mister ed

Outstanding post James. BTW, I saw your post in the candlestick area re this trade too, and I thought that although it was a nice entry it was the ongoing management of the trade that really delivered the numbers for you, this post (above) expanded on why and how you held that winner all the way down, great stuff thanks.

Well, this Blink book has done something to my imagination ... I really like his message, which I think is nicely summarised as "the power of the trained mind to make split second decisions" (from the Wikipedia page). This is what short time-frame traders (day-traders and scalpers) are doing all the time. One of the criticisms of Gladwells book (again, taking this from the Wikipedia page, link above), is from Steve Sailer: "But as far as I can tell, his book reduces to two messages: * Go with your gut reactions, but only when they are right." There is another point Sailer makes but its not relevant here. But that first criticism ... does this remind anyone of trading and how we get out of decisions that are 'not right'?

I'll get my coat ...

Yes, the physical commodities have many industrial uses and must be bought to manufacture goods etc. Real demand, not much intangible about putting diesel in your truck or coal into your power plant.

zdo - David actually said Market "movers".

dandxg - try this link to the video: http://www.videos.traderslaboratory.com/view_video.php?viewkey=33bc65bf8d78622277c4 Sebastian - I have updated the link in your post too.

Thanks for this, I had a look at a description of the book at this site, looks really interesting!

You could plot this on a chart. Call it a Charcoalstick chart. You could write a book. We could start a sub-forum on Charcoalstick charts. Great possibilities...

Thanks Eiger - really great stuff, so comprehensive. Can I add one suggestion to anyone studying Eiger's work, if your charting software allows it use the 'replay' function to see how the price/volume activity unfolded in real-time (well a replay of real-time). I use the function on Investor R/T and find it a great review/learning tool.

Yeah different strokes for different folks. Have a look at Busy day tomorrow thread, give you an idea of how some institutional-side traders trade (and because its a frikkin' great thread).

OK, got you figured out BF! :haha:

MORE! I didn't think we had answered the ones we had already LOL. My understanding of jobbing is that it is equivalent to scalping. It is an English expression (I think). Trading for a pip or so, normally in front of S&R and orders; on an exchange floor a jobber can often see where the orders are and trades just in front of them for a tic or so. Jobbing, like scalping now, requires low transaction costs, which is why it was/is popular on an exchange floor with locals and brokers. % of daily volume - no idea sorry. I don't think you could accurately measure jobbing/scalping volume so any thoughts on % of volume would be anecdotal. I imagine an experienced floor trader could make a good guess, but maybe a screen trader (in a screen-traded market) would find an estimation a lot more difficult. Cease/refrain conditions - if there is a sharp directional move on then jobbing will decline (but not disappear, always orders to get in front of) until price settles.

FW, I looked at the question, the 'cracks' in S&D using a fundamental of economics. I think I was misunderstanding your questions though. The D&S curves, and their shifts, are based on many assumptions, and that model is a gross simplification of the real world and real markets. I am not sure that the law of supply and demand in economics is nothing more than a model upon which to build better models. If it is, then thats promising for traders, because we can build better models for our markets. There are a multitude of 'anomalies' to the rational player model, Wikipedia has a list of cognitive biases, some of which have been studied from a behavioural finance perspective. Such a list is a good starting point for investigating these anomalies and what they might mean for traders and the markets.

What I was thinking was that a rise in price can 'advertise' the stock to previously uninterested parties, so increasing the population interested in the stock and feeding thorugh to more potential (then actual) buyers. Whether this a reasonable point or not .... Thanks for the reminder of the curved curves (!), yeah just drew them simplistically. Maybe I am coming at this from the wrong angle completely ... seems to me that the most reliable time when buying can lead to more buying is when we hit the obvious stop-loss level (for shorts) ... normally some mighty good buying then :haha:

FW - be interesting to read some more of those studies you quoted, can you give the sources, esp. for the ASX study?

Does this even need an IPO as an example? What about a previously 'dormant' stock, stuck in a low-volume, nothing range ...... if interest is created in such a stock by whatever means and attracts new participants into the market for that stock then that may well be an example of supply-induced demand (supply, on the way up, coming from those who have been quietly accumulating it)?

This post (a section of it reproduced below) was on another thread and I thought it relevant to post here, the highlighting is mine OK, so zdo is asking, in the areas I have highlighted, for a discussion of: 1. conditions where buying will attract more buying, and 2. conditions where buying could, but does not, attract more buying. These seem to me to be excellent questions, and in providing answers from a VSA perspective on this thread (and perhaps from a Wyckoff perspective if Eiger (or anyone else of course) is so inclined) we may well provide a valuable service to newcomers to VSA/Wyckoff analysis. Any takers?

I saw this thread a few days ago and I must say I found it confusing. Mind you, me finding things confusing is not unusual at all, usually just requires me to spend more time re-reading and thinking things through. So I have some ideas that hopefully will be useful to further the discussion. Oh yes, also, its been quite some time since I took my economics subjects so please point out and excuse any errors. I want to look at FW’s question about demand, and the contention that " ... higher prices will attract more buying." I think a useful distinction was made by zdo when he said that “higher prices can attract more buying” (my emphasis). OK, let’s look at a supply curve: And now a demand curve overlaid on top: OK, now these two curves are pretty basic, as price rises we expect to see the quantity demanded decrease, and the quantity supplied increased. Where the two intersect is that magical ‘market equilibrium’ – the current price. These curves are based on some very particular assumptions that simplify the world a great deal. One of the main assumptions is that the population remains stable. If the population is not stable in an economy we would expect to see a shift in the demand curve. For example, an increase in the population would see demand increase at any given price, this will shift the demand curve up (to the right). http://www.traderslaboratory.com/forums/attachment.php?attachmentid=7135&stc=1&d=1213847867 I am going to have to brief here, so others might fill in gaps … but in a trading application an increase in the population demanding the goods (stocks, contracts, whatever) can cause the price to increase. An increase in the population may come about from a news release, a change in company or market fundamentals, the publishing of a favourable report in a tipsheet ….. or even from an increase in the price which comes to the attention of others, prompting them to buy (momentum trading). These new momentum traders are an increase in the population, they shift the demand curve to the right …. OK, now I haven’t even considered the effect of a rising price on the supply curve. Pressures of time mean I will have to put this off, or others might have a comment. Briefly, though, an increase in the population (number of buyers) which shifts the demand curve to the right, if recognised by sellers might cause a shift in the supply curve also?

That's right FW - there is a pdf attachment (The Tape Reading Chart) in this post where Wyckoff described an intra-day entry, it includes an intra-day chart on the last page of the attachment.

Hi Ubetido The ideas and principles of the analysis can be applied to daily charts as well as intra-day. Unfortunately there isn't really a shortcut I can point you to, its a matter of studying to learn to recognise entry and exit points. The two VSA threads will be a great benefit, but also have a look at the Master the Markets book (link to free PDFs of the book are found through the threads and elsewhere on this site). The Wyckoff area of the forum may also be helpful to you.

Thanks James, that makes sense now. Just to clarify I have yet to see a no demand bar for the 3 busty blondes.

I second these sentiments Eiger, your knowledge of the VSA and Wyckoff methodologies, and your clear explanations are of great assistance and much appreciated.

Goodonya bootstrap - great post

Thanks for the info thrunner ... looking into this now. What do they say about "too good to be true?".

Nice intro bootstrap, welcome to the site!