Chat Junkies

[firewalker 10]

... here are some charts I was talking about from a while back (anyone remember dow at 14000?

 

It illustrates that the daily gyrations can sometimes stay in the same range for a while. These are some charts from October 2007, but you can find the same things today. I only look at these to get an impression of what the possible extent of a move could be. At that time the trending ranges were about 200 points. So that's the number you need to have in the back of your head when looking at these charts.

 

Like if we are trending and have dropped 500 points on the YM with 1 hour to go and the market approaching support, it would be more risky to short on the break than when we dropped 50 points with still 5 hours to go. But that's just how I see it, and there's no reason both trades can't be profitable. It's just something that helps me 'filter' my setups and skip the medium probability ones.

 

Credit to those who deserve it, it's something I first picked up in some of dbphoenix' ET posts and I gave it a twist of my own.

[firewalker 10]

Nice to see so many ppl in the chatroom these days!

Perhaps it would be fair to also allow the new guys to post in here? Just a thought...

[DbPhoenix 42]

Nice to see so many ppl in the chatroom these days!

Perhaps it would be fair to also allow the new guys to post in here? Just a thought...

 

I've been pumping the chat room, particularly to those interested in trading by "price action". How many of them become regulars remains to be seen.

 

Incidentally, the questions you're asking in the "Ideas for Struggling Traders" thread are excellent. The idea that thousands of market movers all over the world are going to act in concert, event or no event, prompts skepticism at best. At the very least, anyone advancing such a notion would not only have to provide a great many concrete examples but to do so in real time in advance of whatever move they're predicting. Without that, it's just more of the usual hindsight wizardry.

 

All of which is why Wyckoff warns against "event trading" and why he insists that it's all in the chart, a fact which Head2k and atto have demonstrated nicely.

[firewalker 10]

I've been pumping the chat room, particularly to those interested in trading by "price action". How many of them become regulars remains to be seen.

 

Your marketing definitely has an effect... Hakuna (who seems to have a healthy sceptical attitude too) informed me he'll also be joining in next week.

 

Incidentally, the questions you're asking in the "Ideas for Struggling Traders" thread are excellent. The idea that thousands of market movers all over the world are going to act in concert, event or no event, prompts skepticism at best.

 

Well I guess I'm just saying out loud what most of us are thinking...

 

All of which is why Wyckoff warns against "event trading" and why he insists that it's all in the chart, a fact which Head2k and atto have demonstrated nicely.

 

They have indeed. And although it's not been updated in some time, there's also the "all you need is... a chart" thread from a while ago.

[DbPhoenix 42]

Well I guess I'm just saying out loud what most of us are thinking...

 

His implication that anyone who doesn't join the admiring throng is too dumb to understand what he's talking about -- particularly his last response to Hakuna -- suggests guruitis.

 

In any case, I've put together a chart that I hope better illustrates what I was trying to get across yesterday. Here, R was at 1200. Strong R. And I said early on that my "box" was 1100 to 1200. Price hit 1200 around 11:08, but there was no tickq divergence. It then floated back to what had become unexpected S/R about 1190, where it remained until 12:35. It then took another shot at 1200 at 12:39, and there was a minor TD which could have been taken or not but which was negated five minutes later.

 

Price then took off for 1208 at 12:58,

 

 

and here appeared what I would have been looking for had I been trading at the time.

 

 

Note that there's a pretty severe deterioration in the tickq beginning at 12:56, and one could take that. But the clearest sign of weakness is the level of the tickq when price is pushed into an attempt at a new high at 13:01:30. That's the entry (with a tight stop, as always), at least for me.

[atto 20]

I have had two new people request to get in. As is, I can't add them (so I PM Soul). Until we get a better system of doing things, if anyone asks how to get in, just tell them to PM me and I'll forward it on.

[firewalker 10]

Note that there's a pretty severe deterioration in the tickq beginning at 12:56, and one could take that. But the clearest sign of weakness is the level of the tickq when price is pushed into an attempt at a new high at 13:01:30. That's the entry (with a tight stop, as always), at least for me.

 

But, unless I'm mistaken, you are now suggesting a short after we broke - quote "strong R at 1200"... would it not be more logical to look for longs on the pullback then? I mean, the potential of a short around 1208 is around 1200, because at that time there were no signs (unless I'm missing something) that price would fall back below 1200.

 

I do remember yesterday at that time, after price broke down below 1200 (at 13:26 on high volume) you mentioned a re-test (from below) which did provide a short opportunity. Obviously we don't need to agree upon each trade, but I'm curious as to why you would take a short after breaking R.

[DbPhoenix 42]

Partly because of that thick clog above 1200. Given the lackadaisical behavior of everybody concerned, I saw no evidence of any overwhelming desire to initiate and sustain a giant push through all that. And partly because of the rapid deterioration in the tickq. But even if one were to buy that pullback to 1200, he'd have to take into consideration that price broke the demand line in the meantime. This is not encouraging. If he were also following the tickq, he'd also notice that there was no divergence. Rather the tickq was confirming the weakness, particularly at the low at 1315.

 

The TD instead shows up at what had become an S/R level at 1190, and even if I weren't tempted to go long, I'd certainly exit most or all of my short position.

 

If you don't have this data, I'll be happy to provide a chart of the TD at 1190.

[firewalker 10]

But even if one were to buy that pullback to 1200, he'd have to take into consideration that price broke the demand line in the meantime.

 

True, but I would have several reasons to stay away from shorts:

(1) we were still around the end of lunchtime, so some sideways action is not unusual

(2) plus it's a Friday and we'd already gone up considerable amount of points

(3) consolidations after breaking R often happen after a break of the demandline

(4) we are still making HrH's and HrL's

(5) if you take the overnight into consideration (where the upmove basically started), we're still above the trendline

 

 

All this obviously says nothing of the validity of your trade, I'm just trying to improve my Wyckoff understanding and take only the highest probability trades. It's just that this kind of short seems a-typical and countertrend.

 

This is not encouraging. If he were also following the tickq, he'd also notice that there was no divergence. Rather the tickq was confirming the weakness, particularly at the low at 1315.

 

But wouldn't you consider you the TICKQ as an additional confirmation element, rather than as a factor on it's own? I'm not that familiar with TICKQ, I only track it occasionally, so I don't know how reliable it is on it's own...

 

The TD instead shows up at what had become an S/R level at 1190, and even if I weren't tempted to go long, I'd certainly exit most or all of my short position.

 

If one wasn't following the TICKQ all day, would the two purple dots be logical scale-outs per Wyckoff?

 

 

If you don't have this data, I'll be happy to provide a chart of the TD at 1190.

 

That'd be nice.

[HAKUNA 10]

Thanks Atto, FW,

I was beginning to feel dumb in Steve's thread, at first thought may be I am missing something deep in this event trading business, but from what I have learnt on VSA (without jargon ofcourse as Db and Bearbull always point out:) BB certainly does not beat around the bush, had a real go at steve) and on wyckoff forum, just could not get my head around how anybody big or small get into the market and not affect price and volume.

Was told to look at 81min chart (5bars per day, 405minute US Open) and volume , came back and presented my take, asked a simple question, is this correct or not. if not, could steve, his team or anybody else put up a chart of one of their own realtime trade based on event trading (with their prior knowledge of any forthcoming news, reports etc), show an entry, so that I could then look at the same chart and see if I could have recognised or not that entry without that knowledge. To my mind, this was sound logic, but when Kiwi, Brownsfan, OAC etc came in, all about experience, reading books, briefing com, cbot, websites etc doubts crept in, perhaps I have to look outside the box, sort of lateral thinking, pondered over it, but still could not escape the logic staring in my face. hence decided to call it a day.

Mere mention of Wyckoff seems to make some jump up in agony as if somebody has inserted a hot rod up the backside, don't quite understand that, thought trading was all about having a flexible mindset, prepared to look at anything with a logical mind.

Now I see OAC has put up: How to draw a creek? this got to be some Zen type teaching which is going over my head. wish folks would provide some straight answers to some straight questions for a change.

[DbPhoenix 42]

True, but I would have several reasons to stay away from shorts:

(1) we were still around the end of lunchtime, so some sideways action is not unusual

(2) plus it's a Friday and we'd already gone up considerable amount of points

(3) consolidations after breaking R often happen after a break of the demandline

(4) we are still making HrH's and HrL's

(5) if you take the overnight into consideration (where the upmove basically started), we're still above the trendline

 

All this obviously says nothing of the validity of your trade, I'm just trying to improve my Wyckoff understanding and take only the highest probability trades. It's just that this kind of short seems a-typical and countertrend.

 

With the possible exception of (4), however, none of your justifications, have anything to do with what price is doing in front of you in real time in this situation. They have more to do with what you expect to happen that with what is happening.

 

Regarding (4) and (5), using both trendlines and demand/supply lines is important. I recognize that most people don't understand the difference, but among the advantages of using d/s lines is that they help the trader to detect changes in strength and weakness in the overall trend. That may not be enough for you here, but note that you do in fact have a lower high before the last attempt at a higher high, and rather than make a higher low, price instead breaks your trend line. Yes, it does make a more or less rapid recovery, but look at the upper tails on those candles. Each of those candles represents and is part of a series of waves of price movement. Even if one doesn't drop down to a shorter interval, it should be clear that price is reaching up, then collapsing, reaching up, then collapsing. This is not bullish, particularly since price is at the same time trying to clear important R.

 

 

But wouldn't you consider you the TICKQ as an additional confirmation element, rather than as a factor on it's own? I'm not that familiar with TICKQ, I only track it occasionally, so I don't know how reliable it is on it's own...

It is an additional confirmation element. I don't trade it on its own. But then I don't detail everything I see in the chart. That would be quite lengthy (but then that's why I began switching all this over to chat ).

 

If one wasn't following the TICKQ all day, would the two purple dots be logical scale-outs per Wyckoff?

If your blue line is a supply line, then no, since it would have to be adjusted after the lower low. As for the second dot, I suspect he'd exit his position at the breach of the lsh, particularly given the strength of the bounce off what had become S. Though we haven't had coffee lately. I'll ask him next time I see him.

 

That'd be nice.

I'll put something together later.

[DbPhoenix 42]

Thanks Atto, FW,

I was beginning to feel dumb in Steve's thread, at first thought may be I am missing something deep in this event trading business, but from what I have learnt on VSA (without jargon ofcourse as Db and Bearbull always point out:) BB certainly does not beat around the bush, had a real go at steve) and on wyckoff forum, just could not get my head around how anybody big or small get into the market and not affect price and volume.

Was told to look at 81min chart (5bars per day, 405minute US Open) and volume , came back and presented my take, asked a simple question, is this correct or not. if not, could steve, his team or anybody else put up a chart of one of their own realtime trade based on event trading (with their prior knowledge of any forthcoming news, reports etc), show an entry, so that I could then look at the same chart and see if I could have recognised or not that entry without that knowledge. To my mind, this was sound logic, but when Kiwi, Brownsfan, OAC etc came in, all about experience, reading books, briefing com, cbot, websites etc doubts crept in, perhaps I have to look outside the box, sort of lateral thinking, pondered over it, but still could not escape the logic staring in my face. hence decided to call it a day.

Mere mention of Wyckoff seems to make some jump up in agony as if somebody has inserted a hot rod up the backside, don't quite understand that, thought trading was all about having a flexible mindset, prepared to look at anything with a logical mind.

Now I see OAC has put up: How to draw a creek? this got to be some Zen type teaching which is going over my head. wish folks would provide some straight answers to some straight questions for a change.

 

When someone goes on and one about the power of a particular approach then can't provide a single chart example that demonstrates the singularity of that power (as opposed to the "power" of any other approach, such as simple chart reading, that would accomplish the same thing), particularly if that refusal is coupled with remarks regarding the inabilities of those asking the questions (in this case, you and FW, among others) to understand what the claimant is talking about, then bells should begin to go off and flags should be raised (you should probably avoid discussions of "the trading clock"). Therefore, you are perfectly justified in feeling the way you do.

 

On the other hand, you should understand that you are seeking to combine mechanical and discretionary approaches. Therefore, you're going to have to anticipate and accept quite a lot of confusion.

 

Wyckoff is largely discretionary, though there are things that one is always looking for that when detected prompt an almost mechanical response. SMI nudged Wyckoff further into this realm. VSA made it even more mechanical so that it could be transformed into software. Therefore, if you attempt to look at price movement from both a Wyckoff standpoint and from a VSA standpoint, you're going to be using two mutually incompatible approaches simultaneously. This will likely be painful. Add to that "event trading", which is very much non-Wyckoff, and Taylor Trading, which is I-don't-know-what, and you're going to find "straight answers" difficult to come by since you have not yet reconciled all the competing strategies and tactics that are swirling around in your head, and whatever answers you receive are going to be filtered through all of that.

 

As for drawing the creek, that's an SMI thing, and OAC was wise not to ask about it in the Wyckoff Forum since his post, as he expected, would have been moved someplace else. Whoever wants to know about it can ask the question in the VSA thread. They're into that. Or study the SMI material themselves. Studying creeks and ice and polar bears and palm trees and springs and so forth may be helpful to some, but it's superfluous to Wyckoff. Once one learns the basics and understands them, he can tack on all the bows and ribbons and hats and sparklers he likes, but that doesn't mean that what he adds were part of what he studied to begin with.

Edited December 14, 2008 by DbPhoenix

[DbPhoenix 42]

Here's the follow-up chart referred to earlier:

 

 

[jasont 10]

If your blue line is a supply line, then no, since it would have to be adjusted after the lower low. As for the second dot, I suspect he'd exit his position at the breach of the lsh, particularly given the strength of the bounce off what had become S. Though we haven't had coffee lately. I'll ask him next time I see him.

 

I hope you don't mind me jumping in on the convo Db but from the above are you suggesting Wyckoff and/or yourself would typically stick with the abvove mentioned trade on a breach of the supply line if it didn't breach the lsh? If that is the case, what reasoning would one have had to hold on at the 1200 level where FW highlighted in green? I presume a supply line (had it been drawn according to this 1 minute chart) would have been breached and the lsh was also breached.

[DbPhoenix 42]

I hope you don't mind me jumping in on the convo Db but from the above are you suggesting Wyckoff and/or yourself would typically stick with the abvove mentioned trade on a breach of the supply line if it didn't breach the lsh? If that is the case, what reasoning would one have had to hold on at the 1200 level where FW highlighted in green? I presume a supply line (had it been drawn according to this 1 minute chart) would have been breached and the lsh was also breached.

 

We're getting into channeling the dead and hindsight wisdom here. It's fine to say oh yeah I would have done so and so for this and that reason but it's all a crock. When you get right down to it, you have to make a decision based on what's going on in front of you, and I wasn't even there. If there had been an air pocket above 1200 rather than that clog and if I hadn't seen so much weakness at the effort to hold that higher high, I might have gone long. Or not. Even with replay, I can't tell you.

 

But that's the point of this group, isn't it? People who've been looking at and discussing this in chat then discussing it postgame. In the end, you have to fish or cut bait. Or get out of the boat. If you call a short and it turns out to be wrong, then you get out and reassess the situation without being distracted by what you just did. Same if you go long and the rug is pulled from under you. Or maybe you don't get back in at all, but watch it take off without you. If you're misjudging what you see and you're not thinking clearly, what's proven by staying in and insisting that the market bend to your will? Immediately switching to paper-trading when called for is nothing to be embarrassed about.

[HAKUNA 10]

When someone goes on and one about the power of a particular approach then can't provide a single chart example that demonstrates the singularity of that power (as opposed to the "power" of any other approach, such as simple chart reading, that would accomplish the same thing), particularly if that refusal is coupled with remarks regarding the inabilities of those asking the questions (in this case, you and FW, among others) to understand what the claimant is talking about, then bells should begin to go off and flags should be raised (you should probably avoid discussions of "the trading clock"). Therefore, you are perfectly justified in feeling the way you do.

 

On the other hand, you should understand that you are seeking to combine mechanical and discretionary approaches. Therefore, you're going to have to anticipate and accept quite a lot of confusion.

 

Wyckoff is largely discretionary, though there are things that one is always looking for that when detected prompt an almost mechanical response. SMI nudged Wyckoff further into this realm. VSA made it even more mechanical so that it could be transformed into software. Therefore, if you attempt to look at price movement from both a Wyckoff standpoint and from a VSA standpoint, you're going to be using two mutually incompatible approaches simultaneously. This will likely be painful. Add to that "event trading", which is very much non-Wyckoff, and Taylor Trading, which is I-don't-know-what, and you're going to find "straight answers" difficult to come by since you have not yet reconciled all the competing strategies and tactics that are swirling around in your head, and whatever answers you receive are going to be filtered through all of that.

 

As for drawing the creek, that's an SMI thing, and OAC was wise not to ask about it in the Wyckoff Forum since his post, as he expected, would have been moved someplace else. Whoever wants to know about it can ask the question in the VSA thread. They're into that. Or study the SMI material themselves. Studying creeks and ice and polar bears and palm trees and springs and so forth may be helpful to some, but it's superfluous to Wyckoff. Once one learns the basics and understands them, he can tack on all the bows and ribbons and hats and sparklers he likes, but that doesn't mean that what he adds were part of what he studied to begin with.

 

Appreciate your comments, you are right about mixing up too many approaches, more I read on Wyckoff, more it makes sense.

 

As for that creek thing, I thought OAC was being sarcastic on my previous post and on Wyckoff being mentioned a few times. Normally he is anti-Wyckoff, , I give up.

[DbPhoenix 42]

Appreciate your comments, you are right about mixing up too many approaches, more I read on Wyckoff, more it makes sense.

 

As for that creek thing, I thought OAC was being sarcastic on my previous post and on Wyckoff being mentioned a few times. Normally he is anti-Wyckoff, , I give up.

 

It's not so much about "mixing up too many approaches" as it is having a thorough understanding of each of the approaches that one is attempting to reconcile or consolidate. Being "inclusive" sounds great, but if one is trying to combine what may actually be incompatible elements into something tradeable based on what one has read or heard or seen, one can wind up with Spam when what he wanted was pate.

 

I've seen a great many beginners try to paste together price action and indicators and cycles and Gartley and Gann and who knows what all and eventually just say to hell with it all this is too damn difficult and takes too much time. While one could argue quite easily that it does take too much time, I suspect that it would be far less difficult if the beginner were to develop a thorough understanding of just one approach, one strategy, one setup, one quiver of tactics. If nothing else, he might learn just what it is that he is most comfortable with even if it isn't the particular approach he's been studying, or at least learn what it is that he can't stand. If, for example, one has no interest in mathematics or statistics or Excel or anything else of a similar persuasion, that pretty much excludes a substantial chunk of what he might otherwise waste time exploring. But if he knows instead that he needs something mechanical, something codeable, that all this buying pressure selling pressure support resistance new age "Zen" stuff is of no interest to him whatsoever, then he has likewise saved himself a lot of time and can begin working toward a far more specific and probably achieveable goal.

 

You can best determine just what it is that interests you. You can then begin to investigate those approaches which are compatible with those interests. It doesn't take more than a few weeks -- or, in some cases, a few days -- to learn whether something has potential or is a load of crap. But rather than argue about it on message boards, one can go on to something else until he finds that synergy that works for him. If one is lucky, he may stumble on something fairly quickly. More often, it takes a considerable amount of time.

 

As for the "creek thing" (and the "spring"), it's not mentioned anywhere in Wyckoff's course, but OAC et al are having so much fun trashing the Wyckoff Forum, and I hate to spoil their fun . It's a simple thing to test, though. I wonder if anyone will ever do it?

[HAKUNA 10]

Am pretty comfortable with what I have learnt on your forum Db and in the blog, great info. examples BB gave , how the same principles operate after 100yrs on intraday small time frame charts.

 

Don't have 5sec/TD facility like you at present, minimum just 1min, but can understand your tactics, e.g your short on 12th Friday around 1208 would have provided you with a tight stop loss, whereas I would have entered on the bar with the upper tail, late entry around 1205.75 and then over 3pt stop. will then have to take the heat of the next bar though.whereas you could move to breakeven and be still in the trade.

 

I also see your reasons for exit at 1190 , congestion following a vol spike down bar.

From what I have learnt from you posts, is that after breaking 1190 vol decreases and prices hold around above 1187, less selling pressure and then when vol does come in (effort) at , think 13.56 prices rise suggesting demand greater than supply, hence a long would have been justified.

[DbPhoenix 42]

Am pretty comfortable with what I have learnt on your forum Db and in the blog, great info. examples BB gave , how the same principles operate after 100yrs on intraday small time frame charts.

 

Don't have 5sec/TD facility like you at present, minimum just 1min, but can understand your tactics, e.g your short on 12th Friday around 1208 would have provided you with a tight stop loss, whereas I would have entered on the bar with the upper tail, late entry around 1205.75 and then over 3pt stop. will then have to take the heat of the next bar though.whereas you could move to breakeven and be still in the trade.

 

I also see your reasons for exit at 1190 , congestion following a vol spike down bar.

From what I have learnt from you posts, is that after breaking 1190 vol decreases and prices hold around above 1187, less selling pressure and then when vol does come in (effort) at , think 13.56 prices rise suggesting demand greater than supply, hence a long would have been justified.

 

At the risk of dominating the thread (too late), I do want point out at least that W is not the only avenue to success. Lots of people make loads of money off mechanical systems, with or without indicators. I'm not one of them and never could be, but that doesn't mean that it can't be done.

 

So if you want something mechanical, don't give it up. But if that's not for you, that's not the end of the game.

[DbPhoenix 42]

A chart of interest

 

[DbPhoenix 42]

Another chart of interest:

 

[atto 20]

Db is so funny, but I must say I win for imaginative chart patterns

[DbPhoenix 42]

And yet another chart of interest.

 

I don't know what MP has to say about this, but I tripped over it while playing and thought it interesting that the midpoints of each of these ranges is exactly the same.

 

[atto 20]

Here's my long term ES chart. Similar situation, but I drew my inner box differently. Nonetheless, the area we're at now is fairly important. I've noticed a good deal of bullishness from other traders (who use varied methodologies), but we'll see.

 

It also should be noted that there is no $NYUD/$NAUD divergence on this recent move, and the bullish % index has made a higher high. I'd expect that we have a pullback from today's thrust, and then bust through this "interesting" area heading towards the New Year.

Edited December 17, 2008 by atto

[ochie 10]

I don't know what MP has to say about this, but I tripped over it while playing and thought it interesting that the midpoints of each of these ranges is exactly the same.

 

 

From a 30 min. MP perspective I see the level as being significant recently and may be an area of interest currently.