Trading The Wyckoff Way

[goodoboy 10]

This is today's ES, so far.

 

What's going on?

 

 

 

 

I have no idea, I thought after a break of your yellow lines, price would start moving up and creating new trend, but it didn't. Only created some TR that just broke downward. Now retesting lows. 1397 could be the next support that I see.

[goodoboy 10]

 

With regard to your chart, there are no TRs at the time you want to take your trades: there is a move down, a rally to the last swing high, a resumption of the move down, a rally to the last swing low (which is an op to short), a further move up to the opening high, a drift down to 1412, then up to the opening high again, then the close. Since the trend is down by the time you've drawn your first circle, the focus is short, not long, until you get a higher low, since you don't know where support is, except in hindsight. Therefore, your second circle designates a short op. When you then make a higher low, you exit and go long five or six bars later. Whatever TR there may be doesn't form until after lunch, when price can make neither a new high nor a new low.

 

 

 

I need to do more reading like you mentioned. But I re-read the above paragraph 3 times and not understanding why my second green circle would indicate short op.

 

The first green circle is going long when the trend is downward, that incorrect place for long, I know now.

 

Are you saying that after price broke the supply line and broke the range from the bottom, still can not go long on the next retrace because trend nor support is not established yet. But isn't support there where you have marked off in black circle?

 

I am not questioning or going against anything, I am just trying to understand.

[DbPhoenix 42]

I need to do more reading like you mentioned. But I re-read the above paragraph 3 times and not understanding why my second green circle would indicate short op.

 

The first green circle is going long when the trend is downward, that incorrect place for long, I know now.

 

Are you saying that after price broke the supply line and broke the range from the bottom, still can not go long on the next retrace because trend nor support is not established yet. But isn't support there where you have marked off in black circle?

 

I am not questioning or going against anything, I am just trying to understand.

 

I haven't marked anything with a black circle. This is your chart. All I've marked is the top of a potential TR and the last swing low along with a suggested short entry and a suggested long entry.

 

Again, if you want to understand this stuff, you're going to have to study the material. All you want to know is right here.

 

Db

[goodoboy 10]

Unfortunately, I have little to add to what I've already posted today, here and elsewhere. The interday trend is not particularly pertinent to intraday trading. Therefore, none of your trendlines are particularly pertinent. All that matters is that price was in a downtrend from last night to this morning until it found S at 1407, probably because of the R it found there last week. It then rallied to 11.5 and traded in a range thereafter. And that's all there is to it. If you're going to trade a range, you have to sell R and buy S. In a narrow range, there's no time for RETs; you have to just do it. But given the trivial reward, I don't see the point, unless you want to begin scalping, which is too often the refuge of traders who don't know what they're looking at.

 

Thanks Db for the clarification and input.

 

To enter below R and above S is no good either, particularly if you're doing it in the hope that price will exit the trading range. That's not how it works. The risk is too high. If the range isn't wide enough to trade for a reasonably reward and you can't wait for price to exit the range and begin trending again, then don't trade at all. Just wait for the right circumstances. There are no trades here, with the possible exception of longs at 1130 and 1400 (EST): the first would have yielded a point and the second three points, on a 1m chart, if you played it well. Is that worth sitting in front of your computer for seven hours?

 

No, not worth it at all. Too much work for such small points and eye soar. And I don't like scalping for 2-3 pts

 

I'll try again to drive home the point that MAs and trendlines do not provide support or resistance. That's not their job. So don't rely on them for such. If you can't help doing so, leave them off entirely.

 

EMAs removed and reading the section on trend.

 

Thank you.

 

[DbPhoenix 42]

Much punditry over where the ES goes from here. The trend is down, but we've hit at least marginal support, resulting in an "inflection point".

 

 

 

 

Support on the NQ is considerably lower, though 2740 is a possibility:

 

 

 

Edited August 24, 2012 by DbPhoenix

[DbPhoenix 42]

ES makes a higher low and a lower high defining a TR. Ditto with the NQ.

 

Db

[DbPhoenix 42]

Both exit their hinges to the upside, but the trend is still down.

 

Db

[Gringo 10]

Hello,

Below are charts for QQQ.

 

 

 

 

 

The long term trend from the Monthly chart is up. That doesn't mean at this level it can't change. We are at at S/R level now and will have to see how price behaves here. Price has come here without flinching much but resistance is resistance and must be respected in my opinion.

 

I included the 60 min chart to show how it could be used to time entries better and also to indicate that there are multiple mini s/r level within the longer monthly and daily bar intervals. Even though the time frame is the same, having different intervals allows a clearer picture to emerge.

 

Gringo

[DbPhoenix 42]

NQ doing nicely. ES just sits there, as usual. The fascination with the ES continues to escape me:confused:

 

Db

[DbPhoenix 42]

And that's 90m.

 

Db

...

[4EverMaAT 10]

Price trends until it doesn't. When a trend hits a wall, i.e., S or R, what matters is what price then does about it. Does it bore its way thru and continue the trend, does it veer off sideways, or does it reverse? Volume can be informative, but it's the price movement that matters.

 

Stay tuned.

 

Db

Isn't volume the basic unit that allows the price movement? In exchange-traded products accurate volume stats are readily available. Based on what I was reading from another one of your post here, you recommend removing volume bars.

 

Now I do think that the majority of indicators smooth (average) out results, which creates lag. A 'proper' indicator, should merely display or guage what is going on in the markets. So counting the amount of volume per unit price movement (or price movement per unit volume) could be a guage. An alert could be set if prices move beyond a certain levels.

 

Indicators are not that bad

There are lots of examples of this in the Trading By Price thread and the Support/Resistance thread.

 

Db

 

Interesting stuff. It isn't mechanical, but I like some of the fundamentals that go into the approach. Mainly emptying out what one expects the market to do and conduct more observation. The main problem I see with the entry/exit approach not being mechanical is that it is difficult to develop consistent results. But least it is your own conclusions drawn from your own observations, which is a step towards figuring out what is true about [whatever you are observing].

 

The whole concept of trending has been ambiguous for quite some time. The very loose definition of:

Up trend: a series of higher highs and higher lows

Down trend: lower highs and lower lows.

 

still leaves open how long the trend must be for the individual to consider it a trend? Mathematically, there is virtually unlimited up and downtrends occurring at any given time, depending on how you 'look' at the market, when you look at the market, etc. I agree with your conclusion that time[frame] isn't a factor in price movement. People using lagging indicators attempt to use a 'timeshift principle' (switching among several chart timeframes) in an attempt to compensate for the lag. This is akin to trying to shorten the long way, instead of just taking a short path.

[DbPhoenix 42]

For those who have forgotten how to play a hinge or who have not yet read the Hinges thread, here's how it goes:

 

Potential entries are in green.

 

 

 

 

The downside fakeout in the ES is a virtual guarantee that price will run to the top. Potential entries are here in green also.

 

 

[DbPhoenix 42]

Good questions.

 

Isn't volume the basic unit that allows the price movement? In exchange-traded products accurate volume stats are readily available. Based on what I was reading from another one of your post here, you recommend removing volume bars.

 

I've been doing this so long, and this Forum is so old, I forget that not everyone is up to speed on the content.

 

Volume is transactions. Without transactions, there is no price movement. So volume is not only necessary, it's inescapable.

 

And, years ago, I went into great detail about how to interpret volume, i.e., how to take the information about transactions and formulate some hypotheses about price movement, or even draw some conclusions.

 

However, due to some approaches that transform volume into an indicator, it is now practically impossible for beginners -- and some not-so-beginners -- to see it as anything else. It's even color-coded, for Christ's sake. In that state, it becomes a distraction and a hindrance for those who are trying to read price. Therefore, I've begun suggesting to beginners that they just leave it off with the possible exception of those occasions when price reaches an important level and the number of transactions which accompany the movement are actually helpful. Once the beginner begins to learn what volume actually is, he can then put it in its place and even put it back on his charts.

 

Now I do think that the majority of indicators smooth (average) out results, which creates lag. A 'proper' indicator, should merely display or guage what is going on in the markets. So counting the amount of volume per unit price movement (or price movement per unit volume) could be a guage. An alert could be set if prices move beyond a certain levels.

 

Indicators are not that bad

 

Actually, they all lag. But they're not "bad", just unnecessary.

 

The whole concept of trending has been ambiguous for quite some time. The very loose definition of:

 

Up trend: a series of higher highs and higher lows

Down trend: lower highs and lower lows.

 

still leaves open how long the trend must be for the individual to consider it a trend?

 

Depends on the trader's trading window and his objectives. As I've been posting in the Trading By Price thread, interday trend is largely irrelevant to the daytrader unless some important level that might affect the intraday trading is nearby, such as today in the ES (see the TBP thread). What is far more important is the trend leading up to the open. Combine that with the lengths of the buying and selling waves, and you have a pretty good starting point for your initial trades. After that, one trades the price action without much regard for trend. Supply and demand lines become far more important.

 

Please forgive me for not providing links. I do so much of that and I don't know that it accomplishes anything. If you're interested in pursuing this, let me know and I'll come back and edit this post to include the links.

 

Db

[goodoboy 10]

And that's 90m.

 

Db

...

 

Thanks Db for the posting of price action. Its very helpful to us newbie. This forum is good for reading and learning. Any reason why its called Trading in 90 minutes? Just asking.

[goodoboy 10]

For those who have forgotten how to play a hinge or who have not yet read the Hinges thread, here's how it goes:

 

Potential entries are in green.

 

 

 

 

The downside fakeout in the ES is a virtual guarantee that price will run to the top. Potential entries are here in green also.

 

 

 

Thanks for the post. They are read.

 

What timeframe are you drawing the hinge on?

[40draws 10]

It qualifies, though the volume is pretty feeble. A better op which you ought to consider is the RET following the opening rally. This would get you in much earlier, and it's an excellent trading entry as you're able to trade off others' emotions -- and games -- whereas with the hinge you're trading off a battle, which is more calculated. A minor distinction perhaps, but one worth keeping in mind.

 

Db

 

Thank you for the suggestion and thank you for the chart - that makes your suggestion much more clear to me. I will be working on learning to identify those opportunities.

 

I appreciate you taking your time to help me along.

[tupapa 10]

For those who have forgotten how to play a hinge or who have not yet read the Hinges thread, here's how it goes:

 

Potential entries are in green.

 

 

 

What about the short at 1397? We leave the hinge to the downside, come back to the midpoint and I went short 1 tick below the midpoint on the 1 minute bar.

 

Isn't this a very frustating potential entry?

[PrymeTyme 10]

Some thoughts on a potentional play on the actual daily situation

and how i would plan the game,

 

 

well i would look for a long entry on or near the midpoint ..

where we have a higher low accompanied with increased vol.

and we hold this level.. besides that we have broken out of the hinge , etc...

 

Lets pretend that situation occured! (a test of the midpoint)

and iam about to enter along position

 

so now only a few scenarios can happen .. and i have a plan on how to react to them ..

 

First and foremost my SL could been hit! .

 

now on to scenario 1 (s1) we could breakout the top of the highs

wich is also a support line and we might could see a reaction on

the midpoint of the upper range (left) then i watch how price reacts

on the retest of the broken line and either stay in or close the trade or move SL to BE..

 

scenaio 2 (S2) price could bounce off the line . then i watch how price reacts on the midpoint and either let it open or close it out

 

scenario 3 (S3) we might breakdown , we might bounce and

see a retest of broken midpoint if the action is right ,

i close out the trade and might reverse the position ..

but that reverse depends if the reverse position is in lieu

with overall market situation .. like trend , strenght or weakness etc..

else just close out the trade,

 

thats how i plan out trades before i even enter them..

leaving no room to get caught up in a situation where i dont know how to act.. ..

i must confess that i just recently startet planing trades this way ..

so its still new to me , and a construct i work on.. thru expirience etc..

 

cheers

 

 

Follow up on Gold

 

 

looks like scenario 1 is inplay .. and added another point .. wich lets me judge to hold or fold

[tupapa 10]

I just looked at silver and would like to take part in what I anticipate could be a big move over the next few weeks, so after spending some time looking at the daily and hourly I am trying to come up with a plan on when to get in.

 

Idealy, I would've gone long as we broke out of 28 but I wasn't following it...

 

Looking at the daily and the 5 hourly, we found strong support at 26 and we've had a strong rally that has blasted through 30 which was resistance.

 

On the 30 minute chart, I have noted a congestion between 30.20 and 30.80 which could give an opportunity to go long if:

 

1- We re-test 30.2

2- We breakout of 30.8, buy-stop above this level.

 

I think a reasonable target would be 35-36 and I would re-enter if we move to higher ground.

 

Stop loss below 30.2

 

 

I know this is a late entry but I'd like to hear other traders opinions on where, if anywhere, they you would enter the trade.

[thalestrader 14]

If you mean the website, that disappeared long ago. However, the best of it -- or at least what I considered to be the best of it -- is in my book.

 

Db

 

I meant your blog here at TL where you had marshalled so many wonderful Wyckoff resources. I have been referring folks to seek it out since I found it back in 2008. It seems as though it has been demolished. Too bad, it was a wonderful resource, and it would certainly have been a good place for 40d to start.

 

Is the whole blog gone, or has it been preserved elsewhere?

 

Best Wishes,

 

Thales

[DbPhoenix 42]

I meant your blog here at TL where you had marshalled so many wonderful Wyckoff resources. I have been referring folks to seek it out since I found it back in 2008. It seems as though it has been demolished. Too bad, it was a wonderful resource, and it would certainly have been a good place for 40d to start.

 

Is the whole blog gone, or has it been preserved elsewhere?

 

Best Wishes,

 

Thales

 

All the blogs are gone. They were dissembled and converted into "articles". Fortunately, I'd already converted everything I wanted to keep into pdfs when I left several years ago and made them a part of my book (I've learned to back up stuff I don't want to lose). I've moved what I consider the more important stuff to the Wyckoff Forum so I could update the links. So the bulk of it will be either here or in the Articles section. If anybody has questions, though, best ask them here.

 

Db

[DbPhoenix 42]

Thank you for the suggestion and thank you for the chart - that makes your suggestion much more clear to me. I will be working on learning to identify those opportunities.

 

I appreciate you taking your time to help me along.

 

You're welcome. Did you buy that REGN hinge Thursday morning?

 

Db

[PrymeTyme 10]

What about the short at 1397? We leave the hinge to the downside, come back to the midpoint and I went short 1 tick below the midpoint on the 1 minute bar.

 

Isn't this a very frustating potential entry?

 

losing is part of the game/process , nothing frustrating here .. and if u where frustrated u may miss one of the long opportunitys ,, wich probably more then cover your loss ..

 

besides that ..but that is each an there owns plan.. shorting in an uptrend and with recent sign of strenght or buying (shakeout) in the background should be treated with higher risk and if the market doesent respond in the favour of your position.. then get out .. (as seen on the bars wich just plummed along) ie. no good reaction to the downside..

 

cheers

[DbPhoenix 42]

Thanks Db for the posting of price action. Its very helpful to us newbie. This forum is good for reading and learning. Any reason why its called Trading in 90 minutes? Just asking.

 

See post #29.

 

Thanks for the post. They are read.

 

What timeframe are you drawing the hinge on?

 

Yesterday morning. If you mean bar interval, it's 1m.

 

What about the short at 1397? We leave the hinge to the downside, come back to the midpoint and I went short 1 tick below the midpoint on the 1 minute bar.

 

Isn't this a very frustating potential entry?

 

It's not an entry at all. The downside has been rejected, so there's no reason to go short. This isn't a RET in a downtrend; it's a shakeout.

 

Db

[tupapa 10]

 

besides that ..but that is each an there owns plan.. shorting in an uptrend and with recent sign of strenght or buying (shakeout) in the background should be treated with higher risk and if the market doesent respond in the favour of your position.. then get out .. (as seen on the bars wich just plummed along) ie. no good reaction to the downside..

 

cheers

 

What do you mean shorting in an uptrend? We are in a clear down trend on the 15, 60m and 5hour bar interval, and thats largely why I went short.

 

I guess the fact that buyers took price above the midpoint should've warned me against taking the short and at the time I didn't perceive it as a shackeout, and yes you are right, I shouln't get frustrated

 

Do you guys place your buy/sell stop 1 tick or 2 ticks above the close of the bar on the 1 min bar? What would you recommend?