Trading The Wyckoff Way

[Trading The Wyckoff Way]

Bear with me I am brand new at this, but I've read everything I can get my hands on regarding the Wyckoff method including Db's eBook. I am at the stage where I'm Sim trading NQ. Here is the NQ 1 minute chart for Oct. 27th. I did abysmally trying to trade this and would appreciate some feedback as to what were really valid entries in foresight for a newbie.

 

I interpreted the 9:30 volume as a buying climax since in my brief experience I thought 4000 contracts was a hefty volume for 1 minute, so I prepared to go short. But as I waited for the indication of a downtrend I noticed the 1 minute bars were pretty wide ranging varying from 2.5 to 3. points. I remember Db cautioning against trading in WRBs so I aborted my entry. At the time time I thougt this was a pretty good decision since I'm prone, like most newbies, to jump in rather than be patient. In hindsight that seems to have been a terrible decision given that there was a 30 point move to the downside.

 

When I saw the 10:02 volume of 12,000 contracts I interpreted this as a selling climax and prepared to go long. I made my entry at 10:04 for 1731.00 and prompty got stopped out since my stop was set at 1727.0. I wasn't willing to set the stop at 1724.0 for a 7 pt. risk. Where was the proper stop? Or was this just not a good place to enter?

 

So now it's 10:43 and it appears that there might be a reversal; however, I have been burned many times by trying to catch the reversal only to have the price pivot and the trend continue on it's merry way. So I'm pretty cautious and don't go short until 10:51 at 1741.0. Get stopped out a lot since I manged the trade poorly.

 

In hindsight this downtrend, beginning at 10:44 would have been very profitable.

At what point does a knowledgeable trader know that this is a true trend reversal and what evidence tells him that it's not just a swing low in the uptrend. Where is the proper entry in foresight?

 

This is the most difficult area for me, i.e. determing when a true trend reversal is under way.

 

[Trading The Wyckoff Way]

I've been reading Jack Hutson's comments on stops and it's still a grey area for me. Let's say I trade short term,i.e. no open positions overnight, with 2 instruments NQ and AAPL. With NQ if I have identified a resistance level of say 1500.00 and I want to trade a possible reversal off that level, what would be an appropriate stop (in the number of points or fractions thereof) that a stop would normally be placed above the resistance level. I know there are many factors to consider, but I'm just looking for a ballpark here.

 

Same question with AAPL where I have identified a resistance level at say 150.00. Where would you place a stop above that resistance level.

 

Also, Hutson would sometime refer to a very "tight stop". Could you give me an inkling in percentage or point terms of how much we are talking about.