1 00:00:00,170 --> 00:00:02,150 The importance of the present moment. 2 00:00:02,430 --> 00:00:07,250 As we have already discussed, the Wyckoff method is, by definition, a 3 00:00:07,250 --> 00:00:12,330 approach. Before considering possible scenarios, we have to evaluate the signs 4 00:00:12,330 --> 00:00:16,410 that appear on the chart after the interaction between the participants to 5 00:00:16,410 --> 00:00:19,290 figure out who is likely to be in control of the market. 6 00:00:19,950 --> 00:00:24,330 And as the control of the market can change any time due to its dynamic and 7 00:00:24,330 --> 00:00:29,070 adaptive nature, We must continuously analyze the signs that can be observed 8 00:00:29,070 --> 00:00:32,850 the chart to be ready and able to react to these changes as quickly as possible. 9 00:00:33,070 --> 00:00:36,850 One of the most logical ways to do this is to give more weight to the 10 00:00:36,850 --> 00:00:39,470 implications of the latest behavior seen on the chart. 11 00:00:40,330 --> 00:00:45,050 When asked what is the most important thing on the chart, I usually say the 12 00:00:45,050 --> 00:00:48,550 thing that happened, and the next most important thing is what happened 13 00:00:48,550 --> 00:00:49,590 immediately before that. 14 00:00:50,250 --> 00:00:52,250 The reason why is very simple. 15 00:00:52,620 --> 00:00:56,600 because the last key action represents the most current valuations of the 16 00:00:56,600 --> 00:01:01,060 agents, and therefore we should be biased in favor of the roadmap suggested 17 00:01:01,060 --> 00:01:02,520 the last behavior of the price. 18 00:01:02,900 --> 00:01:07,600 With this in mind, we need to then turn to the auction theory we looked at 19 00:01:07,600 --> 00:01:12,020 previously, which suggests the market moves with inefficiencies in search of 20 00:01:12,020 --> 00:01:16,400 efficiency. But we should also refer to one of the basic principles of technical 21 00:01:16,400 --> 00:01:20,900 analysis, which is that the market has a tendency to continue to behave in the 22 00:01:20,900 --> 00:01:21,900 same way. 23 00:01:21,980 --> 00:01:26,040 Therefore, if a market changes from a sideways environment to a trend context, 24 00:01:26,340 --> 00:01:31,320 it will most likely continue in this trend into the future, unless some event 25 00:01:31,320 --> 00:01:35,140 occurs that again leads to the valuations of the participants to 26 00:01:35,140 --> 00:01:37,520 resulting in the price settling into a range. 27 00:01:37,820 --> 00:01:40,020 What does all this mean in trading terms? 28 00:01:40,360 --> 00:01:45,060 The two events that can influence our directional bias are false breakouts and 29 00:01:45,060 --> 00:01:48,620 impulse movements, with the former being the most significant of these. 30 00:01:49,280 --> 00:01:53,220 Under the aforementioned principles, We want to get to the point where the last 31 00:01:53,220 --> 00:01:56,840 false breakout on the chart changes our trading bias in the direction of the 32 00:01:56,840 --> 00:01:58,040 roadmap that it suggests. 33 00:01:58,660 --> 00:02:02,920 The false breakout alone is powerful enough to shift the context of the 34 00:02:02,920 --> 00:02:05,480 and presage a move of intent almost immediately. 35 00:02:06,220 --> 00:02:11,180 As we have already commented previously, almost all impulse movements are born 36 00:02:11,180 --> 00:02:12,720 from a previous false breakout. 37 00:02:13,040 --> 00:02:14,560 That is where we want to be. 38 00:02:15,360 --> 00:02:18,740 Therefore, if we find ourselves in a sideways environment of equilibrium, 39 00:02:19,530 --> 00:02:23,190 and at one of its edges there is a search for liquidity, a failed or false 40 00:02:23,190 --> 00:02:27,430 breakout, from that moment we must be ready for the context that the roadmap 41 00:02:27,430 --> 00:02:30,830 suggests will emerge as a result of this action in particular. 42 00:02:31,550 --> 00:02:35,370 Since we know that generally after the appearance of a false breakout there 43 00:02:35,370 --> 00:02:39,410 be an impulse movement in the same direction, this presents us with a 44 00:02:39,410 --> 00:02:40,410 trading opportunity. 45 00:02:41,070 --> 00:02:46,170 As we can see in the example, impulse movements appear after false breakouts 46 00:02:46,170 --> 00:02:47,210 relevant trading levels. 47 00:02:47,660 --> 00:02:51,400 And when the price reaches the zone of liquidity once again, there is a new 48 00:02:51,400 --> 00:02:54,460 false breakout and reversal towards the opposite direction. 49 00:02:54,900 --> 00:02:58,440 The market can remain in this context for as long as it wants. 50 00:02:58,800 --> 00:03:03,160 Our task is to look for the signs that should appear once the roadmap of 51 00:03:03,160 --> 00:03:04,340 events has been established. 52 00:03:05,140 --> 00:03:08,740 After the development of the impulse movement that manages to break the 53 00:03:08,740 --> 00:03:11,620 level, this will be the most important signal so far. 54 00:03:12,220 --> 00:03:17,140 As we saw previously, we obtain real confirmation of the spring when we 55 00:03:17,140 --> 00:03:19,380 the sign of intent in favor of its roadmap. 56 00:03:20,040 --> 00:03:24,400 So this impulse will be the most important trading event, and the second 57 00:03:24,400 --> 00:03:26,840 important will be the false breakout that caused it. 58 00:03:27,100 --> 00:03:32,400 And as long as this context is respected, which in this case means as 59 00:03:32,400 --> 00:03:36,080 the price does not re -enter the range, the bias in favor of its roadmap will 60 00:03:36,080 --> 00:03:37,080 remain valid. 61 00:03:38,040 --> 00:03:43,450 In this example, if we see a spring and a good sign of strength, What we should 62 00:03:43,450 --> 00:03:47,690 expect is a real breakout and acceptance of out -of -range trading levels, 63 00:03:47,870 --> 00:03:50,390 suggesting we look to take long positions. 64 00:03:50,790 --> 00:03:55,350 And we should be very clear that anything other than that means we need 65 00:03:55,350 --> 00:04:00,390 dismiss the bullish scenario and, depending on what really happens, 66 00:04:00,390 --> 00:04:01,730 consider going short. 67 00:04:02,090 --> 00:04:04,110 But completely the opposite happens. 68 00:04:04,490 --> 00:04:08,190 It's not that the market doesn't build enough acceptance above the broken 69 00:04:08,410 --> 00:04:12,270 It's that it recovers quickly and again executes a false breakout. 70 00:04:12,640 --> 00:04:13,640 an upthrust. 71 00:04:13,740 --> 00:04:17,980 If there are no signs of a higher degree that provide the context only on the 72 00:04:17,980 --> 00:04:22,300 long side, at this point we should assess the possibility of entering the 73 00:04:22,300 --> 00:04:23,300 in a short position. 74 00:04:24,040 --> 00:04:28,500 The prevailing context was established by the spring and the sign of strength, 75 00:04:28,700 --> 00:04:31,940 but we know that the market can change hands at any time. 76 00:04:32,420 --> 00:04:36,560 It has failed to continue adding inputs in favor of the bullish upturn with that 77 00:04:36,560 --> 00:04:40,980 false breakout, and now we know the roadmap suggests we should look to go 78 00:04:41,480 --> 00:04:44,440 an example of how important it is to have a flexible mindset. 79 00:04:44,900 --> 00:04:49,380 The market continues to develop and breaks the last relevant lower level at 80 00:04:49,380 --> 00:04:53,900 bottom of the range, as always, the potential spring area or potential 81 00:04:53,900 --> 00:04:54,900 breakout. 82 00:04:55,060 --> 00:04:59,980 Given that the context is bearish, as we are coming from an upthrust and a sign 83 00:04:59,980 --> 00:05:04,140 of weakness, we should be expecting the development of some type of successful 84 00:05:04,140 --> 00:05:08,860 bearish breakout test, whether it is simply a test or some behavior that 85 00:05:08,860 --> 00:05:09,860 market acceptance. 86 00:05:10,300 --> 00:05:15,260 And once again, it fools us. We might think that now that's it, that there 87 00:05:15,260 --> 00:05:19,960 already been two false breakouts and therefore there was more of a chance of 88 00:05:19,960 --> 00:05:23,620 latest upthrust generating the real bearish downturn, but no. 89 00:05:24,260 --> 00:05:28,080 Again, the market performs another false breakout and re -enters the range. 90 00:05:28,720 --> 00:05:33,680 It is a context in which price and value converge, and most of the participants 91 00:05:33,680 --> 00:05:34,920 consider it to be so. 92 00:05:35,500 --> 00:05:40,240 That is why they trade the edges of the range on one side or the other to take 93 00:05:40,240 --> 00:05:44,540 advantage of the opportunity, waiting for at least one reversal to the 94 00:05:44,540 --> 00:05:48,560 of the range. And the market will continue in this dynamic as long as 95 00:05:48,560 --> 00:05:49,700 fundamentally changes. 96 00:05:50,560 --> 00:05:54,600 Again, at this point, the context once again changes in favor of bullish 97 00:05:54,600 --> 00:05:58,080 control. But we just said that we were directionally biased downwards. 98 00:05:58,480 --> 00:06:00,480 How come we are now biased upwards? 99 00:06:01,040 --> 00:06:05,000 Well, simply because the latest trading event we have observed in the market is 100 00:06:05,000 --> 00:06:09,160 the sign of strength, which has originated from a new bearish false 101 00:06:09,360 --> 00:06:13,940 and this conditions the roadmap in the short term. And here again, the same 102 00:06:13,940 --> 00:06:18,900 situation, a zone of multiple resistance, without a doubt a strong 103 00:06:18,900 --> 00:06:23,440 imbalance, where previously sufficient supply appeared to produce a downturn in 104 00:06:23,440 --> 00:06:24,199 the market. 105 00:06:24,200 --> 00:06:25,360 What will happen now? 106 00:06:25,950 --> 00:06:30,310 Well, once again, given that the context is bullish following the line of the 107 00:06:30,310 --> 00:06:34,790 last two trading events, we will expect there to be acceptance of those levels 108 00:06:34,790 --> 00:06:36,470 and the price will continue upwards. 109 00:06:36,910 --> 00:06:39,550 But no, the market remains stable. 110 00:06:39,930 --> 00:06:44,570 New appearance of sellers in the identified supply zone and a minor 111 00:06:44,570 --> 00:06:48,690 again reversing the sentiment of the structure, even resulting in a complete 112 00:06:48,690 --> 00:06:53,150 distribution scheme that reactivates the bearish roadmap with the aim of taking 113 00:06:53,150 --> 00:06:55,030 the price to the lower part of the structure. 114 00:06:55,640 --> 00:06:57,860 And now we arrive at the present moment. 115 00:06:58,220 --> 00:07:02,280 The market was able to perform another bearish -false breakout and a final 116 00:07:02,280 --> 00:07:05,440 bullish one, which is what is influencing the short -term bias. 117 00:07:05,720 --> 00:07:10,180 At this point, the prevailing roadmap is determined by the bearish movement and 118 00:07:10,180 --> 00:07:11,180 the last upthrust. 119 00:07:11,820 --> 00:07:16,360 With this idea about the importance of the present moment, I simply want to 120 00:07:16,360 --> 00:07:20,680 stress how important it is to keep an open mind and be aware that anything is 121 00:07:20,680 --> 00:07:24,680 possible and that the control and sentiment of the market could change 122 00:07:25,420 --> 00:07:29,360 Just because we have just seen a very genuine false breakout and impulse 123 00:07:29,360 --> 00:07:33,860 movement does not mean that the market will continue to move in line with that 124 00:07:33,860 --> 00:07:39,420 imbalance. The likelihood is that it will because that is the normal and 125 00:07:39,420 --> 00:07:43,620 roadmap that the methodology offers us and it is repeated time and again. 126 00:07:44,000 --> 00:07:48,580 However, the opposite could occur with the emergence of a turning point that 127 00:07:48,580 --> 00:07:51,800 reverses the price and sends it once more in the opposite direction. 128 00:07:52,700 --> 00:07:57,290 And the point here is that If we have fully assimilated this concept and we 129 00:07:57,290 --> 00:08:02,330 also good analysts and traders, when the time comes we will also be able to take 130 00:08:02,330 --> 00:08:05,010 advantage of this new opportunity that is presented to us. 131 00:08:05,410 --> 00:08:09,750 The market can remain for a considerable period in this state with continuous 132 00:08:09,750 --> 00:08:14,030 false breakouts at the edges as long as its participants agree on their 133 00:08:14,030 --> 00:08:16,290 valuations and there is total equilibrium. 134 00:08:16,990 --> 00:08:22,070 This is why we need to actively analyze the market to assess who is in control. 135 00:08:22,590 --> 00:08:24,810 and where the price is most likely to go.