DbPhoenix

RULE #3: If you've been folding a lot, for a long time in the game, and you're starting to think that maybe it's time you got in and played a few hands again -- that's not a good enough reason. Keep folding. The level beyond this is having no desire to act inappropriately-- to be so immersed in the moment and the process that time does not exist and thus impatience does not exist. Great traders have rituals they enjoy for their own sake, a method and a habit that acts as its own reason for being. When you have this mindset, impatience goes away; whatever is in front of you becomes too engaging to worry about what you aren't doing or could be doing. The amount of time a trader should be willing to wait for a good trade is infinite, because with the correct mindset the trader isn't actually “waiting” in the traditional sense; being and experiencing yes, waiting no. (darkhorse)

I want to upload a 5.9meg pdf, but I keep getting a "failed" message. Have the maximum file sizes been changed? Currently it's 19.07 for pdfs. Db

I know of no better way of understanding the continuous nature of price movement than watching a tick chart. Identifying "real changes" in the "short term trend" is not, at the beginning, the point, even if you were to define "real changes" and "short term trend". You may not be able to trade off a tick chart, much less grow wealthy from it. But when you do look at bars, you won't view price as bobbing up and down for a certain amount of time before jumping to the right to bob up and down some more. Even if most traders understand that trades occur continuously, very few trade as if they understood it (if they did, they'd acknowledge that the "close" of a bar is irrelevant, much less wait for it). What you may gain from watching a tick chart, if you relax into it, is an understanding of "activity", i.e., where price moves and how fast it moves there. You'll see price make a beeline for certain levels or points, and you'll see price just drift aimlessly. You'll see excitement infect a movement, even though you may not know why it's occurring. You'll see traders get tired, and price roll over. In other words, these are not just random points on a display; they're traders trading. Even if you never know why they're doing what they're doing, it's important that you see *what* they're doing. Db

Rather than make up charts that would only duplicate what I've already done, I'm going to suggest that the "Trend" thread in the Wyckoff Forum may be of interest to you, particularly if you're not happy with the way you're determining trend. Or not. But it's not going anywhere, so keep it in mind for when you have a slow Saturday. As for others' strategies and tactics, I'm always interested, as long as it's not gobbledygook (which is, unfortunately, too often the case). So don't be shy on my account . Db

And here we are. Now what? Short? Db

Nice bounce off 2465, but so far it looks weak. Db

Your original question was "how do you determine the long-term trend", not "how do you determine change of trend or trend reversals". Getting into all of that is considerably more complicated. Fortunately, none of this is particularly relevant to your trading situation since your timeframe is so brief. If your concern is primarily a determination of whether the market is bearish or bullish in your timeframe, you're more likely to profit from looking at support and resistance zones than focusing on "trend". If price is approaching one of these zones, you can look for the kinds of activity that will tell you what to do. If it isn't, then you can play the intraday trend(s). All of which is very general, but without knowing what you trade, how you trade it, what you look for, how you make your decisions, etc., general is about as far as one can go without giving specific instructions for trading some other way, a way which may not be right for you. Db

Not necessarily. Price was in the process of testing 2490, and it may well bounce up and rally. Or it could fall right through. You have to be prepared for both. 2400 isn't exactly a secret, and it's under these conditions that "the market" surprises and reverses ahead of support. Or not. Again, you have to expect the unexpected. If you haven't read the daytrading part of the course yet, I suggest you do so, at least the first three chapters. It's quick reading. The "levels" are those I've provided on my chart. However, the only trend that matters to a daytrader is the trend that manifests itself tomorrow. You have to be quick to figure out what that trend, if any, is going to be. The second chapter will explain how to do that, though you may skip the Wave part since you are in effect trading the market itself. You'll have to watch the strength of traders to determine how likely it is that price reaches those levels. It may fail to do so, and you'll have to deal with the reversal. If you don't know what to do, I suggest you do nothing but watch. If this is new to you, you can't focus on traders' behavior if you're worried about what you're going to do about it. Eventually, you'll get a sense of what traders have in mind and how far they're willing to go. And if you insist on daytrading, I also suggest that you get used to a tick chart. If you're not tape reading during the day, you're very likely in the weeds. Db Edit: Sorry, I was looking at your chart and it's not complete. Price is already below those levels. But the rest of what I said still applies. Db

Depends on your timeframe. If a year, start at 1100. If two years, 1000. If 3+, 650+/-. Db

Where we are:

That would be great. I'm sure those who want to know more about tape reading would be very appreciative. Db

The original course had two parts. One, The Richard D. Wyckoff Method of Trading and Investing in Stocks: A Course of Instruction in Stock Market Science and Technique is uploaded here (as most know by now). The second part is a 97-page document entitled The Richard D. Wykcoff Method of Trading in Stocks: A Course of Instruction in Tape Reading and Active Trading. Db

Observation, experience, memory and mathematics -- these are what the successful trader must depend on. He must not only observe accurately but remember at all times what he has observed. He cannot bet on the unreasonable or on the unexpected, however strong his personal convictions may be about man's unreasonableness or however certain he may feel that the unexpected happens very frequently. He must bet always on probabilities -- that is, try to anticipate them. Years of practice at the game, of constant study, of always remembering, enable the trader to act on the instant when the unexpected happens as well as when the expected comes to pass. JL

RULE #2: Don't get irritated or angered by long session of folding. We are all playing probability over a long run. Understand it. Accept it. Mentally prepare for it. Keeping our head makes all the difference. (William)

While I don't want to seem dismissive, we're getting into questions here that have been answered on multiple occasions. With charts. I suggest you look at the Trend thread, do a search of the Forum using "trend*" (with or without my name), review Section 15 of the course, and review the material that I sent you. That will tell you everything you need to know about entering or exiting positions off demand lines, supply lines, and trendlines. You may also want to look at "Part Two" of Wyckoff's course, "Tape Reading and Active Trading" (97p). This was written 10+ years after the DayTrader's Bible and offers a different perspective. This particular download is available only to Facebook users (which doesn't include me or I'd upload it here), but you can read it online for nothing (which is why I have no moral objections to providing the link). You can also search the document, though the search function is pretty clunky. Db

As long as you ignore everything before the 10th, yes. But the last swing low may not be tested. If you're in an uptrend, price may reverse at the trendline. Don't be surprised if it does. If you are trading an uptrend, you have to be biased toward the long side anyway since the distance from the swing low to the next swing high is greater than the distance from the swing high to the next swing low, hence a greater profit potential. Again, in an uptrend, your "support" is the trendline as well as previous swing points (preferably both). Remember what Raschke says in the "article" I wrote on support & resistance and trading trend, that, transitioning from a trading range to a trend, you must be prepared to switch from trading reversals to trading retracements. And remember that by defining "current" as only the last few days, your target becomes the upper trend channel, or supply line. If you find yourself in profit, you cannot then change your perspective midstream and decide to hold on for a test of the last swing high, or the one before that, or the one before that. Db

You could argue that you're in an uptrend if you limit your timeframe to the 10th and forward. And if you drop your interval to 1m or less, you can find “trends” all over the place. So I suggest you not become entangled in the trend question and think about probabilities. Your market broke its uptrend a week ago and is in the process of testing the last swing low from the downside. So what are the probabilities for upside here? What is more probable of success, a long trade or a short one? What would be your strategies and tactics for either? Or both? What do you need to do to avoid being surprised? Db

A voice from the past (this is the guy who created a csv file of Section 7). There are no important gaps in anything that's traded 24/7. There may be gaps over the weekend in the e-minis, but otherwise the only "gaps" will be those that may occur when you're not at your screen, but this wouldn't be any different from a "gap" that occurred because you took a nap during the day. It's also a lot more difficult to pound futures one way or another than it is stocks because futures have no float. And even if futures are on a tear, you've got time to act. Assuming you're there. But if you trade EOD, these dramatic intraday moves aren't going to affect you one way or another, as long as your stop isn't hit. Db

A man can't spend years at one thing and not acquire a habitual attitude towards it quite unlike that of the average beginner. The difference distinguishes the professional from the amateur. It is the way a man looks at things that makes or loses money for him in the speculative markets. The public has the dilettante's point of view toward his own effort. The ego obtrudes itself unduly and the thinking therefore is not deep or exhaustive. The professional concerns himself with doing the right thing rather than with making money, knowing that the profit takes care of itself if the other things are attended to. A trader gets to play the game as the professional billiard player does -- that is, he looks far ahead instead of considering the particular shot before him. It gets to be an instinct to play for position. JL

A buystop here for the aggressive trader:

I don't find anything solicitous about it. In any case, I didn't write it. It was created by a guy named WoolyBooger back in the old TMF days. I thought it was very clever. Here it is, for whoever's interested. Db 01Journey14ar.pdf

Does that mean that you want me to repost it? If so, I'll be happy to. Db

Emotionlessness (edited) The true journey of mastery is in each moment. Writer George Leonard, in his book Mastery, refers to this as the "goalless journey". In other words: there is no finish line; the journey itself is the destination. According to Leonard, mastery lives within itself and the practice of itself – doing a thing for its own sake; not just reaching the goal, but each hour, each moment, every day, is the goal. You cannot apply the principles of Zen until you know the game perfectly inside and out. Having the proper attitude of Zen calm and confidence does no good if you do not know the game. Zen will not make up for, or offset, incorrect play. As a result, there is a certain amount of ordinary, old-fashioned work involved in mastering the game, a certain amount of sweating the white beads before the days of tranquility come along. Good [trading] is not a "mood", it is a series of individual decisions. It does not occur by "Buddhistically" meditating ourselves into some dreamlike mental state, but rather by knowing the game well and being in synch with it -- by inserting ourselves correctly into the flow of what is going on in front of us. No Zen attitude will make up for this lack. You may be quite Zen-like and have all the attributes of Zen calm, but if you play incorrectly, the result is that you will get destroyed. Practice, and long hours at the table, are indispensable. Arrive with a system. It is not enough to rely on luck or hope to carry us past the weak parts of our game. These parts must be attended to. The system must be whole and complete. The weak parts must be corrected, or disaster will appear. Learn from your mistakes. When we factor past lessons in for future play, losses are not losses, but rather stepping-stones toward future correct play. Failure, by its nature, moves us in another direction, away from failure. We need to treat these lessons neutrally. Simply learn from them. Don't take them too much to heart or put too much emotion into them. Don't expect a certain card to appear. Bad players do this all the time – expect the best possible outcome to occur – and then are crushed when it doesn't. When things start going right for other players and wrong for you, back off. Looking back at the end of the night at how a losing streak was put together, certain things stand out, and this is one of them: we should have caught on a little sooner. It is important that we notice these situations earlier and react accordingly. Develop a true indifference to the game. George Leonard writes in Mastery that mastery's true face is often "relaxed and serene, sometimes faintly smiling". You sometimes see this with good poker players, a kind of smiling, ironic indifference to the vicissitudes of fate and the outcome of hands. Don't take the game personally. The poker gods are not out to destroy you personally (although it may sometimes seem that way). The game itself is as neutral and mechanical as a roulette wheel, a church raffle, or a lottery ball drawing. Nonattachment. The idea of attachment, in Buddhistic terms, means the linking of our emotions with something that we want, some desired object or outcome. The stronger this connection, the more discontent when we fail to achieve our ends (as well as desperate steps taken trying to achieve them). Emotions have no place in poker. To play in an ego-less state means simply to not let the ego and emotions get involved. When you take your emotions out of the game, other players' emotions become visible. When we are focused exclusively on our own emotions (as we often are), the emotion of others tend to be obscured. When we make ourselves neutral, however, we find that the canvas suddenly becomes blank and the emotions of others begin to appear.

A lot of smart stuff has been posted on message boards, and much of it has been lost, not because it has literally been deleted (though that is sometimes the case), but because it has been forgotten. People move on, they quit, they die, and it's important to pass the good stuff on so that those who read it when it was posted aren't the only ones who benefit. Years ago, a guy named William posted the rules from Larry Phillips' book, Zen and the Art of Poker, one by one in order to encourage reflection and discussion, and this is my purpose as well. I'm not going to post all the rules because, as I said to William at the time, not all of them are as clearly applicable to trading as others. But you will see how very applicable to trading many of these rules are. Db Patience (edited) RULE #1: Learn to use inaction as a weapon. RULE #2: Don't get irritated or angered by long session of folding. RULE #3: If you've been folding a lot, for a long time in the game, and you're starting to think that maybe it's time you got in and played a few hands again – that's not a good enough reason. Keep folding. RULE #4: Don't feel like a martyr when folding. RULE#5: Sometimes others get to play and you don't. Make peace with this idea. Cross your arms and sit back. RULE#6: To win at poker you must embrace the idea of breaking even. A distaste for breaking even can lead us into the valley of pressing and overplaying and other wrongful activity. RULE #7: Regard patience as a central pillar of your game and strategy. Don't assign it a secondary or lesser role. RULE #8 Keep plugging away. Expect nothing. There will be times when you play tight, keep playing tight, and keep on playing tight, and it still does no good; the bad cards just keep coming. You may have to just keep doing it until the end, with no reward at all. RULE #9: Don't fall into the "Now Trap." Players want to win now, today. Results must happen now, in this hand, the one right in front of us. We assign a little more importance to where we are. We make it bigger, more important. But we do this timewise, too; we assign things more importance because they are happening in the present moment. Yet giving greater importance to the present in the game of poker allows us to imagine marginal hands into good hands and good hands into great hands. RULE #10: The long run is longer than you think. Playing only the best hands can be frustrating. Anger and irritability can arise. The emotions can be severely tested. This is where Zen comes in. RULE #11: Don't defend patience too strongly. You can't make yourself go to sleep through sheer strength of will. It is not about the strength of commitment; it is more of a gentler thing, a letting go. 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. RULE #13 Occupy yourself while you are not 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. RULE #14: Begin by playing tight, but don't forget to stay tight. The important thing is not who possesses the control and discipline at the start of the game, but who possesses it at the middle, the end, and all points throughout. RULE #15: Discipline your game. It is more like patience, pacing yourself (especially emotionally) for the length of the game. It is different than mere patience, however. It comes from a larger and longer-term view of things, one that steps back and sees things as a whole.

Here ya go . . . . . Preview02r.pdf