Trading The Wyckoff Way

[PrymeTyme 10]

what chat ?

 

i wanna chat too

 

 

nice weekend yall !

[Gringo 10]

what chat ?

 

i wanna chat too

 

 

nice weekend yall !

 

PM Db, and say Gringo referred you

 

Gringo

[tomerok 10]

nice analysis tomer, what is the green line that seems to be following price?

 

Thanks.

 

Current Day High.

 

after removing everything from the charts i left only current day OHL, prior day OHL and olor time region to plot the first 15 minutes in gray.

 

Besides S&R i'm taking into account when price creates new highs/lows for the day,

and try to see if price has any respect to prior day high/low, in addition.

and the 15 min gray area helps me view more clearly the IB or opening range.

 

Tomer

[DbPhoenix 42]

Db, i am re reading the s/r thread, so i think i will find this eventually.

 

You mentioned in the chat today, and previously on one of my posts that there were too many lines.

 

The thing is, if one selects only 5 lines, how does one detect the minor sr levels we ussually find in rt in thhe chat. Is that why you keep different bar intervals, so that you have the most relevant levels for each?

 

The second thing is that as we are reaching new lows in the nq, we need to go all the way to july to find relevant TRs. After these zones are being populated by new trades, should we move the S/R levels, giving more importance to the most recent areas, I guess the answer is yes, but anyway the worst question is the one that is not made.

 

First, having many lines can paradoxically impede your ability to detect S/R as you may be so focused on the lines that you pay less attention to the dynamics of price movement: the waves, the contractions and expansions, the hesitations, etc. There is also a substantial difference in remembering an S/R level because one has traded through it several times and remembering it -- or trying to -- because one just plotted it that morning. Trading only one instrument also greatly enhances one's ability to understand how it "behaves", and the better one understands that behavior, the better able he is to anticipate changes in that behavior.

 

Second, the answer isn't so much yes as it depends. More recent trades tend to confirm rather than provide anything genuinely new. But confirmation is a plus as well: the more often price finds S or R at a given level, the more confident one can be that price will find S or R there the next time, assuming that one is defining S/R by trades and not by geometry or mathematics.

 

As to what I use, I include whatever is necessary to give me a frame or a context. Very occasionally I may have to use a daily. If so, I will not likely have to look at it during the day (the less, the better). More likely I'll have to use an hourly or a five-hourly, depending on what I need to include whatever I need into one window. But, again, unless the day turns out to be wide-ranging, I may not have to look at this more than once, and then before the open. What I will use more often will be a 15m, 5m, and 1m. And, yes, one can use a 13m or 17m or 3m or 5.5m or whatever, but so what? If one has learned to view price movement as continous, then the objective is to fit whatever one needs into a window rather than get cute with peculiar bar intervals. The more important consideration in daytrading is speed, and if the defaults provide what one needs, then the defaults are fine.

 

Yesterday, my frame was what I posted in the TIF thread, but that was a pretty big frame. Nonetheless, it provided a context and a focus, thus the market became just a bit more predictable rather than completely wild and crazy.

 

The R in the 54-56 area was comfortable as it's become an old friend over the past week. Therefore, it was not unreasonable to expect it to provide R yet again, which it did. But then it double-bottomed just a few minutes later at 47, and price blasted right through it. So, at the same time I'm looking for contraction in the waves, or bar, I'm looking to the left to see where price has found S/R in the past. I look for those levels where price has been repeatedly thwarted from its course, including those occasions when it has hugged or straddled a particular level. If and when price approaches that level, as with 65-66 yesterday, all I have to do is wait rather than guess.

 

 

 

 

 

 

 

And when price stutters in its effort to make a new high, I wait for an LH to short. When price then makes its way to the OH, I look for signs that it's going to find S there. When it does and then makes an LH, there's another short. When it returns to the OH, though, it doesn't find S again; it drops into the opening TR. Weakness. However, it stops before it reaches the MP. Strength. But then a poke to the upside 15m later that goes nowhere suggests that the resolution of this little consolidation will be down.

 

 

 

 

 

 

 

 

But where is it going to stop? 35 seems to be the most logical because of the overnight rally. But, instead, it finds S at 40. Why? This seemed to come out of nowhere, but if one can clear away the extraneous, it's not difficult to locate the most likely sources of unanticipated S/R.

 

Here one can see that price has found S and R at 40 and has even snuggled up to it. One needn't know the reason why, only that it has done so.

 

 

 

 

 

 

 

One can even detect the reasons for the hesitation at 45 on the way down: the little pullback at 45 a hour before the open and the bottom of the TR created midday on Thursday.

 

If one can draw lines at and around all this and lock in to what is likely to be most important in the midst of all the action, then lines would be beneficial. But when push comes to shove and one is wondering where the hell am I, then monitoring several windows, or flipping back and forth through two or three tabs, may maintain or at least restore the calm one needs to trade confidently.

 

Db

 

 

 

.

[Niko 10]

Db,

 

Thanks again very clarifying.

[Niko 10]

Trying to hone my skills with the CL contract, I was amazed how the S/R levels really give the impression of a nice pointy hat is on top of one´s head. Please note all the levels were defined before the market topped.

 

 

This chart is intended for the non believers who are still lurking around. (As everyone else knows that this stuff does work).

 

P.S. I did not know where else to place this, I though given the interval, this could be a good place, if you think this should go somewhere else please move it if required. And yes, I know there are way too many levels. Please bear with me, just this time.

 

Thank you DB

Edited October 27, 2012 by Niko

[pjohnm 10]

26/10

The chart posted by DB pre open prompted some self questioning as to why I did not notice the downward channel developing. I put this down to the way I annotate the charts. Basically, by focusing from left to right, I am drawing the older lines first which impacts my ability to read the chart and the most recent action. Therefore, I must also read a clean chart from right to left as well.

The importance of the down channel was that as price had begun moving from its base pre open, one should have been prepared for the potential for price to continue upwards at the open.

14:30 A dt is made pre open, then a LH, followed by a wide range down bar

14:33 The weakness ends at pre determined S/R (47) and a db is formed .

Having breached 47 from below pre mkt. we should be prepared for 47 to act as S

14:34 Price contracts, then expands to the upside 2 minutes later, taking price back to the dt (the OH). Sellers appear to have withdrawn, given the ease that price accelerates.

13:48 From here, we break through a 2nd pre determined S/R level at 58, (with minimal hesitation), so again, little resistance from the sell side. (effort v result)

14:44 we get our first pull back at 64, and after a 4 pt reverse, we appear to be continuing on our way up again.

14:50 However, as the LSH is broken, the bars contract soon after and we have our first warning the buyers may be struggling. The pace of the upmove has changed to the point of stall. Demand weakening.

14:53 Another contraction in the bar range ensues, more evidence of weak buying pressure

Buyers struggle to create a HH (post 64) and had we a downward channel to refer to on our charts, we would know that we were at the top of a pot'l important level, one where we should be on the lookout for buyers running out of steam.

14:56 Note increasing length of downwaves

14:58 Wide range bars creating LL's. Regardless of whether a down channel was drawn, the action shows the bars expand again and this time confirms increasing selling interest.

15:01 The drop back to 54 is as sudden as the rise was from it, apparently ignoring our 58 level of S/R. Selling pressure has increased and buying pressure has withdrawn.

15:05 The pullback from 54 pauses at 58, the bars contract again but instead of continuing the downmove, buyers attempt another run for the highs and are stopped dead at 64.

15:20 Contrasting the 2nd upwave from 54 to 64 with the first, we can see buyers are having to put in a lot more effort, (4 mins v 13 mins) and the result is a LH. The action has a hinge like quality (LH following HL, price converging to point), and we're now at narrow range bar.

15:25 The hinge is broken to the downside and it is the buying pressure that has receeded

15:33 Having broken 54 from above, buyers are testing it from below, but sellers show interest in defending a level lower than the mid of the mornings trading range (46-66).

15:40 - 15:41 A poke out of the 54/52 range is shortlived, as sellers quickly return price to 52

15:42 - 15:44 Now a contraction in price at the bottom of the mini TR 52/54, and buyers appear to be struggling to hold price above the low of 52 (note open and close of all 3 bars, i.e, the flow)

15:53 Its LH's / LLs from the break of 52 until 42.

15:56 The pullback stops dead at 46, then selling pressure resumes until 38.

16:07 Buying pressure increases post LL at 38 as the downwaves have shortened and the buying waves are lengthening.

[PrymeTyme 10]

might be of interrest to some...

 

 

Springboard in the making on EU?

 

just watch how price dances arround previous support / Potential resistance

wich happens to be 1.3000 .. we hug that level and form higher lows .. and it does look

like a hinge in the making...

 

why i drew in a bullish scenario ? .. just simply the fact that the most recent rallie

was the strongest we whitnessed in months/years ..

 

we trade at a potential resistance but we done react hard on it,

we hug the 1.3000 , sellers seem to have hard time keeping

price below 1.3000 .. and that action at a potential resistance doesent look

bearish...

 

[Gringo 10]

This is Light Crude Oil inspired by Niko. I have attempted to reduce the S/R lines to make it visually easier to see what's going on.

 

 

Notice on daily chart how price quite frequently jumps into another level later to reverse. In trading terms I would consider it quite tricky to trade this or perhaps even smaller intervals would be required to make decisions so as to control multiple stops or reversals.

 

 

It appears that longer term trading using weekly charts is a somewhat easier than shorter term with daily charts. Simply because once a direction is picked light crude oil appears to behave more predictably than at the daily bar interval levels. It is my personal opinion and as I don't watch the behaviour much and only have the prices to judged it and even that in hindsight.

 

On weekly notice this time around the price seems to be having trouble going all the way to the top or the larger range to 110 area and has turned south from mid point. This shows a kind of weakness in here. To tie it with the QQQ analysis (longer term) done a few days back which showed earlier signs of weakness in the longer intervals and here again even oil showing weakness I would stay alert to weakness developing in the global economic outlook in the coming weeks and months. Again after the next rise we'll have a better idea how strong the demand really is.

 

The nice thing in using the Wykcoff method is that even without knowing much about the trading vehicle I am at least able for form a preliminary hypothesis which later could be tested for accuracy. As an example my hypothesis regarding daily trading being tougher than the weekly could now be tested to verify whether it in fact is the case or just an incorrect observation. This makes making practical decisions a bit simpler as I am not dependent on some guru for my decision making. Yes there is work involved but there also is self reliance and a peace that comes with such self reliance.

 

Daily SL/DL chart later added:

 

Gringo

 

Edit: I tried to see whether SL/DL were reasonably predicting changes in trend and it appears they do their job quite well. I have attached another Daily with SL and DL to show it is quite possible to take advantage of the supply/demand dynamics. We could superimpose the two daily charts and the S/R levels coupled with SL/DL could provide a reasonably advantageous insights into how to trade light crude oil. I deleted my first daily chart by mistake so had to create a new one to show SL/DL. If what I am talking about isn't making much sense then perhaps reading the Wyckoff Light can provide a fantastic start.

Edited October 28, 2012 by Gringo
Added Daily SL/DL chart and edit comments

[blocp 10]

thanks for the light crude charts gringo, looking at the daily with the amount of ranges that you have pointed out, one could see that this is possibly heavily traded intraday.

 

also if i'm correct we don't seem to be oversold yet in the current down wave, possibly with lower prices to come at some point.

 

just my thoughts

Edited October 28, 2012 by blocp
added words...

[blocp 10]

here is what I see on the EU,

 

price has risen quite sharply and has found R at the mid point from the range to the left, it has formed a LH a HL and then hasn't been able to reach R again, now as pryme time pointed out looks like a hinge, if we break out to the low of the hinge our next point of S is the midpoint of the second hinge, if this fails we could find S at the midpoint of the lower hinge

 

if we break to the upside we could find R at the 2nd range to the left midpoint, if price pushes through this level the 3rd range to the left midpoint could be next.

 

there are also the R at range highs, lows to pay attention too.

Edited October 29, 2012 by blocp
added words...

[Gringo 10]

Demand showed some conviction on Friday. Lets see if this continues or was just a one time effort. 64.5 was where the bounce did come and price is above the support at 65. This was probably the first sign that demand is not taking in lying down. In any case also notice in 2 hr chart that price tested the lows and then the highs of the downward trending range and got rejected both ways. It did end up closing above the mid of the day's range showing some strength.

 

Nasdaq is closed today because of Hurricane Sandy. Futures are moving around though so it would be fun to watch how futures behave with lesser participants. Keep in mind the trend is still down and we're just getting some signs of demand showing some strength but nothing decisive so far.

 

 

 

 

 

Gringo

[boru 10]

trial

[boru 10]

trial

Edited October 29, 2012 by boru

[blocp 10]

thought this might go nicely with Db's last post, some of this might clash with Db's charts but this is from my journal and I just wanted to share it.

 

can anyone tell me how to post a chart in the post not in the attachments box please?

Edited October 29, 2012 by blocp
added words...

[Niko 10]

 

can anyone tell me how to post a chart in the post not in the attachments box please?

 

I do it this way:

 

After attaching the JPG file I click on it, then i copy the link. After that I press the insert image icon and paste the link on the textbox.

[blocp 10]

why can't I paste charts aaaaaaaaaaaaaa ??????????

 

here is a 1 minute chart posted old school, can't seem to get it to paste full screen......

Edited October 30, 2012 by blocp
trying to paste chart.............

[tomerok 10]

Don't stop the good habits

The large picture - Price is still in a sideways range, slightly downward, in trading ranges since price reached the big R from July - august

 

Since we had a unique day yesterday regarding trading hours I don't know how to address that, so I'll try and address that as normal price action

Latest TR is 2668-2626, price currently at MP

 

Areas of interest

 

2668

2657

2652-2646 – micro TR

2649 – mp

2642

2626

 

Tomer.

[tomerok 10]

After 2 unusual days, a TR from the past 4-5 days is tested, pricefound R at 2677

 

Areas of interest

 

2677

2674

2668

2657

2652-45 – Middle Range

2642

2626

 

Tomer

 

 

Edited October 31, 2012 by tomerok

[Niko 10]

Good Morning Everyone,

 

Hope everything is better after the storm.

 

My levels for the day (all levels +/- 2)

 

95 Week High

91 LT Swing MP

81

69-67

54

50 Last Swing MP

30

04 Week low

 

We are still in a downtrend that started in September 20, Although from the 26 prices have been reaching HL

 

 

If buyers manage to break above 70. next stop should be at 82 and then 91 if they fail, 57, 49 and 30 should be the next stops.

[blocp 10]

here are my charts for today:

[Niko 10]

My analysis for the day.

 

First of all I would like to post my premarket analysis, just to be honorable:

 

 

If buyers manage to break above 70. next stop should be at 82 and then 91 if they fail, 57, 49 and 30 should be the next stops.

 

 

It never managed to get to 30, it stopped at 37.

 

This is my analysis:

 

 

1. After a small trading range formed in the premarket, prices broke S at 57 at the open, sellers moved the market with difficulty (too bumpy).

2. After finding S at 54, sellers tried a last effort to move prices down but were rejected by strong buying at 52.

3. Although 57 brought some sellers with it 59 (preopen range MP) was the level at which sellers finally managed to stop buyers from advancing.

4. After breaking 57 again at 9:35, there were various test, each one with a LH and LL, signaling weakness

5. After breaching 52 at 9:43, prices reached 50 and found S around 48, there came a HL and the buying waves started to strengthen, buyers ones again took control of the market and managed to take prices to 58.

6. At 58 Sellers came in first halting buyers, but then exerting more pressure making LH and forming a small hinge.

7. After breaking out from the hinge and crossing the 54 congestion zone, sellers made it to S at 50, with little opposition from buyers. There after a failed BO, prices congested again as sellers and buyers were not able to move the market in their intended directions. After a failed rally attempt at 10:07, sellers finally took control and managed to break out.

8. Prices found S at 44, although sellers attempted pushing the market lower, they found buyers again at 41. Then after a struggle at 44 prices broke to the upside.

9. Buyers started losing strength at 10:24 after reaching 47 and then, possibly from the 10:08 congestion, supply started halting their advance, managing to move prices down in a strong wave at 10:27

10. S was found at 44 where prices congested for a while forming a hinge that was broker at 10:40 on strong selling.

11. After a difficult descent, prices finally reached S at 37 where sellers were promptly rejected by strong buying on a V Reversal to 41, all the way to the top of the downtrend channel.

12. Prices tested 37 again at 10:56 where a DB was formed.

[tomerok 10]

Today I had a very clear but challenging watching PA

 

As usual notes are on the chart, WHITE are RT notes, YELLOW are my post analysis notes

 

Tomer

 

.

Edited October 31, 2012 by tomerok
missing space between words

[Gringo 10]

We're still in the downward sloping channel. On the 2 hr chart price has made a higher low. This could imply a bit more strength but also keep in mind the price had fallen again back from previous trading day's highs quite easily. I may be looking too deeply into the wiggles within the channel which may nor may not be that essential. The channel is intact and we really don't have a decisive decision yet and that's where we stand.

 

Usually if there is conviction in demand for a long fight it does show up but there is quite a bit of weakness so far that even an up move of a day is nullified the next. Notice how price tested the support around 65 and went below it. There was a sharp reaction and price went above it for a day. Now it has fallen back below the support. It may be that the support at 65 isn't that solid but it is something to keep an eye on. We can only make decisions in advance as in hindsight everyone's perfect.

 

 

 

 

 

There are no certainties, only probabilities and for now the channel holds and instead of getting all worried lets just observe price and base decisions when things do unfold. The LSL, LSH and the TR channel lines are there to give us warning when demand or supply dynamics changes.

 

Gringo

[Niko 10]

We are in a trading range between 30 and 67.

 

Yesterday, although the SL from 10/18 held as the market could not breach R at 67, signaling weakness, the fact that those sellers were not able to breach 30, gives this level more importance.

 

The fact that sellers spent 40.000 contacts moving 20 points and that that same distance was covered by sellers with 20.000 contracts, made me think about effort vs result and the possibility of buyers retaking control of the market before the open. But then those are just newbie speculations.( See chart 2)

 

Chart 1

 

 

Chart 2

 

 

My levels for the day (all levels +/- 2)

 

95 Week High

91 LT Swing MP

81

69-67

54

50 Last Swing MP

30

04 Week low

 

 

If prices manage to cross the mid point, next levels are 57, 67-69 and 81 that would break the current SL

 

If prices find R in the MP at 50, then 30 is the next level. If 30 is broken we would have to move to July for S at 24 and then go all the way to may for S at 04-07 and then 590.

 

Note I am not making calls, as I do not have a setup defined so far. These are just thoughts, and debatable ones of course.