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Dyoung, I would start off with this book to see if the Wyckoff way appeals to you first before getting in deeper. Amazon.com: Charting the Stock Market: The Wyckoff Method: Books: Jack K. Hutson Next, you may want to try to get a hold of some articles written by Hank Pruden who teaches the Wyckoff way. He wrote Trading the Wyckoff Way, Buying Springs and Selling Thrusts and Wyckoff Axioms, Jumps and Backups for Active Trader Magazine (http://www.activetradermag.com/). I have also attached a couple of other articles by Hank Pruden. You can also join a Yahoo group that focuses on Wyckoff trading at Wyckoff-SMI : Wyckoff-SMI. Also, go to Elitetrader.com and read posts from "hcour". He trades using Wyckoff methods and he has some excellent posts. If you still want more after all of this, you can purchase the Wyckoff course from SMI, which runs about $800 (can be purchased in sections). Just like Market Profile, Wyckoff takes a lot more time to learn than trading using indicators. Market Profile and Wycoff will teach you a sound and robust trading methodology and will really teach you how to read the markets. One of the things that Wyckoff and Market Profile have in common is that they teach you how to find the best trade opportunities with the best risk/reward. IMO, this is all you will ever need. Hope this helps. Pruden, Hank - Wyckoff Laws and Test.pdf Pruden, Hank - Wyckoff Tests.pdf

Thought I'd share a basic Excel spreadsheet for tracking trades and trading performance (created on Microsoft Excel 2002). This is intended to serve as a starting point for a Trader's Log and can be modified to suit a trader's needs. My goal was to keep it as simple as possible so that this part of a trader's job does not turn out to be too onerous. Note that there is a lot of room for improvement. For example, this log assumes that trades are opened/closed on the same day and it does not track all expenses, such as the cost of trading platform(s), computing needs, etc. I expect this log to evolve over time. Trader's Log Worksheets: Trades - Enter the details for each trade. The data entry for each trade is done in this worksheet. Trade Analysis - Calculates the trader;s performance fo all, long, and short trades. No data entry required. Account Summary - Summarizes the trader's monthly performance. The initial balance can be entered. Monthly P&L - Charts the traders performance from the Account Summary worksheet. Performance Summary - Provides additional details on monthly performance. Strategy P&L - For traders that trade different strategies, this worksheets tracks the performance of each strategy. Thought we could use this thread for discussing how traders handle this important part of trading and to get other ideas. Hope this is helpful to some. P.S. Some of the worksheets have been protected to avoid making changes inadvertently to it. To unprotect the worksheet, click on Tools > Protection > Unprotect Sheet... TradeLog.xls

Reaver, Out of all the MP books and courses out there, Mind over Markets is the best and the least expensive at 20 bucks. I've re-read it over 5-7 times and gain more insight each time, seriously. That's probably all you need, but it helps to hear other perspectives as well. I'm looking forward to his next book too.

The Cisco-Futures short course is $600 (6 months) and the long course (12 months) is $1200, both include market data for the duration of the course. I do think that there is a lot more insight to be gained from the Cisco-Futures course. Don Jones presents a model trading strategy and covers dozens of other reference points that a trader can choose to use in his/her trading. Some of the sections of the course is a little dated though. After re-reading MoM, it's obvious that it is simply an excellent book on Market Profile. The sections I read over and over again are the ones related to trading brackets and trends. As I've said before, the Cisco-Futures course is a great value considering all the snake oil salespeople out there who take advantage of new traders.

Reaver, No mentors. I learned from Linda Raschke, took the Wyckoff course from SMI, the Cisco-Futures short course, and read a tremendous amount of books. The books were very useful in learning about what's out there and then determining what suits me best. Although I've taken two seminars, Raschke's and Tom Alexander's, in general I would steer away from seminars. They are not generally worth the money. For me it all boils down to Price and Volume. Study Wyckoff and Market Profile. That's the best advice I can give. Unfortunately, Wyckoff and Market Profile take a lot of time to learn and apply. However, it doesn't have to be expensive and it is all worth it in the end.

Reaver, I took the Alexander Trading seminar in April '06. They emphasized trading as a business by developing a business/trading plan and provided their trading methodology, based on MP - a good complement to the Cisco-Futures course and the book Mind over Markets. Their newsletter is good and covers most of what is in the seminar. Note that I did not use them for mentoring services. They focus on trading market development and market structure using Market Profile. The type of stuff that I usually write about in my ES analysis on this forum. Check out some of the free webinars at the CBOT from Tom Alexander. Reaver, FWIW, I think you're on the right track with the Cisco-Futures course and Mind over Markets.

The ES has been in an uptrend since July '06 with relatively short-lived retracements/consolidation along the way. However, the ES has now started to balance/bracket over the intermediate term. If the ES breaks 1378 to the downside, that would not be a good sign for the bulls. See the chart below. If it trades above 1409, that would signal a breakout of the intermediate-term trading range and continuation of the longer-term uptrend. This provides me with some market context so I would be alert for a breakout if the ES trades near its upper bracket limit. Next, I identify the market condition. On the intermediate-term, the ES is currently in balance, so I will identify the key reference points of the bracket. The trading range I'm analyzing is from 11/7 to 12/1. The upper bracket limit is 1409 and the lower bracket limit is 1380; there are also two pronounced high volume nodes (HVNs) at 1404.50 and 1389.25. The ES is currently trading between these two HVNs so it is currently in balance on the daily timeframe. See the next chart below. Finally, I look at market structure by analyzing the daily profiles of the last few days. The key reference areas are the buying tail at 1389.50-1387.50 and the selling tail at 1403-1404.50. The POC is not that pronounced so I will not give it much weight. The chart below shows the daily profiles. Key Reference Areas for the ES on 12/4/06 When analyzing the composite and daily profiles, I try to line up as many key reference areas as possible since a confluence of levels usually provide more significant support/resistance levels. 1409 - Upper Bracket Limit 1403-1404.50 - Friday's selling tail and also contains the HVN of the composite profile (2nd chart above) 1389.50-1387.50 - Friday's buying tail and also contains the HVN of the composite profile (2nd chart above) 1380 - Lower Bracket Limit Trade Plan for 12/4/06 In general, I will monitor market internals and price action as the ES approaches any of these key reference areas. My preference would be to go long at any support level below the price the ES is trading or to go long if the ES breaks out above 1409. However, I would also consider short trades. Prior to the trading day, I look at Globex to see where the market is going to open - within value or outside of value. One other observation, the ES seemed to have rebounded fairly strongly from its Friday's low. That is, it is exhibiting some trending behavior within the bracket, so I will be alert for a gap open and strength near the resistance levels. Another scenarios is that the ES just trades between the two HVNs. My trade strategy is usually to let the market tell me what it wants to do and then trade accordingly. Although I may have a bias at the beginning of the day, I will quickly adapt if the market is telling me I'm wrong. This is always a challenge. Steidlmayer said it well in the book Markets and Market Logic. He said, "It is very important to visualize the many ways in which the market may unfold, rather than trying to forcast or predict how it will unfold. With a market understanding, you can begin to visualize each possibility, and what each would indicate to you about the market and your position." Also note that trading ranges and trends occur in all timeframes, so depending on the timeframe a trader uses to trade, one trader may see a trading range whereas another one may see a trend. Even within a balance area, the market can form smaller balance areas. See the next chart for an illustration.

The Euro (EC) broke out of a long trading range on 11/22 and has been trending with shorter-term balance areas forming with higher value (see chart). Notice how balance and imbalance occurs on all timeframes. When in an uptrend, as the EC is currently in, I choose to only trade breakouts (long trades only) from the small balance areas that form. Also note what a trend looks like in a Market Profile graphic, i.e. nodes forming at higher levels as the market trends with single prints/low volume areas forming from range extension. These high volume nodes and low volume areas provide excellent support levels in trending markets. The traders job now is to be alert for the end of the trend. For now, the EC is trending and I still have a long bias. The second chart shows the trading range from where the EC broke out. Notice that momentum is starting to slow a bit in the EC, but I'm still expecting higher highs. One thing I'm trying to improve in my currency trading is holding for longer periods while the trend is intact as opposed to closing trades at the end of a day or two.

It appears that the course in general does not appeal to too many people, perhaps because of the way it's marketed or presented. I have to agree that the presentation is not the best - website appears disorganized and overwhelming. But for those who can see past all that, the course benefits are great I think. What I like most about the course is that Don Jones presents a model trading strategy that is as objective as you can get. As an engineer, I can relate to that. Enjoy the course Reaver!

The Cisco-Futures course is excellent, IMO. I took the short course, and for those who feels that Market Profile suits their style, it's the best deal out there. It's a great value. Don's book, Value Based Power Trading, and Mind over Markets complement each other very well.

That's correct TinGull. B/A is snapshot, T&S window is actual tick by tick.

James, excellent chat session on tape reading. Very helpful the way you clearly highlighted what we ought to be looking for in the tape. Thanks! In case some folks are not already aware about this, but one thing worth noting about using the bid/ask in TradeStation (i.e., red/green/white in the T&S window) is that TS only provides a snapshot for the bid/ask. That is, TradeStation only updates the bid/ask about once a second so the bid/ask is not always accurate. This is also true for the IB data feed. I do not use IB, but have read about this on other forums. For some traders, using the bid/ask snapshot may be good enough. Anyway, something to think about if you use TS or IB and rely on the bid/ask heavily for your trading.

The EC gapped up 75 ticks/pips and then closed the gap around 4am EST, stopping at Friday's POC around 1.3100 (see chart). This level remains a key reference point since it contains Friday's POC and single prints/low volume from today's trading. Today's POC/high volume node and the upper bracket limit around 1.3175 are also reference points for the next trading sessions. My bias is still to the long side for the EC.

Carter, as you stated, the POC is just another reference point that can serve as support/resistance similar to a moving average, previous day's high/low, etc. In and of itself, there is nothing magical about the POC so I would not focus on developing a trade strategy around the POC itself. Instead, I would focus on developing a trade strategy around market development and then using the POC, as well as other reference points, to position my trades. Do you see the difference? I would focus on trading market development (i.e., balance areas, trends, and the transition between both) and market context (e.g., is this a retracement within a longer-term uptrend, or trending behavior within a longer-term bracket, etc), and then using the key reference points that the Market Profile helps identify (e.g., POC, value area, single prints, range extension, etc.). By doing so, you would be trading based on robust, sound principles and not just a single price on a chart. Placing a trade solely because it has hit the POC feels like a "gimmicky" trade to me. You really want to understand what the market is doing so that you can position yourself with it. The market condition should dictate your trading strategy since trading ranges and trends are traded in dramatically different ways. I use a composite market profile to determine the market condition. After evaluating market condition, I turn my focus to market structure, which I do by looking at the daily profiles of the previous 2-3 days, in general. I would then try to identify a confluence of reference points, which tend to act as more signficant support/resistance levels than a single reference point. Trading mechanically at the POC, or any other single reference point, would not lead to profitable trading and your odds would be no better than 50/50, IMHO. In addition, I would also be careful of placing too much importance on any single price on a chart, such as the POC, UVA, or LVA, and focus more on price regions while monitoring market internals or an indicator of your choice. This is something that took me a while to start doing. As you can probably tell, my trading strategy has been heavily influenced by the book Mind over Markets.

Hi Robyn, Here's my analysis for the EC (Euro), FWIW. Note that I trade the CME Currency and not Forex. The EC finally broke out of a long, 7-month trading range (see chart). Anyone that bought before the breakout is now in the black, so I expect the upper bracket limit around 1.2950 to be strong support. The EC formed new price highs and a new oscillator high, which together indicates a new momentum high. One principle that I follow is that momentum precedes price, so I expect higher highs on the EC. That means I will have a long bias on the EC, and would not plan on going short unless the EC re-enters the bracket (i.e., a false breakout). On Friday, the EC broke out of its trading range and started to rotate, forming a small balance area and gaining acceptance at the new higher prices (see second chart). My trade strategy would be to go long around the POC at 1.3100, if the EC opens above the POC, or around the lower bracket limit at 1.3070. I would also go long if the EC trades above the balance area that formed on Friday around 1.3130. If the EC starts to penetrate the single prints, I would monitor market internals for weakness (e.g. a divergence) to position a long trade. However, if my stop is too far away from my entry according to my risk parameters, I would let the trade go. There is no way of telling where within the single prints the EC may stop and reverse. What I do not want to see is the EC retrace all of the single prints, because that would be at least short-term bearish. Anyway, this is my trading model. Hope this helps.

I posted a "Virgin" VPOC indicator here http://www.traderslaboratory.com/forums/f46/enthios-virgin-poc-indicator-tradestation-810.html#post2814 for those interested in coding the strategy in TradeStation. Would be interesting to see how well it performs when traded mechanically.

Soultrader, thanks for the question. On page 259 of Mind over Markets, Dalton described a short covering scenario (from 1/26/89 to 2/1/89) where Soybeans were in a downtrend, but then rallied due to short covering. During this retracement, Soybeans formed a "P" formation when the buying auction stalled. It then started to head down again. See the chart below. The area within the rectangle is the short covering rally that stalled. If the individual days are aggregated together, the "P" formation becomes easier to visualize. So on the shorter-term timeframe, Soybeans were in an uptrend. On the longer-term timeframe, Soybeans were in a downtrend. Timeframes and market context are very important in my analysis. As the "P" is forming, the market is basically balancing at one end of the distribution so I would expect value area placement to be higher, lower or overlapping. The ES chart below is an example of this. Note the "P" formation from 11/06 to 11/09 and notice that the value are placement for the last three days was higher and lower (when compared to the previous day).

namstrader, thank you for the kind words. I'm glad you find my posts helpful.

In short, a p-shaped profile is typically seen in an uptrend and a b-shaped profile is typically seen in a downtrend. According to Steidlmayer, the four steps of market activity are: Vertical movement up or down - the market establishes a series of prices in one direction (i.e., Trending or Vertical Development). The market finds a price that stops the directional movement. Essentially. the market moves far enough where it shuts off buying or selling. The market begins to move sideways around the stopping price. That is, the market develops one end of the distribution. This is where the market forms a p-shaped profile in an uptrend or a b-shaped profile in a downtrend. The market moves to efficiency and begins to form a bell-shaped curve over the entire range of step 1. Essentially, the market is filling in the 'p' or 'b' shaped formation (i.e., Balancing or Horizontal Development). The markets are in a constant cycle moving from balance to imbalance. I developed my trading plan around these four steps of market development and adjust my trading strategy accordingly. I think it is important for all traders to start their market analysis by determining the market condition. Steidlmayer also refers to a concept called "Minus Development", which occurs when the four steps do not occur in sequence or the market skips a step. For example, a market can start an uptrend, move far enough to shut off buying, and then balance around the stopping point forming a p-shaped profile. Step 4 may not occur because the market continues the uptrend. If you review the trading in the YM during the month of October, you'll see that this is what happened as it continued the uptrend. See the chart below. Having said that, I believe what TinGull is referring to is that the YM is forming another p-shaped profile as seen in the chart below. If the YM trades between the two nodes shown in the profile, then it will complete its p-shaped profile. The question then becomes, will the YM continue its uptrend (step 1) as it has been doing or will it move to step 4 and fill out a larger distribution. TinGull, did I represent your point accurately? Comments/corrections appreciated.

Thanks guys for your suggestions. feb2865, your Forex seminar was a great example of what I was referring to. I trade Euro and Yen (currency futures) and will be paying close attention to your trade setup. I have to reread the transcript to better understand the stops and whether reentries are allowed (i.e., market crossing the H/L several times). Soultrader, sounds like you're comfortable entering a trade when there is a cluster of support/resistance levels, such as MP levels and pivots. How often do you enter like this without reading the tape? I think for position trading, identifying clusters in a longer-term timeframe may give me the confidence to enter trades without monitoring the market in real-time. Torero, I like your comment about letting the momentum take me into a trade. Retracements is a type of trade where I'll enter my order ahead of time too. However, I usually buy pullbacks when price is heading down, I rarely wait for the market to turn back up (vice versa for shorting rallies).

In general, I use market internals to monitor a market for strength/weakness as price approaches a key support/resistance level before I enter a trade. That is, I use market internals to confirm most of my trades. I would like to explore some trade setups that would allow me to enter a trade ahead of time without requiring further confirmation. So... Under what conditions do you feel comfortable placing a buy/sell order ahead of time and letting the trade trigger when your stop is hit without further trade confirmation? For example, do you identify major support/resistance levels that you feel you can simply enter a trade there if the level is hit? I would be interested in hearing from traders who do this as part of their daytrading or position trading portion of their trade plan. I'm currently working on my swing/position trading program of my trade plan and would like to better understand when it is feasible to do this (e.g., trading breakout, S/R, retracements, etc). Thanks.

MrPaul, The number of days that were no change from the previous day is close to zero. So just subtract the numbers above from 100 to get the percentages of lower closes. The data below is for Jan. 1960 to Present. Results are close to 50-50, so not sure how to capitalize on that data. If anyone wants the TradeStation code to do this, let me know and I'll post it. Percentage of Up Days: Monday: 46.48% Tuesday: 51.99% Wednesday: 56.45% Thursday: 52.33% Friday: 54.66% ====== Percentage of Down Days: Monday: 48.98% Tuesday: 49.45% Wednesday: 44.57% Thursday: 47.50% Friday: 44.61% ====== Percentage of NoChange Days: Monday: 0.38% Tuesday: 0.68% Wednesday: 0.59% Thursday: 0.76% Friday: 0.64%

When I started daytrading part-time, I had asked Linda Raschke the following question: Here is Linda Rashke's response: I chose to trade the morning sessions on Tues, Wed, and Thurs. From empirical observation, I would agree with her response.

Hi All, Very good posts by many here. I don't really disagree with what has been said about indicators here, but I'd like to add my thoughts to the thread. I don't get caught up on what's an indicator and what's not indicator. For me, what's important is whether there is lag and whether the "indicator" is based on market-generated information, such as the Market Profile, Price, Volume, Ticks, Trin, Breadth, etc. In general, I don't refer to Market Profile and market internals as an indicator, but it is all technical analysis. For me, an indicator is derived from market-generated information, such as price and volume, and has lag. These days I don't use indicators much because I prefer to trade using Market Profile and market internals. But like I've said before, indicators can be useful in helping a trader interpret the price action in a chart. Sometimes it is easier to see a pattern, momentum, price impulse, OB/OS condition from an indicator than from price itself. There's nothing wrong with that. But make no mistakes about it, everything an indicator shows is right there in the price chart. The problem with the use of indicators is in the way that most traders use indicators and what they expect to get out of them. From what I've seen, many traders tend to use too many indictors, jump from indicator to indicator, and/or experiment with different indicator parameters looking for the holy grail. They try to use indicators for buy/sell signals without really knowing how to interpret what the market is doing - not everyone, but most I think. This is where I think the criticism of indicators is valid. Perhaps misplaced though... One thing I believe wholeheartedly is that new traders should learn to read price action before relying on technical indicators. I will also go as far to say that trading based on indicators alone, without market understanding, is not a long-term strategy for being a consistently successful trader. Kiwi, you contributed a very good post and I agree with most of it. I also agree that there is no lag when using a level as support/resistance. However, my issue with using a moving average as support/resistance is the reliability of the MA itself. Why should an arbitrary MA provide support/resistance for price? Because most traders use it? For me, that's not a good enough reason to risk my money. From my experience, support/resistance derived from Market Profile, with market understanding, is far superior to a moving average or any indicator that I have come across. Personally, I know that I could never trade large size using a strategy that is based on the "squiggles and wiggles" of what I consider to be indicator. I just cannot put that much significance on an indicator, but that's just me. However, with Market Profile, it's different. Market Profile suits me very well. No doubt that I am pretty fond of Market Profile, and I would even say, that it is probably the best and most original contribution to technical analysis over the past few decades if not longer. But Market Profile has its lag too, and as a trader, I need to know the TA tools I use inside out and when they don't work as well. Market Profile is great for determining value when a market is in balance, but Market Profile is not as useful in finding value when a market is trending. When a market is trending, you cannot determine value because the market is in search of value, otherwise it would be facilitating trade within a trading range. I say MP lags in a trend because price is either chasing value, or vice versa. For the record though, I will say that my favorite indicators are the Keltner Channel with a 20EMA, a modified MACD(3, 10, 16), and the ADX(14). And occassionally, I'll use them for confirmation, especially on a tick chart, but NEVER to give me a buy/sell signal. Bottom line for me is would I quit my job as an Engineer to trade using a strategy that is heavily reliant on indicators? No, I would not. I do not see long-term trading success in that scenario. But I would, and will, to trade market development and market structure using Market Profile. I've bought into this whole Market Profile thing, hook, line, and sinker. P.S. I've been trading part-time for about 2 years and this is my opinion thus far. I started with trend-following mechanical systems, moved on to discretionary trading using the indicators listed above (after learning to read price action) and multiple timeframes, and now I am using Market Profile, which has made all the difference in the world in my trading and has given me a huge trading edge. Like most of you, I daytrade primarily (whenever I get the chance).

The ES opened at 1386.25 above the HVN of the composite, so I will have a long bias. Buying pullbacks.