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YertleTurtle
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Everything posted by YertleTurtle
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I don't know what DB considers the sandwich but in my trading I have found the [shakeout*]/upthrust to be high probability and regularly occurring. I only see hinges in retrospect. [*I'll assume this is what was meant. (Db)]
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One of the basic filters I use is that I don't trade upthrusts in uptrends or springs in downtrends. The others would be harder to explain. As for S/R - it is a little subjective only in the sense that there are really S/R zones. So the way one trader draws S/R might be slightly different than another trader. As for number of trades - I average about 1 a day but again this has to do with timeframes and number of instruments you can watch. I would recommend subscribing to David Weis' nightly report - it will help you see how an experienced Wyckoff trader charts and he emphasizes springs and upthrusts.
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I do look for support/resistance on the 1 hour and setups on the 5 minute. My most common trade is the spring or upthrust where a previous area of support or resistance is breached but price then reverses with an increase in volume. This is a very common setup and is profitable for me around 70% of the time (with the filters I use). My second most common trade would be a test after climatic buying or selling. Although forex only offers tick volume and not true volume - I haven't felt this hampers the ability to trade these methods. Tick volume strongly correlates to true volume and will show the increases in trading activity just as well. It is important that you pick a forex broker with good market depth but a little research is all that is required. As for volume - I am constantly monitoring volume to see what it is telling me about the interest of buyers and sellers. These observations are all logical and based on the Wyckoff principles of Effort vrs Result, Cause vrs Effect and Supply vrs Demand. I use trading software that allows replaying of market data at increased speeds and I found that simulating real-time trading was the best way for me to practice and understand these principles. As with anything that is difficult, intelligent practice is essential to learning. I also strongly agree with Gary that any serious Wyckoff trader will need to read his original course (perhaps several times). It is available in the stickies on this forum.
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Wyckoff taught a way of understanding imbalances in supply and demand which cause price to move up or down. These principles work in all time frames. Most Wyckoff traders I know look at multiple time frames and the timeframes one chooses has a lot to do with how much time you have to trade and whether you want to day trade, swing trade or position trade. Generally the smaller the time frame you use the more trading opportunities you will have but the smaller the moves. I look at daily, 4 hour, 1 hour 15 minute and 5 minute time frames mostly. I focus mostly on the 1 hour and 5 minute time frames for setups whereas the other time frames are to look at the bigger picture or for additional confirmation. There aren't firm rules here. As for the pairs that these techniques work best in, I chart 5 USD pairs, the AUD, EUR, YEN, GBP and CAD. Most of my trades are in AUD or EUR recently. These techniques should work on any non-exotic pair. There are stickies in this forum if you want to read more about the Wyckoff method.
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I trade using Wyckoff principles in the forex market. These principles work as much today as they did 100 years ago. VSA which is a derivative method of trading is gaining popularity and has many successful practitioners. As for markets - it works in all markets with sufficient liquidity which represents interest from the composite operator. Basically stay away from penny stocks and instruments which have been trending sideways for an extremely long time.
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Dark pools not enough To be honest I can't remember where I read the 36 hours thing. This is from the CME website: Reporting of Volume & Open Interest "Open interest figures are invariably reported by futures exchanges with a day’s delay. This means that you get “yesterday’s” open interest with “today’s” prices. Volume figures also used to be reported with a day’s delay, but this situation has changed as open outcry trading has been steadily supplanted by electronic trading. Most exchanges now publish “same-day” volumes, although in most cases the figures are rounded estimates. Generally speaking, electronic-only exchanges report same-day volumes, whereas exchanges that still retain a trading floor provide volume estimates or report volume with a day’s delay." This to me indicates that a big trader can delay the reporting of the volume of their transactions by placing orders in the pit. Whether this is delayed until after the close or what isn't clear. There are plenty of reasons to believe that reported contract volume intraday isn't accurate. I have found that I have had better results trading the tick volume in spot currencies and place trades in futures currencies than trade off of futures volume figures intraday.
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Dark liquidity - Wikipedia, the free encyclopedia One of several examples.
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Asking a question that you know the answer to so you can go on the offensive seems in poor taste. I am fully aware that different forex brokers have different liquidity and therefore different tick volume. You can also get tick volume on some platforms for futures if one prefers. Its a bit extreme to say that ticks "don't mean anything" when they are clearly correlated to contract volume. The spot forex market has 10x the liquidity of the futures market. There are good brokers and bad and any trader should do research before choosing one. VSA is about relationships not absolutes so we don't need accurate contract volume to trade using VSA principles - tick volume is good at showing the relative difference in these relationships. Big players in the futures markets can hide their volume for up to 36 hours - they cannot hide their activity. If you look at MM's statement he is clearly indicating that you need to be aware of all volume, spot, futures and options in order to successfully trade VSA on an instrument. I think this is wrong and there are enough VSA traders doing just that to throw out his monkey/dart theory.
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Tick volume is basically the number of price changes during your specified time interval regardless to the actually number of shares or contracts or handles or whatever traded. Contract volume (for futures) is the number of contracts traded as reported to the exchange. For spot forex only tick volume is available since there is no central exchange. There are plenty of successful forex vsa traders.
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Personally I find that using tick volume is superior to contract volume as you can't hide activity from the market. Contract volume can be hidden. This idea of tracking all volume pertaining to an instrument is silly. Volume in the spot and futures market are highly correlated so summing them together won't get any new picture.
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I've been thinking about this. I trade spot forex on 20 minute charts mostly day and swing trading. I still haven't settled on a box size but here are my thoughts. Average true range over a big sample might be a help in determining box size. What we want is for our box size to do two things: 1 - show accurate buying and selling waves 2 - show coiling during accumulation/distribution areas that allow us to accurately predict the extent of a price move. If you determine on your chart (whatever time frame) how wide an average accumulation/distribution area is you would want your box size to be below 1/3 of this distance (maybe 1/4?). If you can determine how big a non-swing generally is (i.e. a price move you consider to be noise rather than a legitimate leg up or down) you would want your box size to be greater than 1/3 of this move size. Obviously its a balancing act but we want to balance removing noise while showing coiling. Another approach might be to mark out a bunch of trading ranges on your time frame and instrument and try out a bunch of different box sizes until you find the one that seems to project the distance of a price move the best. I've been busy studying other aspects of the Wyckoff method but if I come up with something more definitive I'll post it in this thread.
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Thanks Gary, I appreciate you taking the time to comment.
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Gary, I wonder if you could comment on my chart of the EUR/USD daily. Its similar to yours but I drew the bottom of my trading range across the double-bottoms. This would have allowed us to trade the spring on 2/16 and perhaps 3/15. Do you not consider this line as the actual bottom of trading range as the reaction to the high on 1/30 wasn't significant enough? Thanks in advance.
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No problem - just to reiterate - Master the Markets is worth reading too. It is derived from Wyckoff so there isn't any disagreement between them.
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Look at the stickies on this forum and the original wyckoff course: http://www.traderslaboratory.com/forums/attachments/131/17907d1263785828-wyckoff-resources-wyckoff-method-tape-reading.pdf Master the Markets is about VSA. Although VSA is good for entry signals I personally feel that studying Wyckoff's material is much better for understanding accumulation and distribution and the background.
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Buy My Trading Strategy - It's Brilliant!!
YertleTurtle replied to TheNegotiator's topic in Trading Products and Services
Here is my opinion. The only way to become a good trader is through study and hard work. Yes - there are some good a even cheap educators out there that really know what they are doing (Timothy Morge comes to mind). But in my experience the only way to develop confidence and a set of rules that work as a trader is through a lot of hard work. What do I mean? Lets say in our efforts to learn we read or hear about a setup that sounds like it works well. Should we just start trading it? I don't think so. I think a good trader will do the following: 1 - test the setup. This means go through chart after chart and looking for the setup, calculating risk/reward, calculating win percentage and seeing how often the setup occurs. 2- refine the setup. See if you can improve upon the risk/reward or win percentage by creating filters to keep you out of the more marginal setups. 3 - find the setup in real time (if you have replay ability with your software this could really speed up the process 4 - write down formal rules that you will now follow for this setup or throw out the setup When you have tracked the setup on at least a 1000 instances you will gain confidence and experience in the setup and will have added it to your toolbox. Anything else is lazy. Do your own homework and take ownership of your own results. -
JD made a couple of really good points of which I will add one or two thoughts. There are plenty of ways to make money trading of which one is VSA. The actual Holy Grail of trading isn't an approach it is a few simple ideas. 1 - Discipline is key - you've heard it 100 times. How do you know if you are disciplined? Do you have a set of rules you religiously follow? Do you keep records of all of your trades? Without these two basic components a trader isn't taking accountability for his trading and cannot objectively evaluate his results. 2 - Hard work. Again - how much time do you spend ACTIVELY studying the market? This isn't watching the market tick up and down but actually reviewing market behavior, tracking patterns, testing setups etc. How much time do you spend refining your understanding of market behavior, reading and rereading material, searching for new setups or collecting data on existing ones. It shouldn't be surprising that these two are paramount to success as there aren't many people successful in life who haven't cultivated one or both of these skills. If I would add one more skill it would be honest self-evaluation but this might fall under the subset of discipline. I'll leave you with one of my favorite quotes. The reason a lot of people do not recognize opportunity is because it usually goes around wearing overalls looking like hard work. -- Thomas A. Edison
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David Weis has a much better DVD out which is somewhat basic but shows how to trade upthrusts and springs. Its a good foundation for anyone looking to start trading the Wyckoff method as this one setup can make you a lot of money.
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Actually I have started trading spot forex and have been looking at futures volume since this is contracts traded versus tick volume. Although there are occasionally minor differences, they tend to provide the same overall picture. I would imagine this would be true when comparing ES volume to spot S&P.
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I use daily, 1 hour and 5 minute charts to scalp and swing trade spot forex. Most of my signals come from the 1 hour and trades are executed on the 5 minute.
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Volume spread analysis works and it is simple. It still requires a lot of practice to get good at reading charts based on VSA. HLC and volume is all you need. That and a lot of hard work.
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Thanks SJ, My trading platform (Enisgn) has PnF available but it has some quirks. It does everything else brilliantly. I've used ninja before and did not like it at all. I've dabbled with PnF some but haven't dug deep. I trade the spot forex market generally on hourly charts. I wonder if anyone has any suggestions for how to pick a box size and reversal size that correlates to the timeframe one trades in. Perhaps volatility or average true range would be important? Or do people mainly use PnF for a big picture view? Any thoughts would be appreciated.
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Gary, A little off topic but what application do you use for your PnF charting?
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Gary, I only trade forex so it would be pip size (although I would imagine ticks is close enough). Mostly Euro and Auzzie with some Pound, Swiss and Canada. I appreciate any input.
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I've looked over the material at Informed Trades but haven't studied much of it. I spent most of my time studying Wyckoff's Original Trading Course (from 1937). Its located here: http://www.traderslaboratory.com/forums/wyckoff-forum/3866-wyckoff-resources-5.html#post86783 Magic on informed trades has a good course based off of Wyckoff's original. Its located here: Summary Wyckoff Course - InformedTrades Enjoy