#1 Analyzing and Trading Markets Using the Wyckoff Trading Method - バイリンガル字幕
Hello, everybody, and welcome to this new Ifta webinar about analyzing and trading markets using the week of method.
My name is Del Valcou.
I'm a Ifta Marketing Director and I am seconded by Akram El-Shirbeni from Istha, Egypt as webinar moderator.
We have the pleasure to introduce Roman Bogomazov and Bruce Fraser.
Both are recognized experts who teach and the week of method at the Golden Gate University in San Francisco and other institutions.
We'll have 45 minutes followed by 15 minutes to UMA.
Please be kind and type your questions in the question box.
Each question will be addressed at the end of the presentation.
our crime will do this.
As always, the presentation will be recorded and will be delivered to each society in about a week.
Think one more time, Bruce and Roman, for accepting our invitation and sharing from your extensive knowledge.
Now, let me switch the screen to Roman.
Enjoy the lecture.
One second, go on and play.
Okay.
Can you see my screen?
Not yet, but yes, now.
Yes, now.
Okay, great.
And let me know.
Check do you see the pen or you see the pen?
Okay, great
Okay, well, thank you for welcoming us to use the webinar series
It's exciting because you know,
then you started this program what a year ago and now it seems like Ifta colleagues have this opportunity to listen to anybody in the world who is the technical
analysis knowledge and I think Ifta is doing a great job and I'm kind of looking to...
other presentations that you're going to line up for this year.
And I just would like to welcome my friend and my colleague, Bruce Frazier.
Hi, Roman.
Hi, everybody.
And I think that we're just going to let people read the disclaimer.
This presentation is only for educational purposes.
And because we don't have a of time, Bruce, I think that we should just jump right into the material and start.
Let's go.
Okay.
So here is our first slide.
And this slide is kind of like a description of who Wycliffe was, what he did, and some of the interesting people that he...
work with together,
talk to,
and Bruce,
again, you because we are pressed a little bit on time, we're probably not going to go a lot into the history of the method or, you
know, you like a life itself, but I want to ask you a question because you're such a great storyteller.
Why is it so important for us to to know the method from the perspective of what Wyckov did with somebody like Joseph Livermore,
James Keen, you know, why we talking about him codifying those principles and why those principles still work today?
This is probably one of the questions that I receive a lot.
Do the principles that he described almost hundred years ago still work in the current market and why?
Well...
Richard Dykopf was a self-taught individual who came out of a modest background and was
just attracted right away as a youth and as teens to Wall Street and up,
the financial markets,
and after a period of time working on the street,
he started to realize that there was a way that speculation was being done by the people that were really,
really good at it,
and it was different from the way that the public and many other investors were doing it and consistently lose And so,
he decided that he wanted to understand what the real rules of the game were.
And so,
he went on a quest to understand how the Jesse Livermore's and the James Keanes and others of that era had become so,
so successful and how so many others and large numbers had done poorly.
And so,
what we're going to introduce today is a methodology technology that is based on what he discovered,
and principles of successful speculation in financial markets are today really very much the same as they were back in that era.
rules today that are maybe more stringent, that you have to be more careful about following the rules.
It was sort of the Wild Wild West back in the turn of the 20th century when Wyckoff was educating himself.
And The things that we're going to talk about today are just the principles of successful speculation.
It's the way that very large market operators do it, and it's the way that we should be thinking about markets also.
And so, I think that's enough for now, but there's a very colorful history that Richard D.
Weicop, the book on the left there, Wall Street Ventures and Adventures, is his autobiography.
history.
And he was a wonderful writer.
So all that you can that Mr.
Wycoff wrote because he really is a very, very good, very clear writer.
Okay, great.
Let's go to the next one.
So here is a That's a radical idealized price cycle,
and usually this is where we start our studies at Golden Gate University with Wyka students,
we want them to what is it exactly that we're looking for, in terms of what we...
are looking for in the trade.
Obviously, we're looking for the trades that are going to be trending.
And we want to initiate those trades around the areas of accumulation and distribution.
Bruce, why is it important for us to look into the trade in ranges?
And Wyckov Studies has a lot to do with the trade in ranges.
And how can we possibly recognize any type of the directional bias within the trade in range that could develop off to the trade in range?
Well, there's a principle at work here.
This chart is incredibly important and deceptively simple.
But what's going on in accumulation is...
It's sideways market activity where prices trade in a wide bounding trading range where they seemingly go nowhere,
but what we call intelligent activity that's occurring during accumulation.
An intelligent act is very large interest,
which we call the composite operator,
that are very good at what they do, that are accumulating large quantities of shares throughout the entire accumulation range.
And we call this activity absorption.
And this absorption is the careful accumulation of stock throughout.
And happens is that you can see the footprints of what we call the composite operator in this process of accumulation.
And actually break it down into phases, which we'll talk about.
So, absorption in a trading range is an incredibly important concept and once a stock has been
absorbed and this is, so accumulation begins at the end of a large markdown.
Some people would call it a bear market.
So there's this large markdown.
The composite operator does not participate in the markdown phase unless they're shorting stock.
They wait for...
the stock to reach a level where they're willing to start to reach in and start to buy it.
And they will buy shares very carefully throughout and they need to buy so many shares of stock.
They need to absorb so much of the float of the stock that in aggregate among all
of the different participants that call themselves or that we call composite operators.
that it takes time.
It can take months and months and months to do this.
And they're very patient.
They're very thorough.
They're very good traders.
They're very careful about the prices that they accumulate shares at.
And so the same thing occurs with this.
We're going to do a future webinar where we're going to spend more time on distribution.
But concept here is simply that in distribution, the composite operator has completed their campaign.
That campaign is from the buy zone to the sell zone.
And so the composite operator is accumulating shares to hold those shares from the buy zone to the sell zone,
which can take years to unfold.
And then once you get into the distribution area,
they just as carefully, just as thoroughly, and just as patiently distribute the stock that they own in the distribution area, which creates these losses.
Now, there's a difference in the way the principles of price activity unfold in distribution than
the way it unfolds in the Because accumulation,
even though they may look similar,
accumulation is the absorption of shares of stock,
literally removing them from trading activity because the CO,
once they accumulate those shares, they're not going to sell them until prices are much, much higher.
But when you get into the distribution area, they will distribute their shares very carefully.
And They will distribute those shares until they're completely out,
which means that the stock is gone from strong hands to what we call weak hands.
And so the volatility that occurs in a distribution area.
is distinctly different than the way volatility occurs in the accumulation area, which we'll get into a little bit of that today.
Okay.
So guess, let's say if I were a beginner, like Corfin, and I would ask you this question, you so this is very interesting.
to know that there is an accumulation going on in this consolidation and you mentioned something about phases,
something that the trading range can contain and something that we probably can explore.
So, would phase
phases or phase analysis help us out to determine when the price is ready to leave the trade in range and to establish a trend.
Our phases are great because phases,
if we can understand the footprint of prices and the activities of the large informed interests and we can see what they're doing,
it allows to pay attention,
to be patient, and wait for the opportunity for us to jump on board and ride along with a composite operator.
The composite operator needs the entire accumulation to be able to accumulate shares where we understanding
the motives of the composite operator are
are able to buy shares when the market is ready to move and ready to move now for the
stock or the instrument that we're trading.
We do not have to sit through the entire accumulation area with our capital waiting for the liftoff.
We can wait and then participate once the liftoff is occurring.
And this is one of the really brilliant things about phase analysis is it allows us to identify when to act,
when to get busy,
when to be patient, and just to And then the different places that we can get on board as the markup phase begins.
And we can obtain our positions right along with the Okay,
so you've been talking about this area right here,
and we see here how the price is first testing the previous lows of the previous phases,
then there's something's going on with this rally, which is definitely much more substantial rally than any of the rallies that we've seen before.
Then we're looking at this last reaction that reacts back into the trading range,
into the area of the support which previously acted as a result.
And that kind of to me shows a different action that we've seen in any of the other phases.
So, and you mentioned that this is the first phase of the marker.
So, what if this is the first phase of the market for the trend, and this is where
we should start taking our positions, I wonder what's happening prior to that.
How can we decipher, let's say, a stop in action of the major trend first.
How can we look into the middle of the range and recognize that supply has been observed?
What can we do that, Bruce?
Well, we're going to look for these characteristics of these principles in price bars and volume.
And so when we combine our ability to observe the characteristics of price,
In the on classic simple straightforward bar charts with volume we're able to see
The activity of large interests versus the activity of everyone else because the one thing that large interests the composite operator
this collection of all these different very wise traders,
investors are doing, is that when they enter the market, we can see them because the volume expands dramatically.
And so the one thing about the accumulation area is that the classic CO,
this heuristic,
we call it,
which is a,
we call it a useful fiction because it's really a collection of a number of different competing interests that
are all trying to buy the same stock, is that they will attempt to buy shares in the accumulation area.
And, at the same time, not trade or buy the stock badly, which would cause them to
run the price up and out of the trading range until they've completed their entire purchase.
And this is why they will be very careful,
they tend to buy in the bottom half of the trading range,
and they will tend to suspend their buying activities when the stock gets up into the top half of the trading range.
And so they will They will be accumulating, attempting to accumulate on weakness.
They will suspend their buying activities at the top of the range and wait for another trip back down towards the bottom.
And this will go on until the shares just become more and more difficult to bond.
Okay.
You mentioned that the principles behind accumulation and distribution are going to be somewhat different.
Let me talk a little bit about the phases, the intention about the phases.
So we're looking at our first phase A, and this is the beauty of Wyckef method in terms of defining the context of your signal.
So there could be quite a few signals in the trading range.
And for trend following traders, those signals are going to be a which source.
So We the trade and range into the context of phases, we can take specific signals and not all of them.
So about the phases, the first phase A's intention is about the stop in action.
What are we stopping here?
We are stopping the downtrend from going further down.
And the bridge has mentioned,
you a climactic action,
which is a first-grade place for big institutions to accumulate a sizable position,
because there's going to be a lot of fear,
there's going to be a lot of supply,
change of character on the first rally,
automatic and then the test, local test of the climactic action, that we have, and that should stop the trend from going further down.
It doesn't mean that we might not have low or lows after that,
we might, but primarily we are going to be consolidating in this area.
Phase B is all about supply and demand.
How supply is being observed, how demand is being present.
And with all of the swings that we have in phase B, we're going to be building a course.
One of the laws of the Weikf method is a law of cause and effect.
And it states that we need to have a causality, enough time for big institutions to occupy.
in order for us to have a long, sustainable trend.
In institutions, when they buy a huge position, they're not going to sell in a month, in two, in six months.
They're going to be holding this position for a long-term cycle,
something like a business cycle from two to four,
five, six years, depending on the specific industry group, depending on the specific economic conditions that we're currently in.
Phase C, as I've mentioned, is the last test of the previous load.
So it's the last test of the supply.
Why?
Is there still so?
And if there is some institutions would love to get in at the slow price before the trend
and scoop everything that is left of the trend.
Again, they want to control the supply to a certain degree, because that's what would move the price up.
And then on the way up,
other institutions,
maybe so big,
maybe hedge funds,
maybe some mutual funds,
are going to come in, they're going to, their valuation timing models are going to define this area as a potential point of entry.
And this is where we want to operate as well.
This area right here in Phase D is going to show us a lot of change of character from what we've seen before.
It's going to establish the stride of the trend.
And there, the price is going to move with more ease.
It's going to have more velocity to the upside spread.
have monodominant demand signature over supply signature, and going to have a lot of stepping stones on the way up.
Okay, so let's look at the distribution, Bruce.
In terms of the phases, we're still having the same intentions.
Phase A is going to be the stop in action, and this case, we are stopping the uptrend.
Phase B is going to be about supply and demand, building the course.
The is going to be distributing a lot of shares of what they hold.
Phase C is going to be this final test of the previous heist.
And what are we testing there?
We are testing the ability of demand to and sustain the trend.
If that doesn't happen,
we're going to fail and supply is going to increase and we're going to see a change of character relative to the previous phases again.
So, from that perspective, Bruce, I say that maybe, you know, the intentions
behind the phases are going to be the same, but just going to be reversed, right?
But what are the differences between, let's say, accumulation and distribution?
You know, is it a function of supplies, is it a function of what big institutions are actually doing it in this moment?
It distribution.
like a race because these large interests that have large numbers of shares of stock that are selling using.
The reason that you have a ceiling on the stock price where you have resistance, which is a term that was coined by Mr.
Wycock.
is resistance and support,
you have a resistance area, that resistance area is being defined by large sellers that are holding, checking the price, and it from rising further.
And that's what sets up distribution.
Now, they're in a race.
They're in a race to be able to sell at the best price possible to get out of their share.
Then when they are sponsorship, they are strong hands.
When they no longer own those shares, those shares are now in weaker hands.
And in weaker hands, there's no organized support to hold the stock up.
And that,
when you get into the C phase and the D phase, you can see this inherent volatility that is in place because the C.
stock is no longer being campaigned and supported by large interests, large informed interests.
So volatility increases,
and this is the reason why when a stock goes into a markdown phase or the market itself goes into a markdown phase.
The volatility of the declines are so dramatically large,
and the volume is high, is because of the quality or the lack of the quality of the ownership.
And this is why distribution is distinctly different from accumulation.
They similar, they look like they're mirror images of each other.
But the actual volume price characteristics, they're distinctly different.
Okay.
Well, let's look at the example.
Today we wanted to give you kind of like, a quick case study.
Bruce and I have done this so many times and we always enjoy this process.
This is probably kind of like where we want to stay for the whole session.
So it's going to be a simplistic overview,
but the same time we're going to stop and talk about specific principles,
why they are what can you do there in terms of your analysis and what can you do there in terms of your trading.
So we're going to look at Biogen and we're going to look at this here.
that we've had since 2000 with the change of character happening in this area right here.
And this trading range has lasted for almost 10 years.
And if we would be identifying a lack of buy zone,
so that is where we would be initiating or considering to initiate our position,
long term position, this is the trade that we wanted to show the composite operator is going to be involved in.
So the composite operator,
those big institutions, and by the way, when talk about big institutions, we're not necessarily, I don't mean hedge funds or mutual funds.
huge pension funds, insurance companies.
The ones that are going to have billions and billions of dollars behind them to commit to a specific industry.
group.
And the way how they trade it, they're not going to specifically trade just one stock.
They're going to find the leadership in the industry group in different stocks.
So, the way how they can paint in this somewhat different than the individual trader, even an investor
who could participate in this, in this trade.
So, we, our goal and intention here to find the conditions through the selection process that would lead us to this potential
leadership, find the points of entry at the specific places.
And then stay with the trend as long as possible,
and then till the trend is showing a change of character, and this is where we want to exit.
So let's look at how we would label this trading range, and let's just go through this bruise.
Bruce, where would you start your analysis?
So say that we don't see, let's say, phase C here, and we see maybe phase B and phase B.
look at those phases and how would you start your analysis?
Well, I'd like to go over to the left and start with how the prior trend ended.
In this case, it ended, there was a large markup.
And you can see towards the end of the large markup that there is what we call preliminary supply,
which all of a sudden,
in a short period of time, you have this large decline that is a different decline than anything that preceded it in the uptrend.
That is what we call a change of character.
That doesn't,
isn't the end of the uptrend,
but it's a warning to us because the characters that the interests that can cause a stock like this to decline,
that quickly is the composite operator.
And so they started to actively sell shares late in the day.
And then checked their selling activities,
and then they took it up into another continuation of the uptrend, which went to what we call the buying climax.
Now the buying climax and the automatic reaction, which is another big dramatic decline, sets the outer edges of the trading range.
So this is very important.
One thing you learn today is to draw the support and the resistance off of...
the peak of the buying climax and the automatic reaction.
And from that point on, most of the trading in the trading range should oscillate between the bounds of those two extremes.
And that's exactly what we have here.
So, that's the first thing I would do is to define the trading range with those two points.
Those two simple points and look at how long they bounded the trading range for buyers.
And so from that point on,
then we start to look at,
well, when do we go from Phase A, which is a stopping action, it's stopping an uptrend in this case, to Phase B, which
is to build a cause where you have stock that's changing hands or being, in this case, reaccumulated for another move on.
up and in taking many years to do it and then phase C,
which your final testing area and phase D, which the markup out of the trading range and into a new uptrend.
Okay, let's talk about trading a little bit here.
So let's say if I had a position open, you in this uptrend, where exactly would be my exit?
I mean, what are the points of the exit that I could consider here?
Well, any time you see a dramatic buying climax, which would be, you could say that that preliminary
supply has all the attributes of the buying climax.
It would be a place where some stocks should be sold,
and then a push above that, the peak of that preliminary supply into a second buying climax is also a where stock can be sold.
But then also the testing areas.
So the secondary tab.
that failed up thrust, those are places that also stock can be sold.
Okay.
In my classes with students,
you when we're talking about the trade-in taxes,
and this is, you know, a slightly, not different technique, but, you know, maybe little bit more detailed view of this area right here.
Bruce has mentioned the change of character is extremely important concept, and I actually love it so much.
I spend a lot of time going through a lot of charts and working with students just in this concept.
So, one of the things that the long-term investor or swing trader would consider here
is that after we see a change, not necessarily want to get out on the way down.
We always say that we want to to buy after the reaction,
on the reversal of the reaction, and there are only several places where we could buy or sell on the breakout.
So in this case, we don't want to necessarily sell into the reaction.
What we want to do is understanding the contextual structure that the price is going to go up and retest at least this level.
We just want to get out on level.
And we can do this with the trailing stop loss, so exit could be at this point somewhere.
So please note what happens here.
If we are still holding the stock here,
and then we are observing the change of character, again, we don't have to go away from this position right away.
Our exit could be at the better price on the way up,
and then we can go into our stop in action in the building of the course.
Okay, great.
Bruce, so where exactly would we be looking to open a position to the upside, and
would we find that place in such a long trading range?
What would we be looking for?
Well, most people would not have the patients, I guess, to observe a trading range that goes this long.
But once you have this in your The next question is, as it's going through this reaccumulation phase, is this reaccumulation or is this distribution?
And that's a very important analysis that needs to be done.
And how can we define that?
Well, keep in mind that...
And if you look at my blog, we'll you how to get to the blog, the July 31, 2015 blog.
There's a discussion of this.
But what happens in reaccumulation is it's just like accumulation in that the volatility is very high early.
in the distribution area and you can see the volatility coming out of biogen as
you go from the phase B tends to be very volatile,
phase will tend to be much less volatile,
phase D will have volatility to the upside,
and so which you'll is that the volatility is coming out of biogen, which is a classic sign of accumulation.
It's a sign of absorption, because once the stock is in strong hands, it becomes difficult to buy in large quantities.
And so you can see here that it becomes less and less volatile,
and it actually, the lowest low in this re-accumulation is actually occurs in 2002.
And subsequent low that occurs through this entire area is higher.
And that is a sign of absorption.
And so here we can see,
then in point C, that have a pullback that takes it down, not all the way to the lows of the support area.
And that decline, there's a series of tests.
where there's the lowest tested repeatedly throughout that whole area, never being able to get below that low.
And that is a classic sign of accumulation.
Those areas can be bought, also the breakouts can be bought.
And Ramon, you're really good with entries, why don't you pick that up.
Well, one of the things here is we're looking into this reaction.
At this point, we might be thinking, is this a potential phase C for us?
And why phase C is so important, well, because this is where the trend starts.
This is from the lowest point in phase C is going to be the lowest point of the trend.
So we want to catch that as it shows the final absorption of the supply.
So therefore,
our analysis would look into this area right here and how it is being compared to, let's say, previous points of supply that we've seen.
We want to see that contraction of the supply after the expansion of the supply,
and one of the characteristics for phase C that I personally would like to see is that,
you know,
I want to see a long-term contraction of the supply,
so this case,
the highest supply came in phase B,
and then we have a very substantial decrease in the supply,
and then I and then I want to see a long increase of the supply going from phase B to phase C.
Why that important?
Because as we go down, and as composite operator might be even pushing the prices down to check whether supplies are available.
This is the second point of fear in the whole trading range where weak hands are going to
distribute to stock and where the strong hands are going to pick that supply.
The first point of fear was all about to stop inaction.
In reoccumulation,
we might not see that more distinctively,
but on the accumulation charts you are going to have a climactic action that's going to have increase of the spread,
increase of the velocity, increase of the volume.
show us that weak hands are fearful and they are selling their stock.
So now that we are observing the contraction of the supply, we still realize that locally supply has increased.
So we want to have some kind of testing action.
And for the successful test, we want to have two simple rules.
A structural rule,
would be to have a high load for the test,
and then the volatility roll or the volume rule, we want to see a supply signature to start contracting.
So we want to see a high load on the contracting supply.
And we can observe this from this action here, from this swing.
So one of the things is when we see that contraction of the supply and we see a high load,
we just want to identify reversal patterns.
technique you're using for the reversals and just enter the position.
And stop losses would be behind the significant level of the supply.
In case, this is a significant supply locally.
So for the long-term invested, this would be the most appropriate stop loss.
If we are more aggressive swing and we just weakened for this type of swing,
then we definitely want to be more aggressive with the stop loss so that our The average winter loss is going to improve.
We have discussed three major places of where we can open the position.
One of them is going to be in phase C.
Again, there are quite a few details here that we can go through as to how phase C could develop, where exactly in phase C we can open the position.
The second place was on the way up before the price hits the result.
And on the sign of strength rally, And our preference would be to find a sign of strength bar.
Those bars are going to be long bars, elongated bars, that going to have preferably a high demand signature behind them.
And that shows the commitment of strong professional hands So, on this type of bars, we can open at the close.
If you're intraday trading, you can open the position based on your intraday techniques and then switch to the daily stop loss.
There quite a few opportunities there.
So if this was the first point of entry for us, this was the second.
The third one is going to happen after the commitment to the optimization.
side, after the change of character, and after a final test, a back-and-up action that will
show us that supply is not capable to push the prices back into the trading range.
And instead of going back into the trading range, the price tested support, which was the previous resistance, and reverses and resumes the trend.
So this would be the third place for us to open the position within the trading range.
Later on,
we're going to have a lot of opportunities to look into the stepping stones and to add to the position,
you know, on the Bruce, what else, Carol, can we upset you?
Just the idea that you can see here with the nature of the way that the advance is occurring,
that you have these just persistency of prices moving up.
your purchases aren't perfect, that the reactions are shallow, the trends last a long time, and a poor entry.
So, I mean, we obviously want to work for really good entries, but notice how a dramatic uptrend, which is an indication that the stock is in strong hands, and the
only thing that's these large interest to sell stock is much higher prices.
And you can see here that there's just a very robust uptrend.
And there's many places in the uptrend to make purchases.
I'd like this comment by you, Bruce, that the major supply of this stock is in the hands of the composite operate.
And we could see this from the volume signature.
And look at this volume, how it starts to contract.
And on the way up, we actually see the volume decrease.
And this is a very interesting phenomenon here, and I have a lot of questions about this, you know, and a lot.
2009 had a lot of problems identifying a lack of supply and that was that lack of supply the price can move to the upside.
So, a lot of the hedge fund managers or money managers have not participated in the rallies
since the lows of 2000, 2010, because the whole volume signature is contracting.
In conventional technical analysis, we talking about volume-confidentity.
as volume should confirm the price movement in the direction of that volume signature.
Here it's an opposite thing.
So why is this happening here?
The reason why is all in the function of the supply.
as supply is contracting and contracting significantly, and interest are holding that supply of stocks in their hands.
They are not allowing supply to the market, and therefore, even with decreasing demand signature, we still can see the prices going up.
So, you have to think about contraction of the supply as an opportunity for low-quality demand to push the prices up.
There is no way that the price can go lower.
If it's going to go lower, what institutions are going to do?
They're going to buy more.
They're going to support the stock more.
And once there is enough supply in their hands,
even a small demand can Another concept here,
which is extremely important, and Bruce talked about this a little bit, it's this rally right here, was this reaction.
This looks so much different than anything before that we've seen in the trading range.
And we again refer this as a change of character.
This first change of character was on the way into the trading range.
It showed to us that there is something different that's happening relative to the option that we've had,
and therefore we can expect a different trending environment.
So from a trend we're going into consolidation.
In this change of character...
of the trade image, we are changing the environment again.
So from non-tranking environment,
we are showing not only that we are changing into the trending environment,
but also a change of a character, in this case, is showing us a directional bias as well.
So what is this change of character?
What's so important about this?
Well, if we're going to look at the rally that we have had here, this is the largest rally in the trade range.
If we're going to look at the reaction rate here, this is this smallest reaction.
that we have encountered in this trade-in range.
So, therefore, something completely different is happening for the
There is also other characteristics that we can talk about, you for the change of character concept.
Commitment to the upside,
increasing the spread,
increasing the velocity,
sometimes we would like to see an urgency of demand to identify a potential leadership in the future because
if there is an urgency by big institutions to provide, you know, a lot of demand here on the way.
What does it mean for them?
That means that they are willing to show their footsteps at this point and they urgently want to accumulate as many shares as possible.
So therefore they're going to be holding onto their shares for quite some time.
They're going to be seeking other opportunities to push the price up by buying more and therefore that's going to create that future leadership.
That future leadership observe in the relative strength and comparative strength analysis,
which Bruce and I are going to talk about in our next session,
and believe that session is going to be in April,
April 4th, and in May, we're probably going to touch upon how can we actually calculate the potential.
of the cause that was created in the straighten range to project what kind of effect we're going to have,
and we'll talk about the point-and-figure counts and how Wyckev did the horizontal counts and how they're different from a more conventional technical analysis count.
How are we on time, Dan?
47, we 15 minutes left.
That's fine.
Should we start with the questions and we can finish the presentation by probably talking
about what additional resources right here and then we can take some questions?
Just a second.
Yeah, let's take some questions.
The thing I'd like to point out about that very large-scale chart that we were just studying is that these principles...
in all time frames.
So we are looking at a very large time frame,
but you were to look at a weekly time frame,
yeah, which the next chart is actually a close-up of that area there on a weekly basis.
And daily,
intraday, these principles are at work over and over, And so this whatever timeframe you prefer to work in these principles can work for you.
And so here maybe we can leave that chart up while we take some questions.
But here is a blow up of the area that we were just looking at in the larger context.
This also makes the point is you always want to look at the larger context from the area that you're working in.
So if you're looking at working in weekly charge,
you want to look at the history of the monthly data to see whether or there's a story to be told,
principles that work there that might either support you or work And so,
in this case,
we've come down to the weekly,
and you can see that the principles of work here are selling climax,
automatic rallies,
secondary tests,
a B phase,
and a C phase,
final test,
which is a last point of support,
which we just looked at on the monthly chart,
same areas,
but you can see these areas,
and then you could take a point figure count of that base to gain some objectives, and you have the jumping out, the backing up.
And so everything there is at work,
and you can see just the ease with which,
once the accumulation is complete, the ease with which prices just move up and out of this accumulation area and start their mark up.
Actually, what all we care about, we just are looking to identify the preconditions
that set up large markup phases so that we can campaign and participate.
large markups and participate in the very best ideas which the composite operator is operating in.
Go ahead.
I was actually trading the stock right here.
And the reason why, so what was the logic there?
So I was looking at the larger scale time frame.
on the monthly,
identifying this whole area as a potential reaccumulation,
especially in this action right here,
and especially after the sign of strength, major sign of strength, major change of character, and the back-and-up action.
So I was looking at this place to initiate the position.
Now there is a lot of leadership on the way up that Bajan started to show on the sign of strength.
And here is the same sign of strength on the weekly chart, so on the smaller timescale.
So at this area right here, and it was 2011, October, we had a shakeout in the market.
And the market did something like this, it was consolidating, then we had a shakeout consolidation and then we started to to the upside.
So during this area when the market was weaker relative to the stock,
which was making a higher low instead of a low low in the market,
this stock has both prior leadership and local leadership in a smaller trading range.
So when you go to the daily and if you'd like to practice this principle within the principal,
a time frame trading range within the trading range, we have a trading range within the trading range in phase C here.
We have a smaller range here on the back and up action.
You could see that by looking at the highs and the lows or if you're looking at the
relative strength ratio as your indication of the strength or the weakness,
you're going to see that the stock has exhibited a lot of signs of strength in this trading range.
reversal out of the potential phase C here was the way to into that position,
and right away you would be rewarded with this big move to the upside,
and the reason why is because a lot of institutional falling,
and the inability of the price to go lower and to create something that what the market has done shows unwillingness of big institutions to sell the stock.
Therefore, they're going to be holding this dog further down the uptrend and you want to be in this position.
You to be like this smaller fish that is going to follow a much larger big fish.
And this is basically what you want to we do.
We want to see what the big fish is going to do, and want to follow in the same direction.
How is that for that analogy?
We just don't want to get eaten by the big fish.
Exactly.
We want to follow.
We want to be followed.
Yeah.
So we have any questions?
Hold on a second then.
Well, people are still writing the questions.
I wanted to mention a couple of resources, few resources that you can rely on from our side.
And developed quite a lot of products, quite a lot of lectures, webinars.
So one of the main things, and this is where it all started.
And the program has started this program at Golden Gate University.
There are two We teach those classes on campus and,
you know,
if you're close to the area,
and you have this opportunity to take WYCAF classes from Britain and Britain,
those sessions as well, I would highly, highly you know, to go and be taught by Hank.
We also have those classes online and I teach those classes online.
We just started the new semester and I'll be teaching WYCAF 1, WYCAF 2 this year.
Bruce has an incredible blog that has been going on right now for more than six months
and he has so many entries in his blog about Wyckef Method and what Bruce is doing
there is he is describing the methodology so you can literally sequentially start to read him on how to approach this method,
how to start applying it in your analysis and in your trader.
Another source is Wyckef Analytics.com and this is my private source, this is where I privately teach the method.
We have different classes.
I at Wyckef trading course.
advance like a trading course that lasts for four months and then we go into the
like of practical course that lasts also for months this is where we practice the
concepts that we have learned in the work of advance course so check out all of
this sources all of them are great and we can go to questions then.
Yeah the ACRAMP would you please read the questions Yes, thank you, Dan.
We have the first question from Brian, and he said, usual a 10-year example, does this method work in shorter-term environments?
Is it fractal, sorry, in nature?
And we touched on that, but it is fractal in nature.
You'll see these conditions set up in all time frames.
You can see it on daily charts, weekly charts.
You see it in the intraday.
And it's whatever time frame your preference is, you'll be able to use these principles and be able to employ.
Yeah, and there are quite a few questions from students about the intraday, like they would ask, well, what would be the difference?
The principle says,
still going to be the same,
yes, there are some minor adjustments and differences that you have to consider during your intraday trading, and for instance,
you just volatility where some institution can come and just create a counter with a lot of supply,
let's say, or with a lot of demand, and whatever reasons they're using there, it could be their reasons.
We know them, and we don't really care.
All we want to do is to observe how that's going to be put into the context of the data structure
and into the context of the data.
trend that we're having right now, so we go through quite a few into the examples as well showing the principles there.
And we have a second question from my other Brian and he said,
sorry, the letter half of A is B looks to me a lot like face C.
How did you know it wasn't?
Until you see,
it breaks through the top of the trading range and how can you Okay,
Bruce, I think that Brian is referring to this area right here, and Brian, please tell us if this is not the case, and then, you know, this and this two areas here in BNC.
What's the difference?
Please, go ahead, Bruce.
There's, it's always possible to see something, identify it.
as being the conclusion of the testing area and then have it continue on, especially in a large chart like this.
The one thing that you'll notice is in that last run-up to the high where the buying climax
is being tested with the sinus strength is that there's a huge amount of volume as it's pushing up there and pushing up and out.
And that high volume coming towards the end of that,
we would interpret that as being a sign of selling, not of accumulation, because accumulation tends to happen in the bottom half of the range.
So that would make us a little cautious up there.
That doesn't mean we didn't attempt to trade that at the same time.
and trade it to the top of the trading range, but that very large volume would be a flag.
And then also the failed tests that occur after that up thrust action.
would lead us to believe that it may have to attempt to go back down towards the bottom of the trading range.
The thing that we're prepared for in accumulation is that once you get to the top of the trading range,
get up into resistance,
that we expect that the market is going to attempt to go back down to the And how it goes back to the bottom is going to be really important to us,
because if we can get all the way back down,
or if we can only get part of the volume signatures on the way down,
and on, are going to lead us to draw conclusions about how close we are to completing the accumulation.
Another point here,
which is,
I think,
extremely important because some of the students are going to be thinking,
okay, if we're in Phase A here, we should have a test in action in Phase B as well.
And it seems like this could be a potential.
So, the key here to think is the supply signature.
What is happening with the supply?
Supplies definitely increases.
And some accumulation instances, we might have that signature.
But are going to be very rare.
of supply, of such magnitude, would dictate that we would have some kind of retest of the same area later on.
And because this trade-in wrench is so huge,
and the time this action happens, you've actually been in the trade-in wrench for one, two, three, four, almost five years.
So you might be thinking that your retest might happen, you know, far away from where we are testing.
now.
Plus, looking at the market conditions at the time, we're still wearing the uptrend, so that would dictate a rally and a brusus observation about this increase of effort
versus the result, decrease of the result where we can't commit to the upside.
It's a better result than we've had here.
It shows us that there is some interest from big institutions to mark up their price.
But inability to commit above the resistance and a lot of effort with smaller result actually produces a short-tune bearish feeling.
picture for us,
and we can expect some kind of retest back into the trading range and retest of what, retest of this law right here.
So as the price goes down, as Bruce was saying, we would be observing what kind of supply we have here.
And right away,
we see the local increase of the supply that suggests that that, after this part, that we probably were going to retest the support.
Stop in action right here,
and this further absorption is going to tell us that this retest that we've waited after this point of the supply has happened,
and it's successful.
And just as a footnote,
if you look all the way over on the right side of the chart,
which is up to date,
you can see that there's a change of character in the way that the stock is acting and that volume is coming in,
expanding on the decline off the peak.
And so...
There's a change of character that's occurred in the stock at least for the time being And,
by way, this change of character is, you know, what would it mean?
That would mean a change of character from a trending environment to either non
-trendian environment or we might have some kind of potential test and just a continuation of the downtrend.
So change of character is an extremely important concept.
I think it's very under-looked.
I think it's not being explained in the conventional technical analysis as much as I would probably, personally, would prefer.
And Wycke has this.
layer of knowledge, you and though it's a simple tool, but it's extremely useful.
So how are we doing for time?
Do have more time for more questions?
Yes, we have like seven minutes left.
We have one more question from Ricardo, are gaps considered as signals of change of character?
Sure.
One of the exercises that I do with students is, and here we cannot see a lot of gaps.
If we would go to the daily chart, that would be more obvious.
But on the weekly here,
you would kind of like, could start seeing, you know, some these changes of character and how gaps are helping us to differ.
that we are changing the character from an areas where supply is more dominant to the areas where demand is more dominant.
So if we would look at this whole chart,
and here on the daily, there's two bars that are acting out as big weekly bars, probably have daily gaps.
And those gaps are probably going to be quite significant.
So we could see gaps here.
And then after that,
as we go down and as we start consolidating, we can start seeing some gaps that happen to the upside, which has not happened before.
So what is happening in this area?
If we are having those gaps,
that shows an urgency of the demand,
a presence of the demand right there from big institutions,
and therefore we are changing the environment from,
let's say,
environment of the supply,
environment of the downtrend to the environment where supply is being observed on the way up and where demand might be pushing the And then,
again, going through the consolidation here, we might observe some gaps to the downside.
It just tells us that supply is still present, and there is some testing action that needs to happen.
But then when the price is starting to go up, it's starting to register high lows, high highs, and supply has gradually been observed.
We starting to have the gaps to the upside that are showing us a different type of story.
And, again, on the daily chart, that's going to be more evident because you're going to have more gaps.
But you can definitely do that type of study and kind of like go to the change of character idea
and just look at the gaps, how they show a change of character as well.
Okay, good.
And we have one more question from Manish.
Did there an AFL code whereby I can plot them on my graph?
I'm sorry, what to plot on the graph?
An AFL code.
You mean for the work of method.
you know like the phases labeling yes I think he means like like a trading to make a trading system or an expert Well,
I mean, I've seen quite a few.
I wouldn't say that there is a lot on the market,
but the ones that I've seen,
you know, I tend to go away from them because, you know, the beauty of the Wyckef method all in the context.
And Bruce, I want you to elaborate a little bit on this as well from your experience.
But every time I looked at the software that claims to label automatically the phases and Wyckef events in the trading range,
I usually don't find it very useful.
I find it a little bit misleading because there are a lot of mistakes there.
And it just because there are so many variations of the trading ranges that we could observe.
If there would be only one accumulation or one distribution pattern, we can definitely program that.
But there are so many.
So one of the things that I always advise to people who try to encode,
encode the principles,
you know,
and principles of change,
principles of,
you know,
going through supply absorption,
principles of price behavior,
those are much easier to encode and those are still a of principles and you can build the whole system based on that.
This good answer,
the only thing I would add is that I've seen attempts at trying to capture volume signature volume and price together in some kind of a code and a price analysis.
And so the thing that I've that is always missing from that is the context.
And and I write about context in the blog, phases are context.
So, when something happens in phase A or phase B or phase D or phase E, it has a different result.
And Unless you understand where you are in accumulation or distribution or where you are in the uptrend,
it's very difficult to be able to create a in some kind of a signaling system that would give you consistent results.
And so this is a judgmental system.
And so you can create a method out of it and you can follow rules.
It excellent rules, but in the end the judgment of the operator, your judgment is going to be the key to the success here.
Here's an example of this idea.
even with the VPE analysis, and this is something that I was talking about.
HDSI software has this new VPA feature.
So one of the things there, and we know Trade Guider, I has this VPA feature as well.
And some other software is, and again, where's the context here?
So if you're looking at the same type of bar, this bar looks the same as this one.
Look at the type of the spread.
Look at the close, where the close is relative to one half of the point.
Look at the volume spike here.
The demand is present there.
But is it truly just demand?
In this case, contextually, where we are with this bar, we are close to the resistance.
This is an attempt to commit to the upside, and after that the price goes down.
So this bar is not going to have just demand signature.
It's going to have a demand signature that is increasing, plus supply signature that is increasing as well.
At this point of time, demand is going to be still...
prevailing over supply, but then on the next bar, supply is going to take the price down, and this signature is going to change.
In this case, this is a different signature.
We seeing demand is increasing with supply contracting, and demand is heavily outpaced.
So, same type of bar was the same volume signature in contextually different places could mean different things.
And if those softwares cannot define the context,
and they can't, I still have not seen a software that could define the context in the way that let's say.
what like to do.
Then you're probably going to make mistakes, just rely on those signals.
Okay, good.
So, I think we ran out of time, so I thank you very, very Bruce and Roman, and it
has been very interesting presentation, and hope everybody liked the work of approach, so thank you again, and have a good day, both of you.
Thank you, thank you very much.
Thank you so much and then you hit the 100 so you lost the bet.
Thank you very much.
Sure.
Yeah I have here we hit 100, 102 but we work to people as a co-organizers, so I think it's debatable.
All right.
No, no, no, it was 103, I saw that, so give us that two organizers.
No, this is very good, because we would love to have more than 100, of course,
but it puts pressure on organizing other similar high quality webinars.
And we are looking forward to high-quality speakers as you show today and also as Bruce did, okay?
So we appreciate your time and your knowledge and we are looking forward to the 4th of April and the 4th.
The second, the third webinars, okay.
If you have questions about the work of today, please contact the speakers and you'll get more out of their writings, okay.
Thank you very much.
Thank you so much.
Thank you.
Thank attending.
I appreciate it.
Thank you.
Thank you everybody.
Bye-bye.
Good night, good day.
Bye-bye.
Bye-bye.
Bye-bye.
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