DbPhoenix

Keep in mind, however, that Wyckoff had a low opinion of geometric patterns, e.g., flags, pennants, triangles. Nor did he recommend trading breakouts. Consider instead what traders would be looking for by entering previous trading ranges either above or below or by remaining in the current trading range, which is a reiteration of the range from 9/24-5.

Sierra Charts offers replay. There are other charting programs which offer it as well, but I have no experience with them. Replay is particularly effective since one can link charts of varying timeframes and bar intervals into one viewing.

A lot of questions about TICKQ divergences today and no time to answer them during trading, so I'll revisit a few points using this morning's chart. First, the TICKQ (TQ) is an aid, not a crutch. It's hardly infallible, and it shouldn't be. All it is is a measure of breadth. There are no settings to be set, no calculations to be made. Sometimes the breadth is with you; sometimes it isn't. One might consider it to be a measure of mood, and other traders are often just as lost as you are. Second, the TQ may be of paramount importance throughout the day, but I attend to it only at the levels of support and resistance that I have anticipated, one, because that is where divergences are most likely to be important and, two, if I were to act on every divergence everywhere, I'd soon be broke. Three, there can be and often are excellent reasons for taking trades that have absolutely nothing to do with TQ divergences. Retracements and breakouts, for example. Here, S was anticipated at 80. At the open, price rejected 81.5 (see the inset), so an entry could be taken at or just above this level, even though it's far too early to be looking for TQ divergences. After that, divergences are irrelevant until the first level of R is reached at 90. There is a slight divergence here, but there is never a real test. Price instead just drifts sideways. And the short is never triggered if one places an entry stop behind price rather than just jump in. After that, there is a retracement to R now S at 90. Taking this sort of setup need have nothing to do with TQ divergences. Next up is 1700. There is a divergence here, but if one were to take it, he would be stopped out almost immediately. This, plus that fact that 1700 is a midpoint -- and the target is generally the opposite side of the range, in this case 1708-10 -- should suggest that there is more room to the upside and not to keep hammering away at a short. The TQ joins the party when price gets thru 1700. There is a retracement to 1700 shortly thereafter, but, again, what the TQ is doing need have nothing to do with whether or not one takes the trade (though if it is rising or falling with price, it may be telling you that you're on the right track, confirming the direction of your trade). After that, it's just a matter of waiting for price to get to the other side of the range and the next level of R. Until then, whatever the TQ does is of no particular consequence. And 1100 is my quitting time, so.....

Lest one become too mesmerized by the trees, keep in mind that the trading range we've approached is substantial and represents a lot of buyers. This will affect all trading at these levels. We are also at the midpoint of the August leg. The opposite side of whatever range is in play for that day. I don't work toward point-targets. If the limit of the range is unclear, I abide by the procedure I described here. .

You may find it easier to judge the relative strengths of one line vs another if you locate the trading ranges (see post #1) rather than rely on swing points.

Funny you should ask, since I was a big CSer from the late 80s. But when we got to '00, it was clear to me that CS left a lot to be desired, at least by that point. Many reasons, most of which are irrelevant to this forum. Suffice it to say that if you have been less than successful with CS, it most likely is not your fault. Your biggest hurdle may be resolving the conflict between long-term B&H and short-term trading. If you've already done that, then understand that Wyckoff has absolutely nothing to do with fundamentals. It is purely technical. If you want to trade stocks and use CS as a preliminary filter, there's no particular conflict there. You may find, however, that the stocks with those great fundamentals are difficult to buy from a technical viewpoint once you've found them. ETFs may be far more appropriate to your style and your goals. If you are at all unsure of what your goals are, that should be addressed before going further. As to whether it takes you months or years to learn this depends partly on how much time you're willing to devote to it and how much you have to unlearn. If you don't "know" much that is actually untrue, then you may learn this approach without much trouble at all. Since you are oriented toward fundamentals, one of your biggest hurdles may be breaking the habit of asking "why" price is doing this or that. While discussing the why can make for interesting chat, it has nothing to do with the trading decision that must be made. Since you haven't posted here for almost a year, I don't know how much time you've spent with the material. If you've read the stickies, then you may want to move straight to the application. If you haven't read the stickies, then start there.

One of the chief reasons for trading S/R that are determined by AMT is to eliminate -- or at least severely curtail -- overtrading. If you know, for example, that you're going to look for shorts at or near R, then you have no reason to jump into what appear to be good shorts (no pun intended) that show up ahead of R. Similarly, using a tick chart can also help eliminate or curtail overtrading, assuming that you're very clear on what you're looking for and that you have the discipline to wait for it. You don't have to guess as to what traders are doing as you might with, say, a 5m bar. Nor do you have to wait for anything to "close". For something more concrete, you may want to look at, read, study Wyckoff's Studies in Tape Reading, attached to the Introduction. Though many interpret it as a scalper's manual, it isn't. Either way, it will provide specifics of what to look for with regard to congestions, probes, breakouts, rejections, etc. (just don't get too distracted by the details of the stocks being traded -- since most no longer exist -- or how prices are being manipulated or the comments regarding bar charts vs figure charts; focus on the principles of price movement being addressed).

It helps to acknowledge that reversals take place at the tick level. What looks like a V reversal using 15m bars or equivalent may be a double top or bottom using a 1m bar. What looks like a V reversal with a 1m bar may be a double or triple top or bottom on a tick chart. This is not to suggest that one must abandon everything but the tick chart, but it is clearly difficult to see what one isn't looking at.

What makes this continually interesting as well as frustrating is that the market morphs, and one has to be willing to adapt. Yesterday, for example, waiting for a test of 30 was a losing proposition. The market instead found R at the premkt swing high of 25. Why? Who the hell knows? But premkt highs, lows, and congestion levels have been becoming more and more important for some time now, and if one sloughs that off, or ignores it entirely, he will likely be ill-prepared for the coming session's trading.

At its simplest, the purpose of the thread is to anticipate those levels at which trading opportunities will occur during the next trading session. If one finds that he got the levels correct, great. That's an important task to complete. If he didn't get them correct, then he must go back and figure out why so that he can work toward an ever-closer approximation of accuracy in the future. But the emphasis is on the future, the next session, not the past. Beyond that, one can look at how he traded at the levels he anticipated. Even if he nailed the levels, there remain the strategies and tactics to be employed to take advantage of the preliminary work he's done. In other words, one can be dead accurate on the levels but remain flat if he doesn't know what to do with them. If you're happy with the trades you're taking at the levels you've anticipated, there's no need to go further. If you aren't, then this thread may be a resource. The first step, then, is to gain accuracy in locating these levels (see the first seven posts as well as the linked material). The second step is to determine what one will do if and when price reaches these levels, i.e., go short here, go long there, stop and reverse at this or that level. The third step is to do it. The fourth step is to review the trades and determine what went right and what went wrong so that the following session's trading can be more focused, more relaxed, and, one hopes, more profitable. Without the review, one is more or less running in place. Therefore, if you're shaky on step one, work on step one and leave the rest for now. Do you know how to locate these levels? If not, as stated above, see the first page of the thread. Are you locating them accurately? If not, then review what you did the previous day and show in a new chart where you were right and where you went wrong, then plot the anticipated levels for the following session. If you're interested in trading price action rather than bars, then it will become necessary to follow price action rather than a summary of it, akin to watching an event take place in real time as opposed to reading a report of it in the daily paper the following day (or in a weekly newsmagazine the following week). If you want to understand the behavior of traders as they approach important levels, then you'll have to observe that behavior. One can watch the little right-hand notch on a bar of one sort or another move up and down in real time until a new bar forms, but this is no substitute for watching price move laterally, transaction by transaction, printing the little hesitations, the thrusts and shakeouts, the feints and fake-outs. One chart is of course insufficient. You'll need something that shows the forest since all of this is based on accurately locating support and resistance. CVB charts and range charts are both good for providing that context. But trading this broad context will lead to a lot of false starts and missed opportunities. When it gets down to actual trading, you'll need something that has a much narrower focus, preferably with separate volume bars (since these show activity). I suggest a time bar of some sort along with a 1-tick chart. The time-bar chart will keep you focused on important swings and pullbacks and congestions as well as the overall trend and prevent you from getting distracted by what can be unimportant activity on the tick chart (unimportant being anything that isn't taking place at an important level or that isn't interfering with the trend). Whether this is 5m, 3m, 1m, or 30s is entirely up to you. The tick chart will show you, trade by trade, what traders are doing, especially and most importantly as and when they approach the levels you've anticipated. Other than these three basic charts, you can add additional broad context charts. You can also add charts of other indexes. You can also add charts of various breadth measures, if you have them. But the more you have to look at, the more difficulty you'll have in reaching a decision and the more likely you'll miss the trade. Therefore, I suggest that you keep it as simple as possible.

For simplicity's sake, I'll go with your established name. Given your familiarity with MP, I'll assume that you know how to locate the various value areas and their respective highs and lows and POCs -- or, in Wyckoff terminology, the various trading ranges and their equilibrium levels -- and that you've anticipated which are most likely to come into play tomorrow and what you will do if and when price gets there. If so, what's your plan for tomorrow?

The question was addressed to PTVtrader. Do you have two login names?

In order to provide specific suggestions, I -- or anyone else -- would have to have specific examples. Did you make any trades yesterday off the lines you drew? As to recognizing other traders trading, that may be difficult as long as you use summary bars. Is there any particular reason why you're relying on CVBs?

Depends on what you plan to do if and when price reaches any of these levels. How did you arrive at them?

Clearly you have support and resistance working for you here, at least in these examples. Do you have a strategy for taking advantage of these opportunities?

Regarding your first comment, as I said in the S/R thread, support is created at the level where buyers repeatedly buy, and resistance is created at the level where sellers repeatedly sell. Therefore, in order to "work", those traders who trade a given market have to behave in a certain way. If they buy and sell for no particular reason at no particular levels in no particular pattern, then "support" and "resistance" will of course be irrelevant concepts. As for your CVB chart, you're not required to use any particular type of bar, nor are you required to use volume or follow transactions on a 1-tick chart. However, if you don't use volume or a tick chart (or some very small interval chart), you'll be in the position of having to trade pure support and resistance without following price action per se, and that can be tough. If you begin to feel as though you're stumbling in the dark, consider including price action in your S/R explorations.

You're welcome to post them as long as they're posted in advance of the trading day. But dates and times would be helpful if for no other reason than to locate specific areas/bars on the chart. Assuming that this is a standard bar chart, do you have volume available to you? Does your data feed provide reasonably accurate tick data? If the answer to either is "no", then you have a hand tied behind your back. If the answer is "no" to both, then possibly your legs are tied together as well. You are correct that S&R are zones, not absolute numbers. S&R are created at those levels where demand overwhelms supply and vice versa. These reversals aren't going to take place at exactly the same numbers every time (if they did, it would all be too easy). Therefore, maintaining flexibility in the width of these zones is preferable to trying to make them too narrow. The key to successfully trading support and resistance lies not in coming up with a specific level and focusing on it to the exclusion of everything else but rather to become sensitive to how traders are trading as they approach these levels. In this way, if support or resistance are found a few points sooner than anticipated, you won't be sitting there waiting for price to hit "your level" while it reverses ahead of that level instead and leaves you wondering what happened. If they are found a few points later, you won't automatically assume that you were wrong and go make a sandwich while the trade works in your favor after all. Volume and tick data will help you become more sensitive to what traders are doing and what they may plan on doing. Without them, you'll have to focus on how price is bouncing off of or breaking thru a particular level.

Too bad you had a cold today. You nailed S&R perfectly.

She may be confusing "the markets" with what is commonly called "the herd" or "the crowd" since it is true that "the crowd" is always right except at tops and bottoms, which are "two significant times". The market itself, of course, is always right.

Traders found buying interest on that overnite poke to the downside, at least enough to take us back above 1700. But now there's been another as a result of the DG report. This complicates things a bit. 1700 may not be so easy the second time around.

If you're referring to my post above, there's nothing to watch for, which is why it's call a WTF, and there's no time to wait for confirmation. I wouldn't classify it as a beginner's setup.

I'm revisiting this thread because of a subject which comes up on a regular basis in chat, that of the breakout, specifically a certain kind of breakout. Wyckoff was not a fan of breakout entries. Neither am I. He advocated entering inside the crest of an upmove and the trough of a downmove. So do I. He felt the breakout carried the highest risk of the entry options, in large part because one would be so late. So do I. But I've noticed for some time that there is a certain kind of breakout that is as close to fade-free as one can hope for in this world. Tolkien in LOTR characterizes the quiet before the onset of war as "the deep breath before the plunge", and during one of my regular visits to Middle Earth, this phrase struck me as the perfect description of how price behaves in this breakout. Clearly, however, there are two problems in using this phrase: one is that price breaks out to the upside as well as the down, so "plunge" is not always the most accurate choice to describe the action; another is that abbreviating it results in "dbp", which creates unnecessary confusion with my name. So I call it the "WTF?!?", since this is the knee-jerk reaction of those who see it and don't know what they're looking at. The WTF occurs when price has been drifting along, minding its own business, not doing much of anything, usually in a sideways congestion, but sometimes in a slightly upward or downward meander, lulling everyone into a doze. Then, out of nowhere, price plunges, or rockets, at the same time volume pours into the market. The trader thinks "WTF?!?". There is a brief hesitation (the "deep breath"), and then the bottom falls out (the "plunge"), or the afterburners kick in, and the trader watches price leave without him. But if the trader knows what he's looking at and keeps his wits about him, and if the entry is taken at the right time, it tends to be a very clean one, and he can segue into management mode almost immediately. They don't come up so often that one sees them all the time, but they come up often enough to warrant at least a little space in the back of one's mind. An example came up today in the NQ. Here price was in a generally sideways drift. The angle is slightly downward, but each swing pulls well back into the previous swing rather than stair-stepping; there is no concerted effort to drive price downward. Then price drops out of this straight down, accompanied by a spike in volume. There is a hesitation at that point (between 23 and 24) which may last for no more than a few seconds. Here one can set his sell stop just below this hesitation with a very tight stop. If this is a shakeout, his entry will not likely be triggered (if it is triggered, he can be out for little or no loss). If it is instead a breakout (or, more accurately, a breakdown), then the trader is in it, with very little risk. I haven't kept an archive of these examples, so I'll add a few as they come up. In the meantime, it will benefit the Wyckoff trader not to assume that every short, sharp shakeout or thrust that's accompanied by a spike in volume is in fact a shakeout or thrust. It may in fact be the mirror image, and continue in the direction that the apparent shakeout or thrust has begun. Playing it well, however, will require the trader to follow the price action, i.e., a 1t chart, not just a summary of the price action (from the initial drop to the continuation in this instance was less than a minute). Additional Example: Friday, Sept 25 After having said above that these don't come up so often that one sees them all the time, there was at least one good example on Friday and another today (Monday, the 28th). Perhaps traders are becoming more jittery. Friday provides several examples of what aren't WTFs. This is good. Seeing these may help prevent the trader from being dazzled by the glitter rather than wait for the gold. Support on Friday was in the 1698-99 area. Note that once it settles into that level, there is a high volume bar that is unaccompanied by a drop below S. This is followed by another high volume bar 15m later that is accompanied by a breakout above what appears to be R. But there's no follow-through. Price lingers between 1701.5 and 1702.5, but it never gets past that. Hence, no trade. There is then a drop below S, but unaccompanied by volume (first arrow). Then another, but still no volume (second arrow). Finally, there is a drop below S and also an unmistakeable rise in volume. This is the one worth waiting for. This lingers around 1697.5, and a short just below here enables a very tight stop. There are then one or two "WTFs" that technically qualify, but which are not as attractive as the first entry, i.e., the best entry (best because one of the chief advantages of the WTF is the element of surprise; once it's occcurred, there no more surprise). A couple of minutes after the above entry, you have another plunge accompanied by high volume, but, as mentioned above, the element of surprise is gone, and price rebounds higher on this entry than on the first, calling for a wider stop. Not only that, but price piddles around for over 15m before resuming the downmove. Since one's entry price is hit repeatedly, this can be wearing, particularly since buyers appear to be offering support at around 1204. Finally, there is another plunge accompanied by high volume just after 1215. But the real volume comes in on behalf of buyers trying to support price here. And since the next level of S happens to be 1690, there are a number of risks involved in taking a short trade at this level, this late. Not all WTFs, then, are created equal. The best are those which come as a surprise. In confusion lies opportunity.

You may also want to look at this post.

Price can be manipulated in many ways, but how is this related to Wycoff? Do you have something specific in mind?

Thank you for your comments. Point of clarification, though. The focus of the thread is to post one's plans for the coming day -- in foresight -- rather than in hindsight, within the context of support and resistance (see posts 1-3). The trading instrument itself is irrelevant.