DbPhoenix

See The Journey......

Whatever personal differences exist (and there are in fact personal differences, as indicated by the remarks posted) should be irrelevant to discussions of Wyckoff and VSA/TradeGuider. But personal remarks should be made in PMs, partly due to form, but mostly because they have nothing to do with the subject at hand. After so many thousands of posts made to the "VSA forum", it is unlikely that VSA will ever be disentangled from TradeGuider. And this drives some in the anti-TradeGuider contingent crazy. But it must be remembered that there are many who are wildly enthusiastic about TradeGuider and who couldn't care less about the differences between the two. In fact, to them the differences may be irrelevant, if not imperceptible. Similarly, there are those who see no difference between the original Wyckoff and all that has been written about him over the years, particularly the last dozen years. And if they do see differences, they don't see them as particularly relevant and don't care. While only a relative few are going to see this post, lars' thread has been pretty much destroyed, and I hope that he will try again. If he does, and I'm able to help him, I will, not because I'm "interested in VSA", but because I'm interested in anything that addresses price action, anything that is that does not involve a lot of massaging and manipulation. In that regard, it should be noted, again, that there are essential differences between Wyckoff and VSA/TradeGuider, the most obvious of which is the bar. It cannot be argued that the bar is not central to VSA/TG. VSA/TG cannot in fact exist without it. But it should also be noted that many people couldn't care less. They think that trading by the bar is just great. They might even make money with it. To suggest that they're making that money "the wrong way" is ludicrous. I have, in fact, steered many people toward VSA because they wanted something that appeared to have little ambiguity and that could even be coded. In return, many people who have been less than satisfied with their experieces in VSA have investigated Wyckoff, looking for something that focuses more on the continuous flow of price than on the bar. What is important, then, is not what the spokesperson for this or that approach thinks is important, or believes with the fervor of the zealot is absolutely critical. What matters more is an open mind. This enables the beginner to make an intelligent choice, a reasoned choice. Unless someone is selling something, it should make no difference whatsoever what choice the beginner makes. It is his time and his sweat and his money, after all.

If you understand that price and its movement is independent of however we choose to display it, then you pretty much have it. To me, this is a given, but, as I discovered yesterday, there are those to whom the concept of the continuous flow of price makes no sense. They will see the market very differently. (Coincidentally, those who do not grasp the continuous nature of price flow often also consider displays in smaller bar intervals to be "noise", i.e., meaningless, random, irrelevant.) Whether one displays price in time bars, tick bars, range bars, constant volume bars, point & figure, dots, lines, histograms or musical notes is of no concern to price. As long as something is being traded, it's going to do what it's going to do, even if one chooses not to "print" it at all. Finding reasonable and objective explanations of each of these options can be problematic since those who provide the explanations often feel as though whichever option they've selected provides the answer they've been looking for, and if only everyone chose the same option, everything would be clear and everyone's problems would be over. Would that it were so easy. The beginning of the twentieth century was an exciting time for technical analysis, and two means of displaying price rose to the surface: vertical charts (displaying price as a vertical bar with a high, low, close, and sometimes an open) and point & figure. Vertical bars moved laterally in time, a new bar for each succeeding day. Point & figure notations did not move in time; no new notations were made until there was a change in price. This saved a hell of a lot of graph paper. It also enabled some people better to detect bases, support, resistance, and so forth. P&F even developed its own set of patterns. As for the price/volume supply/demand "thing" and its relationship to the price display, one must remember that the more obvious the movement, the more people there are who will see it. Therefore, if one trades EOD using daily bars, he's going to have an awful lot of company. Everybody sees that. Everybody. But if he's trading 5-second bars, not so much. Therefore, he's more likely to take quick profits because the trading crowd he hangs around with is generally not in this for the long haul. However, if he locates a point where all these waves intersect, such as I have shown you above, he can use that 5-second chart to enter a position and have the combined forces of everyone who's looking at a daily chart and hourly and 15m and so forth behind him, providing the confidence he may need to give the trade a little bit of room, a little bit of time to "ripen", rather than be shaken out of what will be a very profitable trade by a momentary twitch that plays only a small part in the grander scheme of things.

The following may confuse you or may be helpful. You tell me The short pink line to the right of this chart is at the level I was watching for this morning: This next chart is the same "timeframe" but a smaller bar interval. The pink line covers the same span: The next is again the same "timeframe", but a still smaller bar interval: The point of interest, in other words, is the same in all three charts. The only difference is the bar interval (in this case, Constant Volume Bars rather than "time" bars). As you say, larger waves are comprised of smaller waves. And they are all moving simultaneously in the same timeframe.

Speaking of the history, James. Is there some way of "disconnecting" it from the chat when it's clicked? Something like a download that can be scrolled and viewed without being pulled back to the current entry every time someone makes a new post? The history worked this way in the old chat and it was very convenient, esp for those who don't trade in the middle of the day. And thanks again for all the work you're doing on this. The room gets busier and busier.

A subject of endless fascination has been the difference between demand/supply lines and trendlines. Perhaps this will help: Up to a certain point, the supply line and trendline are the same. But a trendline changes only when a new low is made. The supply line, however, is a much more flexible tool, following price as closely as a jealous husband. Ditto for demand lines.

Those Aha! moments are worth waiting for.

Even though I don't follow YM, I was curious about what happened pre-market. One often finds trading ranges being developed prior to the open that can be used as guides to trading after the opening bell. That was the case here. Notice that price first works its way toward 8290 and falls back. You don't know why. You don't care. But this gives you a potential level of R. Price then makes another attempt, but can only get to 8280. This suggests weakness and gives you another potential level of R. Then price gives it up and drops to 8245, making a lower low, also suggesting weakness. It spends some time down there and gives you a potential level of S. It then works its way back to 8290, but finds R and can't make a new high. Suggests weakness. It then makes a higher low, which may suggest strength, but is stopped at 8280, weakness again. It then makes a double bottom at 8265, possible strength, and works its way back to 8290, where it meets R yet again and fails rapidly at its attempt at a higher high. Weakness again. It then drops to 8245 to make a double bottom, and you now have a trading range to work with. It then makes a lower high at 8280, again suggesting weakness. From then on, until the attempt to make a higher high at 1035, it's continued weakness, the trading range dropping down a level to 8210 to 8270. Based on what you see, the pre-lunch drop should not come as a great surprise.

I found this post on "Re: Classic VSA Setups Per Tom Williams Original Material" interesting and have nominated it accordingly for "Topic Of The Month January, 2009"

Beginners often see with a clarity that others do not.

Not as difficult as you thought, was it? But don't set aside your S/R lines. S/R are created by where buyers buy and sellers sell, and keeping track of that and how traders behave when those levels are tested will tell you more than any particular point or bar. Assuming that the world began prior to the left edge and you have no context, the first swing point provides potential R. The next provides potential S. The next fails to reach the lsh (last swing high), signalling a potential trend. The next makes a lower low, and you've got your trend. Price, however, quickly returns to the range established by prior activity, and you don't know if you've got a reversal, an eventual continuation, or go-nowhere congestion/trading range, which is where being able to read the motives and relative strength of buyers and sellers through price movement and volume levels can come in handy, particularly when you're trading real time (which is, after all, the point of all this). So we test the lsh and are turned back. But then we immediately test it again. We peek above that lsh, but we quickly fail to hold there. We then make a series of lower lows until we finally test the lsl. We get a bounce, get nowhere near a test of the supply line, and drop back to the demand line, breaking thru and plummeting until lunchtime. All of which brings us back to my 3x5 card: it's all about the behavior of buyers and sellers against support and resistance. If this is beginning to gel, consider going back to your original chart and replacing the candles with plain ol' black HLC bars. Then look at the work you've done, and look at your plain black HLC bar chart. Then back again. When you get tired of doing this, move on to a new chart.

Not at all. You look like somebody who's not afraid to tackle something new. That's more than I can say for a great many of the traders I come into contact with. Give it time, and don't be so hard on yourself.

It's very good. And I hope that the transition hasn't caused any motion sickness. But viewing price and volume in terms of movement rather than bars takes some adjusting, and patience is in order. I suggest you begin by trying to avoid yes/no, on/off, stop/go words like "climax", "exhausted", "lack". A climax, for example, is quite an event, and doesn't come along very often. Save it. As for exhaustion and lack, if that were the case, trading would come to a halt. Though these words may be bandied about by people who ought to know better (including me), they encourage a certain type of perception that will not serve the Wyckoff trader well. Better to think of balancing and a never-ending pushmepullyou. 1. Falling price and rising volume. Both buyers and sellers are heavily into the market, but sellers have the upper hand. Buyers, though, are showing their support (rising volume). 2. Selling pressure is being withdrawn. This can be seen by (a) volume declining and (b) price rising. If the battle between buyers and sellers were continuing at a high level and buyers had the upper hand, price would still rise, but volume would be higher. 3. Correct. Not enough demand. Not even enough to overcome what minimal selling pressure there is, much less make a higher high. 4. Sellers see that buyers don't have it and they begin to push harder. Volume starts out light and price declines, but buyers begin to re-exert themselves and volume increases. Sellers, however, have greater strength, and price continues to decline to a lower low. 5. Sellers again withdraw, though volume is much lighter than it was during the last swing low. Since volume is less, and price is lower, sellers aren't having to work as hard to move price down. 6. Price rises on lower volume. Buyers have the upper hand again, and sellers are backing off. They may be laying a trap, or they may truly be "exhausted" (the latter is possible, but not likely, given price's progress). But neither really matters. Price is rising. Who cares why? It is important to note, however, that volume peaks before price does, so buyers had a little momentum going here, enough to at least test that last swing high. 7. But, when push came to shove, they ran out of gas, and the balance shifted back to the side of sellng pressure. Get the idea? Want to try the rest? And don't abandon your S/R lines. They are just as pertinent to a line chart as they are to a bar chart.

While I applaud jj for making the effort to keep the peace, I'm puzzled as to the justification for this thread. The original VSA thread(s) has been about combining VSA with other "modalities" since post #1: candles, OHLC bars, MP, Market Delta, indicators of various sorts, VWAP, Pivots, SMI, etc. And of course TradeGuider was introduced within the first page. So what exactly is the difference in purpose between this thread and the originating thread?

I darkened your volume line a bit to make it easier to see. Before we go back to your bar chart, tell me what you see here:

I used the first two for Thursday and Friday. The third will be used on Tuesday. A reminder that all these lines were/are drawn in advance.

You clearly put in a great deal of work on this, and I acknowledge the effort. But before we get into "errors", do me a favor. Create the same chart using a line for price rather than bars. Also, if you can, plot a 1-period MA of volume in the volume window. Then post the chart here.

Not exactly. I maintain multiple charts dating back to a year or more. But I only bring up those charts with whatever levels of S/R price is likely to hit that day. Friday, for example, it wasn't necessary to go back more than a week. For Thursday, I had to go back to the beginning of December. This provides much less clutter, though all the charts are available in case some mysterious level of S/R materializes that appears to have no antecedent.

We discussed this before, months ago (previous page), but those who are new to the thread and interested in using the trannies to predict moves in the indies may want to break them down into trucking, rails, marine, air, and so on, since the transportation average tends to be skewed by the airlines. Back when the Dow people were saying that strength in the transports was indicating the end of the bear market (this was when the trannies were like 2000pts higher), I followed Containers, which were not doing very well. A month later, everything fell apart. Now they're showing more or less the same strength as the rest of the market which, unfortunately, isn't saying much.

I keep forgetting to post this. It explains what I mean by a "strong" or "weak" divergence, the strongest being Class A:

Rails are weak, but the other segments in Transportation are doing better. Wonder why?

This is one of the steps in W's routine -- what's the market doing, what're the groups doing, what's the stock doing -- but most people breeze right by it. It provides a nice context, even for daytrading. I thought you'd left for the weekend. Miss us already?

continued in the pdf below..... 01Journey14ar.pdf

This should come as no surprise. While the truth may lie in price movement, there are many routes to that truth, some simple and straightforward, some more circuitous. But if that destination is their goal, they all get there one way or another, sooner or later. As to your having to do most of the work yourself, what did you expect? If you ever encounter anyone who says they can do it for you, make sure you keep your wallet in your pants. As to whether or not we're successful, that's an easy one. Do the maps we provide guide you toward the destination? If they don't, that's all you need to know, and it didn't cost you a thing except time.