Trading The Wyckoff Way

[DbPhoenix 42]

Today the stoxx has spent all morning in a tight range, and now price got to R, I went short following my plan.

 

I am thinking twice about this entry however, since last time price rejected Resistance, at around 11 am UK time, it wasn't able to test the lower limit of the range, instead it made a HL at 2516.

 

So when price got up to R, at 12:27, is the short still a good trade? Or would the LH and failure to re-test the lows invalidate it??

 

I am currently trading but at the same time annotating my thoughts and the outcome of each trade, to improve my trading plan.

 

Again, all your questions can be answered through testing. I realize your supervisor wants you to make as many trades as possible so that you can see "what works", but this is some of the dumbest advice I've ever encountered.

 

You need to test all these hypotheses of yours and develop a plan based on the results. If you don't, you will fail.

 

Db

[DbPhoenix 42]

 

 

 

[20814md 10]

The long refers to the long taken at the test of S, i.e., "if you were long here". Taking a long at R would be, well, not good.

 

Db

Of course, and we are definitely on the same page regarding this and your previous post back to me. - Most basic concepts.

 

However I still feel there was something unclear in your post #171 and I now see that the typo was in the same second to last sentence I previously referenced. But it was "07" and I think you meant "17" as the exit.

 

Enough of this though. I am not trying to prove right or wrong, just clarification.

 

thanks

 

Edit -additionally the reference to 11:00 and 07 exit was another factor in my confusion in interpreting of your post. One would exit a long at 17 and ~10:25. The 11:00 and 07 would be for a short.

Edited September 11, 2012 by 20814md
addition

[tupapa 10]

How specific should a trading plan and how long can it be, have any trading plans been published on this forum??

 

I am building my plan or system, based on testing, but how many "what-if scenarios" should be included in the plan, I feel like I could easily end-up with a very long list of setups and variations, depending on how price reacts.

 

Is it feasible or even advisable to include in the plan every possible twist and turn that price may make? If so, what is left to the traders discretion, or is the trader simply a machine that executes the plan and responds to each what-if scenario flawlessly?

 

Is that, in your opinion, the ultimate goal of the testing and planning process?

Edited September 11, 2012 by tupapa

[tupapa 10]

Of course, and we are definitely on the same page regarding this and your previous post back to me. - Most basic concepts.

 

However I still feel there was something unclear in your post #171 and I now see that the typo was in the same second to last sentence I previously referenced. But it was "07" and I think you meant "17" as the exit.

 

Enough of this though. I am not trying to prove right or wrong, just clarification.

 

thanks

 

Price then tests the earlier LH (the dashed blue line represents both the top of the boxes TR in the insert and the bottom of the immediately following TR). A long here would be exited at 07, which nicely coincides with 1100 EST.

 

He obviously meant a short here...

 

 

Yep Db was wrong, you are right, he is human after all...

[DbPhoenix 42]

Of course, and we are definitely on the same page regarding this and your previous post back to me. - Most basic concepts.

 

However I still feel there was something unclear in your post #171 and I now see that the typo was in the same second to last sentence I previously referenced. But it was "07" and I think you meant "17" as the exit.

 

Enough of this though. I am not trying to prove right or wrong, just clarification.

 

thanks

 

Edit -additionally the reference to 11:00 and 07 exit was another factor in my confusion in interpreting of your post. One would exit a long at 17 and ~10:25. The 11:00 and 07 would be for a short.

 

Yes, you are correct and I've made the change from "long" to "short". Thanks for pestering me about it. Lots going on yesterday.

 

Db

[20814md 10]

He obviously meant a short here...

 

 

Yep Db was wrong, you are right, he is human after all...

 

yes he is human, and a far more intelligent one than I.

[DbPhoenix 42]

How specific should a trading plan and how long can it be, have any trading plans been published on this forum??

 

I am building my plan or system, based on testing, but how many "what-if scenarios" should be included in the plan, I feel like I could easily end-up with a very long list of setups and variations, depending on how price reacts.

 

Is it feasible or even advisable to include in the plan every possible twist and turn that price may make? If so, what is left to the traders discretion, or is the trader simply a machine that executes the plan and responds to each what-if scenario flawlessly?

 

Is that, in your opinion, the ultimate goal of the testing and planning process?

 

See this post.

 

Db

 

....

[DbPhoenix 42]

yes he is human, and a far more intelligent one than I.

 

No, just busy

 

And of course there is the occasional brain fart.

 

Db

[DbPhoenix 42]

Follow-up to this post from pre-market. See also this post from yesterday. Those who don't know what's going on should consult the Trading in Foresight thread, the Trading Ranges thread, and the Support and Resistance thread.

 

 

 

[radsvp 10]

Hi DbPhoenix,

 

Can you verify if I did correct my homework this week. Attached are my trades made today. I did not enter earlier on the 9:31 am bar since I waited the market to confirm the support with a touch or cross of my Mayor Support Line. I notice that some big guys wanted to fight this area seen on the overnight session. I was confidence in this area as you see I traded this zone two time today and both came out profitable. Hope you are doing well. I am trying to implement this to the CL and EUR.

[radsvp 10]

I recently submitted my chart from today but don't see it posted this is a second test.

[DbPhoenix 42]

Hi DbPhoenix,

 

Can you verify if I did correct my homework this week. Attached are my trades made today. I did not enter earlier on the 9:31 am bar since I waited the market to confirm the support with a touch or cross of my Mayor Support Line. I notice that some big guys wanted to fight this area seen on the overnight session. I was confidence in this area as you see I traded this zone two time today and both came out profitable. Hope you are doing well. I am trying to implement this to the CL and EUR.

 

Your homework?

 

Well, since you made 10pts, I'm not in a position to tell you not to trade until you have a plan and you've tested it until you're confident in your trades. But, I don't know you or what you've been doing or how consistent you are, so I'll just caution you about moving too fast.

 

As for your first DL, you needn't be so rigid. You're using it as a trend line and it isn't. It should hug the price line, even if you have to draw a new one. That way, it can do its job.

 

As for your second DL, you were right to exit, but why didn't you re-enter? You didn't draw it too tight, but you could have re-entered on the RET and drawn a new one.

 

And of course there's the short at 1000. But, all told, good job. You don't need the color-coded price bars, tho.

 

And thank you for using EST. Makes things clearer to everybody.

 

Db

 

P.S. As for seeing your posts and charts, they have to be approved since you just started posting. So be patient. I'll approve them when I see them.

 

Db

[Gringo 10]

Hi Db,

 

I got into a few problems today. In the morning in RT I don't have access to futures so had to use QQQ as my surrogate for NQ.

 

The first issue was the TL from yesterday that came in the path of my taking a long at A. I knew at that time without the TL coming down I would have taken the long there without a plan for this contingency caused confusion and I decided to not initiate a position and just monitored price (initiate on paper).

 

Also, when the price is moving violently up and down is it fine to not initiate a position?

 

Do we give importance to TL coming from a previous day or two even though the SL had been broken to the upside and price was back above the S at around point A?

 

From B-C-D-E the plan kept me in good stead.

 

 

 

Gringo

Edited September 11, 2012 by Gringo

[DbPhoenix 42]

Also, when the price is moving violently up and down is it fine to not initiate a position?

 

If it pulls your emotional triggers, leave it alone. Eventually you'll be come desensitized to it. And if you don't, so what? It doesn't last long.

 

Do we give importance to TL coming from a previous day or two even though the SL had been broken to the upside and price was back above the S at around point A?

 

I posted the longer-term TL to show where price was resting, which increased the probability of a long trade. Compared to that, an itty-bitty TL from overnite is pretty trivial. What is more troubling is that the selling waves are longer than the buying waves at and just after the open. However, price rejects the effort to push it lower pretty decisively, and there was potential support there, and the longer TL supported a long, so a long entry would not be irresponsible.

 

But even without it, you've still got a good short and a good long off the next test. Hard to lose. And I notice the pundits were still quiet about all of this. Except in hindsight. So you're entitled to feel pleased with yourself.

 

Db

[TradeRunner 10]

I'm behind on my replays but here are some thoughts and questions on 4/9/12.

 

My lines drawn before the open:

 

 

Overnight:

 

 

Open:

 

Looking at the whole day the lines I drew worked well...

 

[shahab 10]

Great post DBphoenix!

[DbPhoenix 42]

 

Edit: Add 1m

 

Edited September 12, 2012 by DbPhoenix

[tomerok 10]

Hi Db.

 

Good morning.....

Could you please explain the logic behind the 2791 line.

I can see their might be resistance before price rocketed up to 2800 (PHOD) and the last support between 2792-2790.

i guess my exact question is does the breakout of the hinge also contribute to this SR area?

 

Thanks

 

Tomer.

[DbPhoenix 42]

Hi Db.

 

Good morning.....

Could you please explain the logic behind the 2791 line.

I can see their might be resistance before price rocketed up to 2800 (PHOD) and the last support between 2792-2790.

i guess my exact question is does the breakout of the hinge also contribute to this SR area?

 

Thanks

 

Tomer.

 

In a word, yes.

 

The hinge is, after all, a reversion to a mean. As such, the midpoint represents equilibrium, or, as the MP people would put it, "value". That price drops below this, returns to it, rises above it, and returns to it again confirms that value, so all of these feints from one side to another are just circling that mean. Trying to trade this before price exits this morass would be "challenging".

 

Db

[DbPhoenix 42]

Follow-up to this post from pre-market. Those who don't know what's going on should consult the Trading in Foresight thread, the Trading Ranges thread, and the Support and Resistance thread.

 

 

 

 

 

 

 

Note that price spent most of the morning within the confines of the previous hinge and that the best trades were AWAY from the midpoint.

 

 

 

.

[franko 10]

db..which is easier for you to read?

statements written in paragraph form or

the way this is written with notations on chart??

[DbPhoenix 42]

db..which is easier for you to read?

statements written in paragraph form or

the way this is written with notations on chart??

 

It's up to you. What matters is how easily and clearly you're conveying the information. You must like your display or you wouldn't use it, but I find it difficult to read. On the other hand, I'm not trading it, so use what is best for you.

 

As to the candles, they are a means of illustrating price movement and, at bottom, are no different from bars or lines or dots. My issue with them is that they quickly become an indicator; thus, the trader starts focusing on the candle and the candle pattern -- both of which disappear as soon as one changes the interval -- instead of the price movement. If you're profiting from them, I can't very well tell you not to use them, but the longer you use them, the longer it will take for you to perceive and understand the price movement.

 

As to your chart, your first "LH" ought to be an "HL". You should also adjust your DL so that it more closely follows price after price changes its trajectory. This would prompt you to exit the long faster and be in a better position to take the earlier short. The DLs and SLs should be an aid, not a straitjacket.

 

Db

[DbPhoenix 42]

 

 

 

 

 

Add pre-open:

 

 

Edited September 13, 2012 by DbPhoenix

[DbPhoenix 42]

Follow-up to this post from pre-market. Those who don't know what's going on should consult the Trading in Foresight thread, the Trading Ranges thread, and the Support and Resistance thread.