Ask Any Wyckoff-Related Question

[DbPhoenix]

Originally Posted by SRspider Thanks atto, I am new to this stuff and I was a bit confused as to where things or terms came from. I have the SMI course and at first thought it was the Wyckoff course. Are the principles the same? It seems that from the Wyckoff course came the SMI course and then from that came the VSA stuff.

There's a long answer to this and a short one. The short one can be found here.

The long answer, in a nutshell (if that's not a contradiction in terms), is that Wyckoff -- along with Dow, Elliott, Schabacker and a few others -- was an original. Thus much of what we do today is "based on" Wyckoff, from Dunnigan to Ross to Darvas to CANSLIM. But to suggest that one is "applying Wyckoff" when he is using something several times removed from the original material is to do an injustice to that material. This is not to say that the various adaptations and modifications and reinterpretations are worthless. They may in fact have much to offer. But those variations are not the business of the forum, which is understanding and applying the original material. Once one has gone through that process, he is then in a better position to determine whether or not a given variation is an improvement.

As to your question regarding a breaking of support, one can put both the question and the answer in simple terms that don't require extra jargon as long as one focuses more on the behaviors of those who are breaking those supports and less on what terms to use to describe their efforts. However, coming up with a set of rules, or even of guidelines, is not likely to get the trader very far. If you can post charts which illustrate your questions, you will likely be better able to recognize these phenomena in future situations, preferably in real time.

[billbose]

Can the Wyckoff methods be applied to inverse ETFs? Especially the 2x and the 3x ones?
Thanks.

[DbPhoenix]

They can be applied to anything that is freely traded in an auction market.

[billbose]

Thanks for the reply

[momop]

Hello all

I just bumped into this forum and am kicking myself for not checking this earlier. There is so much TA info for a novice like me! Quick question - I see Wyckoff methods mostly discussed on Futures trading..Can those with more knowledge tell if they have experimented with stocks as well ? Probably a dumb question since price/volume action should be similar - but thought someone could provide pointers..

Thanks a bunch
momop

[Head2k]

Originally Posted by momop Hello all I just bumped into this forum and am kicking myself for not checking this earlier. There is so much TA info for a novice like me! Quick question - I see Wyckoff methods mostly discussed on Futures trading..Can those with more knowledge tell if they have experimented with stocks as well ? Probably a dumb question since price/volume action should be similar - but thought someone could provide pointers.. Thanks a bunch momop

Wyckoff himself traded stocks, not futures, and he elaborates on trading stocks thoroughly. But altough he traded stocks, the principles of his method can be applied on any auction market.

[forrestang]

Ok.... let me start with the disclaimer, I HAVE TONS TO STILL LEARN ABOUT TRADING. I AM NOT GOOD YET!!!!!!

OK, with that out the way, people sometimes ask me how to improve their trading (I don't know why cause I still suck)? I must give the impression that I know what I'm talking about.....well if that's the case I must have the whole 'fake it till you make it" thing down?

Particularly the people asking me for advice are those that either take too many trades per day, and people that can't sit through a pullback or retracement after entering to save their lives. Or they ask how to reduce the number of trades they take.

I always ask, have you looked into Support and Resistance? I go on to say this will probably lead to a more deliberate approach, maybe help you filter out a lot of useless trades, and give you some confidence to sit through a trade without pulling out too soon. I then direct them to the Wyckoff forum.

I give the above story to get to this point? After I suggest this, why is the first comment always, "but I am not interested in volume?" Or, "I don't think volume is going to help me!"

Then I always yell inside my head, and usually tell them to just focus on the S/R threads. This has happened with at least a half dozen people so far! And it doesn't make me upset, I'm just curious as to why this is the case?

Ok, I haven't formally studied Wyckoff. My knowledge is limited to the help the kind folks that participate here have imparted upon me. I have transfered this to futures trading, with ok success, my equities/options trading(this which I am utterly killing right now), and just a general way to look at things.

So do I have it wrong? Based on what I see here talked about the most frequently, I would think the areas of consolidation, S/R etc are the most important parts of the idea?

[iso]

Hi,

I have heard you guys talk about "Midpoint" support or resistance. Why does the midpoint have significance? Is there anything that I can read about this?

Thanks

[Head2k]

Originally Posted by iso Hi, I have heard you guys talk about "Midpoint" support or resistance. Why does the midpoint have significance? Is there anything that I can read about this? Thanks

A key concept of Wyckoff as well as of Auction Market Theory is that support and resistance are likely to be provided by zones where a lot of transactions took place in the past. That means zones where a lot of trading volume occurred over time. To put it simply, S/R is likely to be provided by former ranges and congestions.

But that doesn't mean that the S/R must lie at the very extreme of the former range. Not much volume over time is usually built at the extremes. The S/R is more likely to be provided by such an area in the range where a bulk of trades occurs, so called Value Area. And the S/R can be provided by its edge or by its midpoint, because the midpoint is, after all, likely the place where the very most trading volume occurred.

For further information study Auction Market Theory, which is the theory that Market Profile is based on.

[DbPhoenix]

Originally Posted by iso Hi, I have heard you guys talk about "Midpoint" support or resistance. Why does the midpoint have significance? Is there anything that I can read about this? Thanks

You may also want to look at this post.