Trading The Wyckoff Way

[DbPhoenix 42]

Trading in 90 Minutes:

 

[DbPhoenix 42]

Guess I may have the very similar trades with Db today;) Thanks for all of your sharing, ur the true gift for me, haha.

 

btw, i fund your threads of "keep it simple1&2" on ET yesterday, still very powerful!

 

Thank you. Hope you're making piles of money:)

 

Db

 

Incidentally, those of you with the time, patience, and focus to play yesterday's rebound could have played it this way:

 

 

Edited July 18, 2012 by DbPhoenix

[PrymeTyme 10]

EU London Session 1min

 

 

Didnt took the trades .. just mentally played the trading game and analyzed the action

ahh, how i love it! ...

 

some notes to the trades ,:

 

Look at the springboard @Midpoint from overnight session

 

the secondary retest of support

 

and the reaction off the midpoint from the second range

 

neverheless price failed yet again to make a new high.. so ..

my 3rd trade prob wont hold.. eventhou we have signs of strenght in the background

 

 

Edited July 19, 2012 by DbPhoenix
Reload chart image

[DbPhoenix 42]

Nice. Take care, however, even if you're doing this only for yourself, to stage your S/R and the S/D lines. For example, the demand line you've drawn at around noon off your long should be rotated slightly to the left, under that first swing point below R. This would give you a potential exit signal if price (1) breaks the DL and (2) drops below S. When price then makes a new high off your springboard, you can draw a new one where you have yours currently.

 

S/D lines should hug the stride as closely as possible so that they can serve their function. This is largely what distinguishes them from trend lines, and enables the trader to be much more agile.

 

And I reloaded your chart to make it sharper.

 

Db

[DbPhoenix 42]

Trading in 90 Minutes:

 

Edited July 19, 2012 by DbPhoenix
Forgot a supply line

[BlueHorseshoe 10]

Trading in 90 Minutes:

 

 

Hi Db,

 

Please could you share a little info about the order types you would use for entries and exits?

 

Thanks,

 

BlueHorseshoe

[DbPhoenix 42]

Hi Db,

 

Please could you share a little info about the order types you would use for entries and exits?

 

Thanks,

 

BlueHorseshoe

 

When I traded intraday, I used stop-limits for entries and market exits. This is all personal preference, of course.

 

Db

[DbPhoenix 42]

Trading in 139 Minutes:

 

[BlueHorseshoe 10]

Hi Db,

 

Your charts show trading from the open, pressumably to take advantage of the increased volatility at the start of the session . . .

 

You are also showing trades for the NQ - have you chosen this instrument because it generally exhibits greater volatility than other indices such as the ES? Do you think that the approach you're demonstrating would work equally well in the ES?

 

Thanks

 

BlueHorseshoe

[steve46 12]

Trading in 90 Minutes:

 

 

I thought this chart was interesting....looking at the chart carefully and including data prior to the open, I thought the "correct" entry was at the open with stop just below the horizontal line.....you waited quite a long time for your entry and if I am interpreting it correctly, that was just prior to a reversal. Frankly I am surprised no one else has commented on this.

 

Whats missing from your chart on the first swing, is the ability to scan left to see where your previous highs or points of consolidation are...this doesn't reflect on you...there's no way to put all the data you need to evaluate properly, but to adequately decide how to handle the open I think you need to be able to see more data from the previous transactions (previous session).

 

Thanks

Edited July 21, 2012 by steve46

[DbPhoenix 42]

You are also showing trades for the NQ - have you chosen this instrument because it generally exhibits greater volatility than other indices such as the ES?

 

That's correct.

 

Do you think that the approach you're demonstrating would work equally well in the ES?

 

The Wyckoff approach applies to any market that's traded according to the principles governing demand and supply. If by "equally well" you mean profitable, that of course would depend entirely on the trader since the approach is not mechanical.

 

Db

[DbPhoenix 42]

I thought this chart was interesting....looking at the chart carefully and including data prior to the open, I thought the "correct" entry was at the open with stop just below the horizontal line.....you waited quite a long time for your entry and if I am interpreting it correctly, that was just prior to a reversal. Frankly I am surprised no one else has commented on this.

 

Actually, the correct entry was at 5am, but I was asleep. The opening bar was also a possibility, but I didn't like the violence of the opening retracement nor the drop below the demand line. Nor was I comfortable with the 4-5pt risk.

 

As to being just prior to a reversal, since the long was taken in real time, there was no way of knowing that a reversal would take place minutes later. A more important considertation was to minimize risk, in this case just a few ticks.

 

Whats missing from your chart on the first swing, is the ability to scan left to see where your previous highs or points of consolidation are...this doesn't reflect on you...there's no way to put all the data you need to evaluate properly, but to adequately decide how to handle the open I think you need to be able to see more data from the previous transactions (previous session).

 

That's true. And those who've read the course and/or studied the Forum know that context is paramount. However, they are also capable of bringing up a 1m NQ chart on a number of websites, or their own charting programs, and going back as far as they like to get the overall S/R picture. That's a large part of the process of taking charge of one's own education.

 

Db

[PrymeTyme 10]

Short session on EU spot FX today

 

i left the lines on this chart as i drew it .. as i draw them on the fly!

 

(all trades taken with market orders)

 

 

1-2

 

After a sloppy long entry on NO real reaction

i reversed the position on the break of SL

 

 

 

4.

went short as a Lower High was forming

market didnt really react in my favour

looked like it was forming a compression (hinge)

however waht was in my favour was the lower high

and another lower high within the small compression

and the reactions bars where bigger then the rallies within the formation

so i kept the position open.. but was cautions and ready for a breakout eiher way

 

then on the lows of the compression as soon as is saw the rally breaking the previous bar high i got out! as the market wasent really acting in my favour and we have still an uptrend

and signs of strenght in the background so not in favour of my small short scalp

 

as soon as the reaction from the small downtrend line was broken i enter a long position

wich reacted immeditaley in my favour and i let it ride ..

 

btw i just recently saw that the upward trendline was drawn sloppy .. but nevertheless i got out wen the bar had like 5 seconds till the close and was below the line...

 

(the sloppy TLs where caused by a change pf period from1min to min5 and back! )

Edited July 23, 2012 by PrymeTyme

[DbPhoenix 42]

Short session on EU spot FX today

 

i left the lines on this chart as i drew it .. as i draw them on the fly!

 

It's allright to draw them in your head if you can. Taking the time to draw them on the chart can throw you off. Draw them in later for posting or archiving.

 

Db

[DbPhoenix 42]

Re the post six back, here are charts for the NQ and ES. These will be the last.

 

 

[tomerok 10]

Hi DB.

Could you explain why did you wait to go long ?

On previous examples you usually went long on the first bar which close above the bar who broke the trend line.

 

Thank you.

Tomer

[DbPhoenix 42]

Hi DB.

Could you explain why did you wait to go long ?

On previous examples you usually went long on the first bar which close above the bar who broke the trend line.

 

Thank you.

Tomer

 

Since you've posted so little over the past year, I don't know what you're involved in, but I assume you haven't spent much time in the Wyckoff Forum, if any. You may not know, then, that the supply/demand lines have little to do with entries. The entries are taken instead on retests, or "double tops/bottoms". A break of one of these lines means only that the "stride" has changed, not that price will necessarily reverse. For that you generally need a retest of what in real time appears to be a bottom/top.

 

In this case, there was no retest in the NQ but rather a "V" reversal. One doesn't know in real time that this is what one has until it's already over. The question then becomes one of where to enter at minimum risk (as opposed to just jumping in and hoping for the best). This occurs at the first retracement. Here the first retracement occurs rather late, but it's that or nothing. And that's where I entered (note that on the ES, you have a nice retest and a clear entry opportunity). Other NQ entry ops occur at the breakout from the trading range that forms while the ES is retesting its low or the retracement that occurs after that breakout, but these are even later.

 

If this stuff interests you, I suggest you read the Introduction to the Forum. If that interests you further, read the Stickie on Demand and Supply. If you are then still with me, read the other Stickies on Judging the Market by its Own Action, Buying and Selling Waves, and Determining the Trend of the Market (as I survey posts in other forums and other message boards, this last appears to be the stick in the spokes for just about everybody, which is why even those who call themselves "trading educators" end up trying to short uptrends and buy downtrends and wait too long to exit once proved wrong or exit too early with a BE or a loss: they don't understand what they're looking at, so they don't know what to do with it other than go with what they feel; this is not a formula for success). Beyond all of that, there are 3000 posts in the Forum, but these Stickies will tell you whether the material is worth your time or not.

 

Db

[tomerok 10]

Thank you for the pointers.

since i still have questions i'll go do my homework before posting them.

 

Tomer.

[DbPhoenix 42]

Even though this thread is about trading between 0930 and 1100, it's interesting to look at what traders are doing to create support and resistance levels premkt as well as the wave structure. This can be observed while eating your cereal.

 

Db

[DbPhoenix 42]

If you're going to short a stock as a Wyckoff trader, you have to go through the routine.

 

What's the state of the market?

 

What's the state of the sector?

 

What's the state of the group?

 

If these don't show weakness, then the odds of success are thin.

 

Db

 

Not a bad time to begin monitoring this (aapl), if one hasn't already been doing so. See also post #144.

 

Db

 

Edit: Since no one followed up on this, at least for posting, I'll bring it all up to date.

 

Market:

 

 

Demand and supply lines began showing weakness 2 and 3 weeks ago. It hasn't gotten better.

 

Sector:

 

 

Lower high last Thursday. Earnings shortfall not announced until yesterday.

 

Group:

 

 

Lower high last Thursday. Lower low Monday. Earnings shortfall not announced until yesterday.

 

Stock:

 

 

Weakness in the supply line since 6/11. Break of the demand line Monday. Earnings shortfall not announced until yesterday.

 

Wait for the "news" and you will very likely be late.

 

Db

Edited July 25, 2012 by DbPhoenix

[tupapa 10]

Nice to see I was on the right track when I suggested shorting apple a few weeks ago. Back then I couldn't be asked with the Sector/Market/group analysis but thought I'd give it a go today since I have some spare time.

 

Start with the market:

 

 

 

The NQ is finding strong resistance around 2560, forming a double top followed by a steep decline, selling pressure is stronger here than during the first decline, shown by a more pronounced supply line angle (1 and 2)

 

Buyers have recently supporred price in a narrow zone, aprox. 2500-2520, if sellers

brake this level, we can expect a further decline.

 

We can also notice a considerable increase in volume during the last decline (2nd Supply

Line) showing greater effort and conviction from the part of the sellers, a bearish sign.

 

 

The Sector:

 

 

The technology sector has also made a double top around 29.25, an important resistance level. As with the Nasdaq, the second leg shows an increase in volume and a steeper decline.

 

Buyers supported price around 27.6, if we break this support level we can expect a further decline.

 

Notice also the downwards Trendline from the peak in April, that hasn't been breached whilst that upwards blue trendline was broken in mid July.

 

I don't see a Hinge here since there is no clear reduction in volume due to an agrerement in price, instead we see peaks of volume showing disagreement over value.

 

Finally, the stock itself:

 

We have found strong resistance around 620 and we arecurrently approaching support around 570, below this level there is a second support area around 545, if these levels were broken, they would comfirm my suspicions and the stock could fall considerably. Where to?

 

Looking at the analysis I wrote a fe weeks ago, I see an Airgap, with little support for buyers to step in until the trading range marked with a box in the following chart.

 

Edited July 25, 2012 by tupapa

[DbPhoenix 42]

Thank you for the charts. I hope you can see now how important it is to monitor this sort of thing on a continuing basis since the best short was Monday. What is meant by "Back then I couldn't be asked with the Sector/Market/group analysis"?

 

Now the interested trader will have to see what happens with the rally.

 

Db

[tupapa 10]

Thank you for the charts. I hope you can see now how important it is to monitor this sort of thing on a continuing basis since the best short was Monday. What is meant by "Back then I couldn't be asked with the Sector/Market/group analysis"?

 

Now the interested trader will have to see what happens with the rally.

 

Db

 

Yes, I can defentely see how the best short was on Monday, the NQ made a double top, so did the sector and Apple made a lower high. I would've gone for a sell stop limit order below the friday low, with a stop above 620, or would you place a stop above 636?

 

I couldn't be asked back then because I was planning a holiday and had no money to trade, but I can now see how analyzing the Sector and the Market can be of great value...

 

About this:

 

Is there a reason why you chose the SPX rather than the NQ?

 

I've also noticed you've used a different Technology chart from mine, why is this?

 

Excuse my ignorance but I'm not familiar with Sector and group charts..

 

Thanks.

[DbPhoenix 42]

Yes, I can defentely see how the best short was on Monday, the NQ made a double top, so did the sector and Apple made a lower high. I would've gone for a sell stop limit order below the friday low, with a stop above 620, or would you place a stop above 636?

 

Up to you, but I would not have placed it higher than 620.

 

Is there a reason why you chose the SPX rather than the NQ?

 

Broader market. But they're both weak.

 

I've also noticed you've used a different Technology chart from mine, why is this?

 

I use the BigCharts material for the consistency. There will be slight differences because of the stocks that comprise the composites.

 

Excuse my ignorance but I'm not familiar with Sector and group charts.

 

See Section 8 of the course. For the charts themselves, see these posts: here and here.

 

Db

[DbPhoenix 42]

And this gold hinge ought to resolve itself within the week: