About This "Climax"

[DbPhoenix 42]

I'm posting this here rather than T2W because I don't want to invite the attention of the Wyckoff Posse and their extraneous prattle about ice and creeks. If their attention is attracted anyway, here I can at least delete it. I'm posting it at all because I think it's important.

 

 

 

 

One can see the range we broke out of and the -- for now -- climax low along with its climactic volume. I say "for now" because one never knows in real time whether the climax is the real thing or a show of preliminary support (the Wyckoff Posse will tell you in hindsight). After that comes the technical rally and the test, which, consistent with Wyckoff's protocols, occurs on lower volume (i.e., less activity). If one enters on this test, his stop will be below the swing low, the "danger point", which is a pretty wide stop for someone trading his own money, but there it is.

 

Today's activity was not encouraging, and the retracement off the swing high will not be confirmed unless and until price moves past that swing high. That is, however, the weakest spot to go long. To the brave go the spoils, but the brave can also end up riddled with bullet holes.

 

As I said above, all of this may be no more than a show of preliminary support, and price may have much further to fall. In real time, there's no way of knowing. But it is nevertheless important to know and understand what one is looking at before he can even begin to formulate plans on how to take advantage of it.

 

Today, of course, we have options other than daily intervals to trade. Trading an hourly interval, for example, would greatly reduce risk. The chief message here, though, is that this is a climax scenario and it is important to live it in real time, not just in hindsight. If it turns out to be important, one can say to himself at least that he was on top of it throughout, as it was happening.

 

As for the money, if that's an issue, there's always the Q:

 

 

[DbPhoenix 42]

A reminder of the "preliminary support" process. Note that the bottom occurs after a series of "climaxes" and is relatively tame.

 

 

[Gringo 10]

I posting this with the caveat that it was done a long time ago and has possibly hindsight bias in my comments. Nonetheless it's not bad to see price behaviour and volume changes in relation to price drops. It's another example of distribution being spread out instead of being focused on one climactic day or week.

 

 

Gringo

Edited September 4, 2015 by Gringo