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The Adaptability of Markets All the
concepts and ideas that I will be

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are fundamentally underpinned by the
aforementioned theory, the basis of

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is the adaptability of markets.

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Understanding this conceptual framework
in itself is the most powerful tool for

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taking on the financial markets, placing
you in a context in which you will

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understand that anything is possible due
to changing conditions.

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Applied to the matter at hand, These
changing conditions exert their

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during the development of structures, in
which two sides are fighting for

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control of a continuously changeable
market, which can change in favor of

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or sellers.

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The main variables that make the
adaptive markets hypothesis the only

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contextual framework for trading in the
market are traders with different needs,

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traders with different valuations,
traders with different capacities.

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As I've already mentioned, not all
trading is speculative in nature.

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There are many types of participants
that interact in the market and each has

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different needs, with hedging the most
significant of these.

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As well as the intent behind each trade,
it is worth noting that different users

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have timeframes that some traders work
with.

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While some take into account the very
short term, others adopt medium or long

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-term strategies.

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Moreover, the different valuations of
each trader will obviously have an

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at the aggregate level.

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The general consensus regarding an asset
may be that it is oversold and worth

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buying, but the target price could
change, and after a movement in that

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direction, the closing of positions of
those where the price and valuation

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would hinder the subsequent movement,
even leading to a reversal to the

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side.

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Finally, it is also important to be
aware that we don't know the capacity of

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traders involved to continue controlling
the market.

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At any moment, a trader with greater
capacity could appear and cause a

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What at first seemed to be unbalanced in
favor of one side with the appearance

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of this new player may suddenly be
tipped in favor of the opposite side.

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When analyzing market movements, there
are two very important factors to

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We don't know the intention of traders
who are supporting the current movement.

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If they are short -term traders who will
close positions in the next liquidity

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zone or if, on the contrary, they have a
longer -term perspective and will

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continue to further develop a trend.

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We don't know if traders with greater
capacity might suddenly intervene.

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When the price reaches any liquidity
zone, aggressive traders may appear with

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greater capacity to move the market by
pushing in the opposite direction.

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since they may have different longer
-term valuations.

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When the price reaches a potential
spring at the lows of the structure and

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there manages to reach the top again, it
is obvious that the buyers have entered

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down there with a certain amount of
aggressiveness.

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However, we don't know when they will
decide to close their positions.

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They may simply be short -term traders
taking advantage of a visit to a

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liquidity area to find the counterparty
to which to match their orders, either

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at the highs of the structure, or in an
intermediate area, so they can close

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their positions there and take profits.

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This closing of long positions would
cause a loss of bullish momentum and

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possibly a further downward turn.

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We also don't know if there may be long
-term traders involved with a greater

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ability to move the markets who are
looking for this bullish movement in

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to take advantage of it and go short
aggressively.

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Or maybe the traders who have bought at
the spring have a longer -term

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perspective and will do their best to
stay in the market and defend their

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position if necessary, leading to the
full development of the accumulation.

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An action that would attract other
traders who, driven by the fear of

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out, would enter the market and push the
price even higher with their activity,

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which could also activate other momentum
strategies and raise the price even

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more.

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You also need to bear in mind that not
all large traders win in a systematic

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recurring way over time, and on many
occasions, they are forced to accept

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losses. As Albrook says in his books on
price action, in liquid markets even the

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slightest price movement is generated
because a large trader is buying and

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another is selling.

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It is a battle between these large
institutions and therefore some of them

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incur losses in some of their trades.

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This is a problem we will often come
across, so our advantage lies in trading

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favor of the last imbalance.

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For this, it is crucial that we identify
the most critical event, the false

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breakout plus the signal of intent.

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The false breakout is the most decisive
action in the functioning of the market.

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Its underlying logic is so strong that
we should always be compelled to align

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with it.

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Therefore, if all other signs are
consistent, we should always trade in

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direction of the last false breakout.
That is, we should go long after seeing

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potential spring.

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and short after seeing an up thrust we
will explore this concept in more depth

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throughout the course