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Continuous Validation Protocol Due to
the dynamic nature of the market, the

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strength or weakness that its
participants exhibit at an aggregate

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change at any time. And that is why we
must be prepared to react to these

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changes. The way we deal with this
rapidly changing environment is through

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continuous validation protocol.

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It's about actively reacting to what the
market does.

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This means that if the price does this,
we should then expect that.

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This is the best way to know what the
price is likely to do at any given

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and, as a result, to be prepared to act
with necessary speed.

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The key here is to assess all possible
options that the market might develop

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and, even if we are initially
directionally biased towards one side,

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always also take into account an
alternative scenario in the opposite

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enabling us to make a quick change if
necessary.

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A good example is when the market is
moving towards the upper part of a

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structure. This puts us in a trading
zone which could be situated in a

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upthrust. Due to the context, it may be
the case that we are directionally

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biased toward the bullish breakout
scenario and are therefore looking to

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the breakout test since this is what the
context and roadmap suggest.

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But if, when the time comes, what we see
is that the price re -enters the range

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again, firmly refusing to go up and
displaying what looks like a false

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an upthrust.

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then at that point we should have the
capacity to interpret this in real time

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and change our predicted scenario to
look for short positions.

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Why? Well, because we know that the
roadmap at that point has changed.

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As we have already discussed, we should
always align ourselves with the last

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false shakeout.

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The price could make a sharp reversal
downwards at that point, but as long as

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does not re -enter the range, we could
stick with our bullish continuation

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scenario. But with re -entry, everything
changes.

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At that point, if the upthrust is
confirmed, the likeliest outcome is that

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price will visit the lower part of the
structure.

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We may be very bullishly biased because
we have seen a spring and a good sign of

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strength that generates the bullish
breakout.

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But it does not end there. The market
must continue to confirm that the signs

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are aligned with a long position.

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And we already know that the definitive
sign is the non -entry into the range.

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So until we see at least an initial
reaction in the trading zone that

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that the development of the break and
retest is probable, we must be very

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of the possibility of this alternative
bearish scenario.

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We know that different participants with
different capacities, needs, and ways

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of trading coexist in the market, and
this issue is patently clear in this

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of situation.

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That is why our approach is reactive.

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We should not try to anticipate the
market because when the key moment

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we have no way of knowing what will
happen.

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We may be seeing a very genuine
structure being developed, but this does

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mean that it will definitely fully
develop as predicted.

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The fact that the chances of success are
high does not mean that this will occur

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100 % of the time.

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That is why we must apply a continuous
validation protocol to the signs, the

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roadmap, and the context.

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The opposite would be true if, when the
time comes, signs continue to appear in

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favor of the bullish breakout, which, in
this situation, would be a price action

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that denotes a lack of interest in the
bearish movement.

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This is why this last confirmation
action after the breakout is so

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How do we confirm the bullish breakout?

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Well, with a price action that denotes
lack of interest in the bearish

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direction, and, of course, with the non
-reentry of the price into the range.

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It is about constantly visualizing what
we want to see in order to stick with

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the main scenario that is aligned with
the context and the roadmap up to that

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moment.

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We need to think in the following way.

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If the price breaks the creek, then I'm
going to wait for it to perform a test

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and look to buy.

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If, on the other hand, there is a failed
breakout, then I will wait for a test

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in the opposite direction to enter
short.

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This is what the Continuous Validation
Protocol is all about.

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Moreover, here the price develops a fast
trap -type pattern, generating a false

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breakout on the previous pivot.

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This is followed by a strong demand
candlestick or SOS bar, which would give

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the entry trigger to go long.

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This is the rationale we need to apply
to all the trading opportunities that

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arise. Now, imagine that we are in a
potential spring or bearish breakout

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situation.

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How the price reacts after reaching the
liquidity zone is vital in telling us

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which scenario we could favor.

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It will be the last price action that
confirms or rejects the scenario.

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Due to the dynamic nature of the market,
we must be aware that we may see

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behavior that is in line with what was
initially proposed, but which is not

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ultimately confirmed.

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In this context, if we are leaning
towards the development of a potential

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spring, we will want to see a strong
bullish reaction from the market that

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the price back inside the range,
demonstrating that buyers have firmly

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initiative upon the price reaching the
liquidity zone.

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This combination of actions would lead
to a context in which we could expect to

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see at least one impulse movement up
towards the highs of the structure.

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An alternative scenario would be to see
a slight bullish reaction that fails to

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re -enter the range and suggests that
the bearish breakout is potentially

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accepted, which would lead to a context
in which we should expect the price to

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go lower.

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These are the two possible main
alternatives.

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But what would happen if said price
movement, initially denoting a lack of

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interest, finally continues to rise
until it re -enters the range again?

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This is another possible scenario that
we have never considered before.

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Could it happen? Of course it could.

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So, if this is possible, we need to look
at it logically to see how we should

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act if it does.

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Analyzing the structure in absolute
terms, the price has visited the lower

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has refused to continue falling, and
instead has re -entered the range.

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With all this prior action therefore
appearing to be a potential spring,

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The question now is whether said
behavior is indeed a spring and whether

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the ability to tip the balance of the
market upwards.

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From my point of view, of course it is
possible. In the market, anything is

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possible, and objectively, that is what
seems to be happening.

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At this point, we have to decide how we
are going to act in this context.

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In my view, there are two options.

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Either directly reject the opportunity,
casting doubt on both the bullish and

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bearish scenario, or categorize the
opportunity as risky and trading with a

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lower amount.

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It could simply be an extended test
after the bearish breakout and then

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the redistribution.

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Or, it could be a bearish false breakout
that sets up a subsequent bullish

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scenario.

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For me, what happens in the trading area
at the support level of the structure

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would be key.

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To see this, we would simply have to
wait for the price to develop some type

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test on it which allows us to determine
with a greater probability what will

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happen next.

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When we aren't sure how we should read
what we are seeing on the chart, we

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should rely on the most objective
interpretation possible.

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In this scenario, we can effectively
confirm that the potential spring does

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meet the ideal characteristics of what
we are looking for.

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We see that the price has reached the
bottom of the structure and the

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interaction is made up of candlesticks
with a narrow range that denote a lack

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intent. which we should initially
consider to be a sign in favor of the

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scenario.

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Nevertheless, the market continues to go
higher and even re -enters the range.

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The only objective thing we can say at
that point is that the price has re

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-entered and that in principle means the
last behavior was a failed excess, a

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false breakout.

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If, moreover, this is confirmed
subsequently with a successful test on

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this would be a significant enough sign
that would allow us to reactivate the

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bullish scenario, which we would
initially have discarded.

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In the event that it is simply an
extended test after the bearish

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would be crucial that we at no point see
a successful test of the zone.

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If the market is genuinely unbalanced to
the downside, it would be strange to

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see this test develop.

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Also, any behavior suggesting weakness
that we observe, such as an upthrust,

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would be a significant sign.

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What happens in the trading zone is key
to giving more weight to one scenario or

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another. That is why the continuous
validation protocol is necessary, to

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all times what we want to see in order
to lean towards one scenario or another.

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This exercise is very useful not only to
assess the various options that the

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market can offer us, but also to
illustrate examples in which the signs

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very reliable.

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resulting in a trading approach with
fewer assurances.