Trading The Wyckoff Way

[DbPhoenix 42]

the highlighted blue shape has two possibilities.......either it is a flat for a b wave (in terms of Elliott Waves Analysis) and the move to the downside that followed is the c part of the flat.......either it is a second wave and the move to the downside is a third wave.......both scenarios imply at least a retracement, so what I would do I would take a Fibo from the end of the blue shape and look for 31.8-50-61.8 retracement level........also try to see if he move down is extended more than 161.8% of the previous move (it seems so) and in this case we're looking for a possible fourth wave, which typically retrace 31.8% and rarely travel beyond 50%

 

A note to those who are just browsing. If you're not aware of the fact that you're in the Wyckoff Forum, or you're aware of it but haven't read any of it, you may not know that Elliott, Fib, and all the rest of the indicators, patterns, etc are not pertinent. They serve primarily to distract the trader from the behavior of price and unnecessarily complicate the effort to understand it and act upon it. Those who are genuinely interested should look at the If You Can Draw A Straight Line thread (it's short), then return to this discussion thread if their interest is piqued.

[bojangle 10]

I don't trade the Nasdaq, but based on my method, here is a marked-up chart with my s/r.

 

The yellow line, on a break below, is where i'd expect liquidation to happen.

 

The varying thickness of the lines represents level of importance, to me.

 

I prefer to patiently wait for good opportunities, rather than forcing myself to put the "day" in "day trader."

[tradingwizzard 10]

Elliott, Fib, and all the rest of the indicators, patterns, etc are not pertinent. They serve primarily to distract the trader from the behavior of price and unnecessarily complicate the effort to understand it and act upon it..

 

how do you know that?

 

and where's the proverbial politeness?....is it that hard to give a nice, answer?

[Patuca 13]

A note to those who are just browsing. If you're not aware of the fact that you're in the Wyckoff Forum, or you're aware of it but haven't read any of it, you may not know that Elliott, Fib, and all the rest of the indicators, patterns, etc are not pertinent. They serve primarily to distract the trader from the behavior of price and unnecessarily complicate the effort to understand it and act upon it. Those who are genuinely interested should look at the If You Can Draw A Straight Line thread (it's short), then return to this discussion thread if their interest is piqued.

:rofl: :rofl: :rofl: oh my that is funny :rofl: :rofl: :rofl: oh my side..it hurts..:rofl: :rofl:

 

Sounding kinda of like steve46.....

 

Many traders trade with other patterns..and don't find them distracting...but um....lets see ...is "helpful" the word?

 

What makes the wyckoffonian people..the mean reverting" people..and the vsa people think they somehow have an inside road to trading....LIKE "THE" ROAD. :rofl: :rofl: Pu...leeze :rofl:

Edited July 29, 2013 by DbPhoenix

[DbPhoenix 42]

how do you know that?

 

This is the Wyckoff Forum. Its purpose is to discuss Wyckoff and Wyckoff's course. Indicators and patterns are not part of the course. In fact, he specifically cautions against paying any attention to them.

 

and where's the proverbial politeness?....is it that hard to give a nice, answer?

 

Sorry, what was the question?

[fxpaulm 10]

I’ve read most of the threads and at times things are crystal clear and times extremely muddy. For example, numerous places in this forum have I read that O/H/L/C is not important, just the waves and don’t look bar by bar and yet reading the Wyckoff course that seems to be what he is doing. It has been suggested to study tick charts and watch to see the flow of price and until one gets this they will never understand Wyckoff, but in the course, Wyckoff said that devoting one hour a day to the market should yield great results. The only way that would be possible is if he did put some importance to individual bars and the H/L/O/C.

He said in the same section (24M, pg.8) that he had his best results when only looking once a day, now granted, he did have an understudy who would call his attention if something happened, but he did not watch the continuous flow of price and had great results by looking at the individual bars and comparing them to previous bars, he did place importance on closes and his analysis and writings show it.

Am I missing something?

[Gringo 10]

I’ve read most of the threads and at times things are crystal clear and times extremely muddy. For example, numerous places in this forum have I read that O/H/L/C is not important, just the waves and don’t look bar by bar and yet reading the Wyckoff course that seems to be what he is doing. It has been suggested to study tick charts and watch to see the flow of price and until one gets this they will never understand Wyckoff, but in the course, Wyckoff said that devoting one hour a day to the market should yield great results. The only way that would be possible is if he did put some importance to individual bars and the H/L/O/C.

He said in the same section (24M, pg.8) that he had his best results when only looking once a day, now granted, he did have an understudy who would call his attention if something happened, but he did not watch the continuous flow of price and had great results by looking at the individual bars and comparing them to previous bars, he did place importance on closes and his analysis and writings show it.

Am I missing something?

 

fxpaulm,

 

What you are saying is true. Wyckoff could make a decision probably by devoting an hour of his day to looking at the charts and prices. What's not evident from this is the time he spent honing that skill of reading and understanding the flow of price. Those years he spent day trading stocks and seeing price move day in and day out brought him to that level.

 

Theory is good and gives you an idea regarding what to pay attention to. The real deal is then to sit and watch prices in real time or at least even in replay to get the idea how to make abdecision when price is moving left to right and the right side isn't all visible. After the fact charts almost always seem obvious.

 

Once and if you get that clarity then trading would start getting a bit easier. You can look at the bars and still understand the continuity of price. It's just that while learning this skill it's tougher not to see bars as individual stand alone instances.

 

As an example if you were trading as an end of day trader you would probably look at prices once or twice a day and then make a decision based on that. The preceding bars or lines would show you how the price had been behaving and where the pressures of demand and supply was shifting.

 

Please keep up with your observations and hopefully the light bulb would go off one day. Having the theory in mind will hopefully bring it all together faster when the moment of clarity does arrive.

 

All the best.

 

Gringo

Edited August 5, 2013 by Gringo

[fxpaulm 10]

Gringo,

I understand what you are saying about Wyckoff having honed his skill and that explains the success, but I’m also aware that he wrote his course for the people who can only devote one or two hours a day.

 

I base this on part two or the “Tape Reading and Active Trading” course that he wrote after the first. In it he starts with –

 

The majority of those who follow our Method devote an hour a day, more or less, to studying and planning their campaigns. But we have learned that an increasing number wish to trade in the market continuously…

This form of trading is entirely distinct and different from that described in the other Division of our Method, which aims to secure profits from the ten, twenty and thirty point swings. It meets the requirements of those who wish to trade more or less constantly.

 

So it seems to me that the first course, the one over 400 pages, is for people who devote an hour a day. Am I wrong? If that is the case then emphasis must be placed on the range and close of the individual bar and their movement compared to previous bars.

 

That all being true, then it shouldn’t matter that he spent years studying the continuous flow of price, because he wrote the course for people who can only devote one hour a day to trading in mind.

 

Do you think I’m missing something here? If so, please let me know.

[Gringo 10]

Gringo,

I understand what you are saying about Wyckoff having honed his skill and that explains the success, but I’m also aware that he wrote his course for the people who can only devote one or two hours a day.

 

I base this on part two or the “Tape Reading and Active Trading” course that he wrote after the first. In it he starts with –

 

The majority of those who follow our Method devote an hour a day, more or less, to studying and planning their campaigns. But we have learned that an increasing number wish to trade in the market continuously…

This form of trading is entirely distinct and different from that described in the other Division of our Method, which aims to secure profits from the ten, twenty and thirty point swings. It meets the requirements of those who wish to trade more or less constantly.

 

So it seems to me that the first course, the one over 400 pages, is for people who devote an hour a day. Am I wrong? If that is the case then emphasis must be placed on the range and close of the individual bar and their movement compared to previous bars.

 

That all being true, then it shouldn’t matter that he spent years studying the continuous flow of price, because he wrote the course for people who can only devote one hour a day to trading in mind.

 

Do you think I’m missing something here? If so, please let me know.

 

Keep in mind W had written that one should paper trade for a time until the trades start showing consistent paper profits and not go live before that consistency is achieved. So there is this element of screen time involved which may be different for different individuals. The studying and planning the campaign part comes after you've mastered the material.

 

If you want to get better at this kind of trading then you must put in the screen time. If you are unable to resolve the theory into practice then know that you're not the only one. It does take quite a bit of time to get that clarity and then it becomes easier. Just because you've bothered to read W doesn't guarantee success no matter how much you find it to be unfair. You'll need tonnes of exposure and you'll need a trading 'plan'. For that plan to become a reality you'll need to know what you're looking at and what you're comfortable with. Over the years I have seen many a comrades who couldn't make consistent money. Some I would argue even had a better grasp of theory than I had but when it came to making decisions when money was on the line something didn't click. After the fact they could all explain the reasons and how and why things didn't work out but in real time success was illusive. You may be able to find older posts from many of these friends.

 

So the bottom line is how quickly do you want the results? Screen time is the only thing that will clarify it all for you. The theory isn't that complex, especially if you just read the summaries Db has provided and believe me even that summary is sufficient with some doses of the real course. To get the results you need to go through seeing price move and to build that understanding for its flow.

 

Perhaps Db would be able to answer better as I am beginning to sound bitter even to myself. I do wish you to succeed but doing all the work doesn't entitle one to success in this business. Trading is one of the hardest things ever in life simply because the enemy isn't out there.

 

Gringo

[fxpaulm 10]

Gringo,

What you are saying makes sense and I see the importance of screen time, but I still think that is not the essence of the course. To me he sums it up best in Section 22, pg.2

 

The tape reader is able to detect these critical stages at their very beginning and thereby gains the advantage…

Those of us who have neither the time nor the inclination to study the tape for five hours daily require some method of attaining the tape reader’s proficiency by equally effective but more convenient means

.

 

It is my belief after reading and studying the course that Wyckoff wrote it for people who “have neither the time nor the inclination to study the tape for five hours daily…” in view. He honestly believed that people could study his course and make money by studying the market for about an hour a day with the method explained in the course.

 

That is either true or it isn’t, but I believe that he was correct.

 

So while I see the benefit of putting in the screen time to get a deeper understanding of price action, I do not feel that it is the only way for people to learn Wyckoff. In fact, in some instances, people will never get it by studying it that way. Wyckoff believed that people would be better off if they learned to analyze the market with a wave chart, rather than from the tape itself.

 

Unless I’ve grossly misread Wyckoff and the course that seems like the most prudent thing to do when trying to fully comprehend the nuance of his methodology. To me it doesn't make sense to tell some one new to Wyckoff to observe the tick chart and see the ebbs and flow of price, because most people will never grasp it that way. Why not do what Wyckoff recommends in the course?

[DbPhoenix 42]

Gringo,

What you are saying makes sense and I see the importance of screen time, but I still think that is not the essence of the course. To me he sums it up best in Section 22, pg.2

 

The tape reader is able to detect these critical stages at their very beginning and thereby gains the advantage…

Those of us who have neither the time nor the inclination to study the tape for five hours daily require some method of attaining the tape reader’s proficiency by equally effective but more convenient means

.

 

It is my belief after reading and studying the course that Wyckoff wrote it for people who “have neither the time nor the inclination to study the tape for five hours daily…” in view. He honestly believed that people could study his course and make money by studying the market for about an hour a day with the method explained in the course.

 

That is either true or it isn’t, but I believe that he was correct.

 

So while I see the benefit of putting in the screen time to get a deeper understanding of price action, I do not feel that it is the only way for people to learn Wyckoff. In fact, in some instances, people will never get it by studying it that way. Wyckoff believed that people would be better off if they learned to analyze the market with a wave chart, rather than from the tape itself.

 

Unless I’ve grossly misread Wyckoff and the course that seems like the most prudent thing to do when trying to fully comprehend the nuance of his methodology. To me it doesn't make sense to tell some one new to Wyckoff to observe the tick chart and see the ebbs and flow of price, because most people will never grasp it that way. Why not do what Wyckoff recommends in the course?

 

What is preventing you from limiting your view to the daily chart and ignoring everything else?

[fxpaulm 10]

Nothing that I know of...

 

I prefer the 5-min though, and before you ask, nothing is preventing me from doing that either.

 

I'm merely pointing out that the idea that one must first put in tons of screen time and/or observe price by tick and all that other jazz is not the only way to learn Wyckoff. In fact, he himself seems to poo poo that idea in his course.

 

If people learned it they way he intended, I believe there would be less confusion and more people grasping it. So I guess I'm just pointing out the obvious. My hope is that people who want to grasp it will not just get bogged down with some of the suggestions about screen time, tick charts, no thought to price range, and close. That to me seems counter productive and goes against the essence of what Wyckoff intended when he wrote his course.

[DbPhoenix 42]

Nothing that I know of...

 

I prefer the 5-min though, and before you ask, nothing is preventing me from doing that either.

 

I'm merely pointing out that the idea that one must first put in tons of screen time and/or observe price by tick and all that other jazz is not the only way to learn Wyckoff. In fact, he himself seems to poo poo that idea in his course.

 

If people learned it they way he intended, I believe there would be less confusion and more people grasping it. So I guess I'm just pointing out the obvious. My hope is that people who want to grasp it will not just get bogged down with some of the suggestions about screen time, tick charts, no thought to price range, and close. That to me seems counter productive and goes against the essence of what Wyckoff intended when he wrote his course.

 

No one is suggesting that a beginner put in "tons" of screen time observing price tick by tick. The purpose of observing a tick chart is to make the point that price moves continuously. This should not take more than an hour. An hour is not "tons".

 

As to emphasizing the close and the range, you may be bringing this to the course rather than taking it from it. If the close and the range were as important to Wyckoff as you seem to think they are, why did he mention the close only 16 times out of 300 bars, and the range only slightly more than that? If you choose to emphasize these yourself, you are welcome to do so, but Wyckoff's emphasis is on the balance of demand and supply, the trend, and support and resistance, not closes and ranges.

[fxpaulm 10]

Anyone reading the thread and comments will quickly see the importance placed on tick charts, I will leave that for others to see the obvious.

 

No idea where I said that range and close were the end all and be all of Wyckoff (perhaps you could point me to where I said that or even where I said that is where my emphasis in trading is), but he did use them, an honest reading of section 7 will show that. Also, that section will quickly disprove the idea that he did not use bar analysis to some extent. Did he also stress supply/demand, trend and S/R of course, and I in no way said that he didn’t.

 

No, you did not say that range and close were the end all and be all of Wyckoff, though you did say that he emphasized them. My question to you was if he thought they were so important, why did he bring them up so rarely in his analysis of 1930-31?

 

My contention is that Wyckoff wrote the course for people who do not have the time to view price continuously, do you agree with that or do you believe that I’m bringing that to the course? I’ve shown this by pointing to Wyckoff and his course. Yet, reading the different threads and comments, one comes away with the idea that if one does not put in the “screen time” and observe price move via tick charts, then they will not be able to grasp Wyckoff. That is wrong and grossly distorts his work.

 

Wyckoff wrote Part One for people who did not trade the tape during the trading session. As I said earlier, the purpose of following a tick chart for modern traders is to make the point that price movement is continuous. This point can be made in an hour.

 

One other thing, I believe that when Wyckoff talks of price movement he has in mind the range and close. Why do I think that? Simple, in Section 7 he tells the reader to cover the chart and move it bar by bar to get the idea of the price movement and volume, the only way that makes sense is if he is looking at the range of the move that day and the volume and then drawing some conclusions from that. Now is that all he looked at? Of course not, he also observed the S/D, trend, and S/R.

 

That's the only way it makes sense to you, but you are advancing your own interpretation. Yes, price movement. Yes, volume. But he rarely mentions the close or the range. If you want an exact number, scan the course using Ctrl+F.

 

In any case, I fail to see why this concerns you since you trade a 5m bar. There is no close during the trading session, and the only range that matters is the range from the crest of one wave to the trough of the next. If you trade futures, there is no close until Friday afternoon.

Edited August 6, 2013 by DbPhoenix

[fxpaulm 10]

I scanned just Section 7 and in it, Wyckoff refers to the close of the bar at least 18 times and draws trading conclusions from them. He also references the spread regularly in that Section.

 

This all started when I pointed out that Wyckoff wrote Part One of his course for people who do not look at the continuous flow of price and he says that great success can come from that. Reading the different threads and comments here one does not come away with the belief that that can happen.

 

I agree that range (crest to trough) matters, but also sometimes individual bars/ticks/candles in whatever way people view them.

[Gringo 10]

I scanned just Section 7 and in it, Wyckoff refers to the close of the bar at least 18 times and draws trading conclusions from them. He also references the spread regularly in that Section.

 

This all started when I pointed out that Wyckoff wrote Part One of his course for people who do not look at the continuous flow of price and he says that great success can come from that. Reading the different threads and comments here one does not come away with the belief that that can happen.

 

I agree that range (crest to trough) matters, but also sometimes individual bars/ticks/candles in whatever way people view them.

 

I think a bit of clarification is required here. One doesn't need to look continuously at the flow of price to be able to trade, especially those who use 5 mins or longer bar intervals. The idea is not to continuously look at price but rather to understand price as being continuous. When a daily bar is looked at even once a day, even there the previous daily bars show the flow of price in continuity despite it being not continuously looked at. The suggestions here are not to have eyes glued to the screen without blinking but to 'see' the continuity of price independently of the time interval between bars.

 

As a example (a cool example, because I just came up with it and it seems awesome!):

If a snake were crawling left to right and we chopped it in equal pieces and then separated with some constant gap, you would see the snake as if it were bars of some width with equidistant gaps. To decipher the shape of that snake and it's motion (previous motion or state) you would have to imagine the gaps to have been removed and the snake again a whole. (Oh, I tell you this might go down in history as being the example of the century ). The ultimate truth lies in receiving the continuous as discontinuous but perceiving it yet again as continuous.

 

Gringo

Edited August 6, 2013 by Gringo

[fxpaulm 10]

Gringo,

 

I agree with what you said. I think I'm coming off as combative, but that is not my intent. I have learned tremendously from the material here and from all of you. Thanks for making me a better trader.

[bojangle 10]

Marking up the QQQ chart to get the ball rolling again in this thread.

 

This would be a swing-trade idea.

 

If we break above the 76s, the market has potential to push above the 77s for new highs.

 

If we can't push above the 76s and fail, I expect a break lower for the 74s. That may be a good place to buy.

 

In the larger picture, the market seems to be advancing less and less. This leads me to think the market may be getting to long and we could pullback in the bigger picture below the 74s. Though, that is a long-term idea.

 

Good swing trade ideas are: break above 76s or a test of the 74s for a push up beyond the 77s.

[sharehunter 10]

Hi All,

 

I am an Wyckoff student. I am very interested in Wyckoff method. I found that Wyckoff institute issue market report daily and weekly. It really give me a big helps on the way studing Wyckoff method but this only provide analysis on the market. I would like to read analysis example, trading example as well as other report using Wyckoff method on single stock. I believe that it will help me more in studying Wyckoff method. Could you please tell me where I can find there report and document?

 

Thanks you a lot

[tupapa 10]

This is my take on Silver:

 

Weekly:

 

The red SL is broken and we can see climactic VOL. followed by a lower volume test during the previous week.

 

Daily

 

The green Demand Line holds, resulting on a HL and for me, a reason to go long if price breaks above the most recent congestion above 22.

 

From here, I would wait for a test of R at 25, if price reverses I would close and go short, if it breaks above 25 price is back in the range and I would anticipate a test of the range MP at 30.

[miketoll 10]

Hello,

 

I did go through the threads the entire day. The more I read the more I get the feeling that Wyckoff's way of trading is just another theory. Of course it's a theory, but in a way like Elliot Waves or Candlesticks (which is BS as we all know). I don't want to offend anyone, especially DB or any other great contributers. I'm just curious, what Wyckoff's way of trading makes it superior to other theories? I think anyone in this subforum perceives Wyckoff superior, otherwise he wouldn't practice it. So...

 

What are your experiences with Wyckoff in LIVE trading? How much success do you have and where do you see the advantages?

[Gringo 10]

Hello,

 

I did go through the threads the entire day. The more I read the more I get the feeling that Wyckoff's way of trading is just another theory. Of course it's a theory, but in a way like Elliot Waves or Candlesticks (which is BS as we all know). I don't want to offend anyone, especially DB or any other great contributers. I'm just curious, what Wyckoff's way of trading makes it superior to other theories? I think anyone in this subforum perceives Wyckoff superior, otherwise he wouldn't practice it. So...

 

What are your experiences with Wyckoff in LIVE trading? How much success do you have and where do you see the advantages?

 

Hi Mike,

 

I don't know what you've been reading but this was right at the top of the forum: http://www.traderslaboratory.com/forums/wyckoff-forum/3877-introduction.html.

 

As far as trading W live is concerned, how else would one trade if not live? Try reading the Trading in Foresight thread; Trading in 90 mins thread, If you can draw a straight line thread. A great majority of comments are about live trades that were pre-planned in the Trading in Foresight, and then later commented on in the Journal or other threads. You'll have to dig a bit but it's all there. Get the gist of how decisions are made and then see for yourself if this is something for you. Not everyone wants to trade without indicators no matter how much they might think they do.

 

Gringo

Edited October 11, 2013 by Gringo

[Gringo 10]

I am not sure what you're talking about. Here we do our own analysis. When someone gives you a report it's current but what difference does it make for someone who's learning? A few years or a hundred years old report is all the same. The idea is to get the proper way of thinking in order.

 

There are tonnes of charts with explanations if you use the search function. Whatever tickles your fancy type it in and start reading. Eventually, you'll have to do the analysis on your own. If you post something you've analyzed perhaps someone would comment on it.

 

The Wyckoff material and course used here is the original course which is devoid of the exotic terms later added by the SMI. It is not to say SMI's interpretation of Wyckoff may not be profitable, but in this forum we're not interested in the interpretations of Wyckoff but stick with the original.

 

I wish you well.

 

Gringo

[miketoll 10]

Thanks Gringo!

 

I do have specifically two questions about Wickoff:

 

1. At some points DB points out following thread: http://www.traderslaboratory.com/forums/wyckoff-forum/13644-trading-90-minutes-archive-8.html#post159560 I don't even have a clue, how this has to do with Wyckoff? I think it's very valuable information, but at the same time tells me, forget about all theories (including Wyckoff): observe the markets BY YOURSELF and build your own strategy. So why even bother about Wyckoff?

 

2. I don't totally grasp the concept of price continuity. Does it just mean, to forget technicals that are based on history (basically price, volume) and just look at the order flow as a prediction for likely moves?

 

Help is very much appreciated!

[miketoll 10]

I tell you:

I'm so much master, that I call candlestick bullshit, that I threw away elliot waves and that I'm not thinking you can make money in a zero-sum market. Not because some critics proved their failure. Not because I found something that makes more sense and has been lived by "the greatest traders" (livermore, wyckoff, ...). I know very well about variance. I just use the answers to judge, how serious a subject is. It's not difficult to differntiate between deep-thinking people and kids playing around, like they are so often here on forums (like you think, I'm, irght? )

I don't even touch approaches which concepts are too too big. That say at point a someone is accumulating and point b someone is distributing,due to this and that. Big speculation, isn't it? Know one knows if this is true and know one will ever even slightly prove it (you can't right? even your 5 year trading results can't prove it and you know that9. It's a theory which sounds comfortable and logical. Where traders see a light at the end of the tunnel, because they now have their framework they have searched for. You just need to bring enough effort to get this down, right? Pff....

Of course it may work, but maybe it's due to a combination of a hundred others factors and variance. You can't even dream of what variance is like. Wyckoff, Livermore, Wiliams are more likely to be variance, than they are not, especially at the times where they invested. But I won't try to convince anyone about the importance of variance. Don't take it personally, but I think most people here get too much caught up in their "trading world" that they even forget the most essential question: Where is my edge? I'm not talking about you edge is the theory you have. Where's your real edge?

If there would be such a loophole, it would be closed...fast.

 

Yet, I'm open to new things. Thanks for your input anyway!