DbPhoenix

Re the first short, price doesn't do what's expected, even though it has at least two minutes to do so. If it were a good short, it wouldn't be hanging around at that level for two minutes before reversing and breaking the supply line. And there's also the fact that one is underwater as soon as the trade is executed. What a beginner feels at that time is not conducive to clear thinking. And even though your 1s chart shows a probably coincidental pause at your line (the market can't know what lines you've drawn), price doesn't waste any time pushing north. Re the second short, however, you're in a more comfortable position when price hesitates, plus you've had a series of lower highs and lower lows. And when price breaks through the line, it retreats immediately. On a 1m chart, this shows a "close" in the middle of the bar. As for showing the "buy" on the 1s chart, I assume you mean the cover. And no, I really can't as that would be pure conjecture as I wasn't watching the 1s chart. But, again, the key question isn't where to exit the short but that price isn't falling. An equally legitimate choice would be to exit before the supply line is even broken. Price is in effect waving a flag and saying Yo, I'm not going down, fool, I'm going up.

The following charts led up to this point: We are now within a hair of the top of the trend channel. Time to start looking for weakness: Update 5/13: Price stalled at the top of the trend channel for several days but is now driving ahead. Trade now worth in excess of 200pts. .

I'm not doing the vending. But you go right ahead. You're doing just fine without me.

I didn't. Thanks for bringing it up. Between you and Tams, who needs an agent?

Talk about pots and kettles :rofl:

Judging by the first post, in res ipsa loquitur.

Again, there is no such thing as a leading indicator, and repeating the assertion does not make it any more true. As for probabilistic control, all one has to do is learn how to read price movement, as talented and skilled traders commonly used to be able to do.

Incorrect on both counts. Price-based indicators can't change until price does. Therefore they can't lead. And I know what an oscillator is. Thank you. And I've read Appel and Lane.

This is how the next morning looked from just before the open. If you can, read the chart from left to right, not in hindsight from right to left. And I'll note here that these charts are presented in their entirety because posting them section by section in order to prevent you from seeing "what happened next" would mean one hell of a lot of charts. And a lot of extra work for me. Which would be largely pointless since anyone who wanted to could just flip ahead to see how it all turned out. If you'd rather not know, just cover the chart with a sheet of paper and uncover it bar by bar. If you can. Betcha can't You aren't going to learn how to trade price solely by studying these charts. In order to learn properly without jumping head first into real-time trading, you're going to have to find a charting program that provides "replay", which nowadays is not difficult to do. This will enable you to run old charts in whatever bar or line interval you like as fast as you like, though I suggest that you not run them faster than 2x. Otherwise you miss out on the boredom of it, which is something you'll have to deal with when you begin trading real time. By using replay, you won't know what happens next. All you've got is the "current" bar or line segment and what preceded it, a much more realistic simulation than what is presented here. So. The first step, then, is to bring forward the most pertinent support and resistance levels, in this case the resistance level at the top of the trading range shown in the previous post. And just in case you're wondering if all of this is worth the trouble (Oh no, not another thread on yet another approach), the win rate (the percentage of trades that were winners) for this series of charts was 79%. The profit percentage (the percentage of all points traded that were profitable) was 90%. As noted earlier, the position of price in re the trading range in place prior to the open left the trader with both potential options of long or short. That it was at the top of the trading range (TR) meant that the Line Of Least Resistance (LOLR) was down, back to the bottom of the range (this is what price does in TRs, until it gets tired of it). On the other hand, the fact that it was behind the ES, the Nasdaq, and the S&P suggested that it might just take off and finally try to catch up. At the open, price makes its choice. The trader who is convinced that the market is out to get him won't trust this choice, looking instead for all sorts of ulterior motives. This is a waste of time and energy. Trade what you see, not what you think (if I remember correctly, this phrase was coined by Joe Ross years ago, but it's been adopted so freely and circulated so widely, nobody remembers that, and Ross seems not to care one way or the other; in any case, it's an excellent adage and should be taped to the monitor). Price drops immediately. What one thinks about this is beside the point. And there's no time to think about it anyway. The trader instead looks for the first retracement (RET) to go short. He doesn't have to. He could just jump in. But this tactic will result in a lot of small losses and breakeven trades. A lot. So he waits for that pause of indecision and sneaks his order in before the rabble sees what's going on and rushes in. The short itself is placed slightly away from the crest of the RET. This is done to avoid the confusion that often takes place when price is about to change direction and also to force the market to come to him. If he's wrong and the market takes off in the opposite direction, his trade is never triggered and he suffers no loss (jumping into the opposite side of the trade is another matter, addressed later). A point is about right, though at least three ticks. Or discover the best distance for yourself through your own testing. It is immediately clear, however, that buyers have something else in mind since they appear to reject 2811 soundly. But these things can be tricky, and price doesn't always take what appears to be the obvious course. So as quickly as possible the trader draws, mentally or physically, a "supply" line or "resistance" line (not to be confused with a lateral resistance level) since it is a breach of this line that will tell him to exit and re-assess. Traders then sit around for three minutes examining their manicures before buyers decide they're heading north, and they do so. Decisively. Breaking the line. Which means you exit your short. Without even thinking about it. You just do it. No hope, no fear. Just do it. For a small loss. A tiny loss. This leaves you free and clear to look for a trade on the opposite side. Which means looking for the first RET on the buyside. The daylight side. This occurs three minutes later, and you go long in the same way as you went short. This looks pretty good, except that you note that price is approaching the resistance level created by that TR from previous weeks (see first post). Sellers might take a stand here, so you draw a "demand" line or "support" line (not to be confused with a lateral support level), either mentally or physically, to remind you when and where to exit your long if necessary. And, lo and behold, price finds R (resistance) just where you though it might and breaks your line. And you're out. Again. At breakeven or with another small loss. A tiny loss. A loss not worth thinking about. Not even a depressing loss. It's only two losses in a row, after all. Man up. Now you're faced with some interesting choices, and these do require a little thought. Not much. But some. The first RET technically is not an opportunity to enter short since it occurs just a hair inside your support/demand line. But given the undeniable rejection of that resistance level and given that this little RET also represents a failed effort to try again at that higher high, you may just decide to take it, being prepared and more than willing to exit immediately if everything goes wrong and price makes a higher high anyway. And even though the RET occurs on the upside of your line, the entry will be made below it. This approaches rationalization, but it's a legitimate consideration. All of this, of course, takes seconds to consider when you're trading it in real time. If, on the other hand, you're not that aggressive, you can wait for the next RET. You won't make as much, but it is a bit safer, and perhaps you need that. If even that isn't safe enough, you can choose to wait further, remembering that there may not be another RET and you will have missed the opportunity to be in the short at all (generally speaking, the longer you wait, the more likely you are to be stopped out, assuming you get filled at all). And now we separate the traders from the hobbyists. By now you've drawn your supply/resistance line and it gets broken just 5m later. If you took the first RET, you may be intrigued, but if you took the second one, you're underwater and may not be thinking clearly. But if you can sit tight for a moment, just a moment, you'll see that the first break barely qualifies as one. You may after all have drawn your line -- if you actually drew it -- a bit off. So you wait, and the second bar barely registers. So you wait a bit longer, and though the third bar most definitely is outside your line and appears to be heading north, it can't make a higher high than the bar two previous. So you decide to take the chance, being the proficient price action reader that you are, and continue to wait it out. And it is at that point that price drops back below your supply/resistance line. Now we have a separate issue. If you waited this long to enter, your chances of being stopped out are that much greater, as mentioned above. In this case, however, you get lucky. Sort of. Because if you enter even a short distance below either of the RETs, you'll be entering at 2812. And unless you're lucky, your fill is going to be terrible. If you enter with the usual stoplimit order, you likely won't get filled at all. If you're crazy enough to enter with a market order, God help you. All of which are more reasons to enter your short as early as possible, in this case no later than the second opportunity ten bars back. Now. Unless you're plagued with hope, which in areas outside trading is usually a plus but in trading is a curse, you know that parabolic moves not only don't last but also reverse quickly. Even though a supply/resistance line is drawn here, it's superfluous. If you're riding this, you know full well what's happening to you. But if you can set aside the glee for a moment, you can take full advantage of this move and not get stuck dithering about what you ought to do about it, like everybody else. Once this line is broken, you're out. Even if you wait until the following bar, you still have captured as much of the move as one can reasonably expect. So now what? There is a rally, of course, what Wyckoff calls a "technical" rally, meaning that it isn't prompted by mobs of people just desperate to own whatever it is but rather by short-covering. And since short-covering isn't a real "buy", i.e., something that you're going to possess after you've bought it, the rally doesn't last. But, for the time being, you don't know how far it's going to go, so you have to trade it as if it were real, even though it isn't, if that makes sense. If it doesn't, don't think about it for now. It does last long enough for you to draw a support/demand line, which is broken six minutes later. The routine is to wait for a RET after this break so that you can re-enter your short. However, the short is never triggered because price decides instead to resume its trip north. Technically you shouldn't go long here because your support/demand line was broken. But the short side was rejected. So you decide to go ahead and chance the long anyway. Unfortunately the long doesn't get very far. How come? It is an odd but unusually reliable maxim (as opposed to law) that price that can't retrace at least 50% of the immediately preceding rally or decline shows weakness, or strength, depending on the direction. Here, for example, price just barely retraces 50% of the preceding decline. This suggest weakness. And sure enough . . . But lest this go on too long (too late), let's wrap this up since by now you have at least a general acquaintanceship with the routine. The long, of course, is exited. Since price made a higher high after the long was initiated, the support/demand line can be "fanned" in order to give a better approximation of where support lies. It doesn't do any good in this case due to the 50% barrier, but it's a habit worth acquiring regardless. There is no doubt, however, that there is no more support, at least for the time being, and even though the RET is above the line, the short entry, if taken, is below. Again, this may seem like quibbling, but our ducks don't always line up in a nice row, and chances can sometimes be justified. If taken, the short is exited shortly thereafter and you look for a long entry. Given that there is no RET until price works its way all the way back to the 50% barrier, one could decide to pass. However, there's no way of knowing whether or not price will bust through this level. If it does, you're long while everybody else is scrambling. On the other hand, you can wait for the breakthrough, if it happens, then take the next RET up. Trader's choice. Whether one takes it or not is of course of no concern to the market, and a short opportunity occurs almost instantly, another case of the RET taking place above the line while the entry takes place below. There is also the matter of price by now having formed a trading range, narrow though it may be. With a trading range, one rarely has the luxury of waiting for RETs because even if they occur they rarely do so until price is nearly at the opposite side of the range, and by that time one has to consider making a U-turn and heading off into the opposite direction. Therefore, in a case like this, particularly when price meets resistance at exactly the same level, one can justify jumping in at the first sign of rejection and riding price down to the bottom of the range. Here, though, it pays not to exit too abruptly when the bottom of the range is reached. A long at the bottom would not be triggered if set up as usual, and that signal would prompt the quick-thinking trader to re-enter the short. And if he misses it, there's another opportunity four minutes later. Price eventually reached 2972 before breaking the supply/resistance line.

See this thread for the content portion. Ask what you like, but don't be surprised if you're requested to do a search. For instructions on how to do searches, see the Stickies.

You're overstepping yourself. There is no such thing as a "leading" indicator.

So our NQ long is now 130pts in profit. Whether or not it reaches the top of its TC (see post above) before breaking its support line remains to be seen.

If the exuberance in the NQ is puzzling, note that the Naz has been making new highs for weeks.

There are very few people left who contribute to this Forum, and while I'm sure they're not intentionally ignoring you, they probably don't want to offend you either. I think it's great that you're interested in this stuff. However, the Wyckoff Forum is intended to be a resource, not an online course. The only course is Wyckoff's, and that's available for download in the Stickies. Granted few people actually read it, but that's beyond my control. But even though the Forum is not intended to be a course, there are many arcs in the Forum that serve to act as tutorials. They aren't always easy to find, but doing a search will disclose nearly all of them. If you're truly interested, I suggest you take advantage of the search capabilities (see, again, the Stickies). Given that this thread is now over 700 posts long, and I can't imagine any question that hasn't already been asked, I'm closing it and renaming it "FAQ". Doing so may divert interested individuals' attention to the Stickies. Or not. But nothing is to be gained by extending the length of this thread. As another long-time member says, "good luck to all".

I disagree. Yes, Steve's thread is quiet. But that doesn't mean that nobody reads it. The Wyckoff Forum is quiet as well. But it's had nearly a million views. There are a great many people who read this stuff who don't want for reasons of their own to get caught up in all the childish ranting (try Impulse Control Disorder; one can see an excellent example of it today in another thread). This is not to say that Steve has any more to say other than provide ongoing examples. After all, if one doesn't have it after 500 posts, it's not likely that he will (ditto the Wyckoff Forum, in spades). But there are few of us left. Don't encourage anyone to believe that their presence doesn't matter.

And one of them is careening through the halls even as we speak. A psychopathologist would have a field day, or, at the very least, a subject for a monograph. But if I can survive Albert Labos, I can survive anybody.

His "history with a lot of people" is irrelevant. And unsupported. And has nothing to do with you. All this appears to have started when you went after wrb like a pit bull with lockjaw and Steve defended him. If any apologies are forthcoming, they should be coming from you. Be that as it may, if you do not seek interaction with Steve, why are you here taking potshots? Shouldn't you be apologizing to Steve for disrupting his thread? Again? Steve may be 100% full of crap, but that also has nothing to do with you. Give it a rest.

You are in serious need of having your medication adjusted.

Given that this thread is two years old, do you have nothing to add other than sexist remarks? If not, perhaps those new to this thread would enjoy your immediately preceding debate with Ingot.

Sounds like somebody moved somebody's food dish.

For those who read only the most recent post, I should point out that if one had followed tomerok's tactics last Monday, he'd be 80pts in profit. See also the chart I posted on the 25th.

For those who read only the most recent post, I should point out that if one had followed tomerok's tactics last Monday, he'd be 80pts in profit. See also the chart I posted on the 25th, post 567.

Well, as Steve says, "unless you take the time to do your own research, you really can't judge whether a concept is viable (or usable)." So instead of making unprompted and unnecessarily snarky remarks, why not read the thread and determine that for yourself since nothing that anyone says will enhance your understanding in the slightest?

The AD Line is relatively useless for anyone but a fund manager, and not much even then, because of how it's constructed.

Re my post above, a chart of the S&P may help illustrate this notion of "mean". To a large extent the S&P has been in a trading range since '97. If you take the middle of this range, you get the mean (the pink line). If you go by trading volume, i.e., where the most trading has taken place, you end up a little higher (the blue line, +/-). Whichever, the index will revert to this mean. And has for 16 years. When most people talk about mean reversion, however, they do so within the context of the "uptrends" and "downtrends" within this trading range. If you were to draw trend channels to track these up and down swings (not done here to keep things simple), you would be able to draw a line through the centers of these channels. These would be the means for each of these channels, which are essentially diagonal trading ranges (this accounts for the commonly-held and incorrect notion that trendlines provide support and resistance). With gold, you would/could have seen this dynamic beginning at the end of 2011, and gold bounced back and forth through the mean of this range for 19 months (though it would have taken a month to establish the mean to begin with). Now, however, gold has dropped out of this range and is seeking "value". Good luck with that. Apple traded in a series of ranges until the end of 2011 (though if one used a small-enough interval, he could find many ranges on the way up and the way back down). But that's old news. Now, like gold, Apple traders/investors are seeking value. In this case, though, Apple, like most stocks, has an intrinsic value. Whether or not investors are willing to pay a premium over that remains to be seen. In both gold and Apple, therefore, "mean reversion" is no longer particularly appropriate unless one tortures a trendline into fitting whatever the chartist has in his mind. The market, though, doesn't care what the chartist has in his mind. It's interested only in where transactions have taken and are taking place. And in the case of Apple, the last of these "congestions" spanned July through Dec '11, which is where we sit now.