1 00:00:00,270 --> 00:00:04,750 Proactive Position Management We have now reached the final section of the 2 00:00:04,750 --> 00:00:09,150 course. In this module, we are going to use all the concepts we have looked at 3 00:00:09,150 --> 00:00:13,810 so far to establish the entry, the stop loss, and the take profit with examples 4 00:00:13,810 --> 00:00:15,210 at each of our trading zones. 5 00:00:15,710 --> 00:00:20,090 The key to proactive position management is that, because we know the market is 6 00:00:20,090 --> 00:00:25,110 dynamic and conditions change, control can continually swing from one side to 7 00:00:25,110 --> 00:00:29,150 another. And we don't want to be in the market when it could turn against us. 8 00:00:29,450 --> 00:00:33,950 Moreover, we must continually adapt to new behaviors that are generated once we 9 00:00:33,950 --> 00:00:34,950 are in position. 10 00:00:35,110 --> 00:00:39,550 Let's start in a situation in which we are in trading zone number one, in which 11 00:00:39,550 --> 00:00:43,850 we can see that there is some momentum inside a trend and we are looking for a 12 00:00:43,850 --> 00:00:45,410 basic correction before entering. 13 00:00:46,330 --> 00:00:49,950 The drawback of this sort of trade is that we would not wait for the 14 00:00:49,950 --> 00:00:53,990 of a fast pattern that generates the reversal and might give rise to the 15 00:00:53,990 --> 00:00:55,350 continuation of the trend movement. 16 00:00:55,850 --> 00:00:59,430 but rather we would enter the market immediately after observing the change 17 00:00:59,430 --> 00:01:03,530 character that is generated in the short term, due to the concept of a reversal 18 00:01:03,530 --> 00:01:04,530 movement. 19 00:01:04,730 --> 00:01:08,610 Therefore, the fact that this type of trade doesn't involve waiting for at 20 00:01:08,610 --> 00:01:12,970 one fast pattern means it is more likely, in a way, to be adopted by an 21 00:01:12,970 --> 00:01:15,310 aggressive trader rather than a conservative one. 22 00:01:17,530 --> 00:01:21,010 Analyzing the chart, what we observe is that the market has developed a 23 00:01:21,010 --> 00:01:26,080 structure further up, which may not necessarily be textbook in its shape, 24 00:01:26,080 --> 00:01:28,840 the end it has generated a strong bearish momentum. 25 00:01:29,600 --> 00:01:30,840 This is the key. 26 00:01:31,220 --> 00:01:35,440 You may not have been able to trade the distribution structure due to its 27 00:01:35,440 --> 00:01:40,320 erratic behavior, but after seeing the impulse movement, you now know that the 28 00:01:40,320 --> 00:01:41,460 context is bearish. 29 00:01:41,920 --> 00:01:46,080 The impulse movement is clearly being accompanied by an increase in volume, 30 00:01:46,260 --> 00:01:48,940 which suggests that there is harmony in this movement. 31 00:01:49,220 --> 00:01:53,820 And, at the same time, we see that the bullish movement, which in principle we 32 00:01:53,820 --> 00:01:59,150 should treat as a correction, carries low and declining volume, just as we 33 00:01:59,150 --> 00:02:03,850 expect, which means that at an overall level, this behavior comprised of a 34 00:02:03,850 --> 00:02:06,990 bearish momentum and bullish correction denotes maximum harmony. 35 00:02:07,730 --> 00:02:11,510 We also see that the price reaches the upper end of the dynamic that we have 36 00:02:11,510 --> 00:02:15,890 drawn using the linear regression tool, that is, in the trading zones at the 37 00:02:15,890 --> 00:02:16,970 extreme of the dynamic. 38 00:02:17,790 --> 00:02:22,150 This point is important because, as we know, in trend trading, when we are 39 00:02:22,150 --> 00:02:26,320 looking for a basic correction, there is no pre -established trading zone since 40 00:02:26,320 --> 00:02:29,200 we are looking for the trigger after the reversal of the movement. 41 00:02:29,660 --> 00:02:34,120 Therefore, it should be mandatory that in this context, the price should at 42 00:02:34,120 --> 00:02:37,500 least reach this extreme of the dynamic before considering an entry. 43 00:02:38,500 --> 00:02:42,920 Another input in favor of the bearish scenario would be the break of the last 44 00:02:42,920 --> 00:02:45,320 bullish dynamic corresponding to this correction. 45 00:02:45,720 --> 00:02:50,020 And finally, we have the appearance of that large candlestick showing bearish 46 00:02:50,020 --> 00:02:53,180 intent that breaks through the low of several bullish candlesticks. 47 00:02:53,530 --> 00:02:55,770 denoting a strong participation of sellers. 48 00:02:56,190 --> 00:03:01,150 At that point, we already have everything we need and it is time to 49 00:03:01,150 --> 00:03:05,890 orders. In this case, we would establish a short entry order below the low of 50 00:03:05,890 --> 00:03:07,890 the trigger candlestick using a sell stop. 51 00:03:08,670 --> 00:03:12,510 With respect to the stop loss, we could place it either at the high of the 52 00:03:12,510 --> 00:03:16,730 trigger candlestick or, depending on the scenario, above the behavior as a 53 00:03:16,730 --> 00:03:17,730 whole. 54 00:03:18,150 --> 00:03:22,570 With respect to profit taking, The first liquidity zone we identify is at the 55 00:03:22,570 --> 00:03:26,030 previous lowest point, which is the extreme of the bearish momentum. 56 00:03:26,670 --> 00:03:31,190 Therefore, in that area we should do some kind of management. Since there is 57 00:03:31,190 --> 00:03:34,830 enough distance for the price to travel, I would take a portion of the profits 58 00:03:34,830 --> 00:03:36,590 and protect the stop at break -even. 59 00:03:37,250 --> 00:03:41,270 As we can see, the trade developed in our favor and the second take profit 60 00:03:41,270 --> 00:03:45,270 should have been taken after the appearance of that first volume peak, 61 00:03:45,270 --> 00:03:46,630 would have a tidy final profit. 62 00:03:47,370 --> 00:03:50,310 And what would happen now with that new upward movement? 63 00:03:50,630 --> 00:03:53,650 It would seem that we are in the same situation as before. 64 00:03:53,890 --> 00:03:55,910 So should we expect a bearish continuation? 65 00:03:56,970 --> 00:03:59,630 Well, there are several things we need to analyze here. 66 00:04:00,070 --> 00:04:04,570 If we adapt the regression channel to the new levels, we again see that the 67 00:04:04,570 --> 00:04:09,010 price would be at the extreme, in exactly the same position as in the 68 00:04:09,010 --> 00:04:14,820 trade. In addition, It also coincides with that axis line that would identify 69 00:04:14,820 --> 00:04:19,100 old support at the end of the bearish momentum, which could now act as a 70 00:04:19,100 --> 00:04:23,040 resistance level, and that indicates that the trend is following a normal 71 00:04:23,040 --> 00:04:23,879 of behavior. 72 00:04:23,880 --> 00:04:27,320 These would be the major inputs in favor of the bearish scenario. 73 00:04:28,160 --> 00:04:30,800 But what inputs do we have against this scenario? 74 00:04:31,160 --> 00:04:36,900 To begin with, and most importantly, this asset is the S andP 500 in a two 75 00:04:36,900 --> 00:04:37,900 time frame. 76 00:04:37,960 --> 00:04:42,360 and that climatic volume that we saw corresponds to the opening of the 77 00:04:43,020 --> 00:04:47,460 We previously commented that this moment is quite delicate due to the high 78 00:04:47,460 --> 00:04:51,780 volatility. The recommendation was to wait at least 30 minutes before 79 00:04:51,780 --> 00:04:53,240 considering a trading approach. 80 00:04:53,700 --> 00:04:57,500 With this logic in mind, we would not have already taken the position. 81 00:04:58,320 --> 00:05:03,220 As well as this, we need to also ask ourselves if it is possible that the 82 00:05:03,220 --> 00:05:05,040 of the cause has already been covered. 83 00:05:05,500 --> 00:05:09,790 In other words, If we have seen a large enough movement in one direction after 84 00:05:09,790 --> 00:05:13,630 the development of a structure, the market may need more fuel to continue 85 00:05:13,630 --> 00:05:18,030 moving. In other words, it might need another cause before moving forward. 86 00:05:19,490 --> 00:05:23,390 If you look at the chart, the distribution structure doesn't really 87 00:05:23,390 --> 00:05:25,450 much of an influence given where the price is. 88 00:05:26,010 --> 00:05:30,670 Therefore, the idea of a continuation of the bearish scenario should have been 89 00:05:30,670 --> 00:05:35,550 discarded. and what happened next is that this movement was indeed exhausted 90 00:05:35,550 --> 00:05:36,550 a new structure developed. 91 00:05:37,030 --> 00:05:41,650 In this case, said cause was an accumulation which generated a 92 00:05:41,650 --> 00:05:42,650 bullish effect. 93 00:05:43,450 --> 00:05:47,230 See how much volatility is generated after the opening of the session? 94 00:05:47,610 --> 00:05:53,350 With sharp up and down movements, leaving long wicks at both ends, and how 95 00:05:53,350 --> 00:05:55,570 there more genuine movements begin to develop. 96 00:05:55,890 --> 00:05:59,250 It is certainly a behavior that we should avoid at all costs. 97 00:05:59,900 --> 00:06:04,300 Let's now look at trading zone number two, in which we are looking for a major 98 00:06:04,300 --> 00:06:05,500 correction within the trend. 99 00:06:05,840 --> 00:06:10,420 Here is another bearish example, in a situation very similar to that of the 100 00:06:10,420 --> 00:06:11,420 previous example. 101 00:06:11,700 --> 00:06:16,240 Again, at precise moment we are looking at we should be clear that the context 102 00:06:16,240 --> 00:06:20,780 is bearish because it is determined by the distribution, and that the roadmap 103 00:06:20,780 --> 00:06:25,600 tells us to expect a continuation of the trend movement until we see signs that 104 00:06:25,600 --> 00:06:27,340 the control of the market may be changing. 105 00:06:28,300 --> 00:06:32,800 Once we are clear that what we want to do is sell, we have to look for a 106 00:06:32,800 --> 00:06:35,220 zone higher up where we should wait for the price. 107 00:06:35,440 --> 00:06:39,780 In this case, we wait for the appearance of a maximum pivot that will give us a 108 00:06:39,780 --> 00:06:40,780 liquidity zone. 109 00:06:41,120 --> 00:06:45,200 If the price were to reach that level, we would find ourselves in a confluence 110 00:06:45,200 --> 00:06:49,920 zone since it would also reach the end of the bearish dynamic, which again we 111 00:06:49,920 --> 00:06:52,740 have been able to identify by drawing a regression channel. 112 00:06:53,000 --> 00:06:54,440 This would be our main scenario. 113 00:06:55,360 --> 00:07:00,140 As additional inputs that favor going short, we can see the emergence of a 114 00:07:00,140 --> 00:07:04,500 candlestick showing bearish intent and how the market subsequently starts to 115 00:07:04,500 --> 00:07:08,920 move sideways, indicating an acceptance by the participants to trade at these 116 00:07:08,920 --> 00:07:09,920 new price levels. 117 00:07:10,820 --> 00:07:15,300 Subsequently, the price continues to fall, thus confirming that all this 118 00:07:15,300 --> 00:07:17,040 that has appeared has bearish sentiment. 119 00:07:17,840 --> 00:07:21,820 Another possible scenario is that the market does not generate a false 120 00:07:21,820 --> 00:07:25,740 at that pivot point that we have identified and that the downward 121 00:07:25,740 --> 00:07:27,080 continues immediately. 122 00:07:27,610 --> 00:07:31,650 In that case, our roadmap would involve waiting once again for the generation of 123 00:07:31,650 --> 00:07:35,650 another pivot and its subsequent false breakout before joining in the bearish 124 00:07:35,650 --> 00:07:40,450 movement. And finally, another possibility is that control of the 125 00:07:40,450 --> 00:07:44,030 change and the price could reverse with a great deal of bullish intent. 126 00:07:44,630 --> 00:07:47,770 This would be the alternative scenario, the bullish one. 127 00:07:48,270 --> 00:07:52,790 Our task here is simply to wait for the price to confirm the expected scenario. 128 00:07:53,570 --> 00:07:56,570 Let's take a closer look at this alternative bullish scenario. 129 00:07:57,100 --> 00:08:00,880 It may not happen in any case, but we must be prepared for any situation. 130 00:08:01,420 --> 00:08:05,880 At what point, if the bullish reversal occurs, would we be willing to consider 131 00:08:05,880 --> 00:08:10,300 going long? Well, at that point where we are at least above the last bearish 132 00:08:10,300 --> 00:08:13,840 candlestick, which we identified as having extremely high volume. 133 00:08:14,480 --> 00:08:18,540 Right at that moment, we could already say that the volume is in our favor and 134 00:08:18,540 --> 00:08:20,580 therefore determine that control is bullish. 135 00:08:21,320 --> 00:08:26,130 In addition, Waiting for a test in that area would coincide with the highs of 136 00:08:26,130 --> 00:08:30,030 the previous structure, so this confluence of levels would identify a 137 00:08:30,030 --> 00:08:31,250 probability trading zone. 138 00:08:31,710 --> 00:08:35,049 But look, what finally happens is the main scenario. 139 00:08:35,309 --> 00:08:39,770 The false breakout of that liquidity zone and a sign of weakness with the 140 00:08:39,770 --> 00:08:43,490 closing at the lower end of the last bullish candlestick that would establish 141 00:08:43,490 --> 00:08:48,430 control, and which also closes below the bullish dynamic that we have identified 142 00:08:48,430 --> 00:08:50,110 by drawing a new regression channel. 143 00:08:51,240 --> 00:08:55,580 In terms of analyzing the law of effort versus result with respect to movements, 144 00:08:55,800 --> 00:09:00,740 we can see that the pattern impulses and corrections is harmonious, both in 145 00:09:00,740 --> 00:09:01,740 price and volume. 146 00:09:02,100 --> 00:09:06,280 Increased volume on impulse bearish movements and decreased volume on 147 00:09:06,280 --> 00:09:07,280 bullish movements. 148 00:09:07,460 --> 00:09:11,480 At that point, there are already a large number of inputs in favor of the 149 00:09:11,480 --> 00:09:14,500 scenario. So, we launch the orders on the market. 150 00:09:14,700 --> 00:09:19,520 In this case, as with the previous example, It would be the sell stop order 151 00:09:19,520 --> 00:09:23,440 the breakout of the low of the trigger candlestick, placing the stop loss on 152 00:09:23,440 --> 00:09:27,020 other side of the behavior as a whole since the difference between the high of 153 00:09:27,020 --> 00:09:30,520 the trigger candlestick and the high of the entire scenario is minimal. 154 00:09:31,120 --> 00:09:34,380 So, we could choose to establish just one stop loss. 155 00:09:34,960 --> 00:09:39,220 And with respect to profit taking, we identify the liquidity zone below and 156 00:09:39,220 --> 00:09:41,420 establish our first partial take profit there. 157 00:09:42,060 --> 00:09:46,420 If the price reaches that point, automatically protect the position by 158 00:09:46,420 --> 00:09:48,300 the stop loss to not lose money. 159 00:09:49,020 --> 00:09:52,420 The position advances and generates that new liquidity zone. 160 00:09:52,920 --> 00:09:57,980 Initially, we did not have a second clear objective, so we are going to 161 00:09:57,980 --> 00:10:02,040 the behavior of the market and we would use that new zone to close the rest of 162 00:10:02,040 --> 00:10:02,839 the position. 163 00:10:02,840 --> 00:10:07,020 If we feel confident in this trade, we could leave a small part of the position 164 00:10:07,020 --> 00:10:08,640 open and let it run from there. 165 00:10:09,240 --> 00:10:12,160 And finally, the whole movement developed in our favor. 166 00:10:12,570 --> 00:10:16,670 Had we left a small part of the position open, it would have been closed in the 167 00:10:16,670 --> 00:10:18,230 appearance of the climatic volume. 168 00:10:18,550 --> 00:10:23,490 At that point, the bearish run has already been long enough to suggest that 169 00:10:23,490 --> 00:10:25,150 has been definitely exhausted. 170 00:10:25,810 --> 00:10:28,790 And surprisingly, the market continued to slide. 171 00:10:29,010 --> 00:10:32,370 It even left another opportunity in that new upthrust. 172 00:10:32,830 --> 00:10:37,070 This is a good example that illustrates how our assumptions matter little to the 173 00:10:37,070 --> 00:10:41,440 market. We might think that the movement is already quite overextended, and yet 174 00:10:41,440 --> 00:10:44,820 it may still continue to move in that direction, as has happened here. 175 00:10:45,520 --> 00:10:49,360 We might think that the distribution pattern has no effect left and be 176 00:10:49,360 --> 00:10:50,339 completely wrong. 177 00:10:50,340 --> 00:10:51,340 We don't care. 178 00:10:51,660 --> 00:10:55,740 What interests us is that we properly manage our position and always favor the 179 00:10:55,740 --> 00:10:57,580 behaviors that are most likely to happen. 180 00:10:58,320 --> 00:11:03,400 In this case, and under these premises, That last false breakout would not have 181 00:11:03,400 --> 00:11:07,120 been taken after seeing that the movement was extended enough that it 182 00:11:07,120 --> 00:11:08,800 offer us the necessary guarantees. 183 00:11:09,660 --> 00:11:14,100 It is a different matter if, at that point, we were to observe the 184 00:11:14,100 --> 00:11:15,180 of a slower structure. 185 00:11:16,020 --> 00:11:20,820 There things changed because implicitly that structure could suggest that a new 186 00:11:20,820 --> 00:11:23,680 cause is being generated in favor of the same direction. 187 00:11:24,320 --> 00:11:26,900 We would have to analyze this structure individually. 188 00:11:28,080 --> 00:11:32,260 The basic premise regarding trend trading is that the market will continue 189 00:11:32,260 --> 00:11:36,180 move in that direction until an opposite cause is generated that can reverse the 190 00:11:36,180 --> 00:11:40,740 sentiment. But that doesn't mean that the anatomy of the trend can't offer us 191 00:11:40,740 --> 00:11:45,260 more or less confidence, and a very overextended trend is not something we 192 00:11:45,260 --> 00:11:49,200 to see if we want to trade in that direction, because the further the price 193 00:11:49,200 --> 00:11:52,160 moves in one direction, the sooner it is likely to reverse. 194 00:11:53,080 --> 00:11:56,980 That's why it's generally best to avoid joining a trend that visually seems 195 00:11:56,980 --> 00:11:57,980 extended. 196 00:11:58,320 --> 00:12:02,140 Early in the trend, it may be a good idea to enter the market looking for a 197 00:12:02,140 --> 00:12:06,660 simple reversal of the movement. As it progresses, it is better to wait for a 198 00:12:06,660 --> 00:12:10,580 larger correction in the form of a fast structure, and then in more advanced 199 00:12:10,580 --> 00:12:14,500 stages of the trend, the ideal thing would be to wait for the development of 200 00:12:14,500 --> 00:12:18,780 more complex schemes, fully developed reaccumulation, and redistribution 201 00:12:18,780 --> 00:12:19,780 structures. 202 00:12:20,280 --> 00:12:25,380 Let's look now at trading zone number three, trading at the extremes in phase 203 00:12:26,320 --> 00:12:30,440 In this case, we start from a situation in which we have already identified the 204 00:12:30,440 --> 00:12:34,160 three events that stopped the previous trend, which for this example are the 205 00:12:34,160 --> 00:12:37,420 selling climax, the automatic rally, and the secondary test. 206 00:12:38,280 --> 00:12:42,520 From this point on, we know that liquidity zones are created at the 207 00:12:42,520 --> 00:12:43,520 the structure. 208 00:12:43,660 --> 00:12:48,120 Since the previous trend is bearish, I would personally only recommend trading 209 00:12:48,120 --> 00:12:51,840 in this direction because there is most likely still a certain downward 210 00:12:51,840 --> 00:12:56,690 imbalance. And even in this context, we should expect the structure that is 211 00:12:56,690 --> 00:12:59,810 developing to become a redistribution rather than an accumulation. 212 00:13:00,250 --> 00:13:04,170 As I say, we are biased by the direction of the previous trend. 213 00:13:04,970 --> 00:13:09,710 With this in mind then, our main scenario would involve the price 214 00:13:09,710 --> 00:13:12,490 top of the structure and generating a false breakout there. 215 00:13:13,250 --> 00:13:16,850 The key here is that we should only consider trading this scenario. 216 00:13:17,130 --> 00:13:22,070 The market could continue to fluctuate within the range or go visit the lower 217 00:13:22,070 --> 00:13:25,940 end. But at this point in the development of the structure, the most 218 00:13:25,940 --> 00:13:29,120 approach would be to look for a false breakout at the upper extreme. 219 00:13:29,620 --> 00:13:33,780 And right at that moment the false breakout could occur, though personally 220 00:13:33,780 --> 00:13:34,780 have my doubts. 221 00:13:34,800 --> 00:13:38,500 To begin with, the bearish candlestick that would serve as an entry trigger 222 00:13:38,500 --> 00:13:42,640 not denote all the bearish intention that we would expect it to, since its 223 00:13:42,640 --> 00:13:46,080 closing price is in the middle third of the previous bullish candlestick. 224 00:13:46,640 --> 00:13:50,960 We can also see that up to now it has been unable to break the bullish dynamic 225 00:13:50,960 --> 00:13:53,580 that would establish control of the last movement. 226 00:13:54,480 --> 00:13:58,720 In other words, although it is true that this position could be taken, it would 227 00:13:58,720 --> 00:14:02,260 involve greater risk since not all the inputs are aligned in this direction. 228 00:14:02,720 --> 00:14:05,840 Therefore, it would be a trade for a more aggressive trader. 229 00:14:06,380 --> 00:14:10,780 A more conservative profile would wait for the break of said dynamic and would 230 00:14:10,780 --> 00:14:13,860 look for the development of the false breakout test of the trading zone. 231 00:14:14,200 --> 00:14:17,840 And if the entry trigger appears there, they might consider going short. 232 00:14:18,120 --> 00:14:19,620 This would be our main scenario. 233 00:14:20,300 --> 00:14:21,920 What other outcomes could there be? 234 00:14:22,540 --> 00:14:26,940 Well, a scenario in which a long bearish movement develops without any type of 235 00:14:26,940 --> 00:14:30,620 test, which we should look to trade in if we see the generation and false 236 00:14:30,620 --> 00:14:31,780 breakout of a new pivot. 237 00:14:32,240 --> 00:14:36,120 And another alternative bullish scenario, which would be based on the 238 00:14:36,120 --> 00:14:39,860 of the structure at its upper extreme, which would activate the bullish roadmap 239 00:14:39,860 --> 00:14:43,600 and all this behavior would be seen as fast accumulation structure. 240 00:14:44,780 --> 00:14:49,260 The continuation of this potential bullish scenario we already know would 241 00:14:49,260 --> 00:14:53,440 involve first looking for the test after a successful breakout and from there 242 00:14:53,440 --> 00:14:56,220 executing a trade in the upward continuation movement. 243 00:14:57,020 --> 00:15:02,080 This is what it means to carry out proactive management, to continuously 244 00:15:02,080 --> 00:15:05,300 the performance of the market and assess the different options that are 245 00:15:05,300 --> 00:15:06,300 presented to us. 246 00:15:06,640 --> 00:15:12,040 Based on all this information, launch our scenarios and wait to see which one 247 00:15:12,040 --> 00:15:13,140 confirmed by the market. 248 00:15:13,740 --> 00:15:17,920 And here we see that finally the market confirmed the test after the false 249 00:15:17,920 --> 00:15:18,920 breakout scenario. 250 00:15:19,420 --> 00:15:22,600 At this point, the opportunity fills us with greater confidence. 251 00:15:23,240 --> 00:15:27,040 The last bullish trend has already been broken and the candlestick showing 252 00:15:27,040 --> 00:15:31,400 bearish intent closes below the last bullish one, so the short -term bullish 253 00:15:31,400 --> 00:15:32,880 control would also be in red. 254 00:15:33,740 --> 00:15:37,560 Waiting for this type of behavior to happen is ideal when the first 255 00:15:37,560 --> 00:15:39,420 doesn't fill us with a lot of confidence. 256 00:15:40,090 --> 00:15:43,570 This trade would therefore be suitable for a more conservative trader. 257 00:15:45,230 --> 00:15:49,850 Reviewing the operational checklist, the context and roadmap are in our favor. 258 00:15:49,970 --> 00:15:51,330 We are in the trading zone. 259 00:15:51,750 --> 00:15:56,270 We have an impulse movement in our direction, which we identify in the 260 00:15:56,270 --> 00:16:00,670 bearish reaction after the upthrust, which is also the movement that manages 261 00:16:00,670 --> 00:16:01,670 break the bullish dynamic. 262 00:16:01,850 --> 00:16:06,070 We don't see any bullish dynamic impulse movement that denotes much strength. 263 00:16:06,640 --> 00:16:10,420 The bullish false breakout took place at the very edge of the structure and was 264 00:16:10,420 --> 00:16:14,960 significant enough, and the proportionality of the phases seem 265 00:16:14,960 --> 00:16:17,200 should be confident that the trade will be successful. 266 00:16:18,260 --> 00:16:22,840 With respect to the location of orders, the entry would be a stop -type order at 267 00:16:22,840 --> 00:16:23,840 the breakout of the low. 268 00:16:24,060 --> 00:16:29,020 We could use the two stop -loss locations, a more aggressive one just 269 00:16:29,020 --> 00:16:33,320 pivot that generates the trigger candlestick, or a more conservative one 270 00:16:33,320 --> 00:16:34,660 the very edge of the structure. 271 00:16:35,620 --> 00:16:39,720 Meanwhile, regarding the reward, the most ambitious target would be that the 272 00:16:39,720 --> 00:16:42,160 price manages to reach the opposite end of the structure. 273 00:16:42,440 --> 00:16:46,060 But if you look closely, right in the middle of the range we have identified 274 00:16:46,060 --> 00:16:50,000 another minor liquidity zone, which should also be taken into account. 275 00:16:50,380 --> 00:16:55,260 In other words, when it is reached, we could do some kind of management, either 276 00:16:55,260 --> 00:16:58,220 simply protect our position or take a partial profit. 277 00:16:59,700 --> 00:17:03,660 Why would we consider only the opposite extreme as the most ambitious target? 278 00:17:04,300 --> 00:17:08,200 Couldn't this false breakout actually be the test event in Phase C that 279 00:17:08,200 --> 00:17:10,160 generates the complete imbalance of the structure? 280 00:17:10,819 --> 00:17:12,980 Well, of course, we can do whatever we like. 281 00:17:13,280 --> 00:17:17,260 But my reasoning is that, in a structure that is already confirmed, that is to 282 00:17:17,260 --> 00:17:21,400 say, where it is obvious that a change of character has occurred, in which we 283 00:17:21,400 --> 00:17:25,880 have gone from a bearish trend state to a sideways one, the likelihood is that 284 00:17:25,880 --> 00:17:28,700 the price will spend some time building the subsequent cost. 285 00:17:29,200 --> 00:17:33,220 Therefore, the most likely to occur at this point, if the market reaches the 286 00:17:33,220 --> 00:17:37,350 lower end, is that it will find new demand that will generate a subsequent 287 00:17:37,350 --> 00:17:41,910 reversal until finally the agents consider that this equilibrium no longer 288 00:17:41,910 --> 00:17:46,210 represents the fair value of the asset at which point it will generate the 289 00:17:46,210 --> 00:17:51,130 definitive false breakout that will unbalance the price but if you are not 290 00:17:51,130 --> 00:17:54,910 about it you can always leave a small part of the position in case it turns 291 00:17:54,910 --> 00:17:58,590 that this false breakout is actually going to generate the definitive 292 00:17:58,590 --> 00:17:59,590 of the structure 293 00:18:00,080 --> 00:18:03,940 And here we see how it reaches the bottom of the structure and bounces 294 00:18:03,940 --> 00:18:08,580 again. Careful, because this could be the false breakout that generates the 295 00:18:08,580 --> 00:18:12,740 definitive imbalance, in which case we would find ourselves in trading zone 296 00:18:12,740 --> 00:18:16,340 number 4, reverse trading looking for the phase C test event. 297 00:18:17,180 --> 00:18:20,300 If you remember, how do we confirm a potential spring? 298 00:18:20,880 --> 00:18:24,860 We saw at the beginning how the two minimum inputs that we are going to 299 00:18:24,860 --> 00:18:28,700 from the price before we start treating this behavior as a potential spring is 300 00:18:29,310 --> 00:18:34,150 firstly, that it re -enters the range, and secondly, that it does so with good 301 00:18:34,150 --> 00:18:36,130 candlesticks, showing bullish strength. 302 00:18:36,710 --> 00:18:41,330 In this example, at the end of the last bullish candlestick, we could assume 303 00:18:41,330 --> 00:18:43,150 these two requirements have been fulfilled. 304 00:18:43,470 --> 00:18:47,710 But as happened before, the trigger appears before the break of the bearish 305 00:18:47,710 --> 00:18:52,970 momentum, so this already means it is a riskier type of trade, one for a more 306 00:18:52,970 --> 00:18:53,970 aggressive profile. 307 00:18:54,430 --> 00:18:58,650 Moreover, another input that would undermine our confidence is that the 308 00:18:58,650 --> 00:19:02,750 pattern of volume decrease doesn't appear throughout the entire development 309 00:19:02,750 --> 00:19:05,430 the range, although it can be seen in the first part. 310 00:19:06,170 --> 00:19:10,270 Although it is true that the last candlestick is already above the last 311 00:19:10,270 --> 00:19:14,770 bearish candlestick, the first bullish candlestick that appeared did not denote 312 00:19:14,770 --> 00:19:17,870 great strength as it closed in the middle third of the bearish one. 313 00:19:18,130 --> 00:19:22,030 So we have another sign that doesn't denote all the aggressiveness that we 314 00:19:22,030 --> 00:19:23,070 ideally like to see. 315 00:19:24,040 --> 00:19:28,960 In general terms, the number of inputs from our checklist in our favor is low. 316 00:19:29,840 --> 00:19:34,180 Despite this, if we were still looking to buy, we would use a buy stop at the 317 00:19:34,180 --> 00:19:37,760 break of the bullish candlestick, with a stop loss that could be placed at two 318 00:19:37,760 --> 00:19:41,640 levels, below the low of the bullish candlestick and below the whole 319 00:19:42,660 --> 00:19:47,040 In terms of the take profit, the false breakout presents us, in general terms, 320 00:19:47,180 --> 00:19:50,760 with three targets that we should take into account when making decisions 321 00:19:50,760 --> 00:19:52,240 depending on our trader profile. 322 00:19:53,230 --> 00:19:57,330 The minimum objective we want to see of a false breakout is a visit to the 323 00:19:57,330 --> 00:20:01,430 nearest trading level. The intermediate objective will be the opposite end of 324 00:20:01,430 --> 00:20:05,830 the structure, and if we are observing this event in phase C, it will give rise 325 00:20:05,830 --> 00:20:09,830 to a real breakout and subsequent trend development outside the range. 326 00:20:10,310 --> 00:20:14,750 So the most ambitious objective will be to take advantage of this effect and go 327 00:20:14,750 --> 00:20:18,270 looking for an old trading zone that is in the distant past of the current 328 00:20:18,270 --> 00:20:19,270 structure. 329 00:20:19,370 --> 00:20:22,270 In this example, we would have several locations. 330 00:20:22,830 --> 00:20:26,270 In the first place, we would take profits when reaching the first 331 00:20:26,270 --> 00:20:30,670 zone, and the second part would be left in case the price reaches the high of 332 00:20:30,670 --> 00:20:35,170 the structure, where we would find two areas relatively close to each other and 333 00:20:35,170 --> 00:20:38,830 which, at an aggregate level, represent an important supply zone. 334 00:20:39,330 --> 00:20:42,990 And since we could be seeing the start of the definitive imbalance of the 335 00:20:42,990 --> 00:20:47,370 structure, we should probably leave a small portion of the position in case 336 00:20:47,370 --> 00:20:51,830 accumulation is confirmed and the market takes off looking for prices higher up. 337 00:20:52,590 --> 00:20:57,170 An alternative scenario would be to favor a real bearish breakout, for which 338 00:20:57,170 --> 00:21:00,790 already know that we would look for a certain reaction to appear at the lows 339 00:21:00,790 --> 00:21:04,430 the structure that would prevent the price from effectively re -entering the 340 00:21:04,430 --> 00:21:05,430 range. 341 00:21:05,490 --> 00:21:09,710 At this point, we already have a better understanding of the situation, and the 342 00:21:09,710 --> 00:21:13,350 bullish scenario looks more likely since the bearish dynamic has been broken, 343 00:21:13,530 --> 00:21:17,450 which is an important sign of that there is intent from the buyers, and 344 00:21:17,450 --> 00:21:19,610 ultimately this might be confirmation of a spring. 345 00:21:20,490 --> 00:21:24,890 At this point, we can put forward our hypotheses and predict our scenarios. 346 00:21:25,330 --> 00:21:26,850 The roadmap here is bullish. 347 00:21:27,210 --> 00:21:30,490 Therefore, there are several ways in which the market could develop a bullish 348 00:21:30,490 --> 00:21:31,490 continuation. 349 00:21:31,910 --> 00:21:36,510 It could go higher straight away with no consolidation, in which case we would 350 00:21:36,510 --> 00:21:39,150 miss the chance to take advantage of that potential movement. 351 00:21:39,970 --> 00:21:44,070 Another option is that it develops a horizontal consolidation at some point. 352 00:21:44,410 --> 00:21:47,750 And the other option in the bullish scenario would be to wait for the spring 353 00:21:47,750 --> 00:21:49,470 test on the lower part of the structure. 354 00:21:50,190 --> 00:21:52,050 These would be the three bullish scenarios. 355 00:21:53,030 --> 00:21:56,570 And the alternative scenario would be the bearish one, which would become 356 00:21:56,570 --> 00:21:59,950 apparent if at some point we were to see the bearish breakout of the structure. 357 00:22:00,870 --> 00:22:04,870 What would happen if scenario number one were to eventually unfold and the price 358 00:22:04,870 --> 00:22:05,870 goes straight up? 359 00:22:06,130 --> 00:22:09,650 We would miss the chance to take advantage of this movement, but that's 360 00:22:10,130 --> 00:22:13,690 Because if this happens, we would have more opportunities to try to take 361 00:22:13,690 --> 00:22:14,810 advantage of the next one. 362 00:22:15,370 --> 00:22:18,990 And in that case, we already know that these opportunities would reside in 363 00:22:18,990 --> 00:22:22,530 waiting for the test after the bullets breakout in anticipation of higher 364 00:22:22,530 --> 00:22:23,530 prices. 365 00:22:23,950 --> 00:22:27,230 How will we act if consolidation scenario number two develops? 366 00:22:27,570 --> 00:22:31,750 Well, our scenario here would be to wait for the creation and false breakout of 367 00:22:31,750 --> 00:22:33,910 a possible pivot before looking for the entry. 368 00:22:34,490 --> 00:22:36,030 And with scenario number three? 369 00:22:36,250 --> 00:22:39,870 Well, simply wait for a correction to the trading zone at the bottom of the 370 00:22:39,870 --> 00:22:43,570 structure and there look for a behavior that allows us to confirm the spring 371 00:22:43,570 --> 00:22:44,570 test. 372 00:22:44,720 --> 00:22:47,120 This is the key. This is our task. 373 00:22:47,380 --> 00:22:52,220 To put forward all the possible hypotheses and let the market decide, 374 00:22:52,220 --> 00:22:56,000 advantage that we will be ready and waiting to trade depending on what 375 00:22:56,000 --> 00:22:57,000 occurs. 376 00:22:57,060 --> 00:23:01,400 And as we see, of all the possible scenarios, the market appears to be 377 00:23:01,400 --> 00:23:03,520 developing the search for the spring test scenario. 378 00:23:04,120 --> 00:23:05,880 How did we confirm the spring test? 379 00:23:06,220 --> 00:23:10,040 We established that we can confirm the point of the spring test at the moment 380 00:23:10,040 --> 00:23:12,820 when the price breaks the previous high generated in the spring. 381 00:23:13,640 --> 00:23:17,260 That would be the point at which the behavior would offer a greater guarantee 382 00:23:17,260 --> 00:23:21,920 success. But we can also make use of the concept of movement reversal if we want 383 00:23:21,920 --> 00:23:25,980 to look for early confirmation, for which we would wait for the appearance 384 00:23:25,980 --> 00:23:30,020 good bullish candlestick whose price closes above the last big bearish 385 00:23:30,020 --> 00:23:31,020 candlestick. 386 00:23:31,560 --> 00:23:33,540 Which is exactly what is happening here. 387 00:23:33,780 --> 00:23:37,890 In the potential spring test behavior, the price reaches the minimum of the 388 00:23:37,890 --> 00:23:41,970 structure and generates a candlestick with strong bullish intent that breaks 389 00:23:41,970 --> 00:23:46,110 highs of several bearish candlesticks. So we could initially accept this as 390 00:23:46,110 --> 00:23:50,150 confirmation of said test and it would set us up with an opportunity to enter. 391 00:23:50,830 --> 00:23:55,350 In addition, during the development of said test, a pivot was generated which 392 00:23:55,350 --> 00:23:59,550 the price subsequently broke through, filling us with even more confidence 393 00:23:59,550 --> 00:24:00,710 that particular trigger. 394 00:24:01,510 --> 00:24:05,370 At that point, the number of inputs in favor of the scenario increases. 395 00:24:06,090 --> 00:24:08,470 so we could now give the green light to the trade. 396 00:24:09,130 --> 00:24:13,910 As always, we would place the buy order at the breakout of the low and we could 397 00:24:13,910 --> 00:24:19,030 establish two stops, either below the trigger candlestick or below the lowest 398 00:24:19,030 --> 00:24:20,470 point of the entire scenario. 399 00:24:21,270 --> 00:24:26,150 Another option would be to place the stop loss below the low of the spring, 400 00:24:26,150 --> 00:24:29,570 that would be too far away, so I would discard this alternative. 401 00:24:31,250 --> 00:24:35,880 In terms of taking profits, During the last development, the price has 402 00:24:35,880 --> 00:24:40,560 a new liquidity zone, so some form of position management should be taken 403 00:24:41,020 --> 00:24:45,320 What I would do here, given the closeness of that zone, would be to 404 00:24:45,320 --> 00:24:49,480 change the stop to break even and not take any profit, which I would initially 405 00:24:49,480 --> 00:24:53,200 allow to run until the supply zone at the top of the structure is reached. 406 00:24:53,920 --> 00:24:57,960 As with the previous entry at the spring, a small part of the position 407 00:24:57,960 --> 00:25:02,120 allowed to run on in case the accumulation pattern is successful, and 408 00:25:02,120 --> 00:25:04,120 and manages to break out upwards. 409 00:25:05,100 --> 00:25:08,180 An important point regarding the spring and the spring test. 410 00:25:08,600 --> 00:25:13,320 If, after these behaviors, the price starts to move quickly with candlesticks 411 00:25:13,320 --> 00:25:17,040 denoting strength, it will most likely reach the top of the structure without 412 00:25:17,040 --> 00:25:18,040 much difficulty. 413 00:25:18,180 --> 00:25:22,900 But if, on the contrary, we start to see an unclear price action, it is most 414 00:25:22,900 --> 00:25:27,800 likely that we will see at least one more test before the price goes up. We 415 00:25:27,800 --> 00:25:29,120 even see a new false breakout. 416 00:25:30,160 --> 00:25:34,360 If we have seen a potential spring or spring test and we have entered the 417 00:25:34,360 --> 00:25:39,180 and the price does not begin to move quickly in our favor, it is best to 418 00:25:39,180 --> 00:25:43,260 our exposure, adjust the stop loss, or directly abandon the position. 419 00:25:44,020 --> 00:25:49,040 The key, again, is to preserve our capital, and if we have enough signals 420 00:25:49,040 --> 00:25:53,680 suggest our stop loss is likely to be reached, we should reduce risk as soon 421 00:25:53,680 --> 00:25:57,640 possible. This is what proactive position management is all about. 422 00:25:58,510 --> 00:26:02,790 It involves identifying new trading zones that are being created so we can 423 00:26:02,790 --> 00:26:07,610 modify our take profits accordingly and also being alert to possible changes in 424 00:26:07,610 --> 00:26:09,930 sentiment so we can modify our stop loss. 425 00:26:10,830 --> 00:26:15,810 Finally, what happens is that the market is unbalanced upwards and in this 426 00:26:15,810 --> 00:26:20,150 context we would now find ourselves in trading zone number five, continuation 427 00:26:20,150 --> 00:26:22,590 strategy within the range in phase D. 428 00:26:23,330 --> 00:26:27,790 The zone to look for trades here encompasses the entire interior of the 429 00:26:28,380 --> 00:26:31,940 The only opportunity that the market would have offered us in the upper part 430 00:26:31,940 --> 00:26:35,780 the structure were the price generated a pivot and a subsequent false breakout. 431 00:26:36,500 --> 00:26:40,680 The trade would be of a high quality, if it were not for the fact that it occurs 432 00:26:40,680 --> 00:26:42,320 in a very high part of the structure. 433 00:26:42,980 --> 00:26:47,440 The problem is that if we enter there, we are too close to the large liquidity 434 00:26:47,440 --> 00:26:51,300 zone established at highs, so there would be very little room for proper 435 00:26:51,300 --> 00:26:52,300 management. 436 00:26:52,750 --> 00:26:57,290 It is true that our context and roadmap suggest that it is highly probable that 437 00:26:57,290 --> 00:27:01,410 the accumulation pattern will continue to develop, and therefore that the 438 00:27:01,410 --> 00:27:03,470 breakout of said zone will be a real one. 439 00:27:04,050 --> 00:27:08,750 This is something that our analysis and scenario planning may suggest, but it is 440 00:27:08,750 --> 00:27:13,270 not something that will always happen, and in any case, if we are correct in 441 00:27:13,270 --> 00:27:17,390 analysis, there will be more opportunities later on to enter the 442 00:27:17,390 --> 00:27:19,590 advantage of the movement that has yet to be generated. 443 00:27:20,460 --> 00:27:24,180 So at that point, the main scenario would be to wait for the price to 444 00:27:24,180 --> 00:27:26,520 effectively break out of the structure upwards. 445 00:27:27,260 --> 00:27:31,020 Once broken, we would propose different alternatives in favor of the bullish 446 00:27:31,020 --> 00:27:35,780 scenario, the main one being to favor the test after the breakout, for which 447 00:27:35,780 --> 00:27:39,260 should see certain acceptance of the movement with candlesticks that indicate 448 00:27:39,260 --> 00:27:40,260 lack of intent. 449 00:27:40,880 --> 00:27:45,900 Meanwhile, another scenario, as we know, would be to see a new false breakout in 450 00:27:45,900 --> 00:27:50,130 the liquidity zone that manages to shift control of the market again, and makes 451 00:27:50,130 --> 00:27:54,130 the price re -enter the range, in which case the bearish roadmap would be 452 00:27:54,130 --> 00:27:58,490 activated. And here we see how the opportunity we are waiting for appeared. 453 00:27:58,990 --> 00:28:03,690 The main bullish scenario involving two movements materialized and just before 454 00:28:03,690 --> 00:28:08,130 the zone it even generated a small pivot, then on which there was a false 455 00:28:08,130 --> 00:28:10,250 breakout before the bullish candlestick appeared. 456 00:28:10,970 --> 00:28:14,490 At this point in the trading zone where we would be looking for the breakout 457 00:28:14,490 --> 00:28:18,810 test, there is no need to wait for the creation and false breakout of a new 458 00:28:18,810 --> 00:28:24,020 pivot. If we see that the price arrives with some loss of momentum, denoting a 459 00:28:24,020 --> 00:28:26,880 lack of interest, we could look directly for the entry trigger. 460 00:28:27,280 --> 00:28:31,460 On the other hand, if the movement that is going to develop the test arrives 461 00:28:31,460 --> 00:28:35,480 with certain momentum, then it would be advisable to wait for the appearance of 462 00:28:35,480 --> 00:28:37,380 some pattern that would show the loss of momentum. 463 00:28:38,160 --> 00:28:42,860 At that point, we can see several inputs in favor of the scenario, so it is the 464 00:28:42,860 --> 00:28:45,660 type of trade that should fill us with the greatest confidence. 465 00:28:46,220 --> 00:28:50,750 At that point, We have already seen the spring at the lows of the structure, the 466 00:28:50,750 --> 00:28:54,190 sign of strength that has traveled across the entire range and that has 467 00:28:54,190 --> 00:28:55,510 broken out the structure above. 468 00:28:55,910 --> 00:29:00,710 We do not have any strong movement against. The impulses and corrections 469 00:29:00,710 --> 00:29:03,890 be in harmony, and there is proportionality between the movements. 470 00:29:04,190 --> 00:29:08,910 So we are now in a position to confirm the breakout with the non -reentry into 471 00:29:08,910 --> 00:29:12,110 the range and the appearance of the entry trigger on the trading zone that 472 00:29:12,110 --> 00:29:14,090 denotes strong intent in our direction. 473 00:29:14,830 --> 00:29:17,700 Because of all these factors, we could take the trade. 474 00:29:18,400 --> 00:29:22,180 The entry order would be located at the high of the trigger candlestick. 475 00:29:22,400 --> 00:29:26,600 The stop loss would be placed below the low of the behavior as a whole. 476 00:29:26,920 --> 00:29:31,320 And in terms of profits, at the break of the previous high, we could place our 477 00:29:31,320 --> 00:29:35,400 first take profit or simply manage the position and let the rest of the 478 00:29:35,400 --> 00:29:39,500 run on until we see signs that suggest that a change in market control is 479 00:29:39,500 --> 00:29:40,500 possible. 480 00:29:40,590 --> 00:29:44,210 In the end, the market seems to have confirmed the accumulation since it 481 00:29:44,210 --> 00:29:46,770 continued its upward development satisfactorily. 482 00:29:47,210 --> 00:29:50,550 From that point on, we would find ourselves in trading zone number 7, 483 00:29:50,690 --> 00:29:55,170 continuation of the trend in phase E, where we would look for the creation of 484 00:29:55,170 --> 00:29:58,550 pivots and subsequent false breakouts before entering the market in the 485 00:29:58,550 --> 00:29:59,550 direction of the imbalance. 486 00:30:00,390 --> 00:30:04,270 And as always, we should keep in mind a potential alternative scenario in the 487 00:30:04,270 --> 00:30:06,810 opposite direction, at the point where the price is. 488 00:30:07,460 --> 00:30:12,200 what would we need to see it do in order to discard the bullish idea and begin 489 00:30:12,200 --> 00:30:13,920 to consider the possibility of selling? 490 00:30:14,340 --> 00:30:17,960 Well, it would at least need to re -enter the previous structure again. 491 00:30:18,460 --> 00:30:22,760 At that time, all the test price action could be treated as a major false 492 00:30:22,760 --> 00:30:26,020 breakout of the structure, which would activate the bearish scenario. 493 00:30:26,740 --> 00:30:30,600 Where the roadmap would now suggest that we wait for a test on the high part, 494 00:30:30,720 --> 00:30:34,100 which would send the price down through the entire structure until it reaches at 495 00:30:34,100 --> 00:30:35,380 least the low end of the range. 496 00:30:36,270 --> 00:30:39,850 Remember, we always propose different ways in which the scenario can be 497 00:30:39,850 --> 00:30:44,530 represented in the main direction, and also another hypothesis that 498 00:30:44,530 --> 00:30:48,510 the scenario in the opposite direction in case our analysis is incorrect or an 499 00:30:48,510 --> 00:30:51,990 unexpected imbalance occurs in the market that causes a shift in control. 500 00:30:52,430 --> 00:30:55,190 Just a small point about this alternative scenario. 501 00:30:55,590 --> 00:30:59,350 You might think that it would be much more beneficial to try to take advantage 502 00:30:59,350 --> 00:31:03,290 of the alternative bearish scenario in the event that a re -entry below the 503 00:31:03,290 --> 00:31:04,290 previous high occurs. 504 00:31:04,990 --> 00:31:07,530 in what I have identified as trading zone 1. 505 00:31:07,830 --> 00:31:11,290 At that point, we might already have an even smaller minor distribution 506 00:31:11,290 --> 00:31:12,290 structure, right? 507 00:31:13,070 --> 00:31:17,170 The problem with this approach is that objectively we would still be above the 508 00:31:17,170 --> 00:31:21,670 structure, and technically until the actual re -entry to the range occurs, we 509 00:31:21,670 --> 00:31:25,930 shouldn't start to consider said alternative scenario, even if we see 510 00:31:25,930 --> 00:31:27,630 of a potential distribution pattern. 511 00:31:28,610 --> 00:31:30,670 Don't forget this term, potential. 512 00:31:31,250 --> 00:31:34,610 Also, Remember that the market loves to send false signals. 513 00:31:34,990 --> 00:31:38,910 Just be clear that our point of no return will be if the price re -enters 514 00:31:38,910 --> 00:31:42,830 range. From that point on, we would have a better guarantee of considering an 515 00:31:42,830 --> 00:31:47,190 opportunity to sell in that case. The trading zone on which we should wait for 516 00:31:47,190 --> 00:31:48,710 the price is number two. 517 00:31:49,050 --> 00:31:50,050 But beware. 518 00:31:50,410 --> 00:31:53,730 Even if the price has re -entered the range, all is not lost. 519 00:31:54,150 --> 00:31:56,070 This example shows exactly that. 520 00:31:56,990 --> 00:31:59,250 Let's imagine that we find ourselves in this situation. 521 00:31:59,800 --> 00:32:01,880 a potential test after a bullish breakout. 522 00:32:03,120 --> 00:32:06,600 Although it is true that the bearish movement has arrived with a lot of 523 00:32:06,600 --> 00:32:10,900 momentum, the price subsequently develops a fast pattern and even a false 524 00:32:10,900 --> 00:32:15,400 breakout. In addition to a bullish trigger candlestick that denotes a lot 525 00:32:15,400 --> 00:32:20,000 strength, so, aside from the fact that the last dynamic was not broken either, 526 00:32:20,360 --> 00:32:24,860 suppose we decide to enter with at least part of the position so we place our 527 00:32:24,860 --> 00:32:25,860 orders. 528 00:32:25,900 --> 00:32:30,580 And it turns out that the market activates the entry order for us and it 529 00:32:30,580 --> 00:32:36,080 again, also reaching our stop loss, as a result of which we would take a loss. 530 00:32:36,740 --> 00:32:40,280 At that point, the market has re -entered the range long enough to 531 00:32:40,280 --> 00:32:44,320 there is a change in bias and propose the test after a breakout of the trading 532 00:32:44,320 --> 00:32:45,320 zone scenario. 533 00:32:45,940 --> 00:32:48,000 That would now be our main scenario. 534 00:32:48,800 --> 00:32:50,040 And look what happens. 535 00:32:50,640 --> 00:32:54,720 It has penetrated beyond our trading zone, but again found enough demand to 536 00:32:54,720 --> 00:32:57,200 aggressively push the price even beyond the level. 537 00:32:58,020 --> 00:33:02,560 That's why I always say that each market action must be confirmed or disproved 538 00:33:02,560 --> 00:33:04,100 by the subsequent price action. 539 00:33:04,700 --> 00:33:08,460 The action we were trying to confirm at that point was the false breakout. 540 00:33:09,020 --> 00:33:13,580 And how do we confirm this? Well, after seeing a test in the trading zone, a 541 00:33:13,580 --> 00:33:17,020 test that preferably denotes a lack of intent to continue rising. 542 00:33:17,740 --> 00:33:21,980 And what finally happens is that this scenario does not occur and therefore 543 00:33:21,980 --> 00:33:23,460 false breakout action is rejected. 544 00:33:24,020 --> 00:33:26,400 This is proactive scenario management. 545 00:33:27,100 --> 00:33:28,460 And now what do we have? 546 00:33:28,900 --> 00:33:33,840 Well, we are now in the opposite direction, in the same situation as at 547 00:33:33,840 --> 00:33:37,340 beginning trying to confirm the upward movement through a test on the trading 548 00:33:37,340 --> 00:33:38,340 zone. 549 00:33:38,440 --> 00:33:40,600 That would be our main scenario now. 550 00:33:41,280 --> 00:33:46,300 On the other hand, to activate the alternative bearish scenario again, we 551 00:33:46,300 --> 00:33:49,920 need to see the price drop below the zone and re -enter the range again. 552 00:33:50,680 --> 00:33:54,720 And there might be the confirmation that we were looking for with that precise 553 00:33:54,720 --> 00:33:58,680 test on the trading zone and the appearance of a large bullish 554 00:33:59,080 --> 00:34:02,500 We could certainly now execute the trade with greater assurances. 555 00:34:02,980 --> 00:34:07,380 The only negative aspect is that the trigger candlestick travels a long 556 00:34:07,380 --> 00:34:10,120 distance, so our stop loss will be further away. 557 00:34:10,480 --> 00:34:13,440 This is not a big problem in terms of potential profitability. 558 00:34:14,190 --> 00:34:18,370 because if we are right about our scenario, the structure should still 559 00:34:18,370 --> 00:34:19,570 the effect of the accumulation. 560 00:34:20,270 --> 00:34:25,330 In the end, the price moved upwards, and from that point, we would find 561 00:34:25,330 --> 00:34:29,889 ourselves in the middle of the uptrend, where we would look for the creation of 562 00:34:29,889 --> 00:34:33,730 pivots and their subsequent false breakouts before entering the market in 563 00:34:33,730 --> 00:34:34,909 direction of least resistance. 564 00:34:35,489 --> 00:34:39,929 This final example deals with the strategy of trading during the 565 00:34:39,929 --> 00:34:40,929 a trend. 566 00:34:41,220 --> 00:34:44,620 Imagine the price has just broken out of an accumulation structure. 567 00:34:44,980 --> 00:34:46,820 What scenarios can we foresee? 568 00:34:47,699 --> 00:34:51,060 The context at that point we already know is bullish. 569 00:34:51,320 --> 00:34:55,980 Therefore, our main hypotheses should be aligned in that direction, with an 570 00:34:55,980 --> 00:35:00,720 alternative hypothesis based on the opposite direction, in this case, 571 00:35:01,760 --> 00:35:04,760 Therefore, three potential scenarios come to mind. 572 00:35:05,120 --> 00:35:09,240 The first that the price will develop a test of the trading zone to confirm the 573 00:35:09,240 --> 00:35:10,240 bullish breakout. 574 00:35:10,540 --> 00:35:14,940 The second, that it won't go down to the trading level and that it will develop 575 00:35:14,940 --> 00:35:17,280 some form of horizontal consolidation pattern. 576 00:35:17,660 --> 00:35:22,100 The third, that the upward imbalance will continue with no pause at all. 577 00:35:22,440 --> 00:35:27,280 And the fourth and final scenario, the alternative one, that the price will re 578 00:35:27,280 --> 00:35:31,300 -enter the range sharply and that last behavior will end up as a potential 579 00:35:31,300 --> 00:35:33,360 bullish false breakout or upthrust. 580 00:35:33,740 --> 00:35:37,480 As we can see, the price continued to rise even more. 581 00:35:37,920 --> 00:35:40,580 and therefore developed in line with our third scenario. 582 00:35:40,920 --> 00:35:45,020 At this point, the possibility of the bearish alternative scenario is becoming 583 00:35:45,020 --> 00:35:48,260 less likely due to the distance the price has already traveled. 584 00:35:48,860 --> 00:35:53,380 Therefore, the scenario we should prioritize would be some type of 585 00:35:53,380 --> 00:35:58,260 or minor reaccumulation structure before the price continues in the direction of 586 00:35:58,260 --> 00:35:59,260 the bullish imbalance. 587 00:35:59,600 --> 00:36:04,800 Finally, the predicted scenario seems to have materialized. The generation of a 588 00:36:04,800 --> 00:36:06,640 pivot plus its false breakout. 589 00:36:07,080 --> 00:36:10,840 supported by a strong bullish candlestick that would serve as an entry 590 00:36:11,540 --> 00:36:14,740 On top of that, we are at the edge of the bullish momentum. 591 00:36:15,180 --> 00:36:19,420 We see that there is some proportionality between the impulse 592 00:36:19,420 --> 00:36:22,560 corrections. The volume follows a harmonious pattern. 593 00:36:22,840 --> 00:36:26,860 We are supported by a strong bullish movement and there is no bearish 594 00:36:26,860 --> 00:36:31,720 going against it, and the potential spring event is, as we would hope to see 595 00:36:31,720 --> 00:36:35,680 with the trigger candlestick closing above the trading level, and in the top 596 00:36:35,680 --> 00:36:37,960 third of the last big bearish candlestick. 597 00:36:38,540 --> 00:36:43,460 While it is true that the last bearish momentum has not yet been broken, this 598 00:36:43,460 --> 00:36:46,240 trade certainly offers a high probability of success. 599 00:36:46,880 --> 00:36:51,460 It is about analyzing the inputs for and against, and being objective. 600 00:36:51,780 --> 00:36:56,420 The fact that the dynamic has not yet broken seems to be the only input 601 00:36:56,420 --> 00:36:57,420 our scenario. 602 00:36:57,940 --> 00:37:02,620 My point of view here is that we have enough signs in our favor to execute the 603 00:37:02,620 --> 00:37:04,000 trade with some reassurance. 604 00:37:04,900 --> 00:37:10,000 If, in any case, this particular input gives us a greater confidence, we can 605 00:37:10,000 --> 00:37:13,860 wait for that break in momentum to happen before assessing how to enter. 606 00:37:15,020 --> 00:37:19,320 Regarding the orders, the entry level will be as always at the break of the 607 00:37:19,320 --> 00:37:23,620 bullish candlestick. The stop loss would be located below the minimum of the 608 00:37:23,620 --> 00:37:28,220 entire scenario and in terms of targets if we find ourselves taking advantage of 609 00:37:28,220 --> 00:37:29,078 an uptrend. 610 00:37:29,080 --> 00:37:33,100 A more ambitious target would be to identify the most immediate structure to 611 00:37:33,100 --> 00:37:34,300 left above the price. 612 00:37:35,120 --> 00:37:39,740 As intermediate targets, my recommendation is that we take some type 613 00:37:39,740 --> 00:37:44,300 profit in the liquidity zones or trading levels in which we find ourselves to 614 00:37:44,300 --> 00:37:48,020 ensure we don't miss out of a potential profit if the market reverses. 615 00:37:48,680 --> 00:37:52,840 If we don't have a reference structure we can use, we would have to employ the 616 00:37:52,840 --> 00:37:56,460 other methods that allow us to detect whether there is increased participation 617 00:37:56,460 --> 00:38:01,670 from the opposite side such as the evidence provided by climatic 618 00:38:01,670 --> 00:38:04,470 the development of a structure that goes against our interests. 619 00:38:05,090 --> 00:38:09,530 The market developed upwards and reached the first two suggested trading zones, 620 00:38:09,790 --> 00:38:12,550 the liquidity zone and the previous structure. 621 00:38:12,970 --> 00:38:16,910 From there, and if we think that the effect of the cause might already have 622 00:38:16,910 --> 00:38:21,370 exhausted, we should use appearance of climatic volumes as early clues that 623 00:38:21,370 --> 00:38:23,250 indicates a possible shift in the market. 624 00:38:24,410 --> 00:38:29,110 In this case, we can see that several extremely high volumes have developed in 625 00:38:29,110 --> 00:38:34,010 that area, the one marked on the chart being especially striking since it 626 00:38:34,010 --> 00:38:37,190 indicates a huge divergence between effort versus result. 627 00:38:37,730 --> 00:38:42,450 This is a candlestick with a narrow range and a closing price far below the 628 00:38:42,450 --> 00:38:46,650 highs, so that peak in volume could signal a major entry of sellers. 629 00:38:47,350 --> 00:38:50,890 This is reason enough to carry out a more aggressive form of position 630 00:38:50,890 --> 00:38:55,290 management, either placing the stop loss closer to the current price or 631 00:38:55,290 --> 00:38:56,650 immediately closing the position. 632 00:38:56,950 --> 00:38:59,750 And now we have reached the final part of the module. 633 00:39:00,070 --> 00:39:04,550 We have looked at examples for accumulation patterns, but we know that 634 00:39:04,550 --> 00:39:06,310 equally valid for distribution structures. 635 00:39:06,950 --> 00:39:10,130 Absolutely nothing changes except the direction of the position. 636 00:39:10,590 --> 00:39:14,050 The crucial thing to remember is that we always have several options. 637 00:39:14,930 --> 00:39:19,390 Our job is to consider all the possible scenarios that come to mind, and after 638 00:39:19,390 --> 00:39:23,070 that it's up to the market to confirm which one will, if any, be executed. 639 00:39:23,720 --> 00:39:28,640 and to be fully alert to scenario management so we can activate one or the 640 00:39:28,640 --> 00:39:29,640 as appropriate. 641 00:39:30,060 --> 00:39:34,220 We have used all these examples to put into practice one of the most important 642 00:39:34,220 --> 00:39:38,960 lessons, which is to determine when our predicted scenario is no longer valid 643 00:39:38,960 --> 00:39:43,020 and what we would need to see the price do in order to activate the opposite 644 00:39:43,020 --> 00:39:48,220 scenario. Remember that each market action must be confirmed or disproved by 645 00:39:48,220 --> 00:39:49,380 subsequent price action. 646 00:39:49,920 --> 00:39:53,400 This will help us at all times to maintain a flexible mindset. 647 00:39:54,220 --> 00:39:58,640 Finally, my ultimate goal has been to teach you to read the market in real 648 00:39:58,760 --> 00:40:03,100 to open your mind and to be able to suggest different scenarios with 649 00:40:03,100 --> 00:40:07,560 probabilities depending on the current market situation, all with the sole 650 00:40:07,560 --> 00:40:11,900 purpose of knowing at all times what you are going to do based on how the price 651 00:40:11,900 --> 00:40:12,900 is behaving. 652 00:40:13,040 --> 00:40:17,640 To do this, you have a trading checklist that will help you focus on looking for 653 00:40:17,640 --> 00:40:18,920 the most decisive signs.