Trading The Wyckoff Way

[wjrusnak 10]

Alright guys, I just wanted to let everyone know that I'm finished posting on this thread. Hopefully the rest of you guys can keep it going and benefit from it as much as I did. Soon I start a full-time job and won't be able to trade real-time-hours (just like next year while I'm in medical school). Knowing that, it is obvious that I need to find a different focus, whether that is trading the mini Hang Seng for an hour a night, or swing trading some other instrument (I'd rather trade the wacky hang seng than swing ). Hopefully in the future, my schedule opens up so I can again day trade the NQ. Again, thank you everyone who participated in this thread during my "reign" and please keep it going.

[Head2k 10]

Done for the day because I am angry at myself and that's a good time to stop.

I took a trade I shouldn't have taken and didn't take a trade I should have taken. Went long off 98 but it was higher than I planned and it wasn't even my proper setup. But I remember the wrongthink which made me took it. This wasn't the first time I commited this kind of wrongthink and I have even a specific note about it in my plan. I guess I must re-read my setups before every session.

 

Then I missed the long off 90, although it was a perfect V setup according to my plan. Why? First, my mind was too occupied by the bad trade I made earlier and second, it breached the support. But I should have remembered that a breach doesn't mean a break and that the support is the whole 89-92 zone. And I know that after such a V setup a retest is not likely... That's why it's a V setup, after all.

This combination of a bad trade and a missed good trade has a negative psychological impact on me, as I tend to force trades after that, so as I said I better quit.

[Head2k 10]

Alright guys, I just wanted to let everyone know that I'm finished posting on this thread. Hopefully the rest of you guys can keep it going and benefit from it as much as I did. Soon I start a full-time job and won't be able to trade real-time-hours (just like next year while I'm in medical school). Knowing that, it is obvious that I need to find a different focus, whether that is trading the mini Hang Seng for an hour a night, or swing trading some other instrument (I'd rather trade the wacky hang seng than swing ). Hopefully in the future, my schedule opens up so I can again day trade the NQ. Again, thank you everyone who participated in this thread during my "reign" and please keep it going.

I thought you want the trading to become your full time job. Anyway, good luck in any career you choose to pursuit.

[DaKine 10]

Today the range widened and the market found support around 1790...

 

Tomorrow look for:

 

Longs 1789-92

 

Short breakdown of 1790s Below 1790s back in the 1792-1772 range w/ Mid 1781

 

Short 1802 Intraday and Globex 1802 has been R and it also happens to be the Midpoint of the wider range of 1790 - 1814 so a short may make sense but could be choppy...

 

Break above 1802 look for longs to test top of range and potential b/o...

 

1805s may slow up longs but I am less inclined to be short up here possible test 1814s...

 

Short 1812-1814 may be less inclined if the morning shows strength potential b/o

 

Today, missed the DT during Globex at 1812, woulda been a nice one . The short at Globex micro Resistance at 1805s also 11/17 Mid also missed... Got stopped twice on a 1797 and 1793 long. The market then reverses after stopping me out the second time and rallies :crap: boo hoo i know...

 

 

Thanks wj for all your contributions to this thread :applaud:

Edited November 19, 2009 by DaKine
adds

[Head2k 10]

 

R 1792.5-93.5, 1795.25, 1802, 1812-14

S 1781, (1776.5), 1868.5-72, 1758, 1747, 1737-40. If price breaks above 93.5, then 1789.

 

Price fell into the 1768-93 range. Now it seems it is heading up before open, so I'd like to see how it behaves at 92.5-93.5, if and when it tries to escape. I won't take a breakout, only a reversal, and only if it is my setup.

Then there is 95, because after a breakout of the lower range it needs to break into the upper range (95-14).

If price heads lower after open instead, then I will look for a long off ~81 with target in the 89-93 zone. If 81 is broken, then I will look for a long off 68.5-72 zone. I will ignore 1776.5 unless there is a major climax.

[Head2k 10]

Result: I missed a short after BO of 1781. I have troubles with recognizing continuation setups on short side in real time. And it is true that I thought more “climax” in real time than “BO”. But no rejection followed and a nice continuation setup developed. I just didn't see it.

Then took a long at 10:20 (68.75) and was stopped out at reduced stop (68.25). The setup occurred after a break of 68.5 S while the entry range was still wrapping around it and 72 served as R. I recognized that 72 might not be broken but I risked it. Perhaps I should have got out sooner or even SAR, since there was quite an obvious failure at the second try at 72. But SAR'ing is not a part of my plan and I used my standard stop reduction. Anyway, this scenario calls for acknowledging the SAR possibility.

Price then reversed at 60, which was in tolerance of 58, but it was a V which didn't comply with my rules.

[DaKine 10]

Short R 1790-1793

 

Short Mid Point 1780 also possible but don't like it as much it being a MP and all, but worth noting...

 

Short R 1775

 

Short R 71.50-72.50

 

Strength in Globex and above 72s may go long looking for a test of 1790-1793

 

Micro S at 1766 so possible Long

 

Long 1760-1762

 

S 1752 possible Long but market showing weakness...

 

S 1737 -1740 Long but further weakness

 

Ranges

1752 - 1772 61 MP

1772 - 1792 81 MP

 

 

Today did not take the opening short when price opened at support even though globex showed weakness and R at 91s. Ended up with a Short at 78s and got peanuts when S appeared at 72s didnt go long but exited my positions prematurely as the market broke through the range and entered the 52-72 range. I had some Support at 62s so I took a shot when supply line broke w a DB attempt (tight stop) got stopped just before the market reversed at 60... Expected price to get back up to 71 72 area but did not take a short there... back at it tomorrow c-yas

Edited November 20, 2009 by DaKine

[Head2k 10]

 

R 1766 (trend stair-step), 1771.25-72, 1775-6

S (1755), 1746, 1737-40. If 1772 is reached we will have a range with a S zone 1755-60

 

We hit the red range midpoint and then couldn't get over its top. So we could be heading towards its bottom. Or the broader midpoint zone can start acting like S and we will try the top again.

[DbPhoenix 42]

 

 

 

 

[srag&birdie2 10]

The NQ was on the springboard for a significant decline on 25 November.

[Gringo 10]

Here's an update for USD. It appears 22 magically held well. Please keep in mind the fact that price is still going down to mean supply is still greater. What we are looking for are potential signs of a change in trend. A normal correction after such a drop is to be generally expected. If nothing else those thinking of shorting UUP may hold their horses after this. Why waste your bullet on a an animal that's already dead?

 

Please note the huge volume (horizontal volume) for 22-23 price range. It may give a clue that perhaps 22 and 23 levels are price extremes. Atleast that's how I am interpreting it and movement from here may have some significance.

 

[Head2k 10]

 

Tdoay is interesting. We have something between a range and trend here.

Yesterday price broke into the range from 11/23 - 11/25. This range is a bit complicated because there can be several inner ranges defined within. Basically the inner VA of that range is roughly between 1784-6 and 1793-5. Yesterday price played the lower limits of this inner VA before heading up, now the upper limits are in play.

 

One option in such a complicated environment is to wait for the extremes, that is 1798-1802 and 1775-80. Another option is to try to enter off the inner levels.

 

Given the fact that price remains comparatively strong within the inner VA I will look for a long off 1786 or even slightly higher. If price breaks below that, the comparative strength premise is invalidated and I will wait for the outer limit, that is 1775-80 zone.

 

I can short a failure on a poke above 1795.25. Then the outer zone is 1798-1802, the next R is 1812-14. Perhaps 1804-5 or 1809 could bear some importance, but I think that if price breaks above 1802 traders should try for the very extreme zone.

[Head2k 10]

Yesterday's action didn't really evolve to meet my expectations. Price didn't dip after the open but headed straight up instead. Then at 1798 it looked like a rejection first but then a hinge developed below and resulted in a BO of both 1798 and 1802. But after that the power was gone.

 

I cleaned my chart a bit for today:

The current range seems to be 1786 - 1802.

[firewalker 10]

But after that the power was gone.

 

'The power' seems gone quite quickly these days. I've found it quite hard to find more than one trading opportunity per day lately. If you missed the first hour trade, you're basically faced with a market that's completely flat or stuck. Today was almost a copycat version of yesterday's price action.

 

We seem to be struggling to find new traders interested in these levels. The S&P tried to break above 1110 yesterday and today, which was/is a serious resistance level, but each attempt gets faded quickly.

 

My major levels on the NQ are still the same: 1772-75 area and 1810-1812 as the top. In between there we have several minor levels, of which I considered 1792-95 as intermediate support. I'm not sure what's going on, but it almost feels like traders are taking a very early end-of-year-holiday!

[ziebarf 10]

I believe these are the relevant ranges of the EURUSD. Tops/bottoms are blue and the midpoints are rosy brown. If my analysis is correct, a long trade might be setting up here.

[Head2k 10]

We are stuck between 1776 and 86. I will look for a reversal or BO at these levels.

If price breaks up then 92 might serve as R, too. It provided S yesterday and also notice that ~1790 is a volume peak of the whole distribution on the chart. Then there is 1796, the midpoint of the latest marked range.

The levels are quite close together, but one can judge which one is (not) important from the action when price gets there. Yesterday, for example, I thought 1802 was the upper limit, but price just crossed it without any particular effort. So I was warned that I was wrong (again).

If price breaks below 1776, then there is 64 (midpoint) and ~1750 as S.

[Head2k 10]

Non-Farm Employment Change forecast -119k vs. actual -11k is a difference which sends us back to the yesterday's range.

R 1806, 1812-14

S 1792, 1786-8, 1776

[poindexter 10]

Hello DB,

This is my first post after stalking this forum for the last six months or so. I've read most of the threads and some of Wyckoff's work (still reading through more material). When I found this forum and as I read through it an Aurica feeling swelled up. I went through a lot of trading technics and read most of the common trading books (Magee, O'Niell, Raschke, Elder, Van Tharp etc.) but haven't found the trading technic that suits me. That's untill I read Wyckoff and your work.

I'm starting a new path after erasing everything I know about technical analysis and trading.

I chose to focus on itraday trading of EURUSD in the forex market. As Wyckoff suggests, the best way to learn is to jump into the water with a small account.

 

My question is regarding you "Boxes", or trading ranges. I currently trade using 10 and 50 tick charts and draw the boxes on these charts. Do trading ranges or S/R taken from higher timeframe (say Daily) or higher trading frame (500 ticks) are more "important"? Or do you recommend sticking with the chart you use for trading?

 

 

I have more to say about trading Forex using Wyckoff methods (without using volume but using tick charts and accelaration in trading as a means to identify trading climax) and I will post them in the future in the relevant thread.

 

Thank you DB. You are my hero.

[wjrusnak 10]

Hello DB,

This is my first post after stalking this forum for the last six months or so. I've read most of the threads and some of Wyckoff's work (still reading through more material). When I found this forum and as I read through it an Aurica feeling swelled up. I went through a lot of trading technics and read most of the common trading books (Magee, O'Niell, Raschke, Elder, Van Tharp etc.) but haven't found the trading technic that suits me. That's untill I read Wyckoff and your work.

I'm starting a new path after erasing everything I know about technical analysis and trading.

I chose to focus on itraday trading of EURUSD in the forex market. As Wyckoff suggests, the best way to learn is to jump into the water with a small account.

 

My question is regarding you "Boxes", or trading ranges. I currently trade using 10 and 50 tick charts and draw the boxes on these charts. Do trading ranges or S/R taken from higher timeframe (say Daily) or higher trading frame (500 ticks) are more "important"? Or do you recommend sticking with the chart you use for trading?

 

I'm sure DbPhoenix will respond, but I'll give you some feedback as well. First, I would recommend doing some "paper" trading, even if its just a month. Why lose even $500 if you don't have to? Just get familiar with your software, entries, and especially trade management before "jumping in the water". As far as finding the trading ranges, I (as well as DbPhoenix) tend to find them on larger time frames than what I am trading. In your case, larger tick charts. If your primary chart is say... 10-50ticks, then find your ranges on a 500tick (or so) chart and also keep in mind any important support or resistance on even larger charts (1000+). If you really want some precise entries after finding these ranges, you can also "zoom in" further with a 1 tick chart, in addition to your other charts.

[poindexter 10]

Thank you wjrusnak.

I paper traded for the last 4-5 months and I'm feeling I'm ready to refine my trading skills and I know that I can do so only if I trade live (even with the smallest amount of money).

[cunparis 10]

Thank you wjrusnak.

I paper traded for the last 4-5 months and I'm feeling I'm ready to refine my trading skills and I know that I can do so only if I trade live (even with the smallest amount of money).

 

Are you profitable with your paper trading? Are you using paper or a simulator?

 

If you want to trade real money, forex has a big advantage in that you can trade micro lots and risk a few cents per trade.

[poindexter 10]

I used and still use a live demo account in which I am profitable in the long run.

However, my experience with demo accounts indicate that it is very hard for me to follow the trading method I used in the profitable demo in real trading. This time I use a micro Forex account and I am profitable. I feel like I have matured as a trader in the last year. I read a lot of trading psychology books (Douglas and some others) and I use a very simple trading method, my take on the Wyckoff method.

[cunparis 10]

it is very hard for me to follow the trading method I used in the profitable demo in real trading.

 

Can you explain why?

 

I've noticed this too. In my case with simulator I let my winners run. When I went to real money and then I found myself cutting winners short. I didn't want to risk losing the money I had made.

 

So to combat this I went back to simulator and made a rule that I don't touch my trade while it's open. Either my target is hit or my stop. I practiced this on sim until it became normal. Now I'm on real money and I get the urge to close out a trade early but I leave it open and I detach myself emotionally as much as possible, even as I watch a profit turn into a loss.

 

How can I do that? Because I've practiced my method enough that I know it's profitable in the long run and that trying to avoid losers will only make me miss winners.

 

I share that just as something for people to think about, and I'm curious if you can share your experience as to why it's hard to trade real money the same as a demo account.

 

Thanks

[ektrader 10]

This opinion isn't popular but I agree with Mr Poindexter. I believe that to become proficient intrading, you have to conduct 100's of trades. Abusing your demo account is the cheapest way to do it. The typical argument is "Well, trading live money is totally different because of the psychological aspect of trading REAL money and watching your account bounce into the negative etc......." My answer to that is, you have to go into the game wth a good understanding of what your doing. THEN, you can start battling the emotional struggles once you start trading live. Know matter what, that's unavoidabe.

 

I'm not a big believer in trading microscopic, and molecular lots and all that stuff. Why bother? That's just like trading demo anyway. There's know reason to risk 1 red penny of your own money until you have a sound understanding of your platform an a reasonable undrstanding of a trading strategy to attack the market. Then start small and begin to trade live. JMO.

 

Happy Trading

 

Ektrader

Edited December 8, 2009 by ektrader

[ektrader 10]

Can you explain why?

 

I've noticed this too. In my case with simulator I let my winners run. When I went to real money and then I found myself cutting winners short. I didn't want to risk losing the money I had made.

 

So to combat this I went back to simulator and made a rule that I don't touch my trade while it's open. Either my target is hit or my stop. I practiced this on sim until it became normal. Now I'm on real money and I get the urge to close out a trade early but I leave it open and I detach myself emotionally as much as possible, even as I watch a profit turn into a loss.

 

How can I do that? Because I've practiced my method enough that I know it's profitable in the long run and that trying to avoid losers will only make me miss winners.

 

I share that just as something for people to think about, and I'm curious if you can share

your experience as to why it's hard to trade real money the same as a demo account.

 

Thanks

 

Hi Guys,

 

I'm new on this site but I just thought I would chime in on this question. You should NEVER allow winners to turn into losers. You just need to learn to determine weakness a little better or pick more moderate price targets.

 

I can tell you quickly why you can let winners ride on your demo account but not on your real account. "Because it's not your money to lose". Whenn you trade your real account anxiety steps in. Causing you to take profits early. It happens to us all. Very rarely does anyone get the perfect exit. You cannot forsee the future. You can only put the best guess in your favor.

 

Happy Trading

 

Ektrader