Ask Any Wyckoff-Related Question

[DbPhoenix]

	Quote:	Yquem
	thanks DbPheonix. You trade stocks?

I switched from stocks to futures in 2000. However, lest this discussion get too far afield (i.e., the subject of the thread), I'll point out that Wyckoff's chief consideration was minimizing risk. If your work prevents you from trading stocks intraday, you certainly have no business trading futures intraday. In fact, you should avoid futures entirely. If trading stocks EOD also takes too much time (the research and so forth), consider trading ETFs. The last may not seem "Wyckoffian" since ETFs were not traded a hundred years ago. However, Wyckoff's approach found the strongest stocks by first finding the strongest markets, then the strongest groups. With ETFs, you can stop there and trade the group itself (you can even stop earlier and trade the market itself). If you then want to go on from there and trade a basket of selected stocks at some point, that's your choice.

[Yquem]

ok, will go look it up.

cheers!

[DbPhoenix]

	Quote:	Yquem
	ok, will go look it up. cheers!

If by "it" you mean ETFs, here's a link: http://www.nasdaq.com/asp/investmentproducts.asp

You can buy an entire market, such as the S&P; a sector, such as financials or industrials; or something more specific, such as semiconductors or biotechnology.

Again, these were not available during Wyckoff's time, but I think he would have been enthusiastic about them.

[BigKahuna]

	Quote:	Yquem
	Hello there, this is my maiden post. Would like to first thank the moderators et. al. for sharing. Found this website when I was trying to look up materials on tape reading. Would like to ask a question on Wyckoff too - Wyckoff and Livermore are both great masters of the tape. Is it possible to trade "on the tape" in the forex markets? I'm asking this because I have no exposure to forex at all, and can't trade stocks due to work commitment (I'm not a professional trader). Was thinking about the difference in methodology/strategy between the 2. Would appreciate any comment. Thanks!

While I am certainly not an expert on Wyckoff's methodologies, I have studied Gann, Andrews, and a number of others over a twenty something career as a trader. When trading spot forex, you need to use the US Marine mentality:improvise, adapt, overcome.

I trade forex exclusively, now. And while some of the "masters of old" are still applicable to equities and futures with DOM, volume, et al, you have to take the time to study charts to sort out the workable strategies for forex. The cloak and dagger of over the counter markets makes it necessary for such work.

Some may point you to the ecn type of brokers sometimes advertised as "no dealing desk," just know, this is not a true representation of the market at large, just that particular brokers clientèle. If you must use volume related methods, you can use the futures contracts as a reasonable representation, but pricing is different because of the interest swap.

Good luck on our journey.

BK

BTW-dpPhoenix, always enjoyed reading your perspective in another place(forum) and time.

[zdo]

bump #34...
Did Wyckoff talk any about the 'auction' dynamics inside chop?
ie Did he discussed what's going on inside your 'zones', db.

Thanks.

[DbPhoenix]

Other than to point out that traders sought equilibrium within these zones, no.

[kuky969]

Hi DB
thanks for your time and willingness which you explain your thoughts and I always look forward for your new contribution. Please If you got a time could you answer me a few questions please. You write somewhere ...I quote

".....I determine potential S&R beforehand, then I watch how traders behave when those levels are approached. Is price driven down rapidly to support where it then makes a single print and bounces violently? Does it glide in to support and bounce gently along? Does it hammer away at it again and again as if trying to break through a door? And what's the TICKQ doing all this time? What's going on with volume? Is there a classic decline on the retest, if any? Do buyers pile in as expected, or do we begin a search for a new equilibrium (or "value") level? ...."

What do you expect (1 min chart)
---if price bounces violently from SR ??
--- if is hammered away when trying breaks door ???
---from TICKQ behavior on SR levels ?

How do you distinguish (1 min)
--classic decline on retest ??
-- begin of search a new equilibrum ??

You recommend just watch for 1 min chart buiyng and selling waves.But I dont understand what exactly I could watch ?. OK volume withe movements. and what yet ??
--length of swing ??
---duration of swing ?

Thank you a lot

[DbPhoenix]

If price bounces decisively off support, then support is most likely good. OTOH, if price tests support repeatedly, the odds of it failing is increased. The resolve of buyers may not be unassailable. As for the TICKQ, is there a divergence during these tests? (See the Dailies posted to my Blog.)

A classic decline on a retest is a concurrent decline in volume and price with a concurrent renewal of strength in both if and when price resumes its progress.

Compare the lengths and durations of the buying waves with the selling waves, i.e., do the buying waves last longer and go farther? Or are they getting shorter and briefer? Or are the selling waves beginning to last longer and go farther? As for the volume, it can be helpful but it isn't necessarily relevant until you arrive at a point or level where you're testing support or resistance. Price can move quite a distance on very little volume if there's nothing to stand in its way.

To illustrate:

Note that price rejected 1920 at the end of the day on Friday after having spent so much time there midday. Price rejected 1920 again this morning. You don't know why. Doesn't matter.

Now at 3, price tests what might be resistance (1), but it subsequently makes a higher low (4). It tests what might be R again, and it looks as though it doesn't want to go higher. But it makes another higher low (6). It then spends quite a lot of time struggling to move higher, but again makes a higher low (7). This might be called "absorption", i.e., eating away at supply. Price then finally makes a clean break upward at 8, but then moves sideways, digesting the move before moving ahead again at 10.

Among the lessons here is that what price does NOT do (i.e., make a lower low) is as important if not more so than what it DOES do and provides just as much information to the trader who's paying attention and is as free of bias as possible.

[kuky969]

DB

THANKS
I admire your patiance and helpfulness. I think almost clear for me from your book and contributions. Just one thing ...timing entry and exits .. I now this is up to me and I try find some combinations movement of price and volume in 1 min chart for resolve .

[DbPhoenix]

Understanding how price moves is separate from determining how to profit from it. If you don't focus on the former first, the latter will take far longer than necessary.