Trading The Wyckoff Way

[quark 10]

Man, what a great thread. How did the interest fizzle? I've been searching charts, does anyone have any recent examples of hinges?

[DbPhoenix 42]

Man, what a great thread. How did the interest fizzle? I've been searching charts, does anyone have any recent examples of hinges?

 

It is good, esp atto's contributions.

 

The threads got only two votes. Give it a ranking and maybe it'll attract more attention (just click Rating in the toolbar).

 

Db

[Niko 10]

I have been trying to do the count (Number of bars in the different counts) on the Oil P&F Chart in order to define targets for my profit taking but I find two problems:

 

1. What is the best horizontal line to do the count

2. In this case is a 3 point chart, but i find that if I multiply the number of bars from each count by 3 my theoretical target most of the time would be way too far for my timeframe.

 

Any comments will be enlightening.

[quark 10]

So here is one I spotted.

 

If I'm understanding correctly, DB tried to get people to recognize what is going on in realtime. So, DB, it finds resistance at the 1st horizontal red bar, then it finds resistance lower at the 2nd horizontal bar. So, in realtime, when we reach the 2nd horizontal line, I could infer that the price is going lower?

[DbPhoenix 42]

So here is one I spotted.

 

If I'm understanding correctly, DB tried to get people to recognize what is going on in realtime. So, DB, it finds resistance at the 1st horizontal red bar, then it finds resistance lower at the 2nd horizontal bar. So, in realtime, when we reach the 2nd horizontal line, I could infer that the price is going lower?

 

Yes and no. Price on Tuesday filled the gap created the day before. Then it tested that level twice yesterday and couldn't close the deal. So sellers, being in charge, drove price lower.

 

In any case, this isn't a great hinge. If price falls out before it reaches the apex, the move can be pretty lackadaisical. Also, note here that price found support at the last swing low (two weeks ago). Therefore, while you may have had a hinge working, it morphed itself into an ordinary sideways drift. At least until today. You may be saved by that congestion between 63 and 65 at the beginning of your chart. If not, 60 looks like excellent support.

 

Is this the group you were interested in? Were you able to find which group this stock is part of at Bigcharts?

 

Db

[DbPhoenix 42]

Four years ago, I accidentally pegged the peak of the bear market rally (see the post several back dated 5/26/08). Since so many traders are experiencing deja vu here, let's look at where we are. This may help answer some questions about what to do. If anything.

 

 

 

 

 

First task? Determine the trend of the market.

 

Db

[gaelgss 10]

Hello Db,

 

I am interested in learning to trade the original, unadulterated way. At the moment I am interested only in day trading futures so I am planning on thoroughly studying the following material:

 

- The original W course, except:

 

Part 11M, 12M, 13M since these deal with figure charting that is of no interest to me.

Part 18M and 19M since these deal with stocks specifically.

 

- The day traders bible.

 

-All threads in this forum.

 

Is therea anything I am missing that you consider important or should this material be enough for me to understand the principles and develop a trading plan?

 

Are there any other chapters from the original course that I can omit/ are not applicable to futures trading?

 

Is there a chat room/trading room were wyckoff traders share their thoughts?? I have seen this mentioned in the CSW thread but that was back in 2008/2009.

 

Cheers.

[Niko 10]

Range breakout without volume.

 

I am currently following CL, and I am seeig this as it happens (Chart attached) my interpretation of Wyckoff theory is that ther is not going to be a donwside breakout bellow 104,55 due to the fact that there is not selling volume following the downside movement, and that this is posibly a shakeout of bulls.

 

I would think about buying at 60 with a take profit around 90 and stop around 50.

 

Any comments?

[quark 10]

In any case, this isn't a great hinge. If price falls out before it reaches the apex, the move can be pretty lackadaisical.

 

By this you me before the supply & demand line touch forming this shape: >

 

Therefore, while you may have had a hinge working, it morphed itself into an ordinary sideways drift. At least until today. You may be saved by that congestion between 63 and 65 at the beginning of your chart. If not, 60 looks like excellent support.

 

Ok. Got it

 

Is this the group you were interested in? Were you able to find which group this stock is part of at Bigcharts?

 

I have no interest in this stock or which group it belongs to & the groups performance. My study upon hinges is completely seperate from my study of other aspects of Wyckoff. I saw your reference to this thread, read the entire thread & then began to search for charts that formed a hinge. This is one that I came across.

 

You & Atto did such a great job at explaining it, I felt compelled to get some feed back from you guys on what my understanding of a hinge is.

[DbPhoenix 42]

This was posted in the wrong thread, and the "move" function isn't working for me.

 

Sorry, Niko.

 

Db

 

I have been trying to do the count (Number of bars in the different counts) on the Oil P&F Chart in order to define targets for my profit taking but I find two problems:

 

1. What is the best horizontal line to do the count

2. In this case is a 3 point chart, but i find that if I multiply the number of bars from each count by 3 my theoretical target most of the time would be way too far for my timeframe.

 

 

 

 

Any comments will be enlightening.

[Niko 10]

This is where I always fail. Following the trade I just suggested, is it advisable to move my stop under the new support area at 60 (is it a support area?), pehaps to 58 .

 

Chart attached, and new stop suggested is in the red rectangle

[DbPhoenix 42]

Hello Db,

 

I am interested in learning to trade the original, unadulterated way. At the moment I am interested only in day trading futures so I am planning on thoroughly studying the following material:

 

- The original W course, except:

 

Part 11M, 12M, 13M since these deal with figure charting that is of no interest to me.

Part 18M and 19M since these deal with stocks specifically.

 

- The day traders bible.

 

-All threads in this forum.

 

Is therea anything I am missing that you consider important or should this material be enough for me to understand the principles and develop a trading plan?

 

Are there any other chapters from the original course that I can omit/ are not applicable to futures trading?

 

Is there a chat room/trading room were wyckoff traders share their thoughts?? I have seen this mentioned in the CSW thread but that was back in 2008/2009.

 

Cheers.

 

What you read and when you read it is entirely a function of what you need and when you need it. If you force yourself to slog through something that seems irrelevant to what you're doing, you're not going to remember it anyway. But if and when you determine that you do need it, it's there, and you'll then be far more likely to understand and remember it.

 

As for the threads, I'd start with the Trading in Foresight thread, since that pulls everything together (exc. P&F), then work your way backwards to those threads that elaborate on whatever it is you're stuck on.

 

 

Is there anything else? At a bare minimum, Livermore. There are also the books on my reading list, but they may not stick until you're ready for them. The Nature of Risk would probably do you more good than anything, esp in futures.

 

 

Chatroom? No, not that I know of or could recommend. The Day Trading the E mini Futures thread appears to be run like a chatroom. It's not Wyckoff, but joshtrader hangs out there, so at least there'd be somebody who understands what you're talking about. You may even provide some added insight (note the posts made when the ES bounced a couple of days ago).

 

Db

[DbPhoenix 42]

Range breakout without volume.

 

I am currently following CL, and I am seeig this as it happens (Chart attached) my interpretation of Wyckoff theory is that ther is not going to be a donwside breakout bellow 104,55 due to the fact that there is not selling volume following the downside movement, and that this is posibly a shakeout of bulls.

 

I would think about buying at 60 with a take profit around 90 and stop around 50.

 

Any comments?

 

Do you have a tested and profitable trading plan for all of this?

 

Db

[DbPhoenix 42]

By this you me before the supply & demand line touch forming this shape: >

 

Yes. Concurrent with a decline in volume.

 

Db

[quark 10]

So this looks like it could form a setup in the NQ 1 min chart.

[DbPhoenix 42]

So this looks like it could form a setup in the NQ 1 min chart.

 

Volume petered out awfully early, so it may just dribble out the end and drift sideways, but it's best to be prepared for an excursion both to the upside and downside: where to buy, where to stop, etc.

 

Also, I'd rotate my supply line downward so that it more closely tracks the swing highs.

 

Db

[quark 10]

Volume petered out awfully early, so it may just dribble out the end and drift sideways, but it's best to be prepared for an excursion both to the upside and downside: where to buy, where to stop, etc.

 

Also, I'd rotate my supply line downward so that it more closely tracks the swing highs.

 

Db

 

Here is an update with unaltered supply line. Thoughts?

[DbPhoenix 42]

Here is an update with unaltered supply line. Thoughts?

 

Your supply line is incorrect. If you rotate it downward, you're already out of the hinge. A potential buystop would have been at or around 2706. See that thrust? And the accompanying volume?

 

Db

[quark 10]

Your supply line is incorrect. If you rotate it downward, you're already out of the hinge. A potential buystop would have been at or around 2706. See that thrust? And the accompanying volume?

 

Db

 

Copy that. So the supply line is something like this? I've left the original to keep for my records of how to annotate a hinge.

[DbPhoenix 42]

Copy that. So the supply line is something like this? I've left the original to keep for my records of how to annotate a hinge.

 

Not exactly. If there's only one outlier (the arrow), I just ignore it. The point is to track the swing highs as closely as possible.

 

 

I've also circled what I call my WTF?!? entry. It's the only thing that works if there's no retracement.

 

Db

[gaelgss 10]

I've read your trading journal a few times and would like to ask you if this is how an edge is developed.

 

1- I am a day trader that aspires to make a good living out of this.

 

2- I want to trade Nasdaq Futures for 4 hours from the opening, 5 days a week. I use a 60 minute chart to plot support and resistance using your "famous boxes" and I use a 1 minute chart to identify the setup for a trade.

 

3- I am focusing on 1 setup, the wyckoff Hinge. I will trade it only if it occurs at a predefined S/R level on the 60 min chart.

 

I will adress trade management, stop loss etc.. but at the moment I need a clearly defined entry that I can work on.

 

Am I on the right track here? Is this how I should start developing my edge?

 

My main concern is going through 2,3 or 4 days without finding a hinge, which would mean sitting down, in front of the screen 4 hours a day looking at price, but I guess this is normal for a beginner?

 

Thanks once again for the feedback.

[quark 10]

Ok, so I have a question regarding the entry of hinges. So, if I'm inside & there is no break yet. What am I looking for?

 

Am I waiting for a break of the supply or demand line & trade in the direction of the break?

[DbPhoenix 42]

 

1- I am a day trader

 

Why?

 

 

2- I want to trade Nasdaq Futures

 

Again, why?

 

 

3- I am focusing on 1 setup, the wyckoff Hinge.

 

Not the best choice for a bread-and-butter setup. The Hinge is the cookie in the lunch box. You won't see it that often. Go for the sandwich.

 

 

I will adress trade management, stop loss etc.. but at the moment I need a clearly defined entry that I can work on.

 

Maybe. Whether the trade works or not will depend in large part on how it's managed.

 

 

Am I on the right track here? Is this how I should start developing my edge?

 

My main concern is going through 2,3 or 4 days without finding a hinge, which would mean sitting down, in front of the screen 4 hours a day looking at price, but I guess this is normal for a beginner?

 

Thanks once again for the feedback.

 

Watching price move is always a good way to start. As for developing your edge, don't be concerned about that at the beginning. By determining so early what you're going to trade, when you're going to trade, what you're going to look for, etc., you've already cut yourself off from a number of options, which is why I asked my first two questions. Unless you have really good reasons for wanting to be a daytrader and trade the NQs, I suggest you rethink all of that. Trading futures intraday may seem like where all the action is, but it's also where a lot of people get chewed up.

 

Db

[DbPhoenix 42]

Ok, so I have a question regarding the entry of hinges. So, if I'm inside & there is no break yet. What am I looking for?

 

Am I waiting for a break of the supply or demand line & trade in the direction of the break?

 

I haven't looked thru the entire thread again and probably won't, but as I remember there's a lot of discussion of this there. But, generally, set the buystop is set above the supply line with the cover stop below the demand line and the sellstop is set below the demand line with the cover stop above the supply line. But one can vary this to whatever works and is comfortable. Preferably both.

 

 

If the initial entry is missed, then the retracement is taken, unless the breakout/breakdown fails and you slip back into the hinge, in which case you're not in the trade at all. If the breakout/down is good and there is no retracement, look for the WTF?!?. You will, however, have to use a very short interval, probably 1m or less. These don't even show up on the 5m. So while everybody else is avoiding the “noise”, you're following price and picking up on that little hesitation.

 

 

Db

[quark 10]

There really wasn't much on exact entry of hinges throughout this thread, nor much about it on your blog. I could have missed them.

 

The one thing that I'm confused on & you were going through this with Atto is:

 

1) how do you know which direction the trade is going? Or do you not, & is that why you said preferably both. It seems in one of the posts that you elluded to clues of which direction a chart he pulled up would go. Also, Atto mentioned hinges "tend" to be continuations.

 

2) Are you referring to the hinge, or the WTF as for what only happens in the 1 minute or less interval?

 

My interest in hinges is to apply them to daily charts. The NQ example was just something I found after looking & looking at charts. It turned out nicely.