Riding the Wyckoff Wave

[gassah]

	Quote:	namstrader
	Db, or anyone else, I came across Hank Pruden's Wyckoff website and I would like to know what you think about this guy and perhaps you have read his book "The Three Skills of Top Trading" (there is a 16 page pdf that highlights it of sorts at his site).

Pruden has been teaching the SMI/Wyckoff course for many years. I believe he instructs mostly on Unit 1 of the course which is mostly SMI's modifications to the original Wyckoff material. It's hard to evaluate his book because I know the SMI course pretty well and the book is a brief summary.

Disclosure: I'm working with Pruden on organizing a Best of Wyckoff conference.

[Bearbull]

	Quote:	gassah
	Pruden has been teaching the SMI/Wyckoff course for many years. I believe he instructs mostly on Unit 1 of the course which is mostly SMI's modifications to the original Wyckoff material. It's hard to evaluate his book because I know the SMI course pretty well and the book is a brief summary. Disclosure: I'm working with Pruden on organizing a Best of Wyckoff conference.

As I have not read the SMI course, what do you reckon are the main modifications to the original Wyckoff. Gary Fuller at ltg-trading , I presume employs the former as there are numerous references in his archived charts to
"COB - change of behavior", "Jumping over the Creek", "Break of Ice", terms which Wyckoff never used.

[BlowFish]

Well well, DB posting charts with a left hand/outside lines on (channel line). What is the world coming to Seriously I had been under the impression that you did not pay much attention to left hand lines. Is this something you have changed in your trading or is it more likely something I have mis remembered?

Personally I rather like channel lines and will take a trade from the outside one (despite most people recommending against it as it is counter trend). Of course context and confluence help. (need to think of another C)

[DbPhoenix]

	Quote:	Bearbull
	As I have not read the SMI course, what do you reckon are the main modifications to the original Wyckoff. Gary Fuller at ltg-trading , I presume employs the former as there are numerous references in his archived charts to "COB - change of behavior", "Jumping over the Creek", "Break of Ice", terms which Wyckoff never used.

Too many to get into. Primarily, the original course is much simpler and more straightforward. The Wyckoff material I've provided here and in my Blog is from the original course. But the course is 500 pages long. To compare and contrast would take an enormous amount of time.and would serve no practical purpose.

I learned long ago to focus on source material. What the originators say about their own work is often quite different from what others say about it and do with it (assuming that the "others" acknowledge the sources of their work in the first place, which is not common). That's why I have a first edition of Schabacker and a fourth edition of Edwards and Magee (before editors started rewriting it). When I was playing with indicators, I read Wilder and Appel.

There's certainly nothing immoral about Tom Williams or any of these other people offering their own interpretations of Wyckoff's work. I do the same thing in my book (though I try to stick as closely to the original as possible). One must keep in mind, however, that one is not trading Wyckoff but someone's version of Wyckoff, and the two may be worlds apart (if one is trading at all; one can learn to provide impressive chart analyses and yet be completely unable to trade them).

[DbPhoenix]

	Quote:	BlowFish
	Well well, DB posting charts with a left hand/outside lines on (channel line). What is the world coming to Seriously I had been under the impression that you did not pay much attention to left hand lines. Is this something you have changed in your trading or is it more likely something I have mis remembered?

I don't. I'm more interested in the (potential) support and resistance that are provided by the market -- such as a swing point -- than I am the imaginary support and resistance that are provided by a line that I manufacture.

But Wyckoff used these lines to help him track demand and supply, momentum, and stride, and all of that is perfectly legitimate. The trap lies in persuading oneself that the lines one has drawn begin to provide support and resistance themselves, which is (a) illogical and (b) not the point of drawing the lines in the first place.

[BlowFish]

	Quote:	DbPhoenix
	I don't. I'm more interested in the (potential) support and resistance that are provided by the market -- such as a swing point -- than I am the imaginary support and resistance that are provided by a line that I manufacture. But Wyckoff used these lines to help him track demand and supply, momentum, and stride, and all of that is perfectly legitimate. The trap lies in persuading oneself that the lines one has drawn begin to provide support and resistance themselves, which is (a) illogical and (b) not the point of drawing the lines in the first place.

AH Ok Ithought that might be your view. Having said that it seems that there is all sort of 'geometry' in the markets that, while there is no directly attributal 'reason', certainly seem to exist and repeats often enough to be more than random. This can certainly be exploted if that is the traders desire.

[DbPhoenix]

	Quote:	BlowFish
	AH Ok Ithought that might be your view. Having said that it seems that there is all sort of 'geometry' in the markets that, while there is no directly attributal 'reason', certainly seem to exist and repeats often enough to be more than random. This can certainly be exploted if that is the traders desire.

The key word being "seem". Most likely is that we're just throwing virgins into the volcano.

[BlowFish]

It was a carefully considered word. You have to be very careful of perceptional bias, but thats true of any aproach. If you are rigorous in your definitions you can test some of these things to see if there is statistical significance. For example some of Morge's pitchfork behaviour has 80% or so probability after years of extensive testing.

I seem to remember you saying mid points of your rectangles often significant, mid points of swings often seem to be too. Why I wonder? I guess you could argue that being a half way point its a place that both bulls and bears are likely to draw a line in the sand. A bit more abstract are measured moves A-B = C-D. The market does appear to have a tendency to move in similar size segments. And the list goes on. I remain more open minded to some of these sorts of things that to other even though, as you point out, these lines dont represent anything in and of themselves.

[DbPhoenix]

Wyckoff, however, didn't base his approach on geometry but on behavior. The "midpoint" to which he paid so much attention represents a return to equilibrium, what some people call a reversion to the mean, what MP calls the value area and the POC. If price doesn't return to the level at which one might expect to find equilibrium, one can interpret that as strength, which may lead to a higher level of equilibrium. If it drops below that level, one can interpret that as weakness and a search for a new, lower level of equilibrium.

As to whether or not anything one draws or plots can have any statistical significance at all is a subject best left to a general trading discussion. For the purposes of this thread, the only "pattern" per se is the hinge, which, again, is the result of specific trader behavior, and therefore exists outside the trader himself.

[Tannism]

Db
T/F W's Bulge : DB's breach.

Thanks,
TannisM