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Eiger
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Everything posted by Eiger
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Welcome. Since you are a C# developer, you might want to take a look at something called StockChartX, if you haven't already come across it: http://www.modulusfe.com/stockchartx/ I thought this looked like an interesting charting software, but since I don't understand the programming language, I turned to something else. You, however, might find it useful. Good luck, Eiger
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Good stuff, James - Thanks. I use Skype a lot to call overseas and am on my way to China tomorrow, so this will be a big plus Eiger
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I think it depends on the carrier. I had Sprint, which was fine in NYC, but I couldn't make a call from my home when I moved to Connecticut. I have no worries with the iphone, which is AT&T. I've never dropped a call in the 3 months I've had it, and I've used it thus far in CT, Dallas, NYC, New Hampshire, Boston, NJ, and San Francisco. Eiger
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The Most Unbelievable and Controversial Techniques
Eiger replied to romek222's topic in Technical Analysis
I always thought that the Wolfe Wave was a pretty odd-ball method, but damned accurate at times - particularly with the projection from the 1 through the 4 points. The entry is always difficult because you are catching a falling knife. I traded the WW for a long time with one excellent trader who traded the Wolfe Wave exclusively. He slept, ate & breathed WWs. He really was good at trading these across the S&Ps and various commodities. We both took the course from Bill Wolfe and I think this guy outdid his mentor. In any event, I could never trade them consistently enough, though they certainly can be traded well. I also think VSA is controversial because controversial people see it as controversial. It must be in their genes Eiger -
I love the iphone, too. Like you, have the 2nd edition 3G. I traded in a BlackBerry Curve for it. It's the best phone I've ever owned. Simply love it. If you figure out how to Skype off it, let me know. That would be quite cool. I'd owe you a beer or two, or three Eiger
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I have those, too, Tawe
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It was a good day here, too. Small losses like that don't bother me. They happen all the time and are just a cost of doing business. I was able to get short again a little lower, after price broke through the trend channel (another SOW). I followed price down below the AM lows, so I more than made up for the small loss. Eiger
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That trend line did break. Here's what I saw: A - Ultra high volume on an up bar (as was the prior bar). It closes in the middle, signaling supply. Again, we are at yesterday's lows. B - Another ultra high volume up bar. With all that volume, you would expect it to rocket higher. C - A 2-bar Up Thrust/Top Reversal. It is best when the 2nd bar closes below the low of the 1st bar, but this one was telling of supply anyway. D - Volume and spread increase to the downside - supply. E - No Demand. I took a short trade on this and was stopped out at a loss by the hidden UT. F - a bounce off the Demand Line on ultra high volume. The next bar is down - supply. G - another down bar with high volume. There is still quite a bit of supply here. (The bar prior to G was a No Demand) H - A nice Top Reversal/2-Bar UT. Compare with the earlier one. The increased volume said this would take out the Demand Line, and it did. I - No Demand and another good location for a short entry for a try for at least a piece to retest the AM lows. Eiger
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Trend Lines from This AM Here are trendlines from today. You couldn't draw them until the low at E was established. A Demand Line is drawn from the first low and the low at E. A parallel Supply Line is drawn at C. Note how the high after E was contained by the Supply Line (this was also in the area of yesterday's low - resistance). Thus far, the lows at F-G are being held at the Demand line. There is supply in the market on this last leg, however, and the Demand Line may not hold. Can you detect the supply (not just at F & G)? Eiger
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Good to see you posting again. I've got lots of tricks with ticks - been studying and trading with those a long time.
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Two trades from This AM: The first was on the 3-min chart. We opened gap down this AM, with volume & ticks increasing to the downside - weakness. The rally into 10:00 was also weak. A nice No Demand at A was the entry. The market became less able to make downside progress as it approached B. Note the cluster of closes on the 3rd - 5th bars back from B (starting with B as #1). This was some strength coming in, but price was still making new lows at that point. On the bar before B, no new decent low was made, and B was a Bottom Reversal - like bar and a good place to run for the exit. The 2nd was on the 5-min chart. We rally back to yesterday's low (resistance) and at C, high volume comes in on a narrow spread. Next bar is a Top Reversal (so, 2 SOWs at resistance). The market falls and gives a nice No Demand at D, which was the entry. On the bar before E, high volume came in and the next bar makes no new progress. It is also noon hour. I expected more weakness, though, and took off 1/2 at E. I was wrong about further weakness and was stopped out with no profit on the second half. These were the only trades I took this AM. Both take into account the background first, including S/R. I looked for further Signs Of Weakness after assessing the background (confirming ticks followed by a weak rally on the 3-min); a high volume narrow range bar at C (like an End of Rising Market, but not quite) and Top Reversal on the 5-min. Then I look for entries, which this AM were both No Demands that set up properly. Eiger
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S/R and trend lines are best learned from studying the Wyckoff course materials. Tom Williams also discusses how to construct trend lines in his Undeclared Secrets book as well as what to look for as price approaches trend lines and S/R. As for stops and exits, both of mine are much wider than yours. What I do really isn't relevant to what you do in this area. Stops are a function of your account size, risk parameters, and the individual trade set up. You need to first understand risk, how to calculate it, and how that relates to your account size. Then you can translate that into a plan and test it out thoroughly with a fair amount of practice. You will not get all you need to know just from the sources you mentioned. You must go outside these threads and study other sources. For risk and money management, start with Van Tharp. Hope this is useful, Eiger
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As JJ says, it's vital to understand the background and let the market tell you what it is likely going to do next. Part of knowing the background is understanding where support and resistance are when coming into a market. We don't know that from this chart. Keep a higher time frame chart handy and look for areas of S/R, trend channels, and the overall structure of how the market has been trading. It makes life easier. Even though we don't have good background info (see above paragraph), the chart is still readable. Demand came in at A, B, and the bar after B. I labled these with Ds. Although demand was evident, it rallies only to C and at D, there is No Demand. Caution is needed, but there has been no significant sign of weakness. The market reacts. Although F looks ominous, volume does not significantly increase. There was better volume earlier when buying was occuring. The bar after F is a Spring, and volume increases to the upside - more demand. H is a No Supply/Test-like bar that tests the volume on the Spring bar. There is no supply, demand is in control. This is a good entry for a long. The very next bar shows some supply due to the close as price tried to negotiate the old top at C. Next bar, I, is No Demand. It is saying that it will not advance above the resistance. But again, no significant SOW exists at this level. Bar J is a good test and indicates another attempt at the resistance will be made. At K, price breaks through resistance but closes off the highs. Volume indicates there wasn't much fuel behind the move. Next bar is down, and we would expect a reaction. L shows no supply, M is a Bottom Reversal - both indicate strength, though this looks like it might be occuring during the noon hour in the US, and not much is likely to happen when everyone is out to lunch. N is No Demand, but there is no weakness in the background. Instead of weakness, higher lows and higher highs are made. O is No Supply, and the next bar is another Bottom Reversal with good demand. P, Q, and R all show supply where the market is oversold in the trend channel. Note the overall background: this market has been trending up, but there has been no ease of movement up. It has struggeled to go up for most of the trading day. R is an UpThrust and the market sells off. Note the bar after R - it looks like the largest spread on the chart - certainly for a down bar. Volume for the first time also increases on a down bar. Supply has overcome demand. Again, as JJ said, first and foremost, have a keen eye on the background. Then apply bar-by-bar analysis. Most traders trying to use VSA ignore the background and focus on the bars. This is a quick way to lose money and then wrongly discount VSA. Train yourself to see the background. Wyckoff said, "The most important thing to know about the market is the trend." And, it is. You can't know the trend, however, without first looking at the background. So another way to think about it is this: "The most important thing to know about the market is the background." I don't know how much more I can emphasize the background, but there it is. The key to reading any chart is understanding the background. Hope this is helpful, Eiger
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Not all the Springs work out, and they do tend to be lower odds in a downtrend, whether on a daily or intraday basis. The same is true for Up Thrusts in an uptrend; they also tend to be lows odds or stimulate only a small reaction. It's instructive to compare this current Spring with the one that occured in mid-March and look at the differences. Look for clues on the daily chart for why that one worked (even though it also occured in a downtrend) and why this one may not. ----- I saw a similar report this morning about the unwiding of some of the larger trading firms and hedge funds, including Steve Cohen's firm, SAC. Sebastian showed me a report on Cohen in SFO that talked about his ability to manipulate the markets. It was pretty interesting. They described in some detail how he will drive price down to shake others out of the market to acquire their holdings, push price up to attract buyers and unload, use multiple brokerage firms, etc. We don't get to see these kinds of reports too often because these folks are so secretive about their activities, but it is the same kind of things Wyckoff and Williams describe. It's a good idea to pay attention to these kinds of data, even though not strickly technical or depicted on a chart. At some point, all that cash they are now raising will have to be put back to work. Because they operate in such large quantities, we will be able to see their footprints in the volumes and price bars when they do Eiger
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Yes, it was called "The Best of Wyckoff" and was pretty exciting. It was a one-day event and was held at Golden Gate University. Almost 200 people attended. I got a chance to catch up with several Wyckoff folks I know, and met many others. The University and the traders' technical association there (I forget the name, TASC, I think) gave Tom Williams a Lifetime Achievement Award. Very generous of them and quite moving. Tom received a long standing ovation. That was the best part of that conference, I thought. TG was a sponsor and Gavin helped put it together - lots of credit for Hank Pruden and Gavin for doing that. Because it was so successful, they have decided to make it an annual event, which I think will be terrific. Maybe I'll get a chance to meet some of you guys next year? - that would be pretty cool. Eiger
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Well, I am pretty biased as I was a part of the presentations, but people who attended had very positive comments about it. Gavin open the conference and discussed several different charts, including the APPL and Oil charts. Gavin is quite a good trader as well as businessman, and I learned several useful things from him. Sebastian--an absolutely true wizard of the charts and terrific person--talked about VSA's major SOSs and SOWs, then gave his preferred set ups of both strength and weakness. Tom Williams was truly amazing - he spoke about everything from individual VSA principles to broad concepts on how to trade the markets. I was truely honored to meet him. Tom, Sebastian and Gavin did live sessions in the S&P e-minis showing live SOWs, SOSs, set ups and actual trades. Brad Bedford Brown did two live sessions in the FX markets from Australia, discussing his individual set ups in those markets, several of which we saw live. David Blundell, another great Aussie trader (and great person) offered two of his well-researched set ups (one of which I have been using to great success since). Hank Pruden, professor at Golden Gate University, talked about classic Wyckoff analysis--a real treat for me as a Wyckoff guy Paul Avins, an inspiring guy and business coach from London, talked about how to take yourself to the next level. Harvey Loomstein, a nueropsychologist, and I (sport, human performance & clinical psychologist) talked about how to develop a solid VSA trading plan, including how to become skilled at VSA, how to avoid common metal/emotional pitfalls, and how to think like a trader. As I said, people who attended were quite pleased, though again, I'm biased. I thought the content was more than sufficient to develop your own trading plan, complete with solid set ups. Everyone tried very hard to convey an understanding of how the market truly works and to provide the tried and true ways to become a competent trader. I was quite impressed with the content and quality of the material provided. But that is just my opinion. Maybe someone who attended from this board can comment? Eiger
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Update to Spring Idea We've had two relative narrow range down days on lesser volume ($SPX), and today was a NR4 day (though not an inside day), indicating professional activity to the downside has lessened. Yesterday's action was less constructive, however - a down bar after a Bottom Reversal/Spring. It would have been much more constructive to have seen an up bar yesterday. The market is close to the danger point (lows), and needs to rally away from the danger point, otherwise new lows are likely. When price hugs the lows after a rally, it indicates lower prices. Price hasn't been hugging here, but nevertheless, needs to rally to give support to the Spring idea. On the longer term, the second chart is a monthly chart. We are over sold on the trend channel. The 2002 lows are near. It would be surprising not to eventually at least test these lows. Hope this is helpful, Eiger
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There is also resistance from the recent downtrend channel at that level and the Wolfe Wave projection. If price does rally to that level, it would be a good place to look for a reversal. P&F charts are used in Wyckoff & VSA and are useful for targets and S/R.
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Here is an interesting chart. It is the 60-min ES through today. Note we have had a Selling Climax, Automatic Rally, Secondary Tests, and now a Spring. The Wyckoff Principles have thus far proven themselves. This is pretty textbook for Wyckoff and fairly bullish. Note, however, that we have not had a significant Sign of Strength at this point (i.e., we have broken Minor Creek, but not Major Creek), and this is important. Also note that there was fairly heavy volume to the upside today; this calls for a Test before rallying higher. Nevertheless, this looks bullish to me. Others, of course, saw triangles & hinges, or whatever, and call for further downside. It will be interesting to see how this pans out. The best trade will be made on a Back Up to the Edge of the Creek (BUEC), should that occur. Please note that this is only the 60-minute chart. It is not the start of a bull market by any means. If it pans out, though, it could be a half-way decent rally in a bear market. Let's see. Eiger
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One of the very best books on understanding volume and why volume is a key indicator is Tom Williams's Undeclared Secrets that Drive the Stock Market. A revised edition is also available as a free download from Tradeguider.com under the title Master the Markets. If you look in the VSA forum, you will see the thread that has the link to this ebook. The Wyckoff Course (available from the Wyckoff/Stock Market Institute) is the basis of Tom Williams's work and has a substantial amount of information on volume. The SMI website also has a lot of good info on volume and is the source for Wyckoff.
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Nice to see everyone posting on the thread. Winnie asked about identifying the trend. As a VSA trader, it is really helpful to have a mental map of the market. By mental map, I mean a cenceptual sense about how a market moves. We know many things about the market and how it moves. For example: Higher high and higher lows help define an uptrend A move above the last rally high after a downtrend that occurs with good ease of movement, typically indicates at least another swing up Impulse waves up on good spread and volume, followed by narrower spreads and receding volume indicates higher prices What had been resisitance on an earlier swing often becomes support on the current reaction. Momentum typically preceeds price A period of low volitility preceeds a trend The larger & longer the sideways line, the bigger the move out of the congestion area (often the start of a new trend) Markets move from congestion to trending and back again repeatedly Trends often last longer than we think they will VSA indications are excellent in identifying turning points and the start and continuations of trends and much more ... Add your own observations to this list. Create you own list. Hand draw a line chart of your mental model of a trend and annotate it with the things that occur over and over. Think also in terms of trends on higher time frames and how the lower time frame trends interact with the higher time frame. Think about and identify where you expect to find trades and highlight these areas on your drawing. Do the same thing for trading ranges. Now you have a vivid, personal model of the market that identifies key market actions, where to look for trades and what VSA indications you want to see in making and managing a trade. I think you will find this quite useful. I am off to San Franscico in the AM to the Best of Wyckoff and then to the VSA Summit. I am really looking forward to these. Gavin Holmes put both together and has done an excellent job attracting great talent to both. I'm quite excited to be meeting Sebastian and, of course, Tom for the first time, as well as Hank Pruden -- I can't wait. It will be fun. See everyone when i get back. Eiger
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Thrusts shorten to the downside (downthrusts shorten) when the price bar lows start to make less downside progress. The first chart is the 3-min ES today. At the area of A, the market was moving with ease to the downside. There was no real shortening of the down thrusts here. At B, little progress was made on the reaction - little downside movement. Downside thrusts shortened. As C, hardly any downside movement. Here is another way to think about it - this time from the up side. On the second chart, is a series of up waves A, B, C, D. Note how the thrusts of the waves shorten in length the higher the market climbs. The graphic on the left hand side is often useful in this regard. So, you can see thrusts shorten to the downside or to the upside. You can also see thrusts shorten on the individual price bars or in the waves as the market approaches a top or a bottom. In either case, the shortening of the thrust indicates an inability to move price farther in the direction of the current trend, suggesting a potential change in direction. Hope this is helpful, Eiger
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When you have a Test bar after a sign of strength and there is high volume on the Test, it indicates there is still a lot of supply at that level. Usually, when that happens, we will either see the market respond sluggishly on the rally, or, more likely, it will come back into the area for further testing. We see this a lot on the daily charts in stocks. High volume on up bars makes us cautious because there has to be supply within that volume. A good example of this is the test bar that occurs 3 bars after Bar A on your chart. It dipped back into the high volume level around A and had a positive close. But, the volume was almost as high as at Bar A. So, although there was a Selling Climax at A, there is still supply in this market and further testing is likely if the market is to turn here and rally to higher prices. I think you read the attached chart pretty well. In general, once we see supply in control, we can ignore tests bars. We are more interested in No Demands and UTs. The reverse is true in an uptrend. When demand is in control, we can ignore No Demands and UTs and look for tests. I've added a few ideas to your chart you can think about. Hope this is helpful, Eiger
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V-spike reversals happen only about 12-15% of the time (a little more in volitile periods like now). They are a low probability events and not worth trying to trade (in my experience and opinion). I see them and say, "Oh well. Better opportunities are right around the corner." Hindsight always seems clearer than real time - this is true for everyone. But, it is about experience and, moreso, dedicated practice. Are you practicing VSA every day? Are you marking up charts each night? This is what will get you to the place of being able to read the real time chart well. Nothing else. You must practice. It is like becoming a good tennis or soccer player. You don't just walk onto the tennis court or soccer field and expect to play well. It takes a serious commitment to practice before you start to see and can act on this stuff in real time. But, anyone who really practices, will get good at this. There is no doubt about that. Eiger
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We all think this is the best thing to do, but it really isn't. Rather than focusing on the tops and bottoms, focus on strength and weakness. You really do not have to pick a top or bottom to make good money in trading. In fact, i would say that a focus on tops and bottoms will do you more harm than good. I personally think a better focus is building the VSA/Wyckoff Story that i outlined in an earlier post. Look for the clear evidence of a trend change. These usually come slowly with lots of clues. Entries needn't be at the top or bottom - there is usually more than one opportunity to get a good entry. It becomes much higher odds when the evidence based on VSA is overwhelmingly clear. This is what Wyckoff did - he looked for a clear sequence of events to take place. Like trading on a very small time frame, tops and bottoms are much more illusory - we tend to see more than is there in the chart. Eiger