Trading The Wyckoff Way

[DbPhoenix 42]

My mistake but as I said, I was responding to someone else's post who obviously also doesn't know all things wyckoff too does not consider ratio's.

 

I'm obviously in the wrong topic then so see you over on "Gold Bullish or Bearish" where you have been know to drop a wychoff point or two without blowback.

 

Actually he's studied W for three years.

 

But since no one in the gold thread caught the reversal at the top of the trading range in either September, October, or even November, it's probably the wrong place for me to post anyway. And I may very well be out of the gold long by the end of the day. But that's trading.

 

P.S. Now out of it.

[SunTrader 10]

And about my previous question on post# 400 :question:

[DbPhoenix 42]

That's from the SMI course, not the original course. However, if you'd like to read the relevant sections of Wyckoff's course regarding trends and have questions, I'll be happy to answer them.

[Guest Muir]

DB and Sun, Good Afternoon.

 

Well, it's not EOD so....

 

 

First, I've trading much longer than 3 years, but that is neither here nor there.

Wickoff has been very good to me and prior to 3 years ago, no, I had not studied his work, which I consider nothing short of brilliant.

 

Now...

 

Actually there are many things that are not talked about in the Wickoff forum that could be totally applicable.

 

1. Trading time (Wyckoff concept, not mine, see "Studies in Tape Reading.")

 

2. Market Profile as it relates to tape reading (not the garbage posted in the Forum, and yes, there is a primitive Market Profile in "Studies in Tape Reading."

 

____

 

Then there are maybe things that could be talked about in the Wickoff forum, if you realize there is no "Tape Reading" Forum (and, in mho, there does not need to be one)

 

3. Mamis' market internals, i.e. Mamis use of New High and New Lows to confirm or not the Market highs and lows. This is not an indicator, it is the Market speaking itself (as Mamis says in her own language) What would Wickoff have thought of this? No way to tell.

 

4. Ratio charts. Wickoff would have approved? Who knows?!

 

so 3 and 4 are questionable, at best.

 

Yet there is a big difference between ratios, New Highs and Lows and the so called "indicators." What's the difference?

 

The Bell Curve. In one way or another, most, if not all indicators, want a regression to a mean.

And that, is not Tape Reading.

 

And is false, as the most cursory of studies into the Markets reveal that they are not Bell Curve in nature (pointed out by Mendelbrot and Nassim) if interested in debunking most indicators just see http://www.traderslaboratory.com/forums/market-profile/15763-some-new-thoughts.html in that Forum which notice nobody challanged.

 

So yes, I could justify ratio charts 3 dozen ways but is DB correct, of course he is.

 

After seeing years of confused posts from posters with a background of taught non-sense with this and that "indicator" I too would have had it with anything but price, volume and time in a simple chart, and really, that is all you need.

 

Anyways, I just love new discoveries and really do wish the best. And as I have done publicly before, I thank DB.

Edited March 13, 2013 by Muir

[DbPhoenix 42]

Then there are maybe things that could be talked about in the Wickoff forum, if you realize there is no "Tape Reading" Forum (and, in mho, there does not need to be one)

 

3. Mamis' market internals, i.e. Mamis use of New High and New Lows to confirm or not the Market highs and lows. This is not an indicator, it is the Market speaking itself (as Mamis says in her own language) What would Wickoff have thought of this? No way to tell.

 

4. Ratio charts. Wickoff would have approved? Who knows?!

 

so 3 and 4 are questionable, at best.

 

FYI, and those who may be interested, the highest hurdle here is persuading allegedly interested bystanders to read the course. Since that hurdle has rarely been jumped, I cut the course in half. But even that for many people is too much.

 

Beyond that, the next highest hurdle is understanding basic chart reading, particularly telling the difference between up and down, and the longer one has been studying trading, the more difficult this is.

 

But beyond even that is auction market theory. I put this off for quite a long while, but given W's emphasis on support and resistance and trending and ranging and the importance of the "midpoint", continuing to ignore AMT became absurd. So here it is. One might even argue that W invented AMT without being aware of having done so.

 

As for breadth measures, I use them but have avoided getting into them because however sure I might be that Wykcoff would have doubtless used them, they're not part of the course. And since people have in the past gone to great lengths to introduce non-W tactics and ideas and *shudder* indicators, I can hardly introduce new highs/lows and volumes of advancers/decliners without seeming a hypocrite. As far as that goes, I know full well that posters to this forum use indicators in their own charts, but there's nothing I can about that. All I can do is ask that they leave them off when posting their charts here so that we don't go sailing off into yet another most likely purposeless direction.

[Guest Muir]

FYI, and those who may be interested, the highest hurdle here is persuading allegedly interested bystanders to read the course. Since that hurdle has rarely been jumped, I cut the course in half. But even that for many people is too much.

 

Beyond that, the next highest hurdle is understanding basic chart reading, particularly telling the difference between up and down, and the longer one has been studying trading, the more difficult this is.

 

But beyond even that is auction market theory. I put this off for quite a long while, but given W's emphasis on support and resistance and trending and ranging and the importance of the "midpoint", continuing to ignore AMT became absurd. So here it is. One might even argue that W invented AMT without being aware of having done so.

 

As for breadth measures, I use them but have avoided getting into them because however sure I might be that Wykcoff would have doubtless used them, they're not part of the course. And since people have in the past gone to great lengths to introduce non-W tactics and ideas and *shudder* indicators, I can hardly introduce new highs/lows and volumes of advancers/decliners without seeming a hypocrite. As far as that goes, I know full well that posters to this forum use indicators in their own charts, but there's nothing I can about that. All I can do is ask that they leave them off when posting their charts here so that we don't go sailing off into yet another most likely purposeless direction.

 

Well, since we seem to be in agreement on so many points (with the exception of maybe ratios, which is really a very minor point.) I'll reply.

 

I suspected some of the above, but this is one time I do appreciate "FYI"which usually it's meant as sarcastic, but this time it really did inform me.

 

So of course you use New Highs and Lows and Midpoint (I did read your book.)

 

What surprised me is that you too feel that he would have used New High/Lows, but I do not know why this surprised me, well, it shouldn't have, you explain why you have not mentioned it very well.

 

Would there be only 2-3 people interested if you did a sub-forum "Advanced Wickoff?"

 

Hey, just putting it out there. Maybe not now.

 

But somehow, for those of us who have jumped the hurdle and read the course, practiced, applied, restudied (you know, when the "plan" didn't quite work out) and reread Wyckoff's s course and "Tape Reading" and Humphrey and Mamis et al.

 

But even if that's not in the cards, I learned something today, it's a good day.

 

___

 

For those starting out in the course, please note Wickoff is not chart reading, I was PM ed and I replied just that. To me that seems to be the most common misunderstanding I see. Divorcing volume from price is like a marriage not consummated.

This really is how to do it

http://www.traderslaboratory.com/forums/wyckoff-forum/15896-how-do.html

 

p.s. DB: a lot of confusion may be dispelled if you emphasize the non-Bell nature of Markets and therefore the fallacy of *shudder* "indicators." but hey, you've been doing this quite a while.

[DbPhoenix 42]

p.s. DB: a lot of confusion may be dispelled if you emphasize the non-Bell nature of Markets and therefore the fallacy of *shudder* "indicators." but hey, you've been doing this quite a while.

 

This is not unlike trying to convince a teeny-bopper that Justin Bieber and Taylor Swift have no talent. People are going to believe what they're going to believe.

 

Besides, without indicators, one would have to learn how to read price movement, and, in the words of Lewis Black, "that's haaarrrd".

[Guest Muir]

This is not unlike trying to convince a teeny-bopper that Justin Bieber and Taylor Swift have no talent. People are going to believe what they're going to believe.

 

Besides, without indicators, one would have to learn how to read price movement, and, in the words of Lewis Black, "that's haaarrrd".

 

:rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl:

[tupapa 10]

Actually....

 

P.S. Now out of it.

 

Interesting, how come?

[DbPhoenix 42]

. . . buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers

[Niko 10]

CL

 

 

The market was very choppy in the morning and buyers could not advance any further, we are currently stuck around the top of the TC and still below the MP of the last downswing. So we are still in sellers territory. Today´s action could have been the opportunity to take the short around 93 It even gave an entry in intraday.

 

If sellers continue pushing lower we could see prices making a move towards 91 where S will possibly be waiting and at that same level we would possibly have to deal with the hurdle of breaking below the DL of the hinge. Quite a mouthful :haha:

 

GC

 

 

After a strong BO yesterday, buyers stalled around the MP of Jun TR, after buyers gave up, sellers took the chance and started pushing lower, now sellers are going to possibly try to take prices below 1585, If they succeed prices could get back in the chop below the MP perhaps with sellers in control trying to reach S at 1534. This could also turn out to be a RET in which case, "get ready bulls", because this can be your chance.

 

NQ

 

 

We are still in the chop, waiting for a BO. The LOLR is pointing up so a break above the MP of the current TR zone could come in the following days. If the DL does not hold and prices start to fall S will posibly be found around 760. But if 760 is broken we will have plenty of reasons for a short as DL, TC and S would be gone, perhaps a LH would also be good in order to reduce information risk .

[Niko 10]

. . . buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers

 

Great quote for encouraging the newcomers.

 

I always loved this one:

 

"... what the stock market will do?: It will fluctuate" JP Morgan.

 

I guess markets are the same people from 100 years ago, just different clothes and hairstyles.

[SunTrader 10]

That's from the SMI course, not the original course.

......

I try not to make assumptions about what someone means but without a reply, to the question, I assume you and the SMI folks don't see eye to eye on Wychoff. At least on the snippet I posted.

[DbPhoenix 42]

What you posted is not from Wyckoff's course. If you want to know what SMI means by it, you'll have to ask SMI.

[SunTrader 10]

Ok, that speaks for itself. You don't want to answer. Fair enough.

[DbPhoenix 42]

If you can explain how I am to go about explaining a statement that is not part of W's course, please do so.

[Seeker 11]

Beyond that, the next highest hurdle is understanding basic chart reading, particularly telling the difference between up and down, and the longer one has been studying trading, the more difficult this is.

 

 

Could you clarify this comment?

[Seeker 11]

I think a key question here is what can be achieved with Wyckoff methods. Obviously people have different level of skills and understanding. But what can be achieved at the highest level?

 

If it can help anyone to be profitable then of course it is already hugely valuable. But trading is then about return and low drawdown, ideally few losses, or losses that are very small in relation to wins.

 

So what can be achieved with this method of trading? Is anyone brave enough to say?

[tupapa 10]

. . . buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers

 

Don't really get this quote, but I believe the reason why you got out was because price couldn't break Tuesday's high, so you remove the position because the market didn't do what you were anticipating (rally)?

[Niko 10]

I think a key question here is what can be achieved with Wyckoff methods. Obviously people have different level of skills and understanding. But what can be achieved at the highest level?

 

If it can help anyone to be profitable then of course it is already hugely valuable. But trading is then about return and low drawdown, ideally few losses, or losses that are very small in relation to wins.

 

So what can be achieved with this method of trading? Is anyone brave enough to say?

 

Seeker,

 

You have to study the course and test it yourself, it is goint to take a while, but it will eventualy help you understand how the market operates.

[Niko 10]

 

So far we are bouncing from R around 93, looks like the longer term downtrend is kicking in as buyers were unable to reach a HH yest. We are also at the bottom of the ascending TC and a break below PDL would confirm the break of the DL.

 

If sellers manage to take prices below 90.90 then all yest buyers will become potential sellers and their help could take us within the previous TR between (91.70-90.90)

 

If buyers defend their positions and make a HL then we would be in the chop, and the congestion area will widen between 90.90 and 93.50. That would also mean a new attempt to break the Longer term supply line and a push inside the TC.

[Niko 10]

 

After failing to reach the top of the TC buyers lost control and sellers started to push with strength inside the previous TR, although some support was provided at the top, it was insignificant to stop sellers advance.

 

Now, the entry would have been around 86 but I was not there, now wait for a RET towards the top of the TR and catch a REV or wait for prices to hit the bottom and see if a BO is next or a REV to the upside.

[DbPhoenix 42]

 

So far we are bouncing from R around 93, looks like the longer term downtrend is kicking in as buyers were unable to reach a HH yest. We are also at the bottom of the ascending TC and a break below PDL would confirm the break of the DL.

 

If sellers manage to take prices below 90.90 then all yest buyers will become potential sellers and their help could take us within the previous TR between (91.70-90.90)

 

If buyers defend their positions and make a HL then we would be in the chop, and the congestion area will widen between 90.90 and 93.50. That would also mean a new attempt to break the Longer term supply line and a push inside the TC.

 

Though you have your TLs and TCs drawn, you appear not to be taking full advantage of them, focusing instead on lateral TRs and the S/R that they may provide. This is not to say that you have to choose one over the other but that each provides information that can be used to realign the probabilities for successful trades.

 

For example, the move up on the 12th not only tickles the top of the TR from the end of February but also constitutes an overbought condition based on its relationship to the TC. This in and of itself may constitute a short op, but the failure to make a new high the next day, particularly since the attempt fails to break out of the TC, constitutes an even better one.

 

Similarly, the REV off the lower TC line may or may not constitute a long op dep on your risk tolerance, but the retest of that this morning, particularly since it constitutes an oversold condition in relation to the TC, presents an even better long op. All of this activity also takes place at the bottom of that February TR.

[Seeker 11]

Seeker,

 

You have to study the course and test it yourself, it is goint to take a while, but it will eventualy help you understand how the market operates.

 

Thanks Niko. I will continue to spend time on it. I don't know whether it is a better method than any others though, as I said, you'd have to judge based on gains and drawdown and accuracy. I have already spent many years looking at price action and have my own ideas, which work to an extent, but not the extent I'd like in my trading. I hope that Wyckoff's ideas can improve things even more for me.

 

I am currently also watching the 1 tick chart and watching price up and down and perhaps I'll have an a-ha moment at some point. Head down, keep working

 

P.S. I get most of the abbraviations, but can someone tell me what the R stands for in TR?

[tupapa 10]

Range, trading range.