Trading The Wyckoff Way

[Head2k 10]

Regarding bar intervals, or better to say different scales used for a trading decision, I use three of them. The largest scale serves for determining zones of interest, that is S/R. The intermediate scale serves for determining trend between the zones of interest and its changes. And the smallest scale serves for observing behavior at the very test where I am looking for the entry.

To be concrete, for NQ I determine S/R on 10k CVB, then I use 15s - 1m to watch trend and swings, and finally I watch 1 tick chart to find triggers (that is for a decision whether to enter on a particular test).

 

As for trading live vs. sim, I believe one should learn everything he can on a sim. The reason why your behavior changes when you swith to live is that you are still not sure enough about what you are doing. At least that's my case. On a sim you can trade while you are not 100% sure about all your actions and it even doesn't look strange to you. But when you come to the live acount, every your uncertainity gets magnified, be it about entries or exits. If you are not sure what your plan is it forces you to work on a more detailed one (while on a sim you might settle for using "intuition" in that particular case). If you know what your plan is but you break it, then you don't trust your plan enough, perhaps because you haven't tested it enough or because you think it is not good enough.

In another words, switching to live account stresses all the problems you have with your strategy, problems which were not so obvious when you traded on a sim. When you identify these problems, then determine their origin and reason and switch back to sim to work on them. Then repeat. At least that's what I am currently trying to do.

[AgeKay 10]

Be warned that you can't trade Forex with small money unless going with a bucket shop. And in any case, avoid MetaTrader like the plague.

[poindexter 10]

Can you explain why?

 

I've noticed this too. In my case with simulator I let my winners run. When I went to real money and then I found myself cutting winners short. I didn't want to risk losing the money I had made.

 

So to combat this I went back to simulator and made a rule that I don't touch my trade while it's open. Either my target is hit or my stop. I practiced this on sim until it became normal. Now I'm on real money and I get the urge to close out a trade early but I leave it open and I detach myself emotionally as much as possible, even as I watch a profit turn into a loss.

 

How can I do that? Because I've practiced my method enough that I know it's profitable in the long run and that trying to avoid losers will only make me miss winners.

 

I share that just as something for people to think about, and I'm curious if you can share your experience as to why it's hard to trade real money the same as a demo account.

 

Thanks

 

What you described is exactly what happened to me. I let my winners run in demo but cut them short in live. Additionaly, I gave more room for the stoploss in demo (as Head2K said - it is not my money).

As I refined my entries and exits in the demo these things occured less and less until I became more confident in the trading method and sticked to the trading plan.

 

Head2k:

"In another words, switching to live account stresses all the problems you have with your strategy, problems which were not so obvious when you traded on a sim. When you identify these problems, then determine their origin and reason and switch back to sim to work on them. Then repeat. At least that's what I am currently trying to do."

 

This is the reason I switched to live trading, although with a small account. It is in live trading where you identify problems relating to trading and psychology as well as trading method and money management.

 

Thank you for your explanation on bar intervals.

[bakrob99 11]

Hi Guys,

 

.... You should NEVER allow winners to turn into losers....

Ektrader

 

The real question is what is the definition of a winner. 1 Tick gain? 10 Tick Gain? 50 Ticks Gain? It's different for each trader and setup. A winner is only a winner when it hits the target the trader had in mind when he/she calculated the Risk-Reward and placed the trade.

[ektrader 10]

The real question is what is the definition of a winner. 1 Tick gain? 10 Tick Gain? 50 Ticks Gain? It's different for each trader and setup. A winner is only a winner when it hits the target the trader had in mind when he/she calculated the Risk-Reward and placed the trade.

 

The definition of a winner is when you are monetarily satisfied. Most guys e pect too much out of a trade and letting winners ride isn't as easy as it sounds when trading volitile markets like we do. Up 5, up 6, up 7( now you think you have a winner) then up 7.5 all of a sudden the trading gets thin and BAM!! Back down to 6...... Then 6.5 Then BAM again!! Right back to break even or stopped out for a small gain Every day trader experiences this.

 

Happy Trading

 

Ektrader

[jaygo 10]

This thread seems to be dying off a bit so ill do my best to kick it along.

 

My levels for today -

 

1812-14 R - This area has provided resistence for a while so i will short any attempt to break this area if one of my setups occurs. I must also consider playing the breakout of this area.

 

1890 midpoint ill stay away from this area during the open - middle of the range has the least amount of direction, if price was to approach 1812 or 1772 and then react/rally to this level i may trade it depending on the PA.

 

1770-74 - At this level I will attempt a long if PA permits est.

 

1760- mid point - same as above for this level.

[forrestang 10]

My NQ analysis for 15December2009.

 

As of this writing; and all levels are not exact figures but general zones in which I am attempting to contain various brackets of price movement:

 

• 1810~1800 - Current bracket we are in right now
  
• 1800~1792 - This and the bracket below basically create a large range, with 1792 being about a midpoint
  
• 1792~1779 - See above bracket comment
  
• 1779~1759 - Lower Bracket price may or may not reach.
  

 

[firewalker 10]

... so after spending a good month's worth of trading ranging in a +/- 50 point zone, with most important resistance around 1810, we finally broke above that last week. The classic x-mas rally? I don't know, but given the time we spent pushing to break R, it's not that surprising to see the breakout turn into a straight move upwards like this one. I've found the markets particularly hard to trade intraday, so have not been that active.

 

Also, if you bought the BO, I see no reason to exit it (yet), if you are comfortable with holding positions overnight, in this case, already a week.

 

So where is it going to lead to? Based on the wide congestion area from August last year, I really thought we would see some sort of pullback happening, and I thought the sideways PA from November and December was distribution going on. But how can you ever know for sure?

 

So I looked back at that congestion on the daily chart, and it looks like we have reached +/- the top of that now at 1875.

[timokrates 10]

After that, divergences are irrelevant until the first level of R is reached at 90. There is a slight divergence here, but there is never a real test. Price instead just drifts sideways. And the short is never triggered if one places an entry stop behind price rather than just jump in.

 

Thanks for this thread and your other work as well. Over the last weeks I tried to get deeper into everything, but I'm still maybe only at a level of an advanced beginner.

 

Your comment above lead me to ask you about confirmation in general. From what I destilled from your posts specially in this thread I believed that you try to enter your trades from a one tick chart as close to a predefined level as possible.

 

The problem entering without any "confirmation", only with a TICK divergence from my experience so far often caused trouble. Even with a huge divergence forming I often saw price grinding through the level travelling to the next. The problem of course also is, what could "confirmation" be? The entry below/above a bar, springboard or level in general?

 

Don't get me wrong, I know that this all is never a hundred percent and is a puzzle of understanding - which I like, but which also contains some mental dynamite.

 

For me the order (or the plan) how you analyze the market and the (short term) swings and levels would be interesting. Apart from the discretionary aspect involved, how do you put the puzzle of levels, price, volume and market breath together in realtime?

[bigsnack 10]

FWIW, tick divergences are only relevant (to me) under certain circumstances and contexts. It really depends on how much you want to use the tick as a guide. In my opinion the tick and tick/q became the most useful to me only after I studied it just as deeply as most in this forum have studied the Wyckoff way itself.

 

For me tick divergences are relevant only when the divergences show a very specific behavior. Here are what I specifically look for:

 

A) Has the trendline on the tick/q broken prior to the divergence occurring? Quite often, the tick will break trend minutes before price breaks trend or begins to reverse.

 

B) Secondly, I will only enter on tick "hooks". The ideal entry for me is when a trendline on the tick breaks, and is shortly followed by a tick hook with divergence. A perfect example of this was on the trend day we had just before the new year. I follow the NYSE tick, but the strategy works the same.

[bigsnack 10]

A snapshot of the tick from Thursday. I hope it helps!

 

[Head2k 10]

Thanks for this thread and your other work as well. Over the last weeks I tried to get deeper into everything, but I'm still maybe only at a level of an advanced beginner.

 

Your comment above lead me to ask you about confirmation in general. From what I destilled from your posts specially in this thread I believed that you try to enter your trades from a one tick chart as close to a predefined level as possible.

 

The problem entering without any "confirmation", only with a TICK divergence from my experience so far often caused trouble. Even with a huge divergence forming I often saw price grinding through the level travelling to the next. The problem of course also is, what could "confirmation" be? The entry below/above a bar, springboard or level in general?

 

Don't get me wrong, I know that this all is never a hundred percent and is a puzzle of understanding - which I like, but which also contains some mental dynamite.

 

For me the order (or the plan) how you analyze the market and the (short term) swings and levels would be interesting. Apart from the discretionary aspect involved, how do you put the puzzle of levels, price, volume and market breath together in realtime?

 

Since Db doesn't seem to be active, I will try to answer.

Db always said that TICK divergence is only the icing, not the cake. That means that you shouldn't look for TD mechanically. The market tells a story, and TICK is only a part of this story.

 

As for the confirmation, I take exhausion and current trend in account.

Taking exhauston in account means that I look for climactic action at S/R and a lack of follow-through then.

Taking the current trend in account means that I expect a higher high after a higher low. And I am ready to enter off a lower high after a lower low. And if I don't get such entries I am ready for a hinge.

 

The main thing I am looking for is effort vs. result and acceptance vs. rejection. TICK is only supplementary information on micro-scale. That means I use the help of TICK only to guess a local turning point. But before I even decide to look at the TD I must be convinced that this potential local turning point has a greater meaning than just "local", regarding both the level (S/R) and the setup (exhaustion andf / or trend reversal pattern).

 

Anyway, if and when Db is active again, he will probably provide a better answer.

[GhostofLivermore 10]

Is there still a live chat room and if so how can I get to it?

[GhostofLivermore 10]

I've seen mentioned in other posts, talk of your live chat room is it still running and can I be invited to it?

 

sorry for the duplicate ^ I didn't see it posted

[sevensa 10]

Is there still a live chat room and if so how can I get to it?

 

Click on chat in the menu above.

[GhostofLivermore 10]

Click on chat in the menu above.

 

Thanks !

 

Is dbphoenix and other PA traders in the room during live market hours?

[sevensa 10]

Thanks !

 

Is dbphoenix and other PA traders in the room during live market hours?

 

I don't know. Maybe log on and look?

[dla133 10]

Hi,

 

I was just wondering how all those traders who are Wyckoff students came across his teachings. I for one only discovered Wyckoff on this forum. For me reading posts by traders who where obviously more successfull than I was, and who seemed to really have a feel for the markets inspired me to learn more. In the past I had always struggled with chart patterns and believing in them. (Head and shoulders etc). The reason for this was that I didn't understand how or why the patterns where forming. With Wyckoff I like the way you learn to read price action in relation to supply and demand to give you a deeper understanding of what is actually happening.

 

Cheers

Lee

[wjrusnak 10]

First I heard the name Richard Wyckoff when I stumbled across volume spread analysis and Tom Williams. Then after googling a lot and finding my way to this forum, I really discovered the original works of Wyckoff. Also, I learned the most from reading all of the stickies and most-thanked posts that DbPhoenix had suggested in the Wyckoff forum.

[rigel 10]

Folks come across Wyckoff via forums, from other traders, internet search , VSA etc,

Here Dbphoenix has been largely responsible for establishing the Wyckoff forum and his contribution has been invaluable.

VSA/Traderguider unfortunately start with Wyckoff talk and then steer you onto their own take and exorbitantly priced software/seminars/VSA club, DVDs etc, whereas you can pick up most of wyckoff principles/concepts freely on the forum her:))

[rangerdoc 13]

I first heard about Wyckoff in an audio interview that Dave Allman did for Wall Street Uncut. Can't remember who the interviewee was, but I heard the name mentioned more than once in his interviews. Next, I heard Wyckoff from Raschke. It wasn't until I'd reached the end of my indicator rope (or security blanket) that I decided to learn more about Wyckoff, volume, price action, etc.

[georg7e 11]

I am looking for the formulas used in the calculating of the Technometer and the Force

Indexes. There used to be a publication called " Wyckoff Secrets Revealed" that had

this information. I am willing to pay for this information or by a copy of "Wyckoff Secrets Revealed".

 

Much Appreciated,

 

georg7e

[R/R 10]

check the Wyckoff Yahoo group - I recall much discussion of calculating these indicators several years ago.

 

Have you taken the SMI course? These are fully explained there with their intended application. also SMI publishes these for various indices and Wyckoff Wave stocks daily in their subscriptions. (At least they used to).

 

I personally would be very leery about anything titled "Wyckoff Secrets Revealed". where did you hear about this?

 

good luck

[wunderlich 10]

In Wyckoff Yahoo group you will not find any formulas - helas!

 

in 2006, the SMI wrote in an email:

 

 

 

"Introducing

Wyckoff Secrets Revealed

 

For decades, Wyckoff investors have wondered and frequently asked how the O.P., Trend Barometer and intra-day waves are determined. For as long as people have been asking, our response has been that which is not included in the Wyckoff Course is proprietary. On November 1, that is going to change. Everything you have ever wondered about or asked about the Wyckoff indexes and indicators will be will be presented in Wyckoff Secrets Revealed.

 

These are the topics that will be discussed in this new publication.

 

Gathering necessary date

Determining intra-day waves

Developing and O.P. Index

Calculating the Technometer

Calculating the Force

Calculating the Momentum

How to use the Tec and Force

Applications to other markets

 

Wyckoff Secrets Revealed will only be available during November 2006. It will be distributed by e-mail beginning November 1 on a first come first served basis. There are three ways to reserve your copy.

Reserve your copy with a credit card by e-mail at ..

Send your request by regular mail to Wyckoff Stock Market Institute...

 

Wyckoff Secrets Revealed is priced at $75.""

 

 

Ps. : I would also been very much interessted in the formulas ;-)

[cunparis 10]

I

Wyckoff Secrets Revealed is priced at $75.""

 

Usually one would find this sort of thing on the p2p networks but I have not found it.