DbPhoenix

Offer however many interpretations you like, OAC. I was only providing additional information with regard to Bearbull's post.

Still unable to upload the pdf. Don't know what OAC is referring to above.

The second link is an abridgement of the original thread (the first link). It's available in pdf form and was posted to my blog, but it's disappeared and I'm unable to upload it again. Will keep trying.

Yes, I understand. But in order to see this confluence, these lines have to be plotted in some fashion. Do you plot all these lines on the same chart? Or do you have multiple charts which must be coordinated in some way to show this confluence? And how is all of that done in RT in order to make the trade decision?

I wasn't being flippant. You're talking about more than 30 lines. How do you coordinate all of this to make a trading decision in RT?

Perhaps you could provide some examples to show how you use all of this to make a trade decision.

Some may, in fact, be looking not for a mentor but a coach: Trader education has become a hot topic in recent years. Everywhere you look there is someone offering some course, seminar, training program, or whatever. Many are very pricey, and we can certainly debate the real value of quite a few. The proliferation of the products and such can’t help but bring up some of the commonly debated topics related to whether traders can be taught or just have some innate talent which allows them to succeed. This article makes its own contribution to that discussion. In the interest of openness, my personal view is that anyone can learn to trade effectively. By that, I mean we are all capable of trading toward a reasonable and rational set of goals and/or objectives determined by our own personal situation and means. Can everyone become George Soros, Paul Tudor Jones, or Warren Buffett? No, of course not. If we could all do that, those names wouldn’t be as big as they are. Most people simply don’t have the kind of resources traders like that have at their disposal. We all do, however, have the means to trade well within the scope of the money, time, risk tolerance, and other elements of our trading focus. The starting point of effective trading, as with anything else in life, is education. There are certain things one needs to know in order to trade effectively. What those are vary a bit based on the market traded and instruments utilized, but there are some fundamentals. For example, all trading is based on the bid-offer mechanism at some level. There are numerous types of orders for entry in to positions and exit from them. There are exchange hours and instrument specifications. Brokerage commissions are a feature in most markets, and in all one needs to understand how profits and losses are determined. I think we can all agree that these are some of the basic building blocks of knowledge and understanding required to even contemplate trading. At the next level we start getting more in to comprehension of the market action, its interpretation, and knowing how that translates in to profit opportunities and risk. On some level, trading requires analysis to make buy/sell decision – fundamental, technical, or quantitative. For the mechanical trader, that analysis is done through research in the development of one’s trading system. For the discretionary trader it is more an on-going process. Likewise, some kind of risk management program is a requirement, regardless of trading style or analytic method. All of this kind of core knowledge and understanding can, in my opinion, be learned from books, lectures, seminars, courses, etc. It is akin to earning a degree. In order to get that diploma, one must prove that certain things have been learned, skills gained. Once that is done, however, one’s development becomes a more personal journey. It is the same thing in trading. There is a basic set of knowledge we must gain, but after that it is up to us to forge our own path in the markets as our own personal situation dictates. Here is where things start getting muddled. We must each determine our own course in trading, ideally based on a good assessment of the resources we have available to us. There are so many ways we can go, though. Everywhere there are people telling us that this path or that path is the one we should take. How are we to decide? Most of us end up stumbling along through a trial and error exploration of various systems, methods, techniques, and whatnot. Some of us find something that works. A great many do not, and quit in frustration, or broke. This is where having a coach or mentor can make a huge difference. We need look no further than the world of athletics to see how important the role of a coach is to one’s development. I happen to coach high level collegiate volleyball, so please permit me the indulgence of using that sport as an example. There are certain physical attributes which can be strong determining factors for one’s success in volleyball – height and jumping ability being two of them. As the saying goes, you can’t teach height, and while a coach can help one jump higher, genetics goes a long way to determining what a given athlete can do in that regard. Being tall and able to jump high, however, does not guarantee success, and one can be quite good at the sport without being a top physical specimen. There is a lot more to volleyball, and that is where coaching comes in. The role of the coach is basically that of facilitator. He or she aids the athlete in the development in their skills and the refinement of the game. For the novice that means a lot of teaching in regards to skill execution. When working with experienced players, it become much more a question of refinement and showing them how to apply what they know to the best effect given the situation at-hand. Coaching or mentoring in trading should be the same thing. The advantages of having someone to oversee your development are many. There is the obvious element of teaching, as it is often assumed that the coach knows more about the markets and has more experience in them than the trainee. Possibly even more important, however, is the coach’s role as external observer. When I coach volleyball, I can see things a player is doing incorrectly that they cannot see because they lack the proper perspective. I can then tell them what they are doing wrong and help them correct it. A trading coach can do the same sort of thing. At the same time, there is the mental and emotional element to coaching which is separate from the teaching one. Especially in the case of experienced athletes, it is often more a question of maintaining a proper level of motivation and a high degree of confidence to ensure peak performance than anything else. The same can be said of trading, where one’s mental state often seriously influence one’s performance just as it does in athletics. The question of where one finds a coach or mentor is a difficult one. Brett Steenbarger (author of The Psychology of Trading and a contributor to this site on the topic of trader development) and I recently discussed this very topic. There are certainly a great many experienced traders out there willing to share what they know in one way or another. But are they really prepared to provide the guidance needed? Some may be good teachers – imparters of knowledge – but lacking in the ability to be a coach in the full sense of the word. Others might be great motivators, but perhaps do not have the breadth of knowledge and/or experience needed for the educational element of coaching. There are two major obstacles to finding a good trading coach. First of all, it is the tendency of many people to look for someone who’s had a great deal of success as a mentor. The problem with that is in a many cases those people are not well equipped to coach. It’s something seen in athletics all the time. Look to the ranks of coaches in your favorite sport. How many of them can you point to and say he or she was a great player? Now consider how many were good players, but not superstars. There are way more of the latter in the coaching ranks than the former because the average players tend to have to work harder and become better students of the game to be competitive. The other difficulty in finding good trader coaches is that there are no real training programs for these people. As a volleyball coach I can go to training seminars and courses, earn national and even international levels of certification, and work under the direction of other coaches more knowledgeable and experienced than myself. As yet, there is no such readily available structure in trading. We cannot look, for example, at someone’s resume and see that he or she is a Level III certified coach, having been so declared by a recognized training and testing organization. So where does that leave us? Well, clearly there is value in having a coach to help us maximize our performance in the markets. As things currently stand, though, finding a good one for our particular situation is going to remain a challenge. It requires the discipline to not just look at someone’s returns and assume that they can teach you how to do that yourself (remember, teaching you a trading system is not the same as coaching you through applying a trading system). It also requires legwork to check out a possible coach. Have they coached others before? Get references. Make sure you find someone who will fulfill your particular requirements and be a good match. If you can do that, you should see your development as an effective trader really take off. (John Forman)

In a word, yep

Well, maybe not. Mentoring can be altruistic, but much depends on the mentee and the time and effort required. Some require no more than an occasional nudge. Others are like adolescent birds who are all over their mothers, flapping their wings and whining, demanding to be fed when they should have been feeding themselves long ago. And if the mentee is paying nothing, that is very likely how he will value what he's getting. If nothing else, he is far more likely to hit the road as soon as the going gets tough. I've had to think about this in a practical way, and it seems to me that the best way of dealing with this situation is to charge by the hour. This has the benefit of encouraging the mentee to make the most of whatever time is being spent -- literally -- with the mentor. It also helps to avoid the "I paid $5000 for this and it was a complete waste of money" complaint. The mentee ought to be able to figure out in an hour whether the mentor knows what he's doing or not. It also gives the mentor an out if he learns fairly quickly that this kid just doesn't have what it takes. Something for all you would-be mentors out there to think about.

Especially if he started off with 5 The problem with most beginners is that they don't know what they want. This makes them easy prey. And since they tend to think of themselves as Goldilocks anyway, and the mentor community as The Bears, this leads to a usually foreseeable conclusion. Bootstrap made a good point earlier, whether one wants to learn how to trade as somebody else trades or to receive help in finding his own way. But there is also the issue -- rarely addressed -- as to whether one wants to learn to trade or to make money. Most (all?) beginners think they want the former when they actually want the latter, hence the reluctance to read, to research, to put in the screen time, to create a trading plan, etc, and the dogged insistence on beginning to trade as soon as they've figured out how to place an order. I realized long ago that beginners don't want to make money; they want to trade. If they really wanted to make money, then they'd do whatever was necessary to make that money. But they don't. They'd rather trade. So instead of making money, they lose it. As far as they're concerned, it's all a big casino, only without the all-you-can-eat buffet.

To Whom It May Concern, don't assume that any qualified mentor is going to jump at the chance to work with you simply because you're ready to write a check. If he doesn't first determine whether or not you're willing and capable of doing the work, you will likely be dropping your money down a well. A good mentor has better things to do than suckle fledgling traderettes who are incapable of helping themselves. What will you be bringing to the table other than money? If you don't know, or you're thinking "nothing", then you're not ready to interview anybody.

In addition to what traderpsyches has to offer, you may find the following post by jasont useful: Ok guys I'm not sure if anyone is actually reading this thing but I thought I'd try to help people discover what to trade. I'm going to disclose a few things about how I found my trading niche and offer some ideas to help people find out their niche. This may be a long post so if you want some help picking a niche, grab a coffee or beer before starting to read. List what you find so you can help keep track. When I first started trading I was foolish enough to jump in without doing my homework. I jumped into trading a time frame that wasn’t suited to me and trading an instrument (options) that didn’t utilize my personal talents and advantages. So over time I managed to find the right instrument and time frame to trade but how did I go about it? I actually found the time frame and instrument a bit blindly to be honest. I actually stumbled across them and then did the following stuff afterwards to clarify that it was the right thing for me. Hopefully if you’re reading this you can do it before backtesting or simulation trading a method so you don’t waste your time. After reading a great book by Brett Steenbarger entitled “The Psychology of Trading” I realised the importance of finding a trading method that suited my personality. It is very important that you are trading a time frame that suits your personality, this doesn’t mean one that suits your other out of market commitments, that is very different. Just because you work a day job doesn’t mean you should be trading according to daily time frames because the only time you can get to the screen is for fifteen minutes to see the close. First find what time frame suits you and then figure out a way to do it around your work or outside commitments. Being that we are in the thick of global economies you can trade any market around the world from you own home pretty much. So how did I the right time frame and market instrument and how can you find it? Look at Past Activities and Sports I started by looking at past activities and sports I enjoyed. By doing so I managed to find an interesting pattern. I always seemed to play sports that were reasonably fast paced. They included football (Australian Rules as I am from Australia, Ice Hockey, Basketball and Tennis). The one I liked the most out of those was Ice Hockey because there wasn’t really a dull moment for any player whilst on the Ice. Another pattern was particular video games I used to enjoy. They were always ones that were action packed but still required strategy. Shooting games that needed you to be quick but at the same time take everything in that was on screen and work out how you’re going to get to the next area. I didn’t mind the thinking type games such as Command & Conquer and Sim City but I always found they took too long to get things done. Another fast activity I enjoy is riding my motorbike. I like riding around the mountains going as fast as I can but still leaving something in reserve should I need to avoid a road hazard or get out of a bad situation. Here was another clue, I didn’t like putting myself totally on the line, something to keep in mind for risk management. So looking at my history of things I enjoyed, I realized they were all pretty fast moving activities. Previously I had been trading longer term instruments where trades would last for weeks. Obviously not fitting my past activities I enjoyed. So first thing you need to do is look at the activities you have enjoyed in the past and the nature of them. You may enjoy Baseball, Golf or playing Poker which are activities that give you more time to think about your next move. So I had found that I needed something which had a bit more action and was quick. I then needed to find out my personality traits and talents. To do this I looked at how I interacted with people on a social level and what my subjects I gravitated towards in School. You can do the same for College or University or even look at your job. Finding Personality Traits and Talents First starting with school. I was always someone who picked things up very quickly, I’m a fast learner. Another clue to what I should be doing. I never enjoyed nor was I good at History, Math and Science. I enjoyed English, Graphics, Theatre/Drama and Sport. Right there if you read between the lines it tells you that I don’t like the subjects with heavy calculations and rules. I liked subjects with creativity but didn’t like the rules accompanied with Math and Sciences. History required intense study of the past and remembering of facts and information. So I realised I had a liking for and a talent of the creative subjects but without using hard statistics. If you think about your School or College/University days and your current workplace, you can find out what areas you were good at and just as importantly what areas you enjoyed. You need to find areas that you enjoy and that you are good at. Both are important. I then thought about my social life and what I tended to do in conversations and groups. I noticed that I was a quick thinker when it came to talking with people. When I am in a conversation I think about what the person I am talking to will say in response to what I am going to say, before I say it. So like a Chess player who thinks moves in advance, I think conversations in advance. I then try to lead the conversation to the direction I would like it. That was another clue, I seemed to put possibilities together before they happened. I also noticed that I would constantly look for signs in people to tell me that they are enjoying the conversation or looking for something different to talk about. This is when I realized that I liked looking for things people were saying without saying it verbally. Another clue for trading that I tended to look for things that were being told but without being obvious. The last thing I realized was that I was creative in my humor. I would not tell a joke straight, I would make a comment that would get people to think about the joke. Instead of telling a punch line I would give people a reference to come up with the punch line themselves. This was another clue into my personality trait of thinking ahead and my creativity. At School I always was a bit different to everyone else. I wouldn’t do things to fit in, in fact I deliberately would go out of my way to do the opposite of what most people did. Yet some how I managed to still be well liked by the majority of people in school. This was another clue that I didn’t like to follow crowds, I also didn’t like to follow the rules of the School. If there was a rule I thought logically didn’t make sense, I wouldn’t follow it. Things such as wearing a tie with the uniform or being cleanly shaven. Just take some time to think about your own social experiences. You need to be honest with yourself. If you were someone who was comfortable fitting in with everyone else, write that down. It will help determine whether you should be following the trend or going against the grain. There is no point going against the grain if every time you do, you feel unsafe and sick in the stomach because it doesn’t fit with your personality. You also want to think about how you interact with people and whether you are quick in your responses or whether you like to take your time to think about what you say. That can tell you if you suit a fast paced market or a slower moving one. How You Drive Your Car The last thing I thought about was how I ride my motor bike and drive my car. I look for people in their cars turning their heads to see if they are going to change lanes. I look at the front tires of a car to see if they are going to come into my lane. I watch the car and how they move within a lane to see if they are a reasonable driver or a terrible one that is moving from one side of their lane to another. I drive a touch faster than everyone else on the road because I rather keep my eyes on the people in front of me instead of having to watch people next to me and coming up from behind me. These are clues to what I tend to gravitate towards. I am observant of things that aren’t so obvious and I am very individual. There are many things you can find out about yourself in regards to how you drive your car and if you follow the rules strictly or believe it is safer for you to do something else. Think about anything else you can to tell you what your personality is like. I wear clothes in the same style I have worn for ten years. I don’t care if the fashions change, I know my style and I stick with it. I am “street smart” more than academic smart. I like to learn on my own more than being taught by someone else because I think I can learn it myself. List Your Findings Whatever you think of, slice it up and look at the hidden meaning behind it. Then once you have a list of things you do, you then need to see how that relates to trading. I wrote my list that looks something like the following. Don’t like to follow rules unless I agree with them Good at seeing between the lines Like being creative Like things fast paced with action Don’t like to overexpose myself and feel unsafe Don’t like following the crowds Look For Markets That Suit Your Findings So how did I know to trade futures in an intraday time frame? Well I learnt from a past mentor that certain markets should be traded at certain timeframes. Here is the following: Equities should be traded using daily charts Options should be traded using weekly charts Futures should be traded intra day Forex should be traded intra day Now this is not set in stone and only my opinion. I am sure there are people out there trading these instruments in different timeframes to what I have mentioned. The reason these are like I have listed them above is because of the volume traded. Equities are traded a lot but there isn’t the liquidity to get in and out of positions as easily as forex and futures. Don’t forget I am from Australia and our market is not as Liquid as the US or London markets. Considering I wanted to trade quickly, not be exposed to things out of my control and have a bit more discretion in my trading, I realised the Futures were my most suited trading vehicle. I trade them looking at a 5 minute basis and e-minis in particular have high liquidity. I trade against the grain but follow the overall flow of the market. I use the NYSE Tick to tell me that the equities are doing something different to the index futures, looking between the lines. My other indicators are guides and not strict rules where I must do X if Y occurs. I have the freedom to interpret markets. If you get your list of what you are after, you can find a rough time frame to trade such as intra day charts, daily charts, monthly charts, or maybe no charts at all. You may find you are good at reading business statements and use fundamentals. You can then work out your style of trading whether you like to trade with the grain or against the grain. There is no inbetween. Your either trading as the market is moving or your trading as the market is stalling looking for the opposite direction. You can find out if you need strict rules to tell you what you should be doing or whether you trust your own judgment to make the strict rules simply guides. This should hopefully get you headed in the right direction and give you some guidance. Once this stuff is figured out, look for a mentor who trades in a similar way to what you’re looking for or ask around forums for what people recommend according to what you’re looking for. At least you will start in the right direction and can focus on the plan instead of asking whether you are in the right niche.

If you're following this in real time, you'll find it far easier to focus on price movement rather than bars. Otherwise, you're in for a struggle. In any case, in addition to asking yourself what price is doing, also ask yourself what price is not doing. There are people in the chat room who trade by price action, though they may not necessarily go about it the Wyckoff Way. And there may not be anyone who trades the Euro. But it's worth checking out. Remember also that you're going to be ignoring a great deal. If, for example, you plan on buying a test of support, there's absolutely no need to focus on every price/volume bar pair that prints in the meantime. If and when price approaches S, then pay attention to what traders are doing. Otherwise, open up a small window and play solitaire or something. Save your focus for when it will count. And, yes, that's a springboard. Notice the lower high and the higher low along with quiet volume. Bracketing this sort of thing is pretty much a no-brainer.

You're too focused on bars, and that prompts the nit-pickyness. Focusing on bars rather than price movement will cause you to devote your attention to what is essentially trivial and ignore what matters. In your first batch of charts, what mattered was that (a) price failed to BO and (b) didn't even come close to retesting R, creating a lower high. Whether this was illustrated by bars, points, lines, or not charted at all was irrelevant. In this batch, price again fails to break thru with any conviction, falls back below R, but then comes right back again. This particular effort is stopped dead at R, and a short is called for. But look at what's happening with the trading activity (or volume). It rises with those two down bars at 0827 and 0828, but then nothing. Trading activity falls off and there's no follow-through on the drop. Price then, instead of doing what you expect it to do, i.e., fall, makes a U-turn and rises instead. This is sufficient reason to exit the short, stand aside, and re-evaluate (you will at the very least BE). Buyers then make yet another attempt to break thru R and stay there. You will have decided, I hope, whether or not you're going to go long on a BO, if any, wait for a retracement after a BO, if any, go short on a repeated failure to BO, if any, etc. In this case, price does break thru, but it then straddles R, then hugs it before finally taking off. What is most important, however, is not "the bars" but the fact that price isn't falling. That fact should speak to you and provide you with some guidance as to how to manage your position. If holding here for nearly 20m while price plays with itself is intolerable, then you may want to exit and wait for price to break thru "the wall" (you will likely find this wall on a smaller TF, e.g., 5s; the bars from 0855 thru 0858 appear to represent a springboard, which would be clearer on a 5s chart, but I don't follow this, so I can't say until I see the chart).

You got your reversal when price failed to break through R. You then got your retracement at 1300. It didn't retest R, but it was a retracement nonetheless. That volume is "higher" doesn't necessarily mean buying pressure. Look at those upper tails. That's not buying pressure. That's failure. As for going long, you failed to break through R, so why go long? If you're going to go long, wait for the breakout, if any. If you instead want to buy a retracement back to R now S after the BO, that's up to you. But any retracement after a failure to break through R will just as likely end up being a lower high, and a reason to go short, as in this case. You have to think about the purpose behind a retracement, which is to give people who missed the real trading opportunity a second chance to enter. Here, there was no missed buying opportunity since price never broke through R. The missed opportunity is instead the short entry at the reversal, and the retracement afterward represents a second opportunity to enter the short.

These posts should be copied here since they are particularly germane:

And back to the macro:

And as it turned out.....

You guys are coming perilously close to discovering the true nature of price movement as well as that of support and resistance. You're seeing the "message" of what most everybody else sees as "noise".

You are focusing on only a small part of what Wyckoff wrote. You are also attempting to apply academic theory to the stock market, and since neither perfect competition nor perfect knowledge apply, neither can the academic theory. The fact that someone uses the terms "supply" and "demand" and any "law" thereof does not necessarily mean that he is using them in the same way as everyone else who uses the same terms. If you insist on being literal, you're going to miss much or most of what Wyckoff is trying to say.

So's gold. But, like gold, they have no intrinsic value per se.

Not exactly. As I tried to point out dozens of posts ago, the law of supply and demand as it relates to economics is not the same as the law of supply and demand as it relates to the markets no matter how much one may believe otherwise. It was to avoid this source of confusion that I stopped referring to "supply and demand" years ago and began using "buying pressure and selling pressure" instead, which is what Wyckoff means. Unfortunately, I had to pick up the supply and demand terminology again when nic and I started the Wyckoff Forum. That, as it turns out, may have been a mistake. The market does not sell goods and services. It sells hopes and dreams, and the "law of supply and demand" that operates in the markets is not very different from that which operates in other "tangibles" that have little or no intrinsic value such as fine art, collectibles (depending), gems, and, in certain circumstances, real estate, among other things. Anyone who doesn't understand this is in for a hard time.

The following chart was posted last Sunday: Let's see how it all worked out (same chart but drawn with Sierra): Monday and Tuesday, price tested R ©. Thursday it bounced off the midpoint of the lower trading range (D) and tested R © again. Friday it dropped to S (E). The advantage being, again, that all of this can be plotted in advance, saving one from having to peer fixedly at his screen for however long looking for a particular type of bar. For the coming week, the setup's the same, keeping in mind that the interface between the two ranges, at 1960, may take on added importance.

The experience is generally more beneficial if one invites like-minded traders to join him in either an existing room or a new one. Thus everyone has more or less the same focus. This beats here are all the signals you should have seen and all the trades you could have taken.

I wish you wouldn't put words in my mouth, FW. I never said that one should take more trades than necessary. Nor did I say that one should spend all day "looking to find trades". And as for getting the entry right, if one doesn't do so, then there won't be a trade to manage. There were five good shorts off resistance in the ES yesterday, none of which apparently were taken. Trading partners can help one see these if for some reason he doesn't see them himself. If one chooses to go it alone, that's fine. But hindsight charts can take one only so far, and RT trading can't be learned by following message boards.