1 00:00:00,270 --> 00:00:01,270 Take profit. 2 00:00:01,570 --> 00:00:05,270 In this part of the course, we will look at the different options we have for 3 00:00:05,270 --> 00:00:06,270 taking profits. 4 00:00:06,730 --> 00:00:10,530 Based on the price action and volume, we are going to work with four possible 5 00:00:10,530 --> 00:00:14,390 take profit options, which will depend on whether or not we have previous 6 00:00:14,390 --> 00:00:18,730 references. By this, I simply mean looking at whether there are any past 7 00:00:18,730 --> 00:00:22,270 not too far to the left of the chart that we can use as a reference. 8 00:00:22,970 --> 00:00:27,470 If we do see historical data that we can use as a reference, we will use it to 9 00:00:27,470 --> 00:00:29,350 establish two possible take profits. 10 00:00:29,870 --> 00:00:34,230 First, the liquidity zones, which we have looked at so many times during this 11 00:00:34,230 --> 00:00:38,930 course. And second, if we find ourselves in a trend context, we will use 12 00:00:38,930 --> 00:00:42,290 previous structures that have been developed to place our take profits 13 00:00:43,130 --> 00:00:47,890 On the other hand, if we do not have any previous prices to refer to, as is 14 00:00:47,890 --> 00:00:51,970 often the case when we are at record highs or lows, we will use behaviors 15 00:00:51,970 --> 00:00:56,750 can alert us to the end of the movement, such as evidence of climatic action and 16 00:00:56,750 --> 00:00:57,790 the development of structures. 17 00:00:58,599 --> 00:01:00,340 Let's take a look at each of these. 18 00:01:01,180 --> 00:01:03,160 We're going to start with liquidity zones. 19 00:01:03,460 --> 00:01:05,120 There's nothing new to discover here. 20 00:01:05,459 --> 00:01:09,180 We presented the concept at the beginning of the course and it has 21 00:01:09,180 --> 00:01:10,180 us throughout. 22 00:01:10,560 --> 00:01:14,220 These are areas of price reversals, of previous highs and lows. 23 00:01:14,640 --> 00:01:18,820 We know that in these zones there are always a large number of orders waiting 24 00:01:18,820 --> 00:01:23,340 be executed and that is why they are very interesting areas in which to wait 25 00:01:23,340 --> 00:01:24,340 the price to arrive. 26 00:01:24,780 --> 00:01:27,720 The greater the pivot, the greater the strength of the zone. 27 00:01:28,040 --> 00:01:30,280 since you can expect more liquidity at their edges. 28 00:01:30,860 --> 00:01:34,600 We can find them both within a structure and in the middle of a trend. 29 00:01:35,200 --> 00:01:36,880 Here is a real example. 30 00:01:37,240 --> 00:01:40,600 Broadly speaking, these are the liquidity areas of the chart. 31 00:01:41,040 --> 00:01:43,800 We have simply marked pretty much all the pivots. 32 00:01:44,600 --> 00:01:48,600 Depending on the context and the prevailing roadmap, we will use certain 33 00:01:48,600 --> 00:01:53,100 liquidity zones as zones in which to look for an entry, and the opposite ones 34 00:01:53,100 --> 00:01:55,020 zones in which to look for our exit. 35 00:01:55,460 --> 00:01:57,300 But the principle is the same. 36 00:01:57,680 --> 00:02:01,860 Based on the concept of liquidity zones, we are going to use them to do some 37 00:02:01,860 --> 00:02:06,460 type of position management at those points, either entering or exiting the 38 00:02:06,460 --> 00:02:11,820 market. For example, in the first part of the chart, the context is bearish, so 39 00:02:11,820 --> 00:02:14,100 ideally we should be looking to enter the market short. 40 00:02:14,640 --> 00:02:18,640 For this, we know we need to hold out for the creation of pivots and the 41 00:02:18,640 --> 00:02:22,480 subsequent false breakouts on them, and search for the trigger for sale there. 42 00:02:23,000 --> 00:02:27,460 Of the identified areas, the only ones that would have offered our entry 43 00:02:27,460 --> 00:02:28,460 are these three. 44 00:02:28,880 --> 00:02:31,840 At entry number one, we would establish two exits. 45 00:02:32,200 --> 00:02:36,600 Exit number one, which is in the first liquidity zone that the price finds 46 00:02:36,600 --> 00:02:42,520 entry, and exit number two, that is the next area which the price reaches after 47 00:02:42,520 --> 00:02:44,020 we have taken our first profit. 48 00:02:44,280 --> 00:02:46,980 At that point, we would already be out of the market. 49 00:02:48,480 --> 00:02:52,930 In terms of entry number two, we see that it breaks through the previous high 50 00:02:52,930 --> 00:02:54,590 and the entry trigger is activated. 51 00:02:55,050 --> 00:02:57,610 The first liquidity zone, the price comes across. 52 00:02:58,530 --> 00:03:03,050 Exit number 3 doesn't seem to be very significant, but profit should still be 53 00:03:03,050 --> 00:03:05,230 taken there as it is technically a pivot. 54 00:03:05,970 --> 00:03:10,370 Meanwhile, if we have divided the position into two parts, the second part 55 00:03:10,370 --> 00:03:15,070 the profit should be taken at exit number 4, since it is the next liquidity 56 00:03:15,070 --> 00:03:16,070 that the market hits. 57 00:03:16,670 --> 00:03:18,870 The dynamic will always be the same. 58 00:03:19,260 --> 00:03:23,480 a liquidity zone for entering the market, and another liquidity zone for 59 00:03:23,480 --> 00:03:27,300 it. The case of entry number 2 is a little bit different. 60 00:03:27,700 --> 00:03:31,500 Let's look at it in more detail because this is an important concept. 61 00:03:32,100 --> 00:03:36,360 If you look closely at the moment the entry trigger is activated, the two 62 00:03:36,360 --> 00:03:39,980 liquidity zones that can be identified are number 3 and number 5. 63 00:03:40,540 --> 00:03:43,360 That is where our take profit order should be located. 64 00:03:43,660 --> 00:03:46,280 And the following happens, that the market falls. 65 00:03:46,810 --> 00:03:50,850 reaches our first take profit zone and generates a new zone before reaching the 66 00:03:50,850 --> 00:03:55,230 liquidity zone that we had initially identified, number 5, and here things 67 00:03:55,230 --> 00:04:00,090 change. We need to bear in mind that the market is constantly changing and that 68 00:04:00,090 --> 00:04:04,250 it will continue to generate new price reversals which will establish new 69 00:04:04,250 --> 00:04:05,250 liquidity areas. 70 00:04:05,390 --> 00:04:08,790 So our targets need to be adapted to this new market information. 71 00:04:09,350 --> 00:04:13,630 In other words, say we had originally established a take profit level in a 72 00:04:13,630 --> 00:04:14,630 distant liquidity zone. 73 00:04:15,070 --> 00:04:19,510 but while developing a movement the price generates a new closer liquidity 74 00:04:19,510 --> 00:04:25,050 we should also now take this one into account for our position management and 75 00:04:25,050 --> 00:04:30,210 this is exactly what has happened here so the second exit for entry number two 76 00:04:30,210 --> 00:04:35,330 is exit number four and not five because exit four has been generated during the 77 00:04:35,330 --> 00:04:40,110 course of the trade and has led us to modify our position management lastly 78 00:04:40,110 --> 00:04:44,740 regarding entry number three This one does make use of the liquidity zone that 79 00:04:44,740 --> 00:04:49,280 we have labeled as exit number 5, although if you look closely there is 80 00:04:49,280 --> 00:04:53,380 another pivot prior to it, but I have ignored it because it doesn't travel any 81 00:04:53,380 --> 00:04:54,380 considerable distance. 82 00:04:54,960 --> 00:04:58,800 And in the event you had split the trade, the second part should have been 83 00:04:58,800 --> 00:05:00,420 released in exit number 6. 84 00:05:00,920 --> 00:05:03,360 As you can see, there is no pivot there. 85 00:05:03,840 --> 00:05:07,540 This type of exit has been taken due to the appearance of climatic action, 86 00:05:07,680 --> 00:05:10,260 another type of exit that we will look at later. 87 00:05:10,900 --> 00:05:14,600 Looking at the second part of the chart, as the price begins to move sideways, 88 00:05:14,940 --> 00:05:18,860 our bias should continue to be toward going short since the imbalance is 89 00:05:18,860 --> 00:05:23,280 bearish. With that in mind, we could have taken entry number 1, which would 90 00:05:23,280 --> 00:05:27,320 close out taking some of the profit in the liquidity zone labeled exit number 91 00:05:28,100 --> 00:05:32,820 If we had next set the stop at breakeven, as I recommend doing after 92 00:05:32,820 --> 00:05:36,540 initial partial profit, we would have missed the stop due to the subsequent 93 00:05:36,540 --> 00:05:37,540 bullish rebound. 94 00:05:38,030 --> 00:05:41,770 From there, we see how the price visits the lower part of the small structure 95 00:05:41,770 --> 00:05:46,190 and generates a strong false breakout, which would establish entry number 2. 96 00:05:46,790 --> 00:05:50,910 Entering here would allow the price to travel some distance, since the first 97 00:05:50,910 --> 00:05:55,610 take profit would be in the liquidity zone labeled exit number 1, and the 98 00:05:55,610 --> 00:05:59,230 would be above the break of a pivot generated during the development of the 99 00:05:59,230 --> 00:06:00,230 operation. 100 00:06:00,730 --> 00:06:04,990 This is the management dynamic with respect to taking profits in liquidity 101 00:06:04,990 --> 00:06:06,810 created by the generation of pivots. 102 00:06:07,500 --> 00:06:12,180 Although it can be used in any timeframe, this management is especially 103 00:06:12,180 --> 00:06:16,220 for short -term operations where rapid fluctuations can generate sudden 104 00:06:16,220 --> 00:06:18,740 reversals that could take us out of the market. 105 00:06:19,140 --> 00:06:22,880 This exit strategy is ideal for scalping or day trading. 106 00:06:23,400 --> 00:06:27,920 Meanwhile, the type of management described here, using previous 107 00:06:28,180 --> 00:06:32,160 focuses on the search for broader movements, which is why it is especially 108 00:06:32,160 --> 00:06:34,280 useful in medium and long -term trading. 109 00:06:35,140 --> 00:06:39,480 Position management using previous structures is based on auction theory as 110 00:06:39,480 --> 00:06:40,900 key tool for setting objectives. 111 00:06:41,820 --> 00:06:46,260 After an imbalance, the market will seek to find traders with the opposite bias 112 00:06:46,260 --> 00:06:47,800 who are willing to trade again. 113 00:06:48,340 --> 00:06:52,640 This is why the price will move to those areas where there was previously a high 114 00:06:52,640 --> 00:06:55,980 volume of trading, since the same thing is expected to happen again. 115 00:06:57,420 --> 00:07:00,700 We can do this by identifying old equilibrium zones. 116 00:07:01,200 --> 00:07:04,440 which are nothing more than previous accumulation or distribution structures. 117 00:07:04,940 --> 00:07:08,940 It is very important to stress once again the short -term mentality of the 118 00:07:08,940 --> 00:07:13,480 market. The most recent trading zones generated by the market will be more 119 00:07:13,480 --> 00:07:17,040 significant in terms of attracting the price attraction than the older zones. 120 00:07:17,960 --> 00:07:22,340 Imagine that we are at this point on the chart, assessing whether the price is 121 00:07:22,340 --> 00:07:27,000 developing a distribution pattern. If confirmed, what would be a good target 122 00:07:27,000 --> 00:07:31,880 look for? At this moment in time, the most recent structure is just below so 123 00:07:31,880 --> 00:07:35,200 establishing the take profit in that structure would be the best 124 00:07:35,200 --> 00:07:40,760 as we can see the market went looking for it and a new sideways movement began 125 00:07:40,760 --> 00:07:45,900 this is an ideal example to illustrate the concept that past structures create 126 00:07:45,900 --> 00:07:50,260 certain magnetic attraction for the price as a result of the oxen theory 127 00:07:50,260 --> 00:07:51,260 have already looked at 128 00:07:51,950 --> 00:07:55,390 There is an implicit agreement at the aggregate level that if a structure 129 00:07:55,390 --> 00:07:59,910 represented the equilibrium and fair price of the market at some past moment, 130 00:07:59,910 --> 00:08:02,490 will most likely recreate this at a future moment. 131 00:08:03,010 --> 00:08:07,290 Obviously, this only applies when not too much time has elapsed or the 132 00:08:07,290 --> 00:08:08,930 underlying situation could change. 133 00:08:09,630 --> 00:08:13,890 A common issue regarding this type of management relates to where exactly the 134 00:08:13,890 --> 00:08:15,310 take profit level should be set. 135 00:08:15,910 --> 00:08:20,650 Because the structure has a more or less wide range, but the take profit must be 136 00:08:20,650 --> 00:08:22,630 established at a specific price level. 137 00:08:23,270 --> 00:08:27,330 To do this, we can simply assume that the middle of the range represents the 138 00:08:27,330 --> 00:08:31,530 maximum equilibrium, and therefore it could be the price level that we were 139 00:08:31,530 --> 00:08:32,289 looking for. 140 00:08:32,289 --> 00:08:33,429 It is simple logic. 141 00:08:33,630 --> 00:08:37,370 If the structure represents an equilibrium zone, the point of greatest 142 00:08:37,370 --> 00:08:39,970 equilibrium would in principle be its middle section. 143 00:08:40,870 --> 00:08:44,169 Here, we see the market is in the middle of developing a new structure. 144 00:08:44,720 --> 00:08:48,780 So what previous equilibrium zone should we take into account when the imbalance 145 00:08:48,780 --> 00:08:51,800 begins, assuming we have been able to enter the market? 146 00:08:52,020 --> 00:08:55,260 In this case, we now have structures above and below. 147 00:08:55,640 --> 00:09:00,060 So if this turns out to be an accumulation and the price shoots up, we 148 00:09:00,060 --> 00:09:02,460 establish the take profit in the distribution structure. 149 00:09:02,840 --> 00:09:07,660 On the other hand, if a redistribution pattern is confirmed, we should set the 150 00:09:07,660 --> 00:09:10,800 initial target at the level of the small sideways movement below. 151 00:09:11,470 --> 00:09:15,850 What finally happens is that a redistribution is confirmed and the 152 00:09:15,850 --> 00:09:17,870 continues with the bearish trend movement. 153 00:09:18,250 --> 00:09:22,910 And indeed, we see that it manages to reach the last structure, where again 154 00:09:22,910 --> 00:09:24,530 appearance of the buyers can be seen. 155 00:09:25,170 --> 00:09:28,750 What a coincidence that the bearish movement stopped right there, right? 156 00:09:28,970 --> 00:09:31,930 Well, no, it doesn't seem to be the result of pure chance. 157 00:09:32,510 --> 00:09:36,810 The market has developed a bearish movement with a lot of momentum, and 158 00:09:36,810 --> 00:09:40,270 momentum is partly due to the fact that the buyers have withdrawn from the 159 00:09:40,270 --> 00:09:44,940 market. And as we explained before, if one of the forces denotes a lack of 160 00:09:44,940 --> 00:09:49,180 interest, this facilitates the movement in the opposite direction, which is 161 00:09:49,180 --> 00:09:50,420 exactly what happens there. 162 00:09:51,020 --> 00:09:55,540 And at what point have buyers reappeared again? Well, in an old zone where there 163 00:09:55,540 --> 00:09:57,540 was previously interest on the part of buyers. 164 00:09:58,120 --> 00:10:00,240 So what should we expect from now on? 165 00:10:00,580 --> 00:10:04,320 Well, at the present time, we don't have any more references below. 166 00:10:04,860 --> 00:10:09,080 So, if a new redistribution is confirmed, we should apply one of the 167 00:10:09,080 --> 00:10:10,760 that we will look at later on. 168 00:10:11,120 --> 00:10:15,380 But if the price generates an accumulation pattern in that zone, the 169 00:10:15,380 --> 00:10:19,140 level further up can be clearly found in the old redistribution structure. 170 00:10:19,680 --> 00:10:24,720 And finally, the market confirmed the accumulation and the balance tipped to 171 00:10:24,720 --> 00:10:28,600 upside with the price reaching almost to the tick the halfway point of the 172 00:10:28,600 --> 00:10:31,500 previous redistribution that we could have used as a target. 173 00:10:32,200 --> 00:10:36,200 This will always be the work dynamic with respect to taking profits using 174 00:10:36,200 --> 00:10:37,200 previous structures. 175 00:10:37,940 --> 00:10:41,800 Keep in mind that this chart could be of a longer period than your trading 176 00:10:41,800 --> 00:10:42,800 period. 177 00:10:42,860 --> 00:10:47,580 Sometimes, it is very useful to go up a time frame and see the general context 178 00:10:47,580 --> 00:10:50,700 and to be able to identify these types of previous structures. 179 00:10:51,300 --> 00:10:56,040 For example, if you trade on minute charts, trying to identify these 180 00:10:56,040 --> 00:10:57,880 on the hourly chart could be helpful. 181 00:10:58,120 --> 00:11:02,460 If you trade on the hourly chart, Moving up to the daily might allow you to 182 00:11:02,460 --> 00:11:03,880 better identify this context. 183 00:11:04,500 --> 00:11:09,420 And finally, we reach the present moment, waiting for that small pause in 184 00:11:09,420 --> 00:11:12,500 market to determine whether the price moves up or down. 185 00:11:13,080 --> 00:11:17,500 Our job is to have previously identified the targets that we have above and 186 00:11:17,500 --> 00:11:18,500 below the current price. 187 00:11:19,200 --> 00:11:23,260 At this point, we already know that since the price is coming from an 188 00:11:23,260 --> 00:11:27,120 accumulation structure, we should expect the development of some type of 189 00:11:27,120 --> 00:11:31,530 reaccumulation. either a simple consolidation through a minor structure 190 00:11:31,530 --> 00:11:35,370 through the development of a slow structure. And if this behavior is 191 00:11:35,610 --> 00:11:38,930 the upper level target should be set at the highest distribution. 192 00:11:39,650 --> 00:11:44,410 If on the contrary, there is a reaction from the sellers at that point, which is 193 00:11:44,410 --> 00:11:48,910 feasible since the price is currently in a previous equilibrium zone, the target 194 00:11:48,910 --> 00:11:52,310 that it could easily go for would be the previous accumulation pattern. 195 00:11:52,810 --> 00:11:56,650 Although it is true that it could encounter a certain reaction in the 196 00:11:56,650 --> 00:12:01,670 test after the bullish breakout since, as we can see, it also generated a small 197 00:12:01,670 --> 00:12:05,870 reversal. We will now look at the two behaviors that we could use to take 198 00:12:05,870 --> 00:12:10,290 profits if we find ourselves in a trend context in which we don't have any 199 00:12:10,290 --> 00:12:13,070 reference levels to the left on which to base our management. 200 00:12:13,930 --> 00:12:16,050 We will start with the appearance of a climax. 201 00:12:16,910 --> 00:12:21,050 Regardless of how the candlestick is represented, whether it is wide or 202 00:12:21,400 --> 00:12:26,080 Here the key lies in the volume, which is excessively high, and tells us that 203 00:12:26,080 --> 00:12:28,460 there are a lot of large traders in the market. 204 00:12:29,720 --> 00:12:35,020 If the market is at a price ceiling or floor and a huge volume appears, we need 205 00:12:35,020 --> 00:12:38,540 to be alert because this increases the chances of a sharp reversal. 206 00:12:39,180 --> 00:12:43,560 We already know that market reversals usually require some construction of the 207 00:12:43,560 --> 00:12:48,300 cause, even if it involves a fast structure at least, but this will not 208 00:12:48,300 --> 00:12:49,300 be the case. 209 00:12:49,520 --> 00:12:53,200 sometimes the market manages to turn sharply in a V -shaped reversal. 210 00:12:53,700 --> 00:12:57,640 We can use this type of exit to avoid this particular type of behavior. 211 00:12:58,520 --> 00:13:02,320 Because a potential climax pattern could reverse the entire previous trend 212 00:13:02,320 --> 00:13:06,420 movement, this is reason enough to perform some kind of active position 213 00:13:06,420 --> 00:13:11,400 management. Here, we have a very genuine example of this climax event. 214 00:13:12,300 --> 00:13:16,520 If we have taken up a short position, are in the middle of a bearish movement, 215 00:13:16,940 --> 00:13:21,200 and we see the appearance of this kind of volume, the most sensible thing would 216 00:13:21,200 --> 00:13:25,860 be to automatically close the position because, as I say, the probability of a 217 00:13:25,860 --> 00:13:28,180 sharp reversal being generated is high. 218 00:13:28,860 --> 00:13:33,080 Remember, we have previously explained how all market reversals go through a 219 00:13:33,080 --> 00:13:37,340 three -step process, which is generally observed through fast or slow patterns. 220 00:13:37,920 --> 00:13:42,660 In this case, we have the entire process compressed into two candlesticks, the 221 00:13:42,660 --> 00:13:46,660 bearish one, which represents the exhaustion of sellers and the absorption 222 00:13:46,660 --> 00:13:51,120 sales, and the next bullish candlestick showing bullish intent that represents 223 00:13:51,120 --> 00:13:52,680 the initiative of the buyers. 224 00:13:53,160 --> 00:13:58,240 After the appearance of a climax event, the market, on some occasions, may not 225 00:13:58,240 --> 00:14:02,780 turn precisely in that same candlestick, but it should still be taken into 226 00:14:02,780 --> 00:14:08,140 account. This is especially the case if, after a few candlesticks, the market 227 00:14:08,140 --> 00:14:10,880 starts to reverse, as happens in this example. 228 00:14:12,560 --> 00:14:17,280 Often, This event will simply be a buying climax that will later generate a 229 00:14:17,280 --> 00:14:22,360 sideways movement, which will allow us, if we are still in the market, to exit 230 00:14:22,360 --> 00:14:26,680 in a more advanced position on the development of that structure. We will 231 00:14:26,680 --> 00:14:27,780 this in the next point. 232 00:14:28,380 --> 00:14:32,760 However, on many other occasions, the momentum will be so strong that it will 233 00:14:32,760 --> 00:14:37,260 either turn the entire market around in one or two candlesticks, as we saw in 234 00:14:37,260 --> 00:14:41,940 the previous example, or it will not leave us with a clear later exit, as in 235 00:14:41,940 --> 00:14:42,940 this example. 236 00:14:43,040 --> 00:14:46,540 which could result in losing a certain percentage of profits in the trade. 237 00:14:47,180 --> 00:14:51,400 For this reason, one type of management we should consider when we find 238 00:14:51,400 --> 00:14:55,760 ourselves at the edges of the range is to wait to see the appearance of ultra 239 00:14:55,760 --> 00:14:56,760 -high volume. 240 00:14:56,860 --> 00:15:02,180 Here we have another example of a climax event, but as you can see, it is not a 241 00:15:02,180 --> 00:15:06,560 candlestick with a wide range and a closing price at the highs, as a buying 242 00:15:06,560 --> 00:15:09,120 climax is theoretically supposed to be represented. 243 00:15:10,060 --> 00:15:15,160 This is another type of behavior that the VSA methodology labels the end of a 244 00:15:15,160 --> 00:15:20,300 rising market, or the end of the uptrend, and the differentiating element 245 00:15:20,300 --> 00:15:24,620 that the range of the candlestick is not excessively wide, it is quite narrow, 246 00:15:24,820 --> 00:15:27,600 but it still generates climatic volume. 247 00:15:28,240 --> 00:15:32,580 On this occasion, the market did develop a subsequent distribution structure 248 00:15:32,580 --> 00:15:33,580 before falling. 249 00:15:33,840 --> 00:15:38,220 However, there is no doubt that using this particular action to exit a long 250 00:15:38,220 --> 00:15:40,110 position would have been a wise move. 251 00:15:40,810 --> 00:15:45,690 Finally, the second position management strategy for use in a trend context in 252 00:15:45,690 --> 00:15:49,170 which we have no reference level to the left would be to wait for the 253 00:15:49,170 --> 00:15:50,710 development of a complete structure. 254 00:15:51,530 --> 00:15:55,790 Within this type of management, we are going to differentiate two subtypes 255 00:15:55,790 --> 00:15:59,910 depending on the degree of development of the structure, whether we are in a 256 00:15:59,910 --> 00:16:02,690 Phase A or in a potential Phase C. 257 00:16:03,600 --> 00:16:07,660 It is important to note that the new structure should develop in the same 258 00:16:07,660 --> 00:16:11,860 frame in which we identified the previous structure, which gave us our 259 00:16:11,860 --> 00:16:16,380 point. It would also be interesting to assess other elements to make a better 260 00:16:16,380 --> 00:16:20,760 decision, such as analyzing how far the trend has traveled to see if it may 261 00:16:20,760 --> 00:16:23,940 already be in an overextended and exhausted position. 262 00:16:24,960 --> 00:16:29,340 The more trend movement there is, the more likely the future structure is to 263 00:16:29,340 --> 00:16:31,300 a reversal rather than a continuation. 264 00:16:32,290 --> 00:16:37,110 Continuing with the previous example, if you have decided not to carry out any 265 00:16:37,110 --> 00:16:41,310 type of management after the appearance of the climax, perhaps you could 266 00:16:41,310 --> 00:16:46,430 consider doing so after the confirmation of Phase A, which stops the previous 267 00:16:46,430 --> 00:16:47,430 trend. 268 00:16:47,610 --> 00:16:51,610 After the development of Phase A, we know that the market will probably move 269 00:16:51,610 --> 00:16:55,990 from a trend to a sideways environment, and that in this sideways market the 270 00:16:55,990 --> 00:16:58,250 cause of the subsequent movement will be constructed. 271 00:16:59,120 --> 00:17:04,060 This subsequent trend may start again in the same direction, but we cannot know 272 00:17:04,060 --> 00:17:05,060 this at that time. 273 00:17:05,400 --> 00:17:09,640 For this reason, at that point the most sensible thing to do would be to carry 274 00:17:09,640 --> 00:17:10,980 out some type of management. 275 00:17:11,680 --> 00:17:15,359 But if you still don't intend to do so after confirmation of the change of 276 00:17:15,359 --> 00:17:19,619 character, the appearance of the potential Phase C test event, which in 277 00:17:19,619 --> 00:17:24,460 example is a possible upthrust, should be the definitive signal to abandon the 278 00:17:24,460 --> 00:17:25,460 position entirely. 279 00:17:26,250 --> 00:17:30,290 After seeing this, it makes no sense to hold on to the position any longer. 280 00:17:30,850 --> 00:17:34,350 Could the market reverse later and end up as a reaccumulation? 281 00:17:34,650 --> 00:17:36,410 Yes, of course, anything is possible. 282 00:17:36,650 --> 00:17:40,450 But at that point, we already have two major signals that indicate underlying 283 00:17:40,450 --> 00:17:43,850 weakness, climatic action and the potential upthrust. 284 00:17:44,550 --> 00:17:48,950 We know which context and roadmap would be triggered, so it doesn't make any 285 00:17:48,950 --> 00:17:50,950 sense to hold a position in the opposite direction. 286 00:17:51,510 --> 00:17:54,630 There is no point losing a percentage of the amount traded. 287 00:17:55,050 --> 00:17:58,330 in the simple hope that the price might continue in the direction of the 288 00:17:58,330 --> 00:17:59,330 previous trend. 289 00:18:00,470 --> 00:18:04,910 If there really are interests in pushing it back in the direction, we can look 290 00:18:04,910 --> 00:18:08,730 always for a new trading opportunity during the subsequent development of 291 00:18:08,730 --> 00:18:09,669 new structure. 292 00:18:09,670 --> 00:18:11,470 That is the mindset we need. 293 00:18:12,030 --> 00:18:16,030 As I have said before, protecting capital is more important than adding 294 00:18:16,030 --> 00:18:20,910 profit. And once you are very clear about this, you won't hesitate to adopt 295 00:18:20,910 --> 00:18:22,170 most conservative strategy.