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A note I wanted to make about entries is that not only are you maximizing return, you're minimizing risk. Often I'm much more certain about price's direction than in some of my actual entries, but there's no great way to manage risk. My favorite entry from the bull run in Oil is my favorite largely because of this. I took the liberty to add some extra annotations to your chart, Db. My favorite entry is late Sept '08 (short) at about $70-71. Reasons: We're already in a downtrend (lh, ll), and are testing old support (now possible resistance) on the upside. Note that this area was also important as far back as March. This is the first test locally of this resistance, but check out volume: there's a lot of new interest, suggesting sellers feel these prices are high enough to begin again. Price peaked above res, but was (fairly quickly) rejected. Initial hard stops at $73-74ish. Move to b/e a couple days later after the breakdown. There's a few counter-trend possibilities as well, but unless you want to fight the trend, they would probably work as good scale-outs. The one that sticks out to me is Mid-Sept '08 (7th dot). It attracts a good deal of volume and climaxes right at the demand line.

Thank you Db for picking this thread back up. I'd argue the best entry (real time, mind you) is the long in Jan '08 (4th dot). Reasons: Test of support after a hh, with volume entering on the low end of the range (peaking at the low). Place initial hard stops 48-49 (so risking about $2 max, using the widest stop). Probability of stop being hit is moderate: we're working with support, increased buying pressure, and "value"/"liquidity" up above (it's not virgin). A couple of the others are decent entries, which I'll leave to others to analyze. Worst entries: Nov '07 (1st dot). Besides an entrance of volume, there's not a whole lot going for the trade. A massive surge of selling interest entered the markets at the highs right before, so you're buying into possible resistance as is. Stop placement: Difficult, $49ish? Early Dec, '08 (2nd dot). Just made a ll, and approaching virgin possible support (which wasn't even that big of a pullback). Volume entering isn't super convincing, and price has hung out at the bottom of this range for a few days. Stop placement: Difficult, nothing direct from PA; I'd keep it tight at $54. Chance of hitting is high. Mid Dec, '08 (3rd dot). No real idea why you'd enter besides the tiny increase of buying pressure right before. Stop placement is awful (you'd be looking at under 50's, most likely). Chance of hitting is low/moderate, but about the same as the trades much closer to 50. Late Feb, '08 (6th dot). The only thing you have going for you is the breakout (which wasn't horrid: price kept at the top for a couple days without rejecting, which means sellers didn't sweep in). imho, this is one of those "missed a trade, late entry is better than no entry!" Stop placement: Difficult, nothing logical from PA; I'd put it right below that congestion right before R ($56). Chance of hitting: Moderate.

PM him. (...message too short...)

To elaborate, Wyckoff is disinterested in the exact cause for any specific market action, but rather is interested in the action (the fact it occurs in the first place). While most certainly some moves could be attributed to "professional money" or "amateur investors", Wyckoff argues that it doesn't matter. Someone with sufficient capital to move the markets as they did acted, which changed the supply/demand dichotomy.

I found this post on "Re: Price Action Only" interesting and have nominated it accordingly for "Topic Of The Month December, 2008"

Along with a couple others in this thread, I fail to see why the percentages matter. Enter into trading saying, "I will be one of those winners, and I will do whatever it takes to accomplish that goal." If others do the same or not, shouldn't really effect you. Sure, most people lose, but it's clearly a win-able game. Find those who are winning, and emulate how they did it.

You can learn quite a lot here. (Tip: Start at the beginning)

Hinges are a type of springboard, where price coils tighter and tighter (analogy: builds pressure). This is accompanied with a steady drop in volume as the range decreases (ie, less net interest from all parties). A hinge needs lh's and hl's, and should be filled with as much price as possible. The midpoint you'll see a couple of us draw is a sort of "equilibrium" price (think POC, in MP terms). In my experience, over half are trend continuation patterns. However, they're most definitely tradable both ways. A "breaking" is price leaving the supply and demand lines drawn around it. Note, however, that the break isn't always accompanied with a sharp thrust of price reaction; occasionally, it's much more steady. However, the P/V formation is speaking primarily about underlying supply/demand, which does work out in an astute trader's advantage quite often. Additionally, the risk/reward can be quite attractive.

Interesting, I'm INTJ as well, though more on the borderline side of Introverted.

Before you jump heard first and attempt to make a system, it would be to your advantage to research, study, and understand how markets move, what makes markets move, and "patterns" (not necessarily price patterns, but tendencies of the markets) the markets exhibit in certain conditions. A lot less fun, yes, but you'll save much wasted time. I personally feel Wyckoff understood markets and auction market theory very well. You can read all about him and his ideas in the Wyckoff forum here at TL.

Interesting.. what if you ran like 3 strategies.. two "collect" the stock data, and one totals them?

That's the thing: It does win more than it loses, which makes this appear wonderful to a new trader. Unfortunately, it doesn't seem to win enough to cover for the losses that after commissions are MINIMALLY 6 times the wins (once you actually trade this for money and run into slippage, you'll run into even bigger problems). It is up to the reader to decide if the system as presented could beat the ridiculous assumptions -- in TRO's favor -- that I made, and be profitable. With that, I'll let TRO continue his thread in peace...

Commissions and margins are always negotiable. You can also get brokers to price match others. The more volume you do, the harder you can get them to work for you.

A common misconception among traders is that "faster" charts are faster. That is, the 1m is "faster" than the 10m. However, timeframes are just ways we summarize a stream of data by "boxing" data into a set time interval, trade interval, volume interval, etc. More accurately, a 1m chart is more detailed than a 10m, but price moves at the same speed. Sure, it's stretched out horizontally more, but it's representing the same data. So, you could use a 5s chart to scalp, OR to take much longer positions. Therefore, timeframes shouldn't effect your trading effectiveness unless price becomes far too summarized for your tastes. People like to use cute intervals (like 89 tick, 610 volume, or whatever), but it really doesn't matter. Find something that summarizes price in a way that's easiest to look at and analyze for your specific strategy.

Additionally, since the strategy is so mechanical and easy, it's also easy to backtest. 3 month backtest EUR/USD Win rate: 73.37%, Profit factor: 0.84, Net Profit: -6.79% AUD/USD Win rate: 67.19%, Profit factor: 0.60, Net Profit: -35.33% USD/JPY Win rate: 68.46%, Profit factor: 0.68, Net Profit: -22.10% GBP/USD Win rate: 69.51%, Profit factor: 0.69, Net Profit: -29.72% Let's say, however, that the backtest was flawed (against him, of course), and that using trading intuition, TRO is able to cut losses significantly and have substantially more accurate trades. Only fair, since I don't trade this system, and we've never seen actual trades (sans annotated charts, which mean little), so we don't know how bad (or good!) it really is. Let's be nice, and say the average stop loss is more like 15 pips (verses 20). But wait! There's a spread to worry about. Let's factor in a 2 pip spread (on the low side). Risking 17 to win 3. Shucks, slippage. Let's pretend he never gets slippage. So, to break even on this trade, he needs to win 85% of the trades (nearly 6 wins for every loss). If he can beat that, with all the generous assumptions I've made, he'll profit.

You can often get better deals through an IB, as they're pushing a ton of volume so get r/t's cheaper than Dorman offers directly.

Apparently you don't need one.

Way of the Turtle addresses many of these issues (especially backtesting biases), if anyone's interested in creating a mechanical system.

This guy is pretty cool. Thanks for sharing about him.. his youtube channel has some other great songs.

Not supposed to? Care to elaborate? edit: Whoops, didn't see the next page. That makes sense.

I do have to agree with Db's thoughts on this one. My goal for this thread was to discuss Wyckoff-based methods for exiting and scaling out trades. This is only a facet of Wyckoff understanding: how markets move, what drives markets, and how we can profit from this. Wyckoff teachings extend significantly past this, but this is an important area of understanding leading to profitability. Largely, I think it's been very successful so far, and I thank all contributors. I don't personally mind posting complete trades, but I'm not convinced it will help as much as you may think. An example of this might come from anything challenging you've learned before. Two things come to mind for myself: programming and higher level math. Years ago, I could see code, completely understand it, but not be able to produce it myself. This is the same for seeing examples, thinking "oh, that makes sense", and not being able to act on that thought in real time, under different conditions. Additionally, remember, any trades I produce would be from my specific trading plan and setups, which do not necessarily encompass Wyckoff concepts as a whole. The single greatest way to be able to identify climactic action real time (and actually, to start to understand price action) is to watch price action. If time is an issue, record the day, and replay it at a faster speed (and slow it back down when you think the market's at an important place). This is the absolute least mechanical part of the Wyckoff approach.

Well, you certainly could trade that way, and it may be even more profitable. However, my exits don't perfectly capture moves, and a climax (or as some say, climactic action) doesn't always signify the end of a move. I scale out on climactic action because that shows new counter-trend buying/selling interest, but that doesn't mean the new interest will be able to do anything. Thus, I do still want market exposure from my last entry (or market bias). On trend moves, my goal is to re-enter at a better price than my exit. Hope that helps answer your question.

Oh, that's okay. I remember seeing something about hidden forums messing up search totals, and did think that got fixed (and was thinking this was just from that). The 600s cache would certainly do it. Thanks.

Right now, here's what I see on the homepage: However, this is what the forum shows me: The latter is correct (there are no new posts). You think this is a part of the hidden forums bug from before?

I have no restrictions as to what time I trade. Unfortunately, the answer to your second question is not as simple and easy as you are expecting. I'd strongly suggest this as a good place to start reading.