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fxpaulm
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Everything posted by fxpaulm
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I’m not sure how much of an advantage a trader gains by reading volume velocity, balance and transaction size, and market depth, but I would think that after reading all the threads on the Wyckoff Forum one can see that trading pure price can be extremely successful. One can still determine from price where S/R levels are and how price acts as it approaches them. Let’s not forget that time and speed can also be used to judge what price is doing. A trader can be very successful with just using price, S/D lines, TL, time and speed, regardless of the market being traded. Perhaps someone could start another thread like the trading in foresight one to show that it can still be done. While I enjoyed reading it, the majority of it was completed years before I stumbled onto the forum. It would be nice to see the thread active again and sharing ideas and honing the Wyckoff concepts when it comes to charts.
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Gringo, I agree with what you said. I think I'm coming off as combative, but that is not my intent. I have learned tremendously from the material here and from all of you. Thanks for making me a better trader.
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I scanned just Section 7 and in it, Wyckoff refers to the close of the bar at least 18 times and draws trading conclusions from them. He also references the spread regularly in that Section. This all started when I pointed out that Wyckoff wrote Part One of his course for people who do not look at the continuous flow of price and he says that great success can come from that. Reading the different threads and comments here one does not come away with the belief that that can happen. I agree that range (crest to trough) matters, but also sometimes individual bars/ticks/candles in whatever way people view them.
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Anyone reading the thread and comments will quickly see the importance placed on tick charts, I will leave that for others to see the obvious. No idea where I said that range and close were the end all and be all of Wyckoff (perhaps you could point me to where I said that or even where I said that is where my emphasis in trading is), but he did use them, an honest reading of section 7 will show that. Also, that section will quickly disprove the idea that he did not use bar analysis to some extent. Did he also stress supply/demand, trend and S/R of course, and I in no way said that he didn’t. No, you did not say that range and close were the end all and be all of Wyckoff, though you did say that he emphasized them. My question to you was if he thought they were so important, why did he bring them up so rarely in his analysis of 1930-31? My contention is that Wyckoff wrote the course for people who do not have the time to view price continuously, do you agree with that or do you believe that I’m bringing that to the course? I’ve shown this by pointing to Wyckoff and his course. Yet, reading the different threads and comments, one comes away with the idea that if one does not put in the “screen time” and observe price move via tick charts, then they will not be able to grasp Wyckoff. That is wrong and grossly distorts his work. Wyckoff wrote Part One for people who did not trade the tape during the trading session. As I said earlier, the purpose of following a tick chart for modern traders is to make the point that price movement is continuous. This point can be made in an hour. One other thing, I believe that when Wyckoff talks of price movement he has in mind the range and close. Why do I think that? Simple, in Section 7 he tells the reader to cover the chart and move it bar by bar to get the idea of the price movement and volume, the only way that makes sense is if he is looking at the range of the move that day and the volume and then drawing some conclusions from that. Now is that all he looked at? Of course not, he also observed the S/D, trend, and S/R. That's the only way it makes sense to you, but you are advancing your own interpretation. Yes, price movement. Yes, volume. But he rarely mentions the close or the range. If you want an exact number, scan the course using Ctrl+F. In any case, I fail to see why this concerns you since you trade a 5m bar. There is no close during the trading session, and the only range that matters is the range from the crest of one wave to the trough of the next. If you trade futures, there is no close until Friday afternoon.
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Nothing that I know of... I prefer the 5-min though, and before you ask, nothing is preventing me from doing that either. I'm merely pointing out that the idea that one must first put in tons of screen time and/or observe price by tick and all that other jazz is not the only way to learn Wyckoff. In fact, he himself seems to poo poo that idea in his course. If people learned it they way he intended, I believe there would be less confusion and more people grasping it. So I guess I'm just pointing out the obvious. My hope is that people who want to grasp it will not just get bogged down with some of the suggestions about screen time, tick charts, no thought to price range, and close. That to me seems counter productive and goes against the essence of what Wyckoff intended when he wrote his course.
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Gringo, What you are saying makes sense and I see the importance of screen time, but I still think that is not the essence of the course. To me he sums it up best in Section 22, pg.2 The tape reader is able to detect these critical stages at their very beginning and thereby gains the advantage… Those of us who have neither the time nor the inclination to study the tape for five hours daily require some method of attaining the tape reader’s proficiency by equally effective but more convenient means. It is my belief after reading and studying the course that Wyckoff wrote it for people who “have neither the time nor the inclination to study the tape for five hours daily…” in view. He honestly believed that people could study his course and make money by studying the market for about an hour a day with the method explained in the course. That is either true or it isn’t, but I believe that he was correct. So while I see the benefit of putting in the screen time to get a deeper understanding of price action, I do not feel that it is the only way for people to learn Wyckoff. In fact, in some instances, people will never get it by studying it that way. Wyckoff believed that people would be better off if they learned to analyze the market with a wave chart, rather than from the tape itself. Unless I’ve grossly misread Wyckoff and the course that seems like the most prudent thing to do when trying to fully comprehend the nuance of his methodology. To me it doesn't make sense to tell some one new to Wyckoff to observe the tick chart and see the ebbs and flow of price, because most people will never grasp it that way. Why not do what Wyckoff recommends in the course?
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Gringo, I understand what you are saying about Wyckoff having honed his skill and that explains the success, but I’m also aware that he wrote his course for the people who can only devote one or two hours a day. I base this on part two or the “Tape Reading and Active Trading” course that he wrote after the first. In it he starts with – The majority of those who follow our Method devote an hour a day, more or less, to studying and planning their campaigns. But we have learned that an increasing number wish to trade in the market continuously… This form of trading is entirely distinct and different from that described in the other Division of our Method, which aims to secure profits from the ten, twenty and thirty point swings. It meets the requirements of those who wish to trade more or less constantly. So it seems to me that the first course, the one over 400 pages, is for people who devote an hour a day. Am I wrong? If that is the case then emphasis must be placed on the range and close of the individual bar and their movement compared to previous bars. That all being true, then it shouldn’t matter that he spent years studying the continuous flow of price, because he wrote the course for people who can only devote one hour a day to trading in mind. Do you think I’m missing something here? If so, please let me know.
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I’ve read most of the threads and at times things are crystal clear and times extremely muddy. For example, numerous places in this forum have I read that O/H/L/C is not important, just the waves and don’t look bar by bar and yet reading the Wyckoff course that seems to be what he is doing. It has been suggested to study tick charts and watch to see the flow of price and until one gets this they will never understand Wyckoff, but in the course, Wyckoff said that devoting one hour a day to the market should yield great results. The only way that would be possible is if he did put some importance to individual bars and the H/L/O/C. He said in the same section (24M, pg.8) that he had his best results when only looking once a day, now granted, he did have an understudy who would call his attention if something happened, but he did not watch the continuous flow of price and had great results by looking at the individual bars and comparing them to previous bars, he did place importance on closes and his analysis and writings show it. Am I missing something?
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Nothing is every easy, but I thought he had some general guidelines. Otherwise what exactly is the Wyckoff Method? Seems like its watch price & volume and determine if you want to trade, how is that different from the Joe Smith method?
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Question- If you determine that price is on the springboard, then when do you buy according to Wyckoff?
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Section 4M page 26 Wyckoff wrote Net Gain or Loss. Changes in Pressure Up or Down About closing price.
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Does anyone know if and where Wyckoff discusses the position of the close and its relevance? I've done a search through the course, but have not been able to find anything.
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Does anyone just use price to trade? No volume or other indicators. S/R levels and TL and price nothing else.
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Question about when to enter trade based on a HL. What kind of confirmation did Wyckoff use before he got long on a HL?
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Niko, Thanks for the reply, but a quick follow-up. The point I’m not grasping is that the symmetrical triangle described by Shabacker in “Technical Analysis and Stock Market Profits” is exactly like the hinge – filled with price and specific volume behavior that is identical to each other. Of course I understand that not all triangles are hinges, but I was referring to the symmetrical triangle. Now Shabacker discusses false moves, but nothing is said about the pattern failure. That is why I asked if this was just a simple case of saying the same thing just using different jargon.
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I'm not sure I understand, the hinge is also a pattern created by price and its characteristics are the same as the symmetrical triangle pattern that is also created by price - filled with price and trading activity tapering off as it approaches the apex. The formation of the triangle and hinge occur for the exact same reasons. Also, the hinge does not tell you which way it will BO and neither does the symmetrical triangle per Shabacker. Is this just a case of looking at the same thing and one saying I see a pattern and another sayingno I see PA? For example, if you described the hinge to a pattern trader that uses Shabacker he would know it as a symmetrical triangle.
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What is the difference, if any, between a hinge and a symmetrical triangle? Thanks A symmetrical triangle is simply a pattern. A hinge is created because buyers and sellers near an agreement regarding value, and its primary characteristics are that it's "filled with price" (Schabacker) and that the trading activity tapers off before price exits from the hinge.
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Last question, I've recently been exposed to S. Seiden and OTL and he uses supply/demand levels. Of course they say they are looking to trademark their system, but that sent me looking for supply/demand and trading and I found Wyckoff and then this Forum. My question is not knowing much about the way Seiden uses supply/demand, only have seen one video of it, but is there any similarity between the two methods of supply/demand? Thanks Can't say, though I'd want to know why he's a vendor and if I can observe him trade real time. Otherwise, I'd pass.
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DB, Do you know of anyone here who does trade FX? No. Since one can show a real knack for this type of trading without volume, then why the lack of forex traders using price action like Wyckoff? Lack of interest. Few want to be traders. Most want to be engineers, or mechanics, or statisticians, or accountants, or mathematicians, or psychologists. Or gamblers. And it's become much worse over the years.
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No problem and I've read most of the volume thread and the Wyckoff volume material, I was just confused with some of your remarks about volume. When it comes to forex, do you not look at it because no volume and centralized market? I've been in forex a long time, it is much better today than it was 10 - 15 years ago. Thanks
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Also, no volume available it is a 30 min chart of the USD/JPY. In the futures market the Yen volume dried up as it was approaching its apex and then the breakout saw drastic increase in volume, One more question, it looks like sometimes you do not use volume and said most people do not understand it anyway, so is volume important or can you make do without it? Thanks
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When I click the attachment the chart opens in a new tab, sorry not sure how to post charts in other way.
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DbPhoenix, I've read the stickies and Wyckoff and want to thank you for all of your work and effort. I do have a question, on this chart would this be a valid hinge Thanks