment where
sellers were in control to one where

81
00:04:46,870 --> 00:04:48,410
equilibrium has been restored.

82
00:04:48,910 --> 00:04:50,770
and where we don't know where it will
move next.

83
00:04:51,290 --> 00:04:54,950
In the final part of the development of
the structure, we see that for a long

84
00:04:54,950 --> 00:04:59,330
time it is incapable of reaching the
top, which in principle we would treat

85
00:04:59,330 --> 00:05:03,230
sign that denotes weakness, as buyers
cannot be strong enough to send the

86
00:05:03,230 --> 00:05:04,390
to those high price levels.

87
00:05:04,810 --> 00:05:09,910
And what suddenly happens? Well, a
powerful bearish breakout develops, with

88
00:05:09,910 --> 00:05:14,270
volume and a violent show of strength,
which finally unbalances the price

89
00:05:14,270 --> 00:05:17,550
upwards, confirming the pattern as a
distribution structure.

90
00:05:18,410 --> 00:05:20,030
This is the nature of the market.

91
00:05:20,350 --> 00:05:24,290
When you think that the majority of the
signs you see in the chart are bearish,

92
00:05:24,330 --> 00:05:28,650
suddenly, a false breakout can occur
that changes absolutely everything.

93
00:05:29,210 --> 00:05:33,410
This is why the false breakout is the
most important event that we should

94
00:05:33,410 --> 00:05:34,490
look for in the market.

95
00:05:34,990 --> 00:05:40,290
This approach requires a very open mind.
It is enough to make your head spin.

96
00:05:40,570 --> 00:05:42,610
But it is what it is.

97
00:05:43,090 --> 00:05:46,230
Luckily, we do often see the classic
structures.

98
00:05:46,720 --> 00:05:50,420
But the continuous interaction between
supply and demand means that these

99
00:05:50,420 --> 00:05:54,800
processes can develop in an infinite
number of ways and we have to be

100
00:05:54,800 --> 00:05:55,800
to observe them.

101
00:05:56,020 --> 00:05:59,900
Rather than thinking about labeling each
and every price movement, we should

102
00:05:59,900 --> 00:06:04,120
focus on trying to determine who is most
likely to be in control of the market

103
00:06:04,120 --> 00:06:08,360
according to the signs we observe and
based on the theory we have studied.

104
00:06:08,780 --> 00:06:13,940
We should start to be more aware of the
forest as a whole rather than a

105
00:06:13,940 --> 00:06:14,940
particular tree.