Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.
DbPhoenix
-
Content Count
3789 -
Joined
-
Last visited
-
Days Won
1
Everything posted by DbPhoenix
-
The smaller the bar interval, the less useful the volume. Once you're in profit, try to give the trade room without welcoming any sort of fear response. If your heartbeat and respiration increase, just TTMAR (take the money and run). Otherwise, shift into a more relaxed mode and just observe what's going on. If the pace and activity slow down, don't be too quick to bail. Did you consider at the time that that congestion occurring at the top of that run might be a springboard for a further advance (or a decline)? If so, push the reset button and re-analyze the situation. Forget about what you've done and look only at what's in front of you. You may find an opportunity for a new trade that's independent from what you've already done. If you think you're ready for a new tool, you may want to look at the TICK thread. Sounds like an effort to make it more mechanical. I don't think you need it anymore. BTW, where are you? Db
-
RULE #13: Occupy yourself while you are not playing.... It is critical that you learn to enjoy yourself in the cardroom in ways other than in the game itself -- by constantly staying, and playing.... The fact is, if you are playing correctly, you are going to be doing a lot of folding. So you need to think of ways to fill this time. If you hate this period of time -- when you're not playing , and some do -- it will have the effect of throwing your game out of kilter. I can only trade for so many hours. This is another reason look for ways to trade more effortlessly so my energy level can be better maintained throughout the day. There are times when I find myself constantly in the market and that is a very BIG red light that "I AM GAMBLING" because the market is random most of the time and if I am in it all the time then I am not playing the highest probability play. (William)
-
Mine as well. Make the market come to you. Though if you'd used the 1m chart, you'd have gotten in a minute earlier and two points lower. Futures volume is notoriously unreliable, which is one reason why I began focusing on pace and activity using a tick chart. It's something that has to be worked into, but it gives a better sense of "volume" than a bar. What may be more interesting here is that there's nothing remarkable about any of the volume throughout. The trade is in the price movement, regardless of accompanying volume. If you'd relied on volume, you may not have taken it. I can't fault this at all. This was an excellent entry. What are your thoughts on your trade management? Db Edit: Actually, one little quibble. Your stop should have been at 08.
-
Probably bec you were looking at it in RT (real time) and you picked up on the pace and the level of activity. Given the higher low, and the behavior of the TICKQ, it was hardly a gamble. Did you set your entry stop above the retest bar high or did you just jump in? Db
-
For the sake of analysis, could you post the same thing in 1m form? Db
-
Please post a chart that includes what you were looking at at the time. And include volume, even though you weren't using it. Db
-
How are you defining "successfully"? The higher low retest? Db Edit: Should have checked the chart first. I assume you took the 1000 entry?
-
Since you're new, you may not have heard of Thalestrader. As far as I know, he's the only member who ever -- or has ever -- posted real-time trades, much less pre-trades (outside the Foresight thread). And I believe he holds the record for "Thanks" (the new owner may not keep track of this anymore). Beginners and not-so-beginners could do a lot worse than curl up with Post #1 and begin reading. Db
-
As you should, until you decide for yourself to look at something else. And you most likely will, as long as we're in a trading range. But learn how to trade a trading range expertly and you'll be basking on the beach sooner than most. Db
-
Of course you mean "before" you take the position As for my thoughts, you're more likely to get a lot of questions. Be warned. Db
-
I perceived it as a genuine request, not as anything antagonistic. But when I was considering whether or not to take all this up again, I decided that I would work only with those who (a) were genuinely interested, i.e., those who were willing to read and study the course and read and study the threads or (b) asked a question I hadn't already answered. Both these conditions were met, so I started posting again. But I no longer have the time I had four years ago, so even if I wanted to repeat what's here (and virtually everything I know is here), I just don't have the time. So if you want to go through all that, great. We can pick this up afterward. But those who are only curious or who have only casual interest will learn real quick whether or not this is right for them. Anyone, for example, who wants something mechanical or who is still in love with indicators will flee. Screaming. But even those who are genuinely interested must be willing to post their trades in advance (which is why the lynchpin of the "new" Wyckoff Forum is the Trading in Foresight thread). Otherwise, it's all just more hindsight added to the millions already posted, and I have absolutely zero interest in that anymore. Db
-
No point, as it would be only one more example of a hindsight trade with the accompanying hindsight insight one finds on DVDs and in webinars. And you can guess how much hindsight insight I've seen over 15 years on the Web. It's not my purpose to persuade anyone of the superiority or even the efficacy of the Wyckoff approach but rather to help those who are genuinely interested in it to understand it and implement it. There are many paths to profitability, and this is only one of them. Lots of room on the bus for those who prefer some other route. Db
-
This may, however, be less an indictment of hard stops than an example of inappropriate entry. This is, after all, the Wyckoff Forum Db
-
I agree with what you say after "and" (though not with what you say before), but that's not the point of back/forward testing as I incorporate it. Anyone who uses replay to back/forward test a mechanical system is likely to be disappointed, though I see people here and on other boards that have been doing so for up to ten years or more and still can't trade, much less turn a profit, so their capacity for disappointment may be limitless. Price movement is fueled by fear and greed (and, arguably, hope, though hope is a form of fear). These emotions are manifested in trader behavior. The purpose of all this review and study in a Wyckoff context is to develop a sensitivity to this which will then enable the trader to anticipate movements. But if a trader thought it was all mumbo-jumbo, he wouldn't be studying W in the first place, none of which is to suggest that W is the only or even the best approach but only to explain why these means of learning the approach are investigated here. Db
-
Actually, with replay, you can. The patterns W finds in 1930-31 occur today as well, and will occur next week, month, year. I disagree. Backtesting, like simtrading, is useless if done improperly. Done properly, both backtesting (and forwardtesting) and simtrading are invaluable teaching and learning tools. The fact that few people do them properly is not an indictment of the tools. I agree about static charts. As I've said many times, the market is a movie, not a slideshow. That's why I press the issue of replay. However, news and so forth are irrelevant. They color one's perception of the price movement, often to the degree that the trader assigns motive and meaning that are not in the movements but in his head. This can place him in a state of perpetual surprise. Db
-
RULE#12: Don't be impatient about patience.... Your brain is telling you to play patiently while your emotions are saying, "What's taking so long?" These two must be in alignment. The gatekeeper of our subconscious keeps us from constant behavioral modifications, which means that if you are not a patient type, there is probably more work then just telling yourself to be patient. I think one might have a chance in two ways: 1) If you are an enlightened kind of guy, you can tap into your own innate essence for power. The power comes from your strong awareness. All your subtle self-talk and make-believes and all the games your ego plays will evaporate in the expanse of your wisdom. Just like an old man watching children play. 2) Change your internal self-talk. Bypass the gatekeeper and do some behavioral modification. There are two ways to bypass the gatekeeper: use sheer will and persistence, and keep changing your self-talk on the conscious level. Eventually you will nag your gatekeeper to death. (William)
-
Keep in mind that when you're exploring possible "setups", the purpose of the backtesting is largely to find out if there's anything worth pursuing. The meat of this process comes in the forwardtesting, preferably with replay, so that you can see the bars form. It's so much easier to get a sense of traders' intentions when you can see the price move rather than review a series of static images. And, after all, dynamic price movement is what you'll be viewing when you trade; getting used to it is part of the function of forwardtesting. Making it mechanical is always an option. Encouraging a beginner to exercise his judgement at the beginning is arguably unreasonable since he has so little to base his judgement on. Once you've viewed many charts, you'll be more comfortable with an increasingly subjective approach. But for now, it's perfectly fine to look for a particular pattern and trade only that pattern. If it works for you, you'll build your confidence, and that matters more than getting everything right from the getgo. When you're backtesting, look for a pattern that repeats itself with reasonable consistency but also with enough frequency to make it worth waiting for. Then forwardtest it to see how much of the profitability was in the action and how much was in your head (hindsight often makes trades better than they were at the time, but that's how the gurus fleece the innocent). A pattern that is based on trader behavior won't change much because trader behavior doesn't change much. The example you provided, for example, is relatively common: a long bar reaching up toward R, then price runs out of steam, sellers can't find any buyers, a short bar ensues, then it all rolls over. Look for that pattern and see how it works for you. It may not be entirely mechanical, but it may be close enough, at least close enough to formulate a few rules (including a rule that if the rollover is aborted and buyers make another run at R, the apparent weakness may not be real, and the appropriate response may be to back off). Leaving mechanical trading for a lot of fuzzy "it depends go with the flow" babble -- however legitimate the babble eventually turns out to be -- is too big a step for just about anybody. Begin by focusing on what's in front of you, independent of what you want or expect, rather than forcing whatever you're observing into a preconceived set of expectations (like, for example, Fib, or Pivot Points, or moving averages). You will then have much less trouble finding a compromise between mechanical and subjective. Db
-
Over the past half-dozen years or so, Wyckoff has become a racket. The complexity of the merchandising and promotion are such that one would not be surprised to learn that (fill in the massive American conglomerate of your choice) was behind it. Wyckoff knockoffs are nothing new. They go back decades. But with the nineties came the personal computer, the web, and their mutant offspring, the retail daytrader, a vast population of new victims ripe for plucking. Given this situation, and the not uncommon desire on the part of the trader to put forth as little effort as possible, it was only a matter of time before a paint-by-number approach would develop and gain popularity: this volume bar means this and this price bar means that and put them together and you have a winning trade. Simple. Um hmm. But in the real Wyckoff world, it doesn't work that way. Volume is not an indicator. Volume reflects transactions. As such, it is a piece of the puzzle, like the time of day or the day of the week or the general market environment. But there's nothing mysterious about it. And in and of itself, it does not prompt any particular action. What difference does it make, after all, what volume is if price is not doing anything that triggers a trade? And what if one's volume data were inaccurate and unreliable? What if volume weren't available at all? What if one were charting P&F? "Climactic" volume may accompany climactic behavior in price or it may not. It may occur several days (or more) earlier. Or it may occur later. Or not at all. Or it may occur while price just shrugs its shoulders. In any case, it's just information about trader activity. Its weakness or near-absence can be as informative as its more dramatic moves if only one focuses on the information being provided and does not try to discern the extraordinary MEANING that at least one knockoff assigns to it. In your case, having lower volume on a retest is nice, but what does it mean? Answer that and you'll know how much weight to give it, if any. As for when the daytrader -- Wyckoff or otherwise -- should pay attention to volume, given what's been done with it over the past dozen years with the color-coding and that silly experiment with the fat bars and all the efforts to make it into an indicator of one sort or another (all of which require software and/or special feeds and more money), I'm inclined to tell the beginning trader to just skip it, or at least to postpone its use until he has a thorough understanding of the hows, whys, whens, wheres, and whats of price movement. At the very least, this might prevent him from deciding not to take a perfectly good trade for no other reason than that the volume wasn't "right". Db
-
Information regarding trading activity is provided by the level of volume and by price action (or price movement). While the information provided by volume may be interesting and may help the trader reach a trading decision, it is itself largely irrelevant. What matters most is the price action. Here, you're at R. Price chokes. That's really all you need to know to make your decision. Keep in mind that if price fails, you're in the trade. If it doesn't, you're not. What's the risk? Db
-
Few people have. They think only of price risk, but it's largely the information risk that's generating their fear. Since they don't know the difference, they don't know what to do about it. There used to be a guy here on this site that waited for so much confirmation after trend reversals that by the time he finally entered he was stopped out almost immediately because he was so late. He didn't like the fact that I pointed this out more than once. But now he's a bigtime guru charging big bucks to teach newcomers "how to trade". Yeah. Anyway, the book is The Nature of Risk. Here's my review of it: 53 of 53 people found the following review helpful Epiphany, anyone? January 14, 2000 By dbphoenix Format:Paperback The Nature of Risk is a seminal work for anyone who understands that self-knowledge is key for success in the financial markets, particularly at market extremes. Rather than babble about risk in general, Mamis takes this engine apart and examines its parts, among which are information risk and price risk. He explains that as one's tolerance for information risk increases (the need to know why the stock is doing whatever it's doing), one's price risk diminishes (one is better able to jump in and take advantage of whatever opportunities for picking up cheaper shares present themselves). On the other hand, if one has no tolerance for information risk and must know everything about a stock's movement, his price risk will be that much greater because the price will likely, by then, have risen to an over-extended level. Therefore, having identified these components of risk (time risk is another), one must then balance them out in order to approach the markets rationally and unemotionally. An extremely important work, particularly for the investor who is plagued by doubt, confusion, and anxiety. Db
-
I understand the strategy, but I suggest that it will fail, even if you're satisfied with scalping for ticks. This doesn't mean that it will absolutely positively fail, but I suggest that failure is more likely than success. First, the more traders who see a particular level of support or resistance, the more likely it will be/become important, that is, it can't reach importance if few if any traders know it's there. Consider the following (the red line marks the right edge of your chart, more or less): Notice that with every increase in bar interval, more and more of your swing points disappear. By the time one gets to the hourly chart, only two remain. How can your S/R levels/points matter if so few people even know they exist? (Notice also that your "triangle" disappears rather quickly.) As for the stop, yes, it's placed above the climactic swing point (for a short). The market couldn't care less about your risk tolerance. It recognizes only where demand was outbalanced by supply and price rolled over. You can place your stop above any relatively inconsequential swing point you like, but I can almost guarantee that it will be splatted like a bug on the windshield. If you're going to use S/R, then you're going to need as much help as you can get, and the more people who are using those same levels, the more likely they will be there to turn price aside (which they are unlikely to do if they don't even know the points are there). If you don't want to enter at the correct point but would prefer to enter farther away to decrease your information risk, that's fine, but your price risk increases. No way to avoid it. You're going to have to develop a feel for the turn. This is most easily seen with a very small interval. You may see volume increase or decrease as price reaches R. You will likely see the spread narrow dramatically, as in your chart. You'll detect a struggle to push through, followed by a rapid and decisive failure. If you place a sellstop below that last, narrow bar, then you will be swept into the short by the failure. If there is no failure, then your trade isn't triggered. But aside from all of that, you must address your risk tolerance. There are three types of risk -- information risk, price risk, and time risk -- and you have to find the right balance for you. Db
-
Like standing aside until the market decides what it wants to do. Note that both the ES and NQ have dropped back into their trend channels, below their supply lines, below their individual levels of what had been resistance. If you don't know what to do, don't do anything. Db
-
You're correct that a "W type" analysis would have sounded the alarm. In fact, I did so when I was part of The Motley Fool (and those who paid attention, and there weren't many at TMF, saved a hell of a lot of money). But for this type of exercise, it's next to impossible to avoid having one's perceptions affected by foreknowledge. If you want to do it just for the hell of it, feel free. But blind analysis will be of greater benefit to your trading. Db
-
See how it works? Price rises rather than falls, so the short entry is never triggered. Now you're free to look for a retracement to support. If price drops below support instead, then other options present themselves. Db
-
Since no one is ready to post a foresight trade yet, I'll put this here. We've examined the S/R here perhaps to the point of "oh no not again", but I feel obligated to point out the additional opportunity -- a "third chance" -- to go short here. The first op (1) was posted some time ago. The second (2) was posted as well, for those who didn't take (1). The third (3) occurred last week, with a second chance on Friday. A third chance (actually, fourth) presents itself now, for those who want to assume the risk. Second and third chances don't usually work out the way one would want. If price is coming back to the entry point, the implied demand will probably put a stick in one's spokes. But a legitimate short is a legitimate short, and if one is willing to assume the risk, place his coverstop, and stick to it, who's to say he shouldn't? Given that we may be setting ourselves up for an extended sideways nonmove, I'd be reluctant to initiate a new position here. But since others won't be trading with my money, they're welcome to do whatever is right for them. Longs may, after all, get tired of supporting price and just let the thing go. It happens. Db
