Trading The Wyckoff Way

[gassah 10]

So. Anybody detect the buypoint in the NQ today?

 

I don't DT but how about coming out of the pullback around 9:59 and exiting around 12:38 after the high volume of 12:12 and churning about 12:30 and then a support break at 12:38?

 

[DbPhoenix 42]

My NQ chart is considerably different from yours. It opens at 1898, then drops to 1886 by 10:00. It didn't reach 1905 until 11:00. Perhaps your clock is off.

[gassah 10]

Perhaps your clock is off.

 

I'm still shy by an hour and can't figure out how to change it.

 

I think the earliest I could get in is the 10:12 bar following the spring and after the supply line is crossed.

 

[tune 10]

So. Anybody detect the buypoint in the NQ today?

 

Using the chart in #141 there is a block of trades 1881 to 1886 which does tally with the 10:04 and 10:10 low.

 

 

Edited April 19, 2008 by tune

[gassah 10]

Ray covered scenario planning yesterday and it couldn't be more applicable than today's markets.

 

http://tradingsuccess.com/blog/the-mental-state-for-scenario-planning-313.html

 

The SP500 is back in the extreme zones of the upper and lower ranges. The graphic makes for a simple looking plan. If there's acceptance above 1406 than I'd be looking for the upper range to be back in control. If it gets rejected back down below 1384 then the lower range is in control. Sounds simple but it won't work out this way. :\

[gassah 10]

Combining the ranges this one shows that the 1400 area has the least number of price touches, where the market has been least comfortable.

[Tannism 10]

I'm still shy by an hour and can't figure out how to change it.

 

I think the earliest I could get in is the 10:12 bar following the spring and after the supply line is crossed.

 

 

 

Daylight savings time? Spring forward?

[gassah 10]

Daylight savings time? Spring forward?

 

Right. I just can't find the setting in Tradestation.

[treadstone 10]

Thanks for uploading those two charts, gassah.

 

Very interesting and useful information.

[heretodaygone... 10]

I was studying gassah's charts and a question that I had was "why did he choose the july swing high to start his profile?" From this question, I started messing around with volume profiles from different timeframes and here's the results...unfortunately, these charts aren't very visually appealing but I think they may intrigue some who read this thread.The charts are of ES

 

- 1st chart is from the oct.2002 lows with a PVP(peak volume price) at around 1270

 

- 2nd chart is from the oct 2006 breakout with a PVP of around 1450

 

- 3rd chart is from the oct 2007 high till present with a PVP of 1370

[DbPhoenix 42]

Thanks to nic and tune for stepping up to the plate.

 

This chart is a good example of the importance of remaining bias-free. Given the parabolic rise through resistance all the way to 1900, a bias toward the short side would seem to be a duh. And the first level of support appeared to be 1880. However, if one looks back at tune's chart, he can see the congestion area between 1880 and 1890 on the 4th and 7th, the midpoint of which was 1885. Even if he focused on the low to the high on the 7th, he'd still end up with a midpoint at 1885. Therefore, dropping below 1890 does not necessarily mean that the long game is over.

 

Note here that when volume comes in at 0948, price is pulled down. But even though price continues its slide, volume breaks off dramatically, then works its way higher until 0952. All this appears to favor the short side. But look at effort and result. As volume rises, the bars get shorter, and when volume peaks at 0952, price closes well off the low, and buyers are able to push price higher in the next bar with much less effort; hence the lower volume. Therefore, throughout this "downmove", buyers are coming into the market, supporting the price, and even pushing price higher.

 

Volume then dries up considerably during the upswing after moving price to 1892. The big volume comes at 1000 and pulls price down almost to 1886. This appears, again, to support the short side, particularly since sellers are able to move price with little resistance from buyers (low volume, except for 1000).

 

Buyers and sellers then go back and forth, and volume does pick up during this exchange. However, the biggest volume is unable to pull price lower, and the end result is a draw. This is not good for the short side. At 1008, buyers are then able to push price higher with very little effort (again, low volume) suggesting that selling pressure is much less than it had been.

 

During the next segment, buyers are able to keep sellers at bay with relatively little effort (again, low volume). Next, buyers are able to push price all the way back above 1891, and though the volume is higher, suggesting that they had to work a little harder, it is not unusually high.

 

During the last segment, price drifts back a bit, but volume practically disappears, suggesting that sellers are done, and it's up to the buyers (note how easily buyers push price higher at 1019).

 

 

This is only about bars, however, if one can't see them move. If one watches them move in real time or via replay, he can detect the waves easily. Note here how price dips into each trough, then rises back out of it, crests, then repeats the cycle again and again, gathering strength along the way. If sellers had the upper hand, price would not repeatedly recover in this way.

 

[heretodaygone... 10]

The way I view the market is that price will continually test where value is.As traders, determining value and or value excesses are is imo key to trade placement.Here's my view:

[namstrader 10]

DB,

 

I would guess that you are familiar with the Ord Oracle? Do you like his work?

I want to again express my great appreciation for your work and sharing your knowledge. I am so glad I took the plunge to learn everything about Price and Volume that you have provided here at Traders Laboratory. It astounds me how seeing the territory and playing field is much more richer when incorporating your shared map for all of us to learn more from. Before my skills of reading a chart did not know what was really there to understand. You have given me more depth to conceptualizing what the hell is going on with more advanced ways to understanding Demand/Supply with Price, Volume and important areas of support and resistance.

 

Thanks again!

[DbPhoenix 42]

I'm glad the material has been useful. As for the "Ord Oracle", I've never heard of him, but the "oracle" part is pretty much a turnoff right out of the gate.

[namstrader 10]

Tim Ord is his name and I found this attached pdf at his website to share.

Stock and commodities July 2006.pdf

[DbPhoenix 42]

I don't mean to be unkind. I'm sure Mr Ord is a superior person and understands Wyckoff well. But this sort of thing is a pet peeve. When gurus start naming things after themselves, little bells should begin to ring (the "Elder Ray"; set to stun?).

 

I suspect that the user might find his software more useful than TradeGuider, which is for the most part a joke, but it suffers from the same mortal defect: it attempts to code what can't be coded. However, the software is also a lot cheaper. As long as his users remain ignorant of Constant Volume Bars, the market for the software should remain intact.

 

Any book or software program or course or seminar or whatever that promises to shorten the learning curve (that is, provide shortcuts) will do well, particularly if it promises to reveal anything "hidden" or "secret". But there's just no substitute for the screen time, and even the software developer, if he's honest, will acknowledge that fact, albeit grudgingly.

 

But thanks for acquainting me with this gentleman and his work.

[gassah 10]

However, the software is also a lot cheaper. As long as his users remain ignorant of Constant Volume Bars, the market for the software should remain intact.

 

I might have an interest in the software because I'd like to have something that measures swing volumes and use it in other ways, otherwise....

[DbPhoenix 42]

With CVBs, though, it takes maybe 10 seconds to just count it.

 

Of course, you've got the big bucks. Why not just wait for the Db's Cajas Famosas software? I'll give you a big discount.

[gassah 10]

With CVBs, though, it takes maybe 10 seconds to just count it.

 

Of course, you've got the big bucks.

 

What are Constant Volume Bars?

[DbPhoenix 42]

Bars in which the volume for each is constant, according to your settings. For example, they're similar to range bars except that a new bar forms after a given number of shares or contracts has been traded. Since they don't factor in time, they're a good compromise between the standard time bar and P&F.

 

Here's a CVB variety of the chart we've been discussing. Notice that it's fairly easy to see that the "thrust" of the volume is to the upside, especially after the bottom is reached.

 

[Tannism 10]

Now I see what Volume OHLC means in quotetracker.com software.

 

There is no charge for the software. Some brokers provide data as part of using them.

 

This is how XOM charts up both ways. Volume 500K.

[DbPhoenix 42]

One advantage of it is that the trader can eliminate the volume window. However, I can't use it for signals as time is a factor in my signals.

 

For charting the 24/7 activity, tho, it can't be beat as the overnite amounts to only a few bars, not 17 hours' worth.

[Simple 10]

Are you still using Sierra Chart db?

 

It could easily do a variant time chart where overnight bars were compressed by X (specify eod and bod + X). That would be good for showing any structure without the large number of bars and you wouldn't be hostage to o'night volumes to determine your ratio.

[gassah 10]

W analyzes intraday swings in the course and I've wanted to apply it to daily and weekly charts but have never gotten around to it. It would be nice to be able to anticipate the transition from trend to range and vice versa before either one is clearly defined, so that one can switch from a trend following to a range bound strategy in a timely fashion.

 

Attached is the SPY daily using the trial Ord program. It looks as though the end of the trend in 2007 could have been anticipated with this data. The red numbers are the average volumes per swing that Ord prints out but it looked to small to post. I've added the % change for a couple of swings.

 

I think the first clue to the end of the trend was the high volume reaction at BC with 140m average shares vs. the 68m from AB. This might be called preliminary supply.

 

The CD rally is shorter than the AB swing (14% gain vs. 20%) but volume is almost double (120m vs. 68m). This is similar to an up bar with a more narrow spread on much higher volume; or supply overcoming demand.

 

The third clue, if two weren't enough, was the large volume DE reaction with the 100% retracement of CD. Both, in and of themselves, suggested a range formation. The low volume rally, EF, with the volume cut in half allowed for the anticipation of the upthrust at F.

[DbPhoenix 42]

Volume aside, you could just compare the buying and selling waves.

 

 

And it doesn't cost anything