Trading The Wyckoff Way

[Niko 10]

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?

 

TR= Trading Range. And I can assure you that Wykcoff will make you a better trader or kill you while trying :haha:

[SunTrader 10]

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

So you are saying you don't have an opinion agree or disagree. Ok you don't have an opinion. I would think (assuming again) you disagree.

 

But does that mean the late Craig Schroeder of SMI, trader and educator of many decades (according to their website) and the current educator Bob Evans, who I believe is located in Phoenix hmmm did somebody say Phoenix, does not know what they are talking about ...... when it comes to W trend's?

 

You might be right. I definetely don't know much about Wyckoff methods. I know he is a legend and many top traders use his methods to this day. But I also know there are other legends and other methods that work equally well.

 

Seems common sense to me though when talking of trend the timeframe matters. No ifs, and or buts.

[Seeker 11]

So you are saying you don't have an opinion agree or disagree. Ok you don't have an opinion. I would think (assuming again) you disagree.

 

But does that mean the late Craig Schroeder of SMI, trader and educator of many decades (according to their website) and the current educator Bob Evans, who I believe is located in Phoenix hmmm did somebody say Phoenix, does not know what they are talking about ...... when it comes to W trend's?

 

You might be right. I definetely don't know much about Wyckoff methods. I know he is a legend and many top traders use his methods to this day. But I also know there are other legends and other methods that work equally well.

 

Seems common sense to me though when talking of trend the timeframe matters. No ifs, and or buts.

 

Aren't there different ways to define a trend? You could pick two points in time and then if one is above the other, the trend over that time was up (time dependent but not timeframe dependent). You could consider the trend on a point and figure chart, so not timeframe dependent. You could consider the trend to be the path of least resistance, which sort of guesses at the future path of least resistance, so not timeframe dependent either.

[Niko 10]

So you are saying you don't have an opinion agree or disagree. Ok you don't have an opinion. I would think (assuming again) you disagree.

 

But does that mean the late Craig Schroeder of SMI, trader and educator of many decades (according to their website) and the current educator Bob Evans, who I believe is located in Phoenix hmmm did somebody say Phoenix, does not know what they are talking about ...... when it comes to W trend's?

 

You might be right. I definetely don't know much about Wyckoff methods. I know he is a legend and many top traders use his methods to this day. But I also know there are other legends and other methods that work equally well.

 

Seems common sense to me though when talking of trend the timeframe matters. No ifs, and or buts.

 

Where are you trying to get with your argument? Are you sugesting one must use different time intervals to identify different trends. I am sorry I just dont get your point.

[gozila 10]

There is a term in structure called Shortening of the Thrust in wyckoff theory???

 

any body have information or materials talking about that

[DbPhoenix 42]

There is a term in structure called Shortening of the Thrust in wyckoff theory???

 

any body have information or materials talking about that

 

See the course, posted in the stickies at the top of the Forum. The "Introduction" is the first stickie.

[eminiman414 10]

I have to swtich to EOD analysis. Is the process the same as intraday? Longer intervals for s/r and shorter for price movement. So would EOD be looking at the weekly/monthly for levels and daily/60min (or something) for price movement? If I can only devote a short amount of time for analysis would looking at a shorter interval 15min/60min etc be advisable if one can not watch those intervals in real time? If trading EOD would watching the "shorter" interval cause possibly more confusion or the possibility of "improper" entry or exit according to the daily chart? Hope that makes sense.

 

If checking a shorter interval is advisable and encouraged which one would be more appropriate. I'd assume watching a tick chart wouldn't necessarily have much relevance to the EOD trader. So how far down in intervals is too far?

 

note: I do understand the movement/behaviors is more important then interval in which one views it, but I am just asking to create some sort of structure. A structure that I began to develop with intraday trading.

[tupapa 10]

I have to swtich to EOD analysis. Is the process the same as intraday? Longer intervals for s/r and shorter for price movement. So would EOD be looking at the weekly/monthly for levels and daily/60min (or something) for price movement? If I can only devote a short amount of time for analysis would looking at a shorter interval 15min/60min etc be advisable if one can not watch those intervals in real time? If trading EOD would watching the "shorter" interval cause possibly more confusion or the possibility of "improper" entry or exit according to the daily chart? Hope that makes sense.

 

If checking a shorter interval is advisable and encouraged which one would be more appropriate. I'd assume watching a tick chart wouldn't necessarily have much relevance to the EOD trader. So how far down in intervals is too far?

 

note: I do understand the movement/behaviors is more important then interval in which one views it, but I am just asking to create some sort of structure. A structure that I began to develop with intraday trading.

 

I am also currently focusing on EOD trading and I would say the process is very similar to intra-day, that is:

 

Find S/R and ranges on the longer bar interval (weekly)

Analyse the current trend and possible setup on the daily.

Look to place your buy/stop or sell/stop on the smaller interval 60m/30m.

 

For instance US Cocoa:

 

I posted the weekly chart a few days ago, indicating a potential bounce of Support:

 

 

 

The Up-wave developed and resulted in a break of the down trend and a HH, the up-wave is longer than the previous down-wave, which means the bulls could be gaining control. This can be a setup for a reversal.

 

 

 

Now I move to a lower interval, to analyse the trend on the test, for instance the 60m. If Here I see buyers coming in and supporting price above or around the previous low, I can place my buy limit above a small range or a previous bar high or whatever. I don't think the exact entry point is that important, when you are playing a weekly range.

 

 

And no, I don't see the point on watching the tick chart when trading the longer term waves.

[eminiman414 10]

I appreciate the response. My only concern with using the smaller interval is missing the entry since I wouldn't be watching that specific interval. Could chasing the trade come in to play? That is my major concern. What do you think?

[tupapa 10]

I appreciate the response. My only concern with using the smaller interval is missing the entry since I wouldn't be watching that specific interval. Could chasing the trade come in to play? That is my major concern. What do you think?

 

Yes, this also plays on my mind but I guess you are going to have to accept you will miss some entries and just let go of them and move on to the next setup on another instrument.

 

If you are trading EOD, you are not "watching anything" you are placing your entries and exits using statics charts, I see it as a completely different style, much more relaxed.

[eminiman414 10]

Could a second "best" entry be a part of the strategy if the entry on the lower time frame is missed. So for example you miss the HL/double bottom you have drawn, say you miss that, could a part of a strategy be taking a break of the HH on your daily chart that you have posted? If it still makes sense to do so based on price movement.

[Niko 10]

Could a second "best" entry be a part of the strategy if the entry on the lower time frame is missed. So for example you miss the HL/double bottom you have drawn, say you miss that, could a part of a strategy be taking a break of the HH on your daily chart that you have posted? If it still makes sense to do so based on price movement.

 

My experience with second best entries has not been always that good, you need good trends for them to work well.

[Niko 10]

CL

 

 

We are breaking above the top of the TC, but near the MP of the last downswing, did not realize that in intraday today, I was wondering where R came from and voila!! here it is. Gotta pay more attention to context.

 

Next week we could experience selling, perhaps even motivated by the inability of buyers to break above the MP, that inability was seen today from the open. If prices start their trip to S at 91, they will eventully get back to the TC.

 

If prices break below the MP of oct a short would be the thing to do. Now, a long is risky at this levels as we are overbougth, so in order to enter in that direction a HL would be required.

 

GC

 

 

 

After breaking above R at 85, buyers have not been able to get a following and now they are stuck at the MP of the Jun-Jul TR. If buyers manage to reach new highs, one could expect their attempt to reach the top of the TC. if one is still long, the botom of the RET could be used as a stop, but not see any reason to initiate a position below the LSH around 600.

 

NQ

 

 

We are still within the TR, DL holding and still within the uptrending Channel. Nothing to do so far.

[DbPhoenix 42]

If I may, I suggest that you first review the course, particularly the section on stops. Review in particular everything having to do with danger points.

 

Remember that the market doesn't know you and doesn't give a damn about you. Nor does it give a damn about your risk tolerance. Therefore, don't expect the market to respect it. Nor does the market know or care what you've selected as your danger point. But you have to decide what that point is or will be.

 

As for best entries and second-best entries, the best entry is the correct entry, i.e., that entry which will result in immediate or near-immediate profit and which makes whatever stop you've chosen irrelevant. If you don't enter correctly, your risk increases and so does your stop, unless you elect to use a very tight stop to decrease your risk in which case the stop is almost surely to be hit.

 

The most important consideration, of course, is to trade what you can trade. Don't concern yourself with what you can't trade. If you can't trade anything smaller than hourly bars, then work with that. If you can't even trade that, then work with daily bars. But the danger point is what it is, and if you can't get even reasonably close to it AND accept the risk that it might be hit, then don't take the trade at all.

[DbPhoenix 42]

 

NQ

 

We are still within the TR, DL holding and still within the uptrending Channel. Nothing to do so far.

 

Actually, there was quite a bit to do today, if one were daytrading it, much more than oil. I hope you'll think further about this.

[eminiman414 10]

So for example if I can not watch the 60min. in real time should that view be eliminated from my decision making process? I understand what you are saying, and I am going to begin going through the course again this evening. Was just curious on the views of those here if you can not observe price behavior in real time at a specific interval should you not even look at it? In creating setups/strategies why would one include an interval that he can not watch in real time? How could one have a strategy of taking double bottoms at support on the 60min if he only has about an hour a day to observe his charts? Wouldn't most opportunities be missed? Those that would be taken would only be I feel out of sheer luck of coming at the right place at the right time. Then I think if I am making decision from a daily chart, what about that continuous nature of price movement that is not 100% visible on the daily chart?

 

Going through the thinking too much stage.

[Niko 10]

the best entry is the correct entry, i.e., that entry which will result in immediate or near-immediate profit and which makes whatever stop you've chosen irrelevant. If you don't enter correctly, your risk increases and so does your stop, unless you elect to use a very tight stop to decrease your risk in which case the stop is almost surely to be hit.

 

This is a very important concept for taking into account when backtesting.

[DbPhoenix 42]

So for example if I can not watch the 60min. in real time should that view be eliminated from my decision making process? I understand what you are saying, and I am going to begin going through the course again this evening. Was just curious on the views of those here if you can not observe price behavior in real time at a specific interval should you not even look at it? In creating setups/strategies why would one include an interval that he can not watch in real time? How could one have a strategy of taking double bottoms at support on the 60min if he only has about an hour a day to observe his charts? Wouldn't most opportunities be missed? Those that would be taken would only be I feel out of sheer luck of coming at the right place at the right time. Then I think if I am making decision from a daily chart, what about that continuous nature of price movement that is not 100% visible on the daily chart?

 

Going through the thinking too much stage.

 

Price is moving continuously whether you're looking at it or not. The difference between one who understands this and one who looks at a series of bars is that the former understands the nature of markets and the latter is perpetually befuddled, and is far more likely to rely on computerized backtesting and "systems" which rely on indicators and bar closes and candle "signals" and so forth.

 

If you understand market dynamics, you will know where to enter and where to place your stop. If you don't, you won't. And that I'm afraid is that.

 

If, for example, you are going to trade the NQ off the daily, there's nothing for you to do until it breaks out of this little range it's in, trend or no trend. When it does, you'll either buy the BO or the RET after the BO, if there is one. The only question is what to do about the stop, and that will require not only chart analysis but self analysis.

 

An alternative is to maintain a herd, or hareem, or collection of some other sort. AAPL, for example, just broke through its supply line. And there are other stocks and ETFs that are trending nicely and also pay a dividend while you wait. If the NQ is just sitting around clipping its toenails, trade something else. Or two somethings. Or three.

[eminiman414 10]

So since I will be reveiwing charts when I get home from work ideally I should create my setups off the daily chart? Understanding everything that's been discussed.

[blocp 10]

i find it helpful to look at the 60min wave chart to see how price has moved through out the session, even when trading EOD, i think it's up to you how you view the market

[Jillion 10]

Hi Guys

 

please able to confirm my understanding of the accumulation phase:

 

'If we see accumulation during a long term range, we should see shrinking volume near support levels and an expanding volume near resistance.'

 

Am I right in the thinking that 'Smart money' is buying into the downmoves off of resistance and this represents the expanding volume near the range top, and also would it be correct to say that the low volume at the support levels is absorption. ie. the buyers are absorbing the selling and hence the low volume?

[DbPhoenix 42]

So since I will be reveiwing charts when I get home from work ideally I should create my setups off the daily chart? Understanding everything that's been discussed.

 

You may be interested in this post. I made it several years ago to prove a point, that the overlays we use now to show TRs and BOs and RETs and so forth were just as applicable then. Note also that if the correct entry is made, stops are never hit, assuming that they're not too tight and that you're paying attention.

 

The principles don't change. But you won't get any sort of adrenaline rush from EOD trading.

[DbPhoenix 42]

Hi Guys

 

please able to confirm my understanding of the accumulation phase:

 

'If we see accumulation during a long term range, we should see shrinking volume near support levels and an expanding volume near resistance.'

 

Am I right in the thinking that 'Smart money' is buying into the downmoves off of resistance and this represents the expanding volume near the range top, and also would it be correct to say that the low volume at the support levels is absorption. ie. the buyers are absorbing the selling and hence the low volume?

 

Actually this is not a Wyckoff-related question; it's a VSA-related question. And the two have little to do with each other.

 

The statement you quote is incorrect. And there is no "smart money". So your questions stem from a fundamental misunderstanding of volume and of accumulation. Which isn't necessarily your fault.

 

If you want to chuck VSA and start over with Wyckoff, you're welcome to do so. Otherwise, you'll have to wait for the VSA forum to resurrect itself or try some other website. No hablamos VSA.

 

Sorry.

[eminiman414 10]

You may be interested in this post. I made it several years ago to prove a point, that the overlays we use now to show TRs and BOs and RETs and so forth were just as applicable then. Note also that if the correct entry is made, stops are never hit, assuming that they're not too tight and that you're paying attention.

 

The principles don't change. But you won't get any sort of adrenaline rush from EOD trading.

 

Haha that's awesome I am actually at that point in the course right now where price ranges near the high and wyckoff explains how the supply from those trying to get out even is being absorbed. My main concern is missing action by not viewing a smaller interval but then being confused in my decision making process by what that smaller interval is telling me. Example. A supply line breaking on the 60 min before the daily. Almost worried about having too much time to analyze a situation and having a variety of ways to look at it. If that makes sense. This is new and I suppose ill get used to it

[Jillion 10]

Actually this is not a Wyckoff-related question; it's a VSA-related question. And the two have little to do with each other.

 

The statement you quote is incorrect. And there is no "smart money". So your questions stem from a fundamental misunderstanding of volume and of accumulation. Which isn't necessarily your fault.

 

If you want to chuck VSA and start over with Wyckoff, you're welcome to do so. Otherwise, you'll have to wait for the VSA forum to resurrect itself or try some other website. No hablamos VSA.

 

Sorry.

 

I do doubt the information I have stated in the post, as it doesn't make sense to me hence the question. It is of obvious importance that one obtains the correct fundamentals. I would love to learn Wyckoff and also to fully understand Volume, in fact I will begin today!

Edited March 16, 2013 by Jillion