as most of you guys know i hate periods
of consolidation they are boring and
when i see it i get out of my trade
immediately in this video we're gonna
take a deep dive into a period of
consolidation in regards to the y cough
method to show you exactly how those
movements happen why they happen and
when it's going to break out of that
period of consolidation
[Music]
welcome back to the channel everybody my
name's artie and this is the moving
average a show where we discuss
everything day trading to keep you
profitable on a consistent basis
monday's video did really well you guys
want to learn about smart money concepts
and the y cough method so this video
really breaks down phase a through phase
e
of this consolidation range so that you
can trade within that range and or trade
the break out for a long term position
now there is a lot of debate on the
internet about this and the why cough
method a lot of people say the wyckoff
method is only for periods of
accumulation those really really really
long periods and they say that it can
stay in that accumulation phase for two
to three weeks if not months sometimes
and i want to kind of tweak that a
little bit and say that it also works on
smaller time frames
just not identically to how it works on
larger time frames let's get into the
charts okay so we are looking right now
at bitcoin us dollar because it is the
newest most manipulated pile of
cryptocurrency that i've ever seen
and it displays perfect wyckoff method
trends on it so
i'm gonna look at this previous low and
consolidation period that we had before
the recent rally that it just took to 57
000 i'm gonna drop these lines of
support and resistance on the
accumulation phase as we're talking
through this but we have this big rally
push down right once it stops i want you
guys to draw a line right across the
bottom there i'm gonna label this in
just a second but that's the absolute
bottom of that move
then it came up to this point i want you
to draw another horizontal line across
this point this is now your range now
within
the y cough method
there are preliminary levels of support
during that first big move down for this
specific move there was two low points
here that were the preliminary support
levels ps then right here at its low
point we had the selling climax then
immediately after the selling climax you
have the automatic rally the ar then
after the automatic rally you have the
secondary test to test whether that move
wants to continue down
or whether we're going to go into a
period of consolidation so if you look
at this schematic right here you can see
those first preliminary levels of
support the selling climax the automatic
rally and the secondary test all in
phase a so right here we have phase a
once that's over we start phase b phase
b only has one part to it and that is an
additional secondary test in phase b
however there is a lot of
not concrete rules that are to be met
here every accumulation phase is shaped
differently there is a massive amount of
debate on how exactly it should look but
you need to take this not as concrete
rules but general structure a lot of
people say that in the secondary test
area it should break out of that support
and down and create these new levels of
support and resistance or ranges of
support and resistance within this
accumulation phase but sometimes it
might create narrower support and
resistance levels like it does here so
when that does happen i want you to look
at the peaks in this consolidation range
and this is the only evidence that you
have to go off of because you're not
seeing any of this area so i'm going to
put it right here at the bottom of the
wick of the secondary test in phase b
let that move up and then put my next
resistance line right here at the top of
that push after the secondary test these
are the ranges that you need to be
extremely cautious in and fearful of
like i mentioned in monday's video
during this accumulation phase
the composite man the the bad guy in
this situation
is slowly
buying up a ton of positions not enough
to really move the market in any
dramatic way but enough to slowly build
up his position to then push for that
extremely long-term uptrend so we're
gonna draw up another line right here
ending phase b and we're gonna start
breaking down phase c in phase c again
there's only one thing you need to keep
in mind right here and that is the lps
the last point of support so normally
the last point of support happens once
and then it starts going up but in this
scenario the last point of support
happened at the exact same time but also
wicking below the support line that the
previous secondary test made and in this
scenario as you're watching it play out
that last point of support is going to
conclude phase c now in phase d usually
you get those higher lows showing the
movement up creating higher last points
of support those lps's at this point we
start to break out of that previous
price range and right here this happens
very very quickly within a few hours and
if you can see we're on the one hour
chart right here right here we get two
things that happen almost at the same
time and that is the sos the sign of
strength breaking out of that little
range right there as well as the b u
slash lps which is the buy up or the
break up and the last point of support
right there so basically you break out
of that range and you're putting your
long position right here and your stop
loss below
that previous high now i know i advocate
one to two risk to reward ratio but when
you're looking at price manipulation on
such a grand scale with the composite
man and all of this theory behind it
you're looking for a break out of a
consolidation period to completely
change the trend and go on a really long
term bull run
in these scenarios one to fours one to
fives are completely suitable but what i
would suggest is after you get to a one
to three
take most of your profit off the table
and use a trailing stop loss using like
a 50 moving average hoping that it will
continue and you can ride that trend all
the way up until the next stage in the y
cough method which is going to be the
distribution phase that next area of
consolidation on the high end which i
will probably have to get into in
another video because this thing is
already like 20 minutes long now i'm
really anti making a one hour long video
on this so in the next video i'm gonna
explain the entire mark up phase that
entire phase that goes up to the
distribution phase covering this stuff
again on the high end for people looking
for short positions so what i'd like to
do now is show you this in replay mode
so that you can really see what's
happening during this entire movement we
start to come down in this nice push
down the selling pressure is hard
we create that preliminary support on
that first move we create another
preliminary support right there and then
at the very bottom we make the selling
climax that usually comes accompanied
with long wicks
but you really have to wait for the
selling climax to be over and then the
automatic rally to go up and that
usually happens right here because we're
creating these lower highs then once
that trend breaks that's that automatic
rally that break in the trend line so
now these are your two levels of support
and resistance and then it will come
down to create the secondary test that
double check whether the trend wants to
continue down or whether it's going to
fall into phase b c d and e once you see
that secondary test be made in phase b
then you need to start really marking up
okay we are in an area of consolidation
let's see what phase c looks like and
you're going to draw phase c you're
going to see where the last point of
support is going to be and you're going
to mark that up then you know once that
last point of support is made we are now
in phase d
at phase d is when you should start
looking for long positions setting up
your long right here at the top of that
range in phase d you're gonna start
seeing these higher lows being formed
this new trend being formed and at that
point you can start seeing these lower
points of support building up and then
breaking out of that range right here is
where you really need to start looking
for your long position entry and where
you want to put your stop loss because
like you see right here it happened very
quickly whereas on the traditional they
give you a little bit of seesaw effect
right here but on this one it happened
immediately you need to be ready knowing
that you've already gone through phase a
b c and you're in phase d looking for
your long position and phase e of course
is going to be the entire bull run that
you're having now with this one i had a
one to five risk to reward ratio but
obviously if i kept a trailing stop loss
so let's say that i did a trailing stop
loss after i got my one to five you use
a 50 or a 100 in this case the 100
worked a lot better so maybe you should
just do that and ignore my 50 statement
earlier trailing stop loss on the 100
and you can see it really kept that
upwards momentum
and at this point i mean if you would
have held that that's what a one to nine
once it broke out of that hundred it's
these long-term positions after big
areas of accumulation or consolidation
or however you wanna call them these are
big moves guys these are really
profitable i really appreciate the whole
wyckoff method and everything taught in
this it helps you realize like what's
going on in market manipulation
scenarios and it's not only on a higher
time frame where you're looking at four
hour or daily charts this is the
psychology of a retail trader versus a
bank the composite man you know you have
this panic selling and then the
composite man comes in and swoops it up
and they're just growing their position
here while they're really messing with
the retail trader gaining as much
position as they can before they push
this uh
nice move up all right i know that was a
really long video and i really hope that
this video helped you guys understand
periods of consolidation i get a lot of
questions on it how do i know if price
is consolidating you're looking at
seesaw up and down you're looking at
high volumes and you're looking for any
type of structure with the wyckoff
method like you'll start seeing these
phases what i suggest you guys do is
really go and back test and look at
markets and different things that you
trade and see
okay this is a period of accumulation
let's break it down so that when i do
see it live i know what i'm looking at
now if you guys haven't seen monday's
video you can check it out right here
put these two together and you will have
more knowledge on all of this that i'm
discussing and if you guys appreciate
this video you like the way that i teach
you want to see more videos like this
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clicking this button right here thanks
so much for watching and we'll see you
in the next video