Original subtitles

The trading roadmap.

The roadmap simply refers to what you can expect to happen in the market after

certain point or depending on the most recent condition.

Depending on the degree to which we observe the market, we can distinguish

between three different roadmaps.

Roadmap depending on the general context.

Roadmap depending on how the structure develops.

Roadmap depending on trading events.

First, we have the roadmap linked to the most recent condition of the market.

This is about knowing the prevailing context and trying to trade only in line

with it.

We already saw this previously in the section on how to analyze a chart from

scratch. Let's do a quick review of the main ideas.

If the market is developing a trend movement, the context is promoting that

direction and therefore the roadmap would tell us to continue trading in

direction until we see signs that suggest that the movement has come to an

We simply apply the principle of technical analysis.

which suggests that if the market is moving in a certain direction, it will

likely continue to do so in the future.

In other words, if we see a distribution structure above and the market is

falling, the roadmap suggests the market will continue moving downwards.

And if what we see below the price is an accumulation and the market is moving

upwards, the roadmap will indicate to expect the market to continue moving

higher. Within a range, as previously commented, the context is neutral.

We will now look into the best way to proceed, depending on which phase of the

structure the market is currently in. So, we also have a roadmap that is

dependent on the development of structures, which has to do with

changes in market sentiment determined by the phases through which the

development of an accumulation or distribution structure passes, from its

beginning and until its full development.

Correctly identifying the limits of each phase can help us contextualize and

understand more soundly and objectively what is happening in the market.

Within a structure, the first change in sentiment is observed after the

appearance of Phase A, the end point of the previous trend, where the market

changes from being in a trend situation to a sideways movement.

In this case, the roadmap suggests we should no longer expect the market to

continue moving in a trend.

Instead, we should expect to see it develop subsequent sideways movement,

would correspond to Phase B.

The key trading idea here is once we see the first change of character appear,

we should stop thinking about looking for trading opportunities in the

direction of the price and settle into a neutral state.

During phase B, the market is building the cause that will originate the

subsequent effect.

It is an environment of neutral sentiment, where price and value come

We could look for trading opportunities at the edges of the range, buying at the

bottom and selling at the top.

Once the market has spent some time building the cause during Phase B, the

roadmap would suggest we wait for the Phase C test event, the false breakout,

unfold. If successful, the false breakout would give rise to the last big

of character, as a result of which the price would once again move from a

sideways context to that of a trend.

In general, we see two major changes of character that occur, in terms of the

sentiment of the structure.

at the beginning and at the end of the structure, and which establish the

beginning and the end of the context of market equilibrium and disequilibrium.

Finally, we have the roadmap which is dependent on the appearance of the

events that we are looking for.

Having addressed the previous concept on how we can confirm the appearance of

trading events, we then have to establish what the confirmation of said

really suggests to us.

That is, what we are going to expect the market to do from there or what is the

same thing, which roadmap we need to follow after the appearance of each one

these. After the confirmation of the spring, either with or without a test,

roadmap established according to the methodology suggests we wait for at

one upward movement that takes the price to the upper end of the structure.

If that search for liquidity in the form of a bearish false breakout has

consumed a large number of orders that were pending execution and therefore a

tipping point has occurred in favor of the buyers, The immediate effect that we

should see on the chart is a significant sign of strength, capable of taking the

price through the entire range.

This sign of strength in itself would implicitly confirm that what we have

seen is highly likely to be the spring that could unbalance the entire

and send it upwards.

In reality, it is the show of bullish strength that really confirms the

because without it, the action would end up being a simple bearish test.

and this would suggest a certain amount of weakness.

Look at what a critical moment this is and how it can change the direction of

the market.

As we saw with the behavior of the spring itself, the way in which the show

strength develops is very significant.

If the balance of the market is genuinely tipped upwards, the momentum

shows will be very notable and will be reflected in price action with wide

-range candlesticks, suggesting a certain ease in the movement.

which is the combined effect of two important causes, that there is pressure

from the buyers and that there is an absence of sellers.

Both attitudes will generate a movement of imbalance more easily.

The law of supply and demand in its purest form.

Note how little time is consumed by the bullish movement in the example on the

slide, and how the market momentum of underlying strength even generates gaps

between candlesticks.

Sometimes the range will be quite wide.

So, of course, the market may have to pause somewhat before it reaches the

rather than going through the entire structure directly.

There should be no problem with this, unless along the way it develops some

potential minor distribution scheme or shows evidence of a minor upthrust.

Behaviors that could have enough capacity to send the price down.

In this example, we see how, after a strong upward reaction, it reaches the

middle of the range and begins to develop a minor structure.

At first, it might even seem that it is developing a minor upthrust, but note

how it is part of two internal substructures, which are aligned in

bullish context established by the spring.

This combination of structures is one of the strengths of the methodology, and

knowing how to analyze them together allows us to gauge the market from a

solid standpoint.

But what happens if, instead of developing an upward impulse movement

denotes strength, the market begins more hesitantly?

The fact that we see a price action with overlapping candlesticks with narrow

ranges is evidence that there are still traders with short positions willing to

trade in that zone.

And this suggests that perhaps the market is not yet ready to develop the

reversal and therefore reduces our confidence in the roadmap.

If the market has not fundamentally changed anything, if nothing has

change the valuations of the agents, it would be logical to think that the range

continues to represent a fair price for most traders, and that this movement has

simply led to the entry of some shorter -term traders who have seen an

opportunity to buy at a reasonably low price, but that they may have simply

taken advantage of a brief move up to the middle of the range or to some

previous liquidity zone to close out their positions there.

If we see that the market does not start an upwards impulse movement almost

immediately after the potential spring, it will most likely now develop a new

test at the lows.

It may simply perform a test of the spring, but there is also the

that it will develop a new false breakout.

This is a big drawback of trading directly at the spring without waiting

test.

One problem is that if there is a lot of momentum in the market, the price may

be tipped upwards by an imbalance without first developing the test.

On the other hand, Not waiting for the test throws up the problem that there is

always a chance that the market will hit a new low.

This is because, in essence, the usefulness of the test lies in testing

precisely that, in verifying if indeed most of the traders are positioned on

same side and that the market is ready to develop the impulse movement.

In summary, having seen the spring, the roadmap suggests we wait for a movement

to the top of the structure.

If the price starts to move quickly, With candlesticks denoting strength, it

will most likely reach that top end without much difficulty.

But since we know that anything can happen in the market if, on the

after the spring we start to see an unclear price action, it is most likely

we will see some form of test before the price goes up.

We may even see a new false breakout.

Then, at that point, the established roadmap should be set aside and

when we see exactly what we are hoping to see on the chart.

In the final part of the structure, With the last major change of character, we

can already see the appearance of the impulse movement that is able to

the breakout event.

The roadmap here would be to expect the development of the successful test and

the continuation of the upturn outside the range.

Here, there are fewer inputs to interpret.

We are out of range and all the signs suggest that the path of least

lies in the direction of the shakeout and the show of strength.

At this point, and as long as the market continues to confirm the breakout

action primarily as a result of the fact that the price does not re -enter the

range, there is a lack of interest. We simply have to continue to wait for the

break and retest to find our entry trigger above some trading level. In the

example, we see how there was a possible option to enter the market to buy above

the trading zone in which we would expect the development of the break and

retest, which should have been taken.

Instead of immediately developing the continuation of the upturn, the price

begins to develop a new minor structure.

At this point, we should continue to follow the original bullish roadmap as

as the price does not re -enter the range again, especially in such a

type of structure in which practically all the signs that we want to see in an

accumulation structure can be observed.

Reduce volume during the development of the range, a good show of strength, and

up to that point, no re -entry into the range.

Why do I say that the previous opportunity should have been taken?

Because in real time, we don't know what can happen. And the price could have

simply performed a quick test and started the upturn from there, as we see

this other example.

Remember the distinction between analyst and trader.

The analyst puts the scenario with the roadmap on the table and the trader

executes it.

Nothing more.

Sometimes it will work out and sometimes it won't.

The key is that when the time comes, If the signs are all aligned, we execute

our entry without hesitation.

At this point, we can once again turn to the roadmap used for the general

context, which suggests that the market will move in the direction of the last

shift outside the range.

And from here, we can start looking for possible target areas that the price is

likely to visit as an effect of the cause.

But we will talk about this later when we address the possible targets to look

for.

Since we have been working with examples of accumulation patterns, we know that

the context is bullish, and we should continue to expect the market to

in that direction until we see signs that suggest a new change of character.