DbPhoenix

Thank you, Susana. The check is in the mail If you have any questions, don't hesitate to ask.

In order to succeed at trading, you must have an edge. Your edge begins with the knowledge you gain through your research and testing that a particular price pattern or market behavior offers a level of predictability and a risk to reward ratio that provides a consistently profitable outcome over time. Without it, one is just "playing" the market in order to have something to talk about on message boards. To get it, you have to know exactly what you're looking for and what to do with it once you've found it. This process is what the journal is all about. The journal goes through several stages depending on where you are. Once you've decided where you want to concentrate your efforts (at this level, the journal may resemble a diary), then you begin the process of developing a system (or method, strategy, procedure, whatever you want to call it). Here the journal takes on a different character. Once you've developed a tentative/preliminary system, you begin testing/trading it, and the journal adopts a still different character. The first step is to decide what kind of trader you want to be. What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X. Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches are selected deliberately and for thoroughly-considered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)? The second step is to decide what you're going to trade and when you're going to trade it. Have you found an instrument -- futures, stocks, ETFs, bonds, options -- that provides you with the range and volatility you require but also the safety that enables you to relax and trade in an objective and rational manner? Have you yet found a time (5m, hourly, weekly) or tick (1t, 200t) or volume (1K, 100K) interval that gives you enough trading opportunities but also gives you enough time to think about what you're doing? If you want to limit your trading to the "morning", are you physically and psychologically prepared to trade all day? If not, can you shrug off whatever opportunities you may miss by limiting the amount of time you spend trading? The third step is to develop your system*. A system consists of (a) a set of rules that you use to select profitable positions and (b) a set of rules that you use to manage the trade once you're in it. (*Note: again, whether you call it a system, a method, a strategy, a plan, a scheme, an approach, a procedure, or a modus operandi is not as important as sitting down and doing it.) Developing a system begins with deciding just what it is you're looking for. Therefore, begin by studying price movement in real time (or at the end of the day through "replay", if your charting program offers it). By "study", I mean to observe it with intent, not just read about it or listen to somebody talk about it. Note the conditions under which price rises, falls, drifts. Make every effort to avoid imposing your biases onto what you observe. You may see trading as a war, a competition, a game, or a puzzle. You may think you're out to kill somebody, outwit somebody, or are out only to detect the flow and slip into it, riding the waves as if you were sailing. None of this should be allowed to affect what you observe. Develop a set of preliminary hypotheses which exploit the profit opportunities presented by these movements, e.g. price began trending "here". Price broke out "there". Price reversed "there". What can I do to take advantage of that? What do I have to look for? Decide what strategy will best take advantage of what you think you've found. Are you looking to catch a reversal in the hopes that it will become a trend? Or are you looking to trade series of reversals within the day's or week's range? Or do you prefer to wait for a breakout and trade what may become a trend? Or would you rather wait for a retracement in what may be shaping up to be a trend? Limit yourself to only one strategy at the beginning. Carefully define the setup (the set of circumstances which you define which triggers an entry) which implements this strategy, preferably using old charts (attempting to define the setup by studying realtime charts is inefficient since you don't yet know what it is that you're looking for). This is called "backtesting". All else flows from this. Unless you know what you're looking for, you cannot test it, much less screen for it. If you have not tested it, you have no idea of the probability of its success. With no idea of the probability of success, any trades made are essentially guesses. Therefore, focus on the setup. One setup. Determine its characteristics, find the markers of buying and selling interest, buying and selling pressure, buying and selling exhaustion. Define it so specifically and so thoroughly that you can recognize it without any doubt whatsoever in real time. Decide provisionally where best to enter, what the target ought to be, where the stop should be placed, and so on. Only after the setup is defined and tested (and it can't, ipso facto, be tested until it's been defined) can one even begin to think about trading it with real money, much less trading multiple setups. Attempting to shortcut this process merely expands the amount of time it will take to develop the necessary skills. Nothing is gained by painting the house before scraping it, cleaning it, and priming it since you'll have to do it all over again sooner rather than later. You are free to create your own based on whatever jingles your bells. You may, for example, focus on divergence. Or higher swing lows and lower swing highs. Or candlesticks of one sort or another. Or trendline breaks. Or base breakouts. Doesn't really matter. What matters is that you keep four concepts in mind: demand/supply, support/resistance, price/volume, and trend. In this way, you can create your own setups which hundreds of thousands of other traders won't be watching along with you. You must understand, however, that what determines the success of the trade is the trader, not the setup. If you're looking for something that "works", you may as well save yourself a lot of time and stop right here. What will “work” – or won’t, as the case may be – will be you. Forward-test what you have so far, again using old charts, preferably replaying them (if replay is not available to you, then scroll through them, bar by bar). In other words, "pre-test" the setup. Make whatever modifications are necessary to the setup, i.e., re-examine and re-define your strategy. Address risk management, trade management, money management in further detail. Determine the ratio of winning trades to losing trades (you will, of course, have to define "winner" and "loser", which is where risk management and trade management come in). Determine the ratio of profit to loss. Determine the maximum loss. Determine the maximum number of consecutive losers. Note that beginners often use "win/loss" to combine two separate considerations into one, and failing to keep them separate can create problems. One is win:lose. The other is profit:loss. Between the two, the "lose" and the "loss" have two distinct meanings. Win:lose refers to the ratio of winning trades to losing trades. Profit:loss means, expectedly, the ratio of profit to loss. You'll read that the % of winners can be less than the % of losers as long as the winners are sufficiently profitable, one's management is superior, etc. And, yes, theoretically, one can "win" less than 50% of the time if his profits sufficiently outweigh his losses. But if your real-time real-money test begins with a string of the losses anticipated by your backtest, you'll be out of the game almost before it begins. In fact, one can be left high and dry even if his % of wins outnumber his % of losses, as mentioned above, if there is insufficient control of the amount of loss OR if the losses occur in sufficiently high numbers at the beginning of the trial.Then there are commissions and assorted trading costs to take into account, which is why traders who actually trade find that, without size, all the postulations about percentage don't mean much in practice. Paper-trade this plan, in a simulated environment, as a semi-final test, until you are satisfied that it performs at least as well as it did during the previous testing phase. This may take several months or more depending on how many trials you perform. If your plan is not consistently profitable, go back however many steps are necessary to arrive at a potential solution. (See also Making High Probability Trades.) Trade the plan using real money in real time, spending only what is absolutely necessary on "tools" (currently -- 2008 -- this is SierraCharts with an IB feed) and trading the minimum number of shares, contracts, etc., allowable. If your plan is not consistently profitable, go back however many steps are necessary to arrive at a potential solution. Recalculate your win rate and profit:loss ratio on a continuing basis. If your plan is consistently profitable in practice, increase your size to what is a comfortable level, maintaining a continuous loop of re-appraisal and re-evaluation. When things come unglued, back up as far as necessary to regain your footing. Novices rarely do any of this. They borrow something from somebody or somewhere and perhaps modify it somewhat, but they rarely go through the defining and testing process themselves. Some just try whatever seems like a good idea and hope for the best. If one has absolutely no idea where to begin, there is nothing wrong with using a canned strategy IF it is used only as a point of departure. In other words, the canned strategy, regardless of what it is or what claims are made for it, still has to be tested, which often entails taking what is unexpectedly vague to begin with and defining it to a level of specificity that enables the testing to take place (it should come as no surprise that those who do go through the process succeed and those who don't, struggle, often to the point of being driven out of the market). Examples of canned strategies that are reasonably well-defined include the Darvas Box, the Ross Hook, the Opening Range Breakout, O'Neil's Cup With Handle, Dunnigan's One-Way Formula. Some of these are more vague than others and will require considerable work on definition before they can be tested. But they serve as points of departure. Wyckoff’s "hinge" is another setup, though not one which would be classified as "canned", requiring as it does some sensitivity to trader behavior. The hinge is a type of "springboard", in which price action firms, like Jello, another Wyckoff concept (the springboard, not the Jello), the idea being that something is getting ready to happen as a result of what bulls and bears have been doing to "discover" price. (The pattern people call it a coil or symmetrical triangle; the difference is that the hinge is the result of a particular dynamic between bulls and bears and can be expected to result in something; the coil is technically nothing more than a pattern, and can result in nothing at all but drift.) This particular "setup" occurs when bulls and bears are struggling over price, and it can be seen everywhere from a tick chart to a monthly chart. There is first a wide discrepancy between what one side thinks is a fair price and what the other side thinks is a fair price. Since they disagree, the range narrows, the bars get shorter, trading activity becomes subdued, and eventually you close in on a point which is more or less a midpoint between the two extremes. From this, price will then move -- often explosively -- in one direction or the other IF the hinge is being formed in an important spot, such as a point just after the initiation of what promises to be an important trend. The market always tells you what to do. It tells you: Get in. Get out. Move your stop. Close out. Stay neutral. Wait for a better chance. All these things the market is continually impressing upon you, and you must get into the frame of mind where you are in reality taking your orders from the action of the market itself — from the tape. Your judgment will become poorer from the very time when you decide that you know more about the market than the market is telling you. From that moment your results will be unsatisfactory, for in this trading business the tape is the boss. You must learn to obey its orders, doing exactly what it tells you. When you can accomplish this, you are on the high road to success in your stock trading. Richard Wyckoff Recommended Books: The General Semantics of Wall Street by John Magee (see my review) The Nature of Risk/How to Buy/When to Sell by Justin Mamis (see my reviews) And if you're greener than green . . . The Wall Street Journal Complete Money and Investing Guidebook or Standard and Poor's Guide to Money and Investing

So how does AMT play out in trading? There are several ways of locating the requisite support (upper limit), resistance (lower limit), and consolidations (or congestions or trading ranges or any sort of sideways movement). One can, for example, plot a volume distribution (the hinge is circled): Drawing a line below the bottom of the middle distribution gives one a zone on which to focus, particularly when price opens below this zone (price also opened below this zone the previous day, leading to another profitable trade): Or one can draw a box around the congestion: Or one can use plain ol' S/R lines, noting the test of the previous day's high: All ways of illustrating the same thing. And it doesn't require special software. This, then, is what one should have had for the day following the previous chart, at minimum. If one doesn't know in advance what he’s going to do at each point, then he’s not prepared. And this is what happened the day after that: Price finds support at B, resistance at C. Preparation, Execution, Review. 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 was the same, keeping in mind that the interface between the two ranges, at 1970, might take on added importance. And as it turned out..... Note that while intraday data is included in these charts, the principles of AMT apply regardless of the bar interval of the chart, even if there is no bar at all (e.g., a tick chart or a T&S digital display). The high of the range is the high of the range, regardless of how one chooses to display it. Ditto the low of the range. And the bulk of the trades take place in the middle. Therefore, whether one trades off a tick chart or a weekly chart, he can incorporate AMT principles into his work. NEXT: [THREAD=12805]For Daytraders Only: the TICKQ[/THREAD]

I read somewhere recently -- and can't remember where -- having to do with Market Profile, I believe -- that most experienced traders will avoid trying to catch the tops and bottoms and focus on "the middle", waiting for confirmations to enter and confirmations to exit. However, since "the middle" is by definition where most of the trading is going on and is largely non-directional, there is also a lot of whipsawing in the middle, and that generates a lot of losing trades. One can sometimes avoid this by widening the stops, but, since the market always teaches us to do what will lose the most money, this will turn out to be an unproductive tactic. The safest and generally most profitable trades are found at the extremes. Therefore, you wait for the extremes. Wyckoff used a combination of events to tell him when a wave was reaching its natural crest or trough: the selling/buying climaxes, the tests, higher lows/lower highs, and so on, all confirmed by what the volume was doing and by the effect the volume had on price (effort and result). As a result of this work and of his exploration of trading ranges, he developed the concepts of support and resistance along with their practical application. Auction Market Theory (AMT) takes these investigations into support and resistance further, an “organic” definition of support and resistance like Wyckoff’s, that is, determined by traders’ behavior, not by a calculation originating from one’s head or from a website somewhere. Determine whether you are trending or “balancing” (ranging, consolidating, seeking equilibrium, etc), determine the limits of the range (support and resistance), and you’re in business. The notion of support and resistance has been and is the missing piece for many market practitioners. One can try to hit what appear at the time to be the important swings again and again and be stopped out again and again, hoping all the while that once one hits the true turning point, all the effort will turn out to have been worthwhile and the P&L will change from red to black. But by waiting for the extremes, one avoids most or all of those losing trades, and, even more important, avoids trading counter-trend. These boxes -- which are simply a graphic variation of the Market Profile distribution curve, whether skewed or not, or of the VAP (Volume At Price) pattern -- are nothing more than a means of locating those extremes. What I've found more useful about them is that they are encapsulated by time, i.e., the price and volume ranges have a beginning and an end. This enables me to see at a glance where the important S&R are, or at least are likely to be. Without them, one ends up with line after line after line until the S/R plots become a parody of themselves. All of this can be very confusing to someone who’s learned to view the market in a different way, perhaps less so to someone who’s just starting since he has so much less to unlearn. But backing up to the basic tenets of AMT, as well as to the concepts developed by (and in some cases originated by) Wyckoff, one can perhaps find a solid footing and proceed from there. To begin with, in the market, price is often not the same as “value”. In fact, one could say that since the process of “price discovery” is a search for value, they match only by accident, and then perhaps for only an instant. Blink and you missed it. Add to this the fact that for all intents and purposes there is no such thing as “value” but rather the perception of value. After all, what is the “value” of, say, Microsoft or GE or that little stock your stylist told you about? This state of affairs may seem like a recipe for chaos, but it is in fact the basis for making a market, that is, reconciling the differences – sometimes extraordinarily wide differences – in perceptions of value. As Wyckoff put it, if a stock (or whatever) is thought to be below “value” and a trader or group of traders see a large potential for profit ahead, he/they will buy all they can at or near the current level, preferably on “reactions” (or pullbacks or retracements), so they don’t overpay. If the stock is above what they perceive to be value, they'll sell it (or short it), supporting the price on those pullbacks and unloading the stock on rallies until they are out (or as much out as they can be before the thing begins its downward slide). “This”, he writes, “is why these supporting levels and the levels of resistance (a phrase originated by me many years ago), are so important for you to watch.” When price then begins to lose momentum and move in a generally sideways direction, you’ve found “value” (if value hasn’t been found, then price won’t stop advancing or declining until it has). Value, then, becomes that area where most of the trades have been or are taking place, where most traders agree on price. Price shifts from a state of trending to a state of balancing (or consolidation or ranging), the only two states available to it. The trading opportunities come (a) when price is away from value and (b) when price decides to shed its skin and move on to some other value level (that is, there’s a change in demand). This is also where it gets tricky, partly because demand is ever-changing, partly because you’ve got multiple levels of support and resistance to deal with and partly because we trade in so many different intervals, from monthly to one-tick. If we all used daily charts exclusively, it would all be much simpler, though not necessarily easier. But that’s not the case, so we must remember always that a trend in one interval – say hourly – may be a consolidation in another, such as daily. The hourly may be balancing, but there are trends galore in the 5m chart. Or the 5s chart. Or the tick chart. Regardless of how one chooses to display these intervals – line, bar, dot, candle, histogram, etc – there are multiple trends and consolidations going on simultaneously in all possible intervals, even if they’re in the same timeframe, even if that timeframe is only one day (to describe this ebb and flow, Wyckoff used an ocean analogy: currents, waves, eddies, flows, tides). To sum up where we are so far, and keeping in mind that there is no universally-agreed-upon auction market theory, the following elements are, to me, basic, and are consistent with what I've learned from Wyckoff et al: An auction market's structure is continuously evolving, being revalued; future price levels are not predictable An auction market is in one of two conditions: balancing or trending. Traders seek value; value is price over time; price is arrived at by negotiation between buyers and sellers. Change in demand drives change in price. One can expect to find support where the most substantial buying has occurred in the past and resistance where the most substantial selling has occurred. Now let’s translate all of this into a chart. I'm sure everyone has noticed that swing highs and lows and the previous days’ highs and lows and other /\ and \/ formations can serve as turning points and appear to act as resistance. However, this type of resistance stems from an inability to find a trade and is accompanied by low volume*. Price then reverts to an area where the trader finds it easier to close that trade. That's what provides that ballooning look to the volume pattern “A” in the following chart. "Resistance" in this sense, then, refers to resistance to a continuation of the move, whether up or down. *Volume may look “big” at the highs and lows, but the price points are vertical, not horizontal (as they would be in a consolidation), so the volume – or trading activity – at each price point is lessr than it would be if the same price were hit repeatedly (again, as it would be in a consolidation). Note that you may have more than one "zone of concentration" (this is how jargon gets started), as in the first balloon. Nearly all the volume is encompassed by the pink lines, but there is a heavier concentration within the blue lines because of where price spends the greater part of its time. The volume in the balloon “B”, however, is more evenly distributed throughout the zone, partly because price spends so much time in it and partly because it ranges fairly steadily within it. Instead of rushing to the limits and bouncing back toward the center, they linger at those limits, the sellers trying to push price lower, the buyers trying to push price higher. Thus there is more volume at these edges than in balloon “A”, but buyers eventually fail in their task as sellers do in theirs, and trading drifts back toward the center, providing, again, a relatively even distribution of volume throughout the range. Balloon “C” is similar to “A” but much thinner due to the fact that price has made only a single round trip to the bottom of the range. It lingered a bit in the middle, simultaneously creating that protrusion in the center of the volume pattern. But volume at each end is thinner than in “B”, thinnest at the bottom due to the \/ shape, giving the volume – if one is fanciful – something of a P shape. If price drops through one of these zones, those who bought within that zone are going to be miffed. Some of these people are going to try to sell if and when price re-approaches that zone. This is the basis of resistance. There's just too much old trading activity to work through in order for price to progress unless there is enough buying pressure to take care of all those people who want to sell what they have, then push price even higher (in which case those who sold may think they screwed up yet again and buy back what they just sold). However, those who bought or sold at the outer reaches of these zones will also be disappointed if they can't find buyers for whatever it is they just bought, not because there's too much volume but because there isn't enough. So how does one trade all this? First, you will have to monitor several intervals at the same time in order to (a) find out what interval you want to trade and (b) where price is within whatever range or ranges is/are in that interval. For example, if you’re most comfortable with a 5m interval, you’ll want to check a smaller interval or two to see what price is up to down there, but you’ll also want to look at larger intervals, such as the 15m or 60m or even the daily (I’m using time intervals here in order to keep this from becoming even longer than it will be, but the same approach applies whether you’re using range bars, volume bars, tick bars, candles, lines, etc). Second, locate the ranges. Box them or circle them or color them or in some other way highlight them. If you find a range that is wide enough for you to trade (that is, there are enough points from top to bottom to make a trade worthwhile), get “into” the range via a smaller interval in order to find a trend. Perhaps at some smaller interval, price is at the bottom of that range. That gives you a good possibility for a long (or it may be at the top of the range, giving you a good possibility for a short). At this point, you have three options: a reversal, a breakout, or a retracement. If, for example, price bounces off or launches itself off the bottom of the range (support), trade the reversal and go long. If instead it falls through support, short the breakout (or breakdown, if you prefer). If you don’t catch the breakout, or you prefer to wait in order to determine whether or not the breakout was “real”, prepare yourself to short whatever retracement there may be to what had been support and may now be resistance. A more boring alternative is that price is nowhere near the top or bottom of any range that you can find but rather drifting up and down, aimlessly. No change is occurring; therefore, there is no trade, or at least no compelling trade. Finding the midpoint of the range may be useful since price sometimes ricochets off the midpoint, or launches itself off the midpoint if it has settled there. Such actions represent change since price may be looking for a different value level. It may come to a screeching halt and reverse when it gets to one side or the other of the range and return to the midpoint, or it may launch itself through in breakout form and extend itself into the next range, if there is one, or create a new range above or below the previous range (in determining which, back off into larger intervals in order to determine whether or not price is in a range in one of those larger intervals). NEXT: [THREAD=12809]Getting Down to Cases[/THREAD]

The indicator phase is something that probably everybody probably has to go through, whether it's MAs, stochastics, MACD, %R, VWAP, Market Profile (if you're looking only at the form if it), Pivot Points, Fibonacci, Bollinger Bands, chart patterns of one sort or another, candles, or even the price bars themselves (range bars, CVBs, tick bars, VSA, etc). And if one can make that endeavor successful by going through the necessary testing and developing the necessary plan, then there's absolutely nothing wrong with settling into that phase for the rest of one's successful trading life. Since all of this depends on its existence on the movement of price, however, it is all "price action", hence the confusion over what is meant by "price action". But trading by price means simply that one is following price flow (not order flow, but the movement of price) and the imbalances between buying pressure and selling pressure that prompt that flow. It has nothing to do with any kind of indicator or any sort of bar or even any kind of chart. Is it superior? Yes, if it makes more money than an indicator-based approach. If it doesn't, then no. Does it get one into moves earlier than an indicator-based approach (including those which focus on bars)? Yes, if one understands the buying-selling dynamics mentioned above. But getting in early is only part of what is required to make a profit. Otherwise, all counter-trend traders would be rich. Though there are undoubtedly price action people who look down their noses at indicator people, the PA people have no reason to feel superior. And contrary to the beliefs of some indicator people, the PA people do not fail to understand indicators; they just don't see the point (other than perhaps scanning a database for price movements). In most cases, the latter have in fact gone through all this, as mentioned earlier, and had insufficient success with it, just as they've been dissatisfied with the chat room phase and the newsletter phase and the advisory service phase and the red-green arrow software phase and the seminar-course-workshop-DVD phase and the trade-the-news phase and the chart pattern phase and have instead found a more comfortable fit with a focus on price flow. It's all about the money and how one chooses to go about getting it. There is no inherently better way, particularly if the trader doesn't care to do the work. A good fundamentalist, after all, will beat a bad technician any day. Therefore, if one is using indicators but has no idea how they're calculated, much less done the testing necessary to make the most of them, he is unlikely to reap the full -- or any -- benefit. If one is trading price flow but embraces irrational views of what constitutes support and resistance, he is similarly unlikely to reap the full benefits of that approach. Either way, it's all about study and testing and screen time. Without that, it makes absolutely no difference how one goes about the process of entering and exiting a position. NEXT: [THREAD=12808]Auction Markets[/THREAD]

Trading by price -- and "volume" (or trading activity) -- requires a perceptual and conceptual readjustment that many people just can't make, and many of those who can make it don't want to. But making that adjustment is somewhat like parting a veil in that doing so enables one to look at the market in a very different way, one might say on a different level. One must first accept the continuous nature of the market, the continuity of price, of transactions, of the trading activity that results in those transactions. The market exists independently of you and of whatever you're using to impose a conceptual structure. It exists independently of your charts and your indicators and your bars. It couldn't care less if you use candles or bars or plot this or that line or select a 5m bar interval or 8 or 23 or weekly or monthly or even use charts at all. And while you may attach great importance to where and how a particular bar -- or candle -- closes, there is in fact no "close" during the market day, not until everybody turns out the lights and goes home. Therefore, trading by price and volume, or at least doing it well, requires getting past all that and perceiving price movement and the balance between buying pressure and selling pressure independently of the medium used to manifest or illlustrate or reveal the activity. For example, the volume bar is a record of transactions, nothing more. The volume bar does not "mean" anything. It does not predict. It is not an indicator. Arriving at this particular destination seems to require travelling a tortuous route since so few are able to do it. But it's a large part of the perceptual and conceptual readjustment that I referred to earlier, i.e., one must see differently and one must create a different sense of what he sees, he must perceive differently and create a different structure based on those perceptions. As long as one believes, for example, that "big" volume must or at least should accompany "breakouts" and clings to this belief as ardently as he clings to his rosary beads or rabbit's foot or whatever, he will be unable to make this perceptual and conceptual shift. If you can work your imagination and use it to travel in time, you will have a far easier time of this than most. Imagine, for example, a brokerage office at the turn of the 20th century. All you have to go by is transaction results -- prices paid -- on a tape. No charts. No price bars. No volume bars. You are then in a position wherein you must decide whether to buy or sell based on price action and your judgment of whether buying or selling pressures are dominant. You have to judge this balance by what's happening with price, e.g., how long it stays at a particular level, how often price pokes higher, how long it stays there, the frequency of these pokes, their pace, at what point they take hold and signal a climb, the extent of the pokes, whether or not they fail and when and where, etc., all of which is the result of the balance between buying and selling pressures and the continuous changes in dominance and degree of dominance. One way of doing this using modern toys and tricks is to watch a Time and Sales window and nothing else after having turned off the bid and ask and volume. But this wouldn't do you any good unless you spent several hours at it and no one is going to do that. Another would be to plot a single bar for the day and watch it go up and down, but nobody's going to do that, either. Perhaps the least onerous exercise would be to follow a tick chart, set at one tick. Then follow it in real time. Watch how price rises and falls due to imbalances between buying pressure and selling pressure. Watch how and where these waves of buying pressure and selling pressure find support and resistance to their movements. And when I say "watch", I mean just that. Don't worry about what you're going to do about whatever it is you're looking at. Don't worry about where you'd enter or where you'd exit or how much money you'd make or whether you'd have been right or wrong to do whatever. Just watch. Like fish in an aquarium. If that seems only slightly less exciting than watching concrete harden, or it's just not possible for you to watch this movement in real time, then collect the data and replay it later at five or ten times normal speed. You can do an entire day in little more than half an hour (though you won't get any sense of real-time pace). Granted this means a lot of screen time, even in replay, and only a handful of people are going to do it. But those few people are going to part that veil and understand the machinery at a very different level than most traders. Once the continuous nature of these movements is understood, the idea of wondering -- much less worrying -- about what a particular volume bar "means" is clearly ludicrous, as is the "meaning" of a particular price bar or "candle" (including where it "opens" and "closes" and what it's high is and so forth). If this is not understood, then the trader spends and wastes a great deal of time over "okay so this volume bar is higher than that volume bar but lower than this other volume bar, and price is going up (or down or nowhere), so...". And if you're really into this, further reading: http://www.traderslaboratory.com/forums/131/riding-the-wyckoff-wave-3739-36.html#post35679 http://www.traderslaboratory.com/forums/131/ask-any-wyckoff-related-question-3879-5.html#post44808 http://www.traderslaboratory.com/forums/131/trading-the-wyckoff-way-5097-5.html#post55050 NEXT: [THREAD=12807]Indicators[/THREAD]

Actually I'm using only two now: a 1t to follow the price action and a 30s for context. But there's nothing "best" about this. Experiment and find what's most useful to you.

You're welcome. I hope it will be helpful.

You betcha. I hope you can run with it.

Trading by price can sometimes seem like trying to negotiate Manhattan with a map drawn in 1625. Any confirmation, weak as it may be, any landmark would be helpful in determining whether or not one was making the correct choices: turn here? there? move forward? go back? The trader who trades via daily charts has a number of aids at his disposal to help him make his choices: a variety of charts of indexes, sectors, groups, sister stocks and "indicator" stocks, measures of trading activity and so on. The intraday trader, however, has very little to aid him in his trading decisions that does not involve settings, calculations, or massaging of some sort, none of which are of interest to the "naked" trader. One aid, however, which requries nothing of the trader other than to plot it is the TICK (for NYSE stocks) or TICKQ (for Nasdaq stocks). The TICK(Q) is a simple, straightforward measure of market breadth (again, either the NYSE or Nasdaq), the difference between the number of stocks trading on an uptick and the number of stocks trading on a downtick throughout the day. Therefore, if a greater number of stocks are rising, so does the TICK(Q). If a greater number of stocks are falling, so does the TICK(Q). This feature of the market landscape, then, tells the trader whether or not whatever it is that he's trading is in synch with the broader market. In the application to be described here (and referred to as well in some of the Dailies entries), the TICKQ is used to spot divergences between it and the NQ at predetermined support and resistance to confirm (within the context of unavoidable uncertainty) potential reversals and continuations. Or, to put it more simply, if your work has led you to expect a reversal at support level X and the TICKQ shows absolutely no inclination whatsoever toward reversal when the time comes, you may be well-advised to hold back from hitting that Transmit button. On the other hand, if the TICKQ reverses ahead of that test of support, you may be that much more confident that what you thought would be supoort really will be support and transmit that entry. Note: the fact that these charts start on what appears to be the same date as the charts in the Dailies section is pure coincidence (if you look closely, you'll see that they are in fact a year apart). These TICKQ charts are two months old because I started this project two months ago and got sidetracked and don't want to start over. However, almost any chart from any day will yield these same divergences and confirmations as long as support and resistance are being tested (sometimes price just sits there, thinking about what it's going to have for lunch). In order to alleviate clutter, I've taken a pass on flagging every congestion, every swing point, every possible source of support or resistance. Instead I've focused solely on those features which are most likely to directly influence the trading decisions I will have to make that day, in this case the 11th. After the open, price and the TICKQ (plotted here as a line rather than as "dots") glide southward together, not stopping dead on 1110 (it happens), but extending the test into the previous trading range's territory by almost four points. The TICKQ, however, rebounds at 09:36:30, more than a minute before price does so, and while this is not the best example of a tradeable TICKQ divergence (TD) since there's no retest of 1106 (+/-), the fact that this is all taking place at or about predetermined support may increase the probability of a successful reversal enough to provide you with the confidence to take the trade. http://www.traderslaboratory.com/forums/attachments/255/28560d1336537576-daytraders-only-tickq-chart1a.gif' alt='28560d1336537576-daytraders-only-tickq-chart1a.gif'> Price then rises almost without pause all the way to 1118, off which it bounces as if from a rubber wall. The TICKQ also turns weak here, though whatever divergence there may be is squidgy since there has not yet been a retest of 1118 (I'm tempted to call these "single dips" as if there isn't enough jargon floating around already). However, as with the bounce off support a few minutes earlier, the fact that this is predetermined resistance must be a factor in the trading decision (or management decision, if one is already in a trade). If one is trading multiple contracts, he can cash in one or more of them. If he's trading only one, he can exit and look for a subsequent re-entry. Or he can hold on for a bit to see if this is nothing more than a pause before a continuation. When price tests 1118 again at 09:43, the TICKQ also makes a lower high, this time a clear divergence. If one has not already exited, this is a perfectly legitimate and justifiable place to do so (particularly if trading only one contract). Whether one has exited or not, he'll see when price drops to 1116 that the TICKQ makes a higher low. Price then rallies again to 1118. If the trader is short, he'd be wise to cover. If he exited his long and didn't short, now's the time to look for a re-entry. If he's still holding the original long, he can lean back and feel satisfied with himself. But to address and track every possible management option from here on out would result in a very long post (and, for me, an organizational nightmare). And the point of this, after all, is primarily to explore TDs at support and resistance. What the individual then chooses to do about them – even if he chooses to do nothing – is entirely up to him according to his style, his goals, his strategy, his risk tolerance, and so on. So, keeping our eye on the TD ball, we see that price spurts away from this level once (first arrow), then again (second arrow), then sails all the way to 1128. Now the resistance here was predetermined and expected (see the macro chart at the beginning of this post), but is this all there is? Might price move all the way to the more important range high at 1135? It's only six points away, but when price makes a higher high, there is a TD (the double arrow). This resistance is more important than the one at 1118, but it's not the brass ring, either. By now, however, there are a couple more things to look at that may help one hold onto his winner (or at least discourage him from shorting) if he is determined to be patient without being irrationally stubborn. First, you clearly are in an uptrend by now and can therefore draw a guiding trendline. Until that trendline is broken, there's no compelling reason to exit (though given the TD, one should at least know where the exit is). But, second, there is also the matter of the last swing low at 1125. Until that's broken, your uptrend is intact. And when 1125 is tested at 09:53, 1125 holds, and on the trip back to 1130, the TICKQ joins in enthusiastically. Several minutes later, however, at 10:01, there is another TD, and one has to ask himself whether the 5 extra points he might get if price moves all the way to the upper limit of the range is worth the 7 points lost if he moves his stop to just under 25 and watches it get tripped. There is also the amount of time it will take for all of this to play out, which could be a few minutes or much longer. But, again, the purpose here is to describe the landscape, not to detail how to go about finding one's way through it. If one holds on, he will see that, when price drops below 1125, the TICKQ makes a higher low. When price tests 1125 again five minutes later, the TICKQ drops like a hot knife through butter. BUT price holds at 1125 and doesn't go along for the ride down, a subtle divergence but one worth of attention nonetheless (also called The Dog That Didn't Bark, when what you expect to happen, doesn't). All of these events in combination suggest that the line of lest resistance is up, not down, and after one more test of 1130 and a half-hearted test of 1125, price takes off for the eventual resistance at 1136. Now at last we get to our final level of predetermined resistance at 1136. There is a slight divergence at 10:29:30 and one can exit there or place a sell stop just below 1133. If the latter, there is a much clearer TD at 1032 and again at 10:32:30. To hang on after this would be more than a bit hopeful. But what about a short? You're at serious resistance, you've got your TD, and you've done quite well so far. And it's only 10:30. And the target, according to AMT, is at least the other side of the is range, or 1120, sixteen points away. Once price gets there, however, at 13:00, there's no TD. What to do? First remember that the TICKQ is not 100%. If it were, we'd all be rich. Nor is it a "signal" as indicators are (or try to be). It is a measure of market breadth, nothing more. As such, it can serve as a heads up if it diverges from or confirms movements at predetermined support and resistance, the operative word being "can". Sometimes it is mum, and one must use what else he knows in order to make a trading decision. In this particular case, you've got price at demonstrated support. You also find yourself at the midway (50%) level in the move from the previous day's last swing low to the just-completed swing high. You've also got quite a lot of the house's money in your account and nothing else to do for the rest of the day since it's raining and there's nothing on TV. So you pat the TICKQ on the head and let it rest for a while and you either take the trade or you don't. As you then watch price take off with or without you, you watch and wait to see what happens if and when it gets to the first level of resistance, our old friend 1127 (or 26 or 28; we're not talking statistical precision here). And forty minutes later, it reaches resistance and presents you with an unmistakeable TD. Now we embark on a return trip to support, dropping below the last swing low by one point at 14:19, and, again, we have an unmistakeable TD. Taking the long, we then watch to see how far price gets to the upside before hitting some level of resistance and perhaps creating another TD. And demonstrating that you just never know, price gets all the way back to the high of the day before diverging from the TICKQ at 15:43. A strong suggestion to exit, certainly. A "signal" to short? 15m before the close? I'll leave that one up to you (though price does drop back to 1123 . . . ). Price waffles around in this area for several hours, probes lower a few times, then opens the next morning at about this level. It tests resistance at the 1127 level, diverges with the TICKQ by 09:38, then drops to test the 1116 level, diverging with the TICKQ by 09:47 (by 10:22, it's back to resistance at 1136).

A springboard can be said to exist when preparations have been made for, and the psychological moment has arrived for, a quick and important move . . . Auction markets are in continuous flow from trending states to non-trending states. If a trader is interested in movement and momentum, he will likely be interested in a trending market and try to avoid a non-trending market (what is often called "chop"). Springboards serve to alert him to upcoming changes from one state to another. They alert him to prepare for a transition (whether it turns out to be substantial or trivial) from non-trending to trending or vice-versa, i.e., that point at which price is on a "springboard" to an advance. One can busy himself with questions of who's doing what and why (weak hands, strong hands, professionals, amateurs, intent, prediction, and so on), but none of this is essential or perhaps even important. What is important is being prepared for whatever hand the market deals you. In this way, one can maintain calm and objectivity, not dither with last-minute surprises. What one does with what is in front of him depends largely on whether he is in a trade or he is looking to enter one. If he is in a trade, he's looking for signals that momentum is slowing. If he isn't, he may be looking for the same thing as an opportunity to enter, depending on what else is going on (e.g., is support being tested, is this the end of a parabolic move, has trading activity spiked or evaporated). However, before getting into all the possible tactics that can be employed to play these movements, I suggest that whoever is interested in this subject work toward finding these zones where traders are seeking balance (or equilibrium or fair value or whatever one chooses to call it). Again, these zones occur in all charts in all timeframes. And if one understands why they form, he is less likely to be freaked when his trade stops, much less retraces (he will, of course, have decided in advance what he is going to do when this unavoidable circumstance presents itself). To start, a chart of the DJTA over the past four years (originally posted in March ’07). It could be any instrument over any time period with any bar interval, but I'm being specific -- and using bigcharts, which is available to everyone -- so that anyone who's interested can follow along. I've also deleted the periodic volume bars and used dots rather than price bars in order to turn attention away from what is immaterial and toward the movement of price. Without any annotations whatsoever, one ought to be able to see that price is moving in a generally upward direction with occasional "pauses": If annotations are necessary, the following may be helpful: The exact lower (support) and upper (resistance) levels of these "zones" are not critical. What is more important in each is the general area in which the bulk of trades occur. What may also be important to the trader from a tactical standpoint is the "mean" within each of these zones toward which price will revert when bouncing around between support and resistance. Note that each time price trends upward, it then stops or pauses in order to find equilibrium (or balance or fair value or whatever). It may engage itself in this for minutes or years, depending on time frame and bar interval. Once it has found this equilibrium, it gets comfortable. This is a "safety zone", and the bulk of trades will occur here. These pauses are not as dramatic as the trending moves because it seems as though nothing is going on. But more trades are placed at these prices than at the prices within the trending move simply because these prices are traded again and again over a period of time. This process lays the groundwork for what may become important support and resistance later (as opposed to, for example, a swing point, which, while dramatic, represents relatively few trades). Eventually, there is an imbalance, or disequilibrium, and the springboard makes good its name. Price emerges from this "comfort zone" and either reverses the trend or resumes it. The emergence may be gradual, or it may be dramatic, as with a breakout. Here, in June of '04, it moves up 200pts and immediately forms a new zone. Only later, in October, does it make a more dramatic move. But that, again, reverts into yet another zone in which traders seek balance, this one lasting for 11 months. For those who aren't scalping and who like a deliberate approach to trading, the profit opportunities will most likely be found in the reversals which occur between support and resistance in these zones and in the breakouts which occur when price's state of equilibrium is fouled and it seeks a new one. But whether one trades reversals off of S&R or breakouts through S&R, he is working the edges and avoiding the "chop". If price isn't approaching S or R, much less testing it, he's waiting, and observing, and monitoring. Traders rejected 5000 in May ‘06, then again in July. 4200 was rejected in August and September. This is a wide range, the mean of which was 4600. Price worked the area between 4500 and 4900 for several months, again seeking equilibrium. This equilibrium was broken in February, but traders have now returned to their most recent "comfort zone". This is where they can find trades and reasonable safety. Price may remain here and find balance either side of 4800 (again, this was posted in March ’07). Or it may try again to resume the uptrend. The reversals trader who doesn't mind trading tight ranges might trade here. The breakouts/momentum trader will wait for some determined move out of the range, either up or down. But he will not likely be searching for trades in chop. If locating these zones or pauses in which these efforts toward balance and equilibrium take place is a problem, plotting "volume by price" can help: Note, again, that the bulk of trades are taking place within these zones. It is those areas with the fewest trades, those areas where traders are least secure, where the most potential for price movement -- often sustained price movement -- occurs. If one has no understanding of support and resistance whatsoever, much less where to locate them, this is as good a place as any to begin, and better than most. As for hinges, these are an additional aid to spotting those areas in which traders are seeking equilibrium. They are created by successive lower highs and higher lows and represent a tightening and compression. If interest is sufficient, this compression will eventually lead to a worthwhile move (if it isn't, price may simply dribble off into nothing worth bothering with). As Schabacker later said, these hinges or coils should be "filled with price", that is, there is no aimless drift but a struggle between those who want to move price ahead and those who don't. Therefore, price should bounce in an ever-tightening range which culminates in a release of pent-up energy and a tradeable move.

Put simply, support is the price at which those who have enough money to make a difference are willing to show their support by retarding, halting, and reversing the decline by buying. Resistance is the price at which those who have enough money to make a difference attempt to retard, halt, and reverse a rise by selling. Whether one calls this money professional or big or smart or institutional or crooked or manipulative or (fill in the blank) is irrelevant. If repeated attempts to sell below this support level are met by buying which is sufficient to turn price back, these little reversals will eventually form a line, or zone. Ditto with resistance. A swing high or low represents a point at which traders are no longer able to find trades. Whether that point represents important support or resistance will be seen the next time traders push price in that direction. But everyone knows this point, even if they aren't following a chart. It exists independently of the trader and his lines and charts and indicators and displays. It is the point beyond which price could not go. Hence its importance, both to those who want to see price move higher and those who don't. The following illustrates the potential support and resistance provided by swing points and zones. It also illustrates a means by which one can define "trend". If one doesn't understand trend, he’s going to have trouble understanding breakouts, retracements, and reversals. If he doesn’t understand support and resistance, he’s going to have trouble understanding how and where and when to enter and exit, much less where to take profits, assuming he has any. Traders must understand the characteristics of a trend day, even if interested only in intraday scalping. A trader anticipating a trend day should change strategies, from trading off support/resistance . . . to using a breakout methodology and being flexible enough to buy strength or sell weakness. A trader caught off guard will often experience his largest losses on a trend day as he tries to sell strength or buy weakness prematurely. Because there are few intraday retracements, small losses can easily get out of hand. The worst catastrophes come from trying to average losing trades on trend days. Raschke To determine the effects of supply and demand, look for breaches of either support or resistance within whatever interval you're trading, particularly a breach with a quick and strong recovery (which belies the breach and suggests strong buying interest [demand] or selling interest [supply], whichever the case may be). If one is trading trend over the longer-term, he has little to do but sit on his hands until price breaks out or breaks down. If he chooses to trade the shorter-term, he can buy failures to break through support and short failures to break through resistance during those “balancing” or “equilibrium” phases. To understand that price rises because demand -- or buying interest -- is greater than "supply" -- or selling interest -- is a no-brainer. The trick is to recognize these changes in balance or equilibrium in real time. Hindsight charts are fine for illustrating principles. In fact, they're nearly essential. However, one must then take the next step and translate those principles into a trading strategy that enables him to make decisions based on those principles in real time, e.g., "failure to breach". For example, one must at least locate in advance those areas or zones in which the aforementioned balance is most likely to change, then wait patiently until those changes actually occur, then act on what he observes. Note that as the interval gets smaller, the opportunities increase, but so does the necessity for strict rules. For example, one of the arrows has an asterisk, there to show that while the swing point is lower than the immediately preceding swing point low, it is higher than the more significant low made the previous Friday. Therefore, "higher low" has no intrinsic meaning. The trader must instead place all of this in context and define very clearly just what it is that he is looking for. In this case, if the trader were not already in, he most likely would not enter long at this point but wait for confirmation of an uptrend and enter at the next higher low (this occurs the next day, Wednesday). Or he may go ahead and take the risk, entering on Tuesday. While doing so entails more risk, it also may mean a tighter stop, depending on how the trader manages stops. There is thus no "best" way to manage the trade. After all, the trader may have entered long at the previous Friday low (12/8) and never have closed his long trade. Looking back at the first chart, it would seem that there are few if any opportunities during November/early December since price has “stalled”. But the above and the preceding charts demonstrate that it all depends on your point of view. Even the very last day, represented above, offers excellent opportunities for relatively easy profits. The first step for a trader is to determine the current trend of the market. The second step is to determine one's place in the current trend. The third step is to determine the proper timing of one's entry into whatever it is he's trading. -- Richard Wyckoff

Charts are a visual record of price movement. If one isn't interested in price movement, one may not find much of value in them. As a map, however, they are about as close to the "territory" of price movement as you're going to get, one degree of separation, if you will. But then we begin to fiddle with it: time bars, volume bars, tic bars, range bars, equivolume bars, candles, lines, histograms, etc, etc. Then we lay on the Fib and the Gann and the Wolfe and the Pivot Points. Plus all the infinite number of indicators with all their variations. Eventually price is nearly lost, and we can't even determine the trend, much less where we are in it. This is analogous to travelling someplace and drawing a map of that place, then moving on to some other place, checking off that particular task, believing that it's "done", relying on the map one has drawn for far too long. Revisiting that place after a number of years, one finds that the territory has changed dramatically, that landmarks and signposts are no longer there, that one's map bears little relation to what is, only to what was. In the market, the transaction and the agreed-upon price is the "territory" and everything begins there. If we massage it, or ignore it entirely, we become disconnected with what the market is doing. In order to know what to do at the time that one needs to do it, one has to be connected with what is happening in front of him, not on a fanciful representation of it. He has to walk the territory, not just trace a route on a map, a route that may not even exist in the present. Db

Jones buys 100 shares of Fruehauf Trailer at 24. He will tell you with all the enthusiasm of the true believer what a fine company Fruehauf is, and what excellent prospects they have for the coming 12 months. He will tell you everything he knows that is good about the stock, but he will not tell you anything that is bad. For him there is no bad. His mind is made up. He does not want to be confused with facts. He is not looking for the truth; he has found it. And like a politician or a minister or a trial lawyer, he is not trying to see reality as it is. He is trying to keep himself convinced that his map of Fruehauf is actually a good one. He wants to hear nothing that will upset his all-out judgment. What he wants and needs is argument to bolster his shaky judgment and make him feel a little more secure. Therefore, he will not read, or he will forget, anything that appears in the Wall Street Journal that threatens his faith that Fruehauf is all good. And he will clip and treasure the favorable comments or reports that tend to show that he was in fact right. The data he collects are no doubt true, but they present a very one-sided picture. Suppose, now, that Fruehauf stock sells off to 18. Will he re-examine the territory and see whether there have been essential changes in the situation “out there”? Or will he, more often than not, cling to the old map of his original opinion and simply go on a search for more evidence to confirm his rightness in that opinion? He may even buy another hundred shares on the basis that if his original conclusion was valid, then this new purchase will lower the average cost of all the shares he owns, so that even a moderate advance would put him back in the profit column. What is he doing? Is he making an impartial evaluation of a stock? Or is he defending his obsolete opinion in the face of present facts? Is he acting in a way that is likely to make him profits? Or is he setting a higher value on being right than on the money involved. Let Fruehauf drop to $12 a share. Will this man sell now? No. It would hurt too much to sell. Who would it hurt? Why, it would hurt him, of course. How would it hurt him? Well, it would mean a loss in money. But isn’t it clear that the larger loss is not measured in dollars, but in pride? It will hurt less to sweep the facts under the rug, delude one’s self, and maintain that one was right in the beginning and is right still, than it will to admit that one was a fool. To put it another way: If he has decid-ed, “The stock is worth $60 a share,” and the market says $12 a share, then the market must be wrong. For the sacred map cannot be wrong. It would hurt too much. Call it fantasy, prejudice, opinion, judgment, or what you will, when the high abstraction collides with bare facts, it is the facts that have to give way if your value system places such a high premium on rightness that your tender ego cannot suffer the slightest setback. Many men cannot afford to take monetary losses in the market, not because of the money itself so much as because of their oversensitive, poorly-trained selves. The humiliation would be unbearable. The only way that occurs to such men to prevent such painful situations is to strive to be always or nearly always right. If by study and extreme care they could avoid making mistakes, they would not be exposed to the hard necessity of having to take humiliating losses over and over again. And so? And so, too often, rather than settle for a relatively minor loss, our friend will stand firmly on the deck of his first judgment, and will go down with the ship. The history of Wall Street, and of LaSalle Street, too, is studded with the stories of men who refused to be wrong and who ended up ruined, with only the tattered shreds of their false pride left to them for consolation. How to avoid such unnecessary tragedies? Be always right? You know that isn’t possible. Keep away from the speculative market entirely? That is one answer, but it’s rather like burning down the barn to get rid of the rats. There are other answers, and they are simple. They are standing there, right at hand, like elephants in the front hall, if we can only see them. In the first place, there is no rule that we can’t change our minds. It’s not necessarily wrong or a mistake to believe that Fruehauf stock will go up from $24 to $60. What is wrong is sticking to the opinion after the evidence clearly shows that the conditions have changed. The rational approach is to be ready at all times to consider new evidence, and to revise the map accordingly. In the second place, it need not hurt so much to have to change one’s mind. Unless we are so wedded to absolute standards that we cannot entertain anything that will conflict with what we decided in the first place, we can alter the map to any degree we want, or completely reverse our position. If we have a good method of evaluation, in which we have confidence on the basis of observed and verified results, we will not have to think of these changes of opinion as defeats. They are simply part of the process of keeping our maps up to date. If we plan to travel to Boston over Route 20 and there is construction underway on a five-mile section of the route, we don’t try to blast our way through. We take the detour. We go by the territory as it now is, not by the old map. And if the road is blocked entirely and no detour possible, we don’t shoot ourselves, or run our car over a cliff; we simply turn around and go back home and try again tomorrow. It is perfectly amazing how many losses you can take in the market and not get hurt very much, provided you are able to cut these losses short as soon as a change of trend appears. In order to do that, you will have to keep an open mind—not open just to favorable things that confirm what you wanted to believe in the first place, but open to any reports that will have a bearing on the situation, whether good or bad. The really serious losses come when someone closes his mind and stubbornly refuses to recognize new factors in the situation. Of course, it’s not enough merely to keep losses small. In order to keep solvent, one must also have some profits; but profits, too, bring their psychological woes.

The book doesn't include everything, of course. It would be thousands of pages. But I hope that it crystallizes what is in the forum. As to what is valuable, or not, and to whom, who can say? But you may want to look at the Most-Thanked Posts thread, since those posts are chosen on the basis of the number of thanks they receive and are thus "chosen" by readers. Those will lead you to specific threads of which you can read some or most or all. Since the vast majority of the posts in the Wyckoff Forum are repetitions or just chat, there's really no need to read all of it, or even most of it. The important things come up again and again and are not likely to be missed.

No offense intended, but if you've lost your job and need to make money to take care of your family, the last thing you should consider is trading. Not only would you be undercapitalized, but you'd be trading with "scared money", and that's not a good place to be. Think of looking for a job as your work. Schedule your day accordingly, e.g., checking online job sites, the local newspaper, going on interviews, etc. If you like, schedule your screen time as part of that day, e.g., 09:00 to 10:30, or 2:00 to 4:00. But under no circumstances should you be trading with real money, nor should you take away from the time you need to spend working or looking for it and sitting in front of screen instead. As far as my book is concerned, you can get much of what you need to know from this blog and from the Wyckoff Forum. Read it, study it, ask questions. It may help take your mind off your situation. But don't allow it to dominate your thoughts to the extent that you're not doing what you need to do: supporting your family. Don't be discouraged.

Done .....................

On its way. My apologies for communicating with people this way. Apparently TL does not allow people with fewer than 5 posts to use PMs. I don't understand why, but there it is.

It's on its way. Hope you read the preview.

The book is $30 via PayPal to dbsburrow@yahoo.com. However, if you have not read the preview, I suggest you do so before spending any money. The book may not be what you want.

My eBook: Trading By Price For those who are interested, here is a preview of my eBook, Trading By Price. The eBook consists of a set of 24 "eBooklets" which you can read in any order you like. Some you may choose not to read at all. You are, after all, in charge of your own learning, and the only pop quizzes are those administered by the market. If you choose to purchase it, contact me at dbsburrow@yahoo.com [ATTACH]28544[/ATTACH]

Admin Note: These articles are ported over from DbPhoenix's blog The purpose of this is to serve as a closet, or attic, or self-storage facility. A place for me to store what I don't want to lose, all in one place, partly for me, but largely for those who may be interested in what I think about market stuff and trading stuff. I've reserved the right to moderate comments. Assuming that this works, the point of it is to keep the blog on task as much as possible. Substantive questions will be answered, if I can, but good wishes and so forth will not be posted, not because I don't appreciate them, but because all of that is a lot for newcomers to wade through after a while, so please don't be insulted if you don't see your comment posted. The first post is a link to a preview of my book. This may be of no interest to you whatsoever, but I do encourage those who are interested to at least look it over before plunking down any money for something that may be of little or no use to them. Good trading. Introduction [THREAD=12796]My eBook: Trading By Price[/THREAD] I. Mapping the Territory [THREAD=12798]From Magee's General Semantics of Wall Street[/THREAD] [THREAD=12799]Mapping the Territory (courtesy of John Magee)[/THREAD] II. Support & Resistance and Trading Trend [THREAD=12801]Support & Resistance and Trading Trend[/THREAD] III. The Springboard [THREAD=12802]The Springboard[/THREAD] IV. Trading Naked [THREAD=12806]Trading By Price[/THREAD] [THREAD=12807]Indicators[/THREAD] [THREAD=12808]Auction Markets[/THREAD] [THREAD=12809]Getting Down to Cases[/THREAD] [THREAD=12805]For Daytraders Only: the TICKQ[/THREAD] V. The Trading Journal [THREAD=12810]The Journal[/THREAD] [THREAD=12815]Appendix A[/THREAD] [THREAD=12817]Appendix B[/THREAD] VI. The Trading Log [THREAD=12818]The Trading Log[/THREAD] [THREAD=12819]The Trading Log: Appendix[/THREAD] VII. Misc. [THREAD=12820]Wyckoff the Great[/THREAD] [THREAD=12821]Seven Habits of Ineffective Traders[/THREAD]

What has been provided is the original course. If you doubt that, you are welcome to obtain your own copy from the Library of Congress. It will cost approximately $100 plus postage and handling.

Updates:

The entry I was referring to this morning. Note the behavior, not just the geometry.