Trading The Wyckoff Way

[V_2008 10]

I have a suggestion if I am not stepping on anyone's toes. I also don't know if it is wyckoff related or not.

 

For Euro look to the first hours range (Frankfurt time, since this is the main euro trading city - which on my chart is 2am-3am ET) and watch how price reacts when it revisits the zone at some point in the future:

 

Well Thats pretty clear for me about revisiting of resistance line. I was talking about two lines on whixh I should pay attention. Well as DbPhoenix said we are looking at some different lines. For me this line (which you showed) is median of congestion area from 27.02.2013 1.3098. So price has hitted that line and now what? What are you trying to tell? THis was a major line? Or price has pushed down in hindsight?

[V_2008 10]

Gringo has mentioned options a few times but I don't know enough about them to even consider using them. It is something that I will decently explore. They are best used to bet on an imminent move right? I think Wyckoff would approve of them since he was such a fan of the springboard.

 

Question about Gold to the more experienced EOD guys;

 

The most recent rally was strong meaning the low at 1556 and we may have just experienced a technical rally. If that is the case, we want to buy on a successful secondary reaction.

 

This is what Wyckoff had to say about this, from Section 7m:

 

-The second opportunity comes when the market completes three days of lower support but the closing prices of each of these days are close, showing that the selling pressure is losing its force, since the net result of this pulling and pushing is to leave the asset unchanged after a considerable reaction (Contraction of Volatility).

 

-At the same time, lower volume on the reaction confirms the inference that selling pressure is losing its force; buying power is overcoming it, as it now appears that the market has completed a secondary reaction.

 

 

1- When I trade intra-day, I have a rule of thumb that the secondary reaction, must retrace at leas 2/3s into the technical rally. Is this reasonable for EOD trading?

 

2- In this example,Wyckoff mentions three days of lower support and lower volume as the characteristics of the secondary reaction. Doesn't it make more sense to find the entry on a smaller bar interval than the daily like DB mentioned a few days ago? Maybe look for a micro-range on the 15-30m chart and place a buy stop above or a limit order at the lower limit of the range?

 

Since I am used to intra-day and I have done my testing on 1m and 1tick charts, I don't want to apply the wrong principles to EOD trading.

 

Hello Tupapa!

 

So from a bigger picture (5H chart) we are still in a down trend from this point of view. Price has pushed through previous support line. But it has pushed through this line with good force and I think good volume. From 5H chart I can't see that this move with high probability will be stopped, as I have already said we have just penetrated previous support.

Don't pay attention to 3 bars going lower things, market doesn't care for your abbility to predict reverse. It can be 1 to infinity intervals further. Wyckoff was talking about his chart and his time. It differs from Gold chart. As I can see price hasn't gained any scores to go higher. Potentially we are in a trding range as previous HH has respected high levl of this Pot. TR. I think we have time to evaluate this future contract

 

I think at this time you can look for short high probabilities trades.

 

P.S.: I am not willing to tell you what you must do, but this green line to the upside looks pretty good to put your ego on a first place.

[Perrin 10]

I could write loads but I have to get some other work done - tidying up - I'm trying to make my life and myself a bit more organised (so that's lucky escape for anyone who doesn't have a day to spend reading one of my longer posts).

 

Regarding the plan - I used to have plans set in stone, which worked ok, but I've kind of moved into just doing what i want, when I think it's a good idea. I'm still kind of following the set-in-stone plans (which is something like a buy on retracement or crash, that kind of thing, but it depends on the other price action - sometimes I wouldn't buy on a retracement or crash because I've seen that the trade works better certain times rather than other times. If the trade doesn't work, I can always exit.) I think I've just kind of internalised a lot of information and I will be the system, rather than my system being the system, if that makes any sense. Which is not something I'd recommend to anyone. I really don't quite know how to articulate what I'm doing.

 

Why 4th Feb...? Basically, there was a sell off a few weeks previous, and then another sell off which pretty much made everyone go "arghh." So then when everyone was just standing there wondering what just happened, I approached and said "hello", and enquired why the sad faces? I sympathised with the stunned trader's story and said to him "look, how about I offer you 1610", which I thought was a fairly reasonable price at the time. He accepted, so here we are. It was the right entry for me. Probability of success - umm, I have no idea, I haven't calculated it (I probably should). It was quite high for me, I imagine. Not very high for the bloke I bought the stock off, unfortunately. But he'll learn from it and then he'll come back and beat me and take my money next time, which is great because it'll keep me on my toes and stop this game from ever getting boring.

[DbPhoenix 42]

Unfortunately, not everyone profits by doing what they want when they feel it's a good idea. They will more likely benefit from a structured approach, which is what W offers.

 

Here, for example, you have what may be a climactic sell-off followed by a rebound of sorts. Three days later, however, you have a test of that low. The entry, then, becomes the upmove on the following day.

[eminiman414 10]

Analysis of 3/1 TF. Just as a disclaimer I will speak in terms of bars but only because it might be easier for anyone who would like to comment/correct/has opinions on my analysis to better follow along. I am watching a 1 tick chart along with the 1 minute chart.

 

In the TIF thread I posted my ideas on Thursday night for Friday. I anticipated a drop from the 908 level which ended up happening during the overnight and shot down to 902 which was relatively close to the 901.2ish midpoint of the larger range. At around the open (1k CVB chart) price came back to the 904.5 area which was the midpoint of the smaller range within the upper portion of the larger range (908-893). I felt as if shorts were still favored at the moment.

 

I'll try to be to the point with this I apologize if it gets wordy/thank you in advance for reading and any comments, corrections, or any words of wisdom.

 

Point A: Price moved aggressively down to the 901.2 midpoint of the larger range. Highlighted are 3 bars where I will explain what I saw on the 1 tick chart. Price bounced fairly quickly off the low of the day at that moment, however as price continued to move upward I notice the speed and extent of the up waves on the 1 tick began to decrease and watched that small up move begin to fizzle out. I glanced at the 1 min quickly and saw volume start to drop off a bit as well. Price then began to decline again with the down waves increasing in size/speed (more powerful sprut down, slower shorter move back up). Price on the 1 tick chart made lower highs and lower lows as we approached the 901.2 area again. I know I don't have an official setup but since i was "favoring" the short side and I was at a predetermined level, I shorted the break of the midpoint (sim) entry at 901. Exit was either a break of the SL or 897 which was the next S level. I exited at 897. Feel like my supply line was drawn properly, but I also feel a tighter one could have been drawn?

 

Point B: We bounced off of S/LOD rather aggressively. Watching this I said to myself will this be a technically rally and a test nearer to S or a legit more "v like" reversal. Again price moved up aggressively but began to fade with declining volume. A demand line was then drawn. Price had another quick burst up (1 tick chart) which made me start to believe price was going to continue its move upward. Again watched as move up faded slightly and broke the DL. Price did have a quick burst as it broke the DL but the break quickly faded. I know its not the break that is particularly important but how it is broken. This to me was another clue that price would move upward at least back to the 901.2 area. Price did go that way and quickly.

 

Point C: I witnessed on the 1 tick chart again price movement or I should say traders activity began to decline (based on speed of transactions and wave structures) as price was around the 904.5 area which is the midpoint of the of the smaller range within the upper portion of the bigger range lol (just re-read that sentence). On the 1 min you can see the supply lines showing a decrease in the upward momentum and volume at that point start to decrease. All of these in combination lead me to anticipate another move downward. Somewhat of a similar scenario happened like point A on the 1 tick chart where there was a "down trend" leading to the break of the 904.5-.7 area. Price again picked up speed to the down side on the 1 tick and seen on the 1 min also with an increase in volume. Price again hits 901.2 and again saw a shift in pace/activity/volume and no push downward and again price rose.

 

I just re-read this and realize based on a short convo with DB that maybe when I said price moves I should have said buyers or sellers instead. When watching now I think in terms of people and behavior almost like a detective/psychologist however my wording in my analysis wouldn't confirm that.

 

To sum up i also had an inclination that the Russell was heading more towards another larger range being built. I came to this conclusion on based off the previous large up move we had in the longer term and price reaching all time highs, as well as the behaviors within those down channels.

 

In closing I posted the 10k cvb from the TIF thread, the 1k cvb around open time, the 1 min, and the 10k cvb from the end of the day to see if anyone agrees the TF appears to be heading toward somewhat of a large range again.

 

Thanks again! Any and all comments welcome.

Edited March 2, 2013 by eminiman414

[tupapa 10]

Hello V_2008, Thanks for participating in this discusion on gold.

 

P.S.: I am not willing to tell you what you must do, but this green line to the upside looks pretty good to put your ego on a first place.

 

Let me start with this, my post has nothing to do with telling you what to do, it is simply a scenario for a potential reversal at support, something that may or may not happen. This has nothing to do with my ego and I am not trying to prove anything, I am simply learning since I am a novice. Some people learn by reading, I don’t, I learn by asking questions and engaging in discussions, and I specially learn by doing.

 

So I am posting these trade ideas, in foresight to learn, to learn from others, but more importantly, to learn from my mistakes. I love making mistakes, since they point the way towards were I want to be.

 

 

Moving on to trading, which is what this thread is all about:

 

So from a bigger picture (5H chart) we are still in a down trend from this point of view. Price has pushed through previous support line. But it has pushed through this line with good force and I think good volume. From 5H chart I can't see that this move with high probability will be stopped, as I have already said we have just penetrated previous support.

 

First of all your chart is missing the most recent price action, which is the most relevant if we are considering a reversal, if you are going to trade you need up to date charts!

 

Bare in mind that this is EOD trading, so when you mention "bigger picture" we are looking at monthly and weekly charts. If you have a look at these (posted by myself and Gringo a few pages back) you will notice both gold and Silver are in a Trading Range, within a macro uptrend.

 

You could say price is in a downtrend towards the bottom of the trading range, but remember that you are focusing on the trees, don't forget the forest.

 

Don't pay attention to 3 bars going lower things, market doesn't care for your abbility to predict reverse. It can be 1 to infinity intervals further. Wyckoff was talking about his chart and his time. It differs from Gold chart. As I can see price hasn't gained any scores to go higher. Potentially we are in a trding range as previous HH has respected high levl of this Pot. TR. I think we have time to evaluate this future contract

 

 

Wyckoff wasn't talking about one chart and one period, he was talking about human interactions in the trading arena. These interactions create discernible patterns, that repeat themselves over and over again, regardless of the market, time scale or even time period. Why do we find the same patterns today as Wyckoff did 80 years ago? Because at the end of the day, trading reflects human emotions, fears, insecurities, greed, etc.. and these don't change with time.

 

That's why we can safely assume, that the same patterns Wyckoff found the past century and that we find today, will be found in future markets.

 

I think at this time you can look for short high probabilities trades.

 

I would argue the opposite, for the following reasons:

 

I am looking at both the Etf and the futures:

 

Both the future and the ETF show:

 

 

 

1- An expansion in volatility after a prologed decline with an abnormal increase in volume, that leads to a strong rejection caused by a vacuum of sellers (this is the first buying opportunity, and Wyckoff defined it as a, "Buying on the Climax")

 

 

2- There is a test that, so far, could results in a HL and look at the volume, it is much

lower! But how do we interpret this?

 

-- The HL and lower volume tells us there are less traders willing to sell at lower prices, however, it also tells us traders are still interested in buying (if not, price would've continued moving lower).

 

According to Wyckoff, this is the second buying opportunity, but why? Well, if there are less traders willing to sell gold at a lower price, but there are still traders willing to buy (which we've established above) we are assuming the remaining buyers will have to compete among each-other for whatever supply is still available, if price starts rising, those that haven't bought will start bidding prices higher due to a fear of missing out, leading to an upwave that could run for as long as it encounters selling to temporarily (or permanently) halt the ascent.

 

This is why I believe entering long is a high probability trade, and one that Wyckoff would take himself. Now as we all know, there is nothing sure in trading, which is why we place a stop below the climax lows.

 

This is how I understand the current price action in gold, but I am a novice so If the more experienced guys see things differently, I'm sure they will let us know.

Edited March 2, 2013 by tupapa

[DbPhoenix 42]

However,as you said,sometimes an identical looking trade doesn't work today.Often,the solution to that problem is not rule based but instinct.As traders we're not too happy to have grey areas in our trading plan and would prefer to have a rule for every single situation.

 

Personally, i believe this is impossible on one level and would explain the difference between a good trader and an outstanding trader.Or maybe i should say a good analyst/outstanding analyst.Because like anyone else,there are times when you have strong feeling obeying your rules won't be the right thing today,but the rationale is that it's better to lose a trade following your rules than lose it not following your rules.

 

So this is the part of trading that cannot be taught.It's an issue every trader has to work through to resolve in their own way.How much weight.if any,do you give to your instinct conflicting with your rules? Only you can solve that problem.

 

I agree up to a point. However, strong feelings and instinct are nearly always (always?) based on something seen or read either in the moment or previously that is prompting the feeling. It may not be conscious and the trader may even not be able to verbalize it, at least not at the time, but the feelings don't just "come". And if they spring from his work and his training, that's fine.

 

However, these feelings too often also stem from fear: fear of taking the trade, fear of missing out on the trade, fear of not holding on too long, fear of not holding on long enough, fear that one really has no idea what he's doing. In that case, the trader ought to stop trading until he's addressed these issues. Then he will have more confidence that the "strong feelings" are protective and constructive and not an instrument of self-sabotage.

[DbPhoenix 42]

Analysis of 3/1 TF. Just as a disclaimer I will speak in terms of bars but only because it might be easier for anyone who would like to comment/correct/has opinions on my analysis to better follow along. I am watching a 1 tick chart along with the 1 minute chart.

 

This is good. However, I caution you, as I've cautioned others, many times, not to get too wrapped up in boxes and lines. If you're going to follow them at all, the most important is the box that you're trading in, if any. And the most important levels are the bottom and top and midpoint of that box. Previous ranges may also be important, but remember that those people may not be there any more and whatever interest they might have as a result of something they're holding is at least somewhat removed because they're not holding it any more.

 

On the other hand, everybody can see these ranges and may act on them even though they have nothing at stake at the time. The ranges show that traders earlier found value in those ranges. Maybe that value is still there. Maybe not. You'll find out soon enough. A large part of the value in being aware of these ranges is to avoid being surprised. You want to take advantage of the confusion of others; you don't want them taking advantage of yours.

 

Of course, if we were trending, it would all be much simpler and easier. But we're not. The big firms are so into CYA mode that getting any sustained action becomes more and more problematic. If you're following just TF, add at least three or four more so that you're not forcing yourself to trade something that you really ought to leave alone at the time.

[SunTrader 10]

....

What are you trying to tell?

......

Exactly what I said, to watch the levels of the first hour's (Frankfurt if Euro) trading each day.

 

Sometimes they are coincidental with previous sup/res levels. I only look how price reacts to these levels going forward whether or not they line up with price in the past.

[DbPhoenix 42]

I have a suggestion if I am not stepping on anyone's toes. I also don't know if it is wyckoff related or not.

 

For Euro look to the first hours range (Frankfurt time, since this is the main euro trading city - which on my chart is 2am-3am ET) and watch how price reacts when it revisits the zone at some point in the future:

 

If it does provide a trading opportunity at some point in the future, that would be fine. But as for trading the opportunity that's presented in the moment, a Wyckoff trader would I hope see that price is testing the level reached the previous day during lunch and look for a shorting op.

[eminiman414 10]

This is good. However, I caution you, as I've cautioned others, many times, not to get too wrapped up in boxes and lines. If you're going to follow them at all, the most important is the box that you're trading in, if any. And the most important levels are the bottom and top and midpoint of that box. Previous ranges may also be important, but remember that those people may not be there any more and whatever interest they might have as a result of something they're holding is at least somewhat removed because they're not holding it any more.

 

On the other hand, everybody can see these ranges and may act on them even though they have nothing at stake at the time. The ranges show that traders earlier found value in those ranges. Maybe that value is still there. Maybe not. You'll find out soon enough. A large part of the value in being aware of these ranges is to avoid being surprised. You want to take advantage of the confusion of others; you don't want them taking advantage of yours.

 

Of course, if we were trending, it would all be much simpler and easier. But we're not. The big firms are so into CYA mode that getting any sustained action becomes more and more problematic. If you're following just TF, add at least three or four more so that you're not forcing yourself to trade something that you really ought to leave alone at the time.

 

First, thanks for your response the "this is good" is my first "decent grade" i'll say and I'm happy about it lol. None of my friends or girlfriend really understand what I am doing so it feels really good to get that as feedback.

 

Second, I understand that those boxes/lines are just that, however i placed them at areas of interest based on what I saw from those ranges, areas to give me added focus/direction of price. The colors of the "lines" represent the levels of importance so to speak being tops, bottoms, and midpoints. I would say that I grasps the concepts of all of this stuff and if I was given a written test I would get an A. Only recently have I actually been seeing it all come together and work out in real time, mainly the movement from top to bottoms of ranges/midpoints etc. I also understand that if price enters a previous range area those levels may or may not be relevant anymore, but those boxes/lines are there because one time they were relevant and are there to keep my eyes open and sharp on what could be. I originally had "lines on my chart but only bc that's what i read to do. Find the area plot the top, bottom, mp. Still didn't see any direction. Now I can see it making sense. Like ok we are at the top of a range, what is going on? If price reverses we are headed towards...? Sometimes it will get to the mp or opposite end quick, sometimes slow, sometimes heads that way but then just gets tied up. I took few days and just watched a larger timeframe to see this movement from one level to another, go to that level nothing was doing down there and went back up to the top of the range again. Did this as more of a general viewing of price but do understand that there were swings in between those movements. I am incorrect in anything i've observed?

 

Last, CYA mode? Googled it do you mean cover your assets? I've been watching the TF because I actually found it "easier" to locate these ranges and the movements within and between them and that is when everything kind of clicked. So I stuck with it. I originally started with the NQ but I just found so many of these ranges especially at the beginning of this year and just had far too many levels and was sort of confused. Looking back I guess the 50, and 25ish 00 areas of that range in the beginning of the year should have been my main focus. Just was finding too many levels and the TF i saw that information more clearly. What do you mean by "If you're following just TF, add at least three or four more so that you're not forcing yourself to trade something that you really ought to leave alone at the time." Are you suggesting I go back to the NQ, or add instruments I watch along with the TF? I will replay the NQ sometime tonight or tomorrow and maybe check out what I find with this new knowledge I feel as if I've obtained.

 

Please correct me if i've made any wrong statements or just am completely off. It's not easy learning on your own and I greatly appreciate all of your help.

[Guest Muir]

Tupapa,

 

I'll wait for Sunday night, Monday early AM to give me some guidance on GLD GC.

It is at the extreme low range of a 2 -year range trading range.

Though nobody mentions intermarket analysis, I look at it as relative strength type Wickoff.

If you plot GLD divided by SPX or DOW or whatever, even the futures (GC/YM for contract periods) it is a beautiful strong unbroken line for 6 months against gold, it's just about the prettiest line you can imagine.

Also, how does price react to news? It's not that I care about what the talking heads are saying, I care about how the market reacts to news.

If there was ever a moment for gold to rise, it's now and it's acting abysmally anemic. So I'll wait for guidance for trend bias.

This is an EOD thread, but it goes without saying intraday many opportunities arise.

[DbPhoenix 42]

Last, CYA mode? Googled it do you mean cover your assets?

 

Cover Your Ass. The hero worship of so many of those who post here aside, "professionals" haven't been doing all that well, so they're more likely to be cautious rather than go out on limb. Translation? Trading ranges, waiting for something to happen.

 

What do you mean by "If you're following just TF, add at least three or four more so that you're not forcing yourself to trade something that you really ought to leave alone at the time."

 

Given an environment like this where so many instruments are in TRs, it helps to be familiar with the behaviors of at least several instruments in case something is being set up for a breakout, or a reversal. Gold, for example, looks good, at least for Monday. But don't jump into something just because it looks good. Watch it, and find out how traders trade it. It may or may not be good for daytrading.

[DbPhoenix 42]

So do you always hold for the target or do you let instinct into your trading plan ever?

 

Unless I'm looking at the top or bottom of a trading range, I don't do targets. I never know what traders are going to do since they don't know themselves, so the idea of targets doesn't really enter into it. Same with reward:risk ratios.

 

But instinct? No to that as well. But then I don't trade like most people trade. My charts are as naked as they can be. Not even a moving average. So if I'm coming off support and bars are expanding, it isn't instinct that tells me that buyers are in control. And if I'm approaching resistance and the bars are contracting and are beginning to roll over, a short looks pretty good.

 

In any case, I would not encourage a beginner to allow instinct into his routine until he's showing a consistent profit. Otherwise he may even be set back.

 

I never bring this up, or at least I haven't in a long time, because the big problem among beginning and not-so-beginning traders is fear. So that's my focus. But the money is made not by precision entries or precision exits or even superior trade and risk management; it's made by size. Nobody is going to make a living trading one contract. But trading enough contracts to make a living requires a security in one's trading plan that is completely outside the experience of nearly every trader.

[Perrin 10]

Knowledge and awareness? A trader needs knowledge and awareness of others, himself and his profession, I think

[DbPhoenix 42]

If you plot GLD divided by SPX or DOW or whatever, even the futures (GC/YM for contract periods) it is a beautiful strong unbroken line for 6 months against gold, it's just about the prettiest line you can imagine.

 

What about the lines from 11/11 to 12/11 and 2/12 to5/12? Are they not as beautiful? Or are you allowing yourself to be influenced by confirmation bias?

[tupapa 10]

Tupapa,

 

I'll wait for Sunday night, Monday early AM to give me some guidance on GLD GC.

It is at the extreme low range of a 2 -year range trading range.

Though nobody mentions intermarket analysis, I look at it as relative strength type Wickoff.

If you plot GLD divided by SPX or DOW or whatever, even the futures (GC/YM for contract periods) it is a beautiful strong unbroken line for 6 months against gold, it's just about the prettiest line you can imagine.

Also, how does price react to news? It's not that I care about what the talking heads are saying, I care about how the market reacts to news.

If there was ever a moment for gold to rise, it's now and it's acting abysmally anemic. So I'll wait for guidance for trend bias.

This is an EOD thread, but it goes without saying intraday many opportunities arise.

 

Hello Muir, I'm not sure how to plot gold divided by a market or what this is suppose to accomplish, maybe you could post a chart and explain what exactly this is telling you?

 

I don't look at correlations or the news, I simply rely on price and volume to make a trading/investing decision, which is what Wyckoff proposes in Section 7.

 

You might be waiting for confirmation, which is fine, but remember that if you purchase on an up-wave you are increasing your risk. Wyckoff considered buying on an up-wave the least favorable opportunity.

 

The first opportunity in Gold was buying on the Climax on the 20th

 

The second opportunity is buying on the test, either Friday or maybe tomorrow, if price doesn't rally before you place your bid.

 

The third and last opportunity is buying as price breaks the climax highs, above 1620.

[Perrin 10]

Surely trading by size would come automatically if one were successful - if he masters himself and is consistently successful on all his trades (whatever his definition of success is). How could it not? If someone masters himself then they are whatever they want to be. Surely everyone has the potential to be anything they want to be. People gravitate towards success even if they don't completely understand why they do so, don't they?. It's gravity. I gravitate towards you Db because you are an incredibly bright shining light. Hmm, gravity. That's related to mass & size isn't it.

 

"Size doesn't matter," or so my girlfriend tells me. She is much more intelligent (not to mention tactful) than I am so I'll have to rely on her judgement there. If a person had mastery then they would find a way to fill their position with whatever size they could handle. But one would need to be absolutely sure that they were doing the right thing at all times in everything they do - and I guess what you mean is that not many people can do that? To have awareness of what they & others will do in any given circumstance? To know where they want to be and what they want to be. Most people don't know, do they? They are just there. They just... They're just themselves (the majority are average?). Which is fine, nothing wrong with that. They are who they want to be. Um, what do I want to be? Oh right, ok. I remember. I'd better continue the journey. Long road, this. Interesting though.

 

Hang on, another thought... but... if you can't have mastery, is there any point in even trying?? Do or do not...?? So why am I here? "It is your destiny" Ohhhhh great. So I have me to thank for this. Well thanks, me. You're welcome. Cheers.

 

Sometimes I write things and then delete them because they don't make a great deal of sense if I come back to them later, or even on re-reading. Sometimes I do wonder about myself. Please someone delete this post if it will not be helpful to others, thank you. Kind of reminds me of Mission Impossible's 'this message will self destruct in 5 seconds...' I'll keep it in my own journal anyway because it kind of makes sense to me. My apologies for confusing anyone (or myself) if I read it again in the future (as opposed to the past) and it makes even less sense.

 

Saying that, Mitsubishi also talks a lot of perceived nonsense so at least I'm in good company

[Perrin 10]

One person's sense, if seen from another completely different viewpoint, is non-sense. And if one acts completely out of kilter with the beliefs of others then they won't have the faintest clue what you're on about and they will probably ridicule you, or ignore you, or stone you to death, or whatever.

 

Ok I'm getting there slowly. Fun this, ain't it? Maybe I should create my own journal thread, I'm not sure I should be saying this stuff here where there is serious trading to be discussed. Ok I'll do that later. Apologies for any intrusion, just ignore me. *Trader finding himself, nothing to see here, move along now ladies and gentlemen.* Wow this is so cool. Ok ok I also realise that I probably need to be careful & sensible about this. But my god, this could be fun.

[tupapa 10]

One person's sense, if seen from another completely different viewpoint, is non-sense. And if one acts completely out of kilter with the beliefs of others then they won't have the faintest clue what you're on about and they will probably ridicule you, or ignore you, or stone you to death, or whatever.

 

Ok I'm getting there slowly. Fun this, ain't it? Maybe I should create my own journal thread, I'm not sure I should be saying this stuff here where there is serious trading to be discussed. Ok I'll do that later. Apologies for any intrusion, just ignore me. *Trader finding himself, nothing to see here, move along now ladies and gentlemen.* Wow this is so cool. Ok ok I also realise that I probably need to be careful & sensible about this. But my god, this could be fun.

 

what are you talking about?? lol

[Niko 10]

I think Perrin likes to think out loud, which is kinda fun to read. I like his posts, I guess I was not cut out to write like that, I have to keep it short out of lack of muse I guess.

 

 

Note: The purpose of this thread was originally to discuss trading journals and logs as a necessary part of learning how to trade and improving one's performance and also to answer any questions one might have about the instructions for creating and maintaining the journal and log. I also wanted to provide a place for the occasional journal-type entry for those who didn't want to commit to a trading log in the Trading Log section.

 

However, this has over 400 posts now, and I'm sure everyone understands what a journal and log are and how to create and maintain them. At this point, it has become just another redundant thread.

 

Therefore, I'm closing it and encouraging people to open up logs in the Trading Log subforum. It's outside the Wyckoff Forum, but if at least several of you start maintaining logs like tupapa did long ago, you won't be lonely. Just make sure your log title is easily identifiable as belonging to you.

Edited April 17, 2013 by DbPhoenix

[Guest Muir]

$INDU:$GOLD attached which is nothing more than the DOW divided by gold.

You could do the SP.

It's a quick relative strength view that's quite precise.

 

Now compare that to GLD

 

You can do a 2 year chart of both

 

I day trade looking for spikes in volume and keeping the SP:GLD (or afterhours the futures

GC:YM) as resistance and support trading ranges.

 

Not trading today.

Again, not an EOD trader, but directional bias is very important to me, otherwise, the bigger timeframe will squash me as I attempt to take nickels in front of a steamroller.

 

As far as the news goes, listening to it for guidance is a fools game, seeing how the market responds to the news, well, that is tape reading from "Studies in Tape Reading:" p.68 modern copy "Should a stock fail to break on bad news, it means that insiders have anticipated the decline and started to buy it."

Almost every book on DBPhoenix's recommended list mention divergences in the news versus the price action. It is a fundamental part to understanding distribution and accumulation, so I would not poo-poo it too quickly.

It does come at a price however, the inanities one hears, but there is a solution, turn the volume off (or better still, if online just read the headline.)

 

Hope that helps.

[Gringo 10]

Hello Muir,

 

What you are saying is in essence a relative assessment of one instrument with another. I have looked at this in the past and it does give visually clear information regarding the relative strengths of the two compared instruments. The slight issue I have with this is precisely what makes it so valuable:

 

1) Relative strength is clearly observable.

2) Absolute value is not.

 

If one is long and both instruments are dropping, the relative strength might still show the ratio between the instruments to be linearly correlated and going upwards, whereas, in reality both the instruments are losing value and hence money for someone who's long. Now this loss may be lower for the relatively stronger instrument but in absolute terms a loss is a loss.

 

This does allow one to pick the stronger instrument and if the direction is right that instrument is more likely to out perform the weaker one. But beyond the clear identification of the relative strengths I fail to see (perhaps I am wrong) how this could help with timing or proper entry. This information could be gleaned from just looking at the percentage gains of the compared instruments during the past run and just identifying which ran more.

 

This is not to say this isn't valuable for you and may not be helpful for others. My simple point is that there are other ways of identifying this same information but perhaps not so clearly, and this may very well be the reason you use them.

 

Gringo

[Guest Muir]

Hello Gringo,

 

That's not how I use $INDU:GLD (in reality I use YM/GC futures afterhours and SPX:GLD otherwise)

 

If you go finer grain, you can see support resistance. Zoom into 5 minutes.

 

But daily works.

 

See attached 3 month

I'm sure you will spot DB's "cajas famosas."

There is plenty of room there for me to day trade,.

 

More importantly, it gives me direction and timing

 

I'll not short the higher point on the "caja" and go long on the lower.

If the chart were to change, then I'd reverse.

 

It's a quick heuristic with what the longer term time frame is doing. (The Market Profile traders shoot themselves in the foot more often than not when they device "strategies." I did point out to them that there was a primitive Market Profile in Wickoff's work p.88 in "Studies in Tape Reading" but they're more interested in "methods.")

 

 

________________

 

Tape reading:

The Science of determing from the tape the immidiate trend of prices.

It is judging from what appears on the tape now, what is likely to be shown in 5 minutes or more.

[Guest Muir]

What about the lines from 11/11 to 12/11 and 2/12 to5/12? Are they not as beautiful? Or are you allowing yourself to be influenced by confirmation bias?

 

Nope.

Definitely not. (at least one can hope not)

 

Pulling out 2 years further gives one perspective.