Riding the Wyckoff Wave

[gassah]

Originally Posted by Bearbull When an effort is made to point out the fallacy and the divergence of VSA from its original source Wyckoff, instead of engaging in productive discussion, it is looked upon as an attack on their Gurus teachings and in turn they try to teach you the right way of trading

I find it strange. People with more experience are offering advice after having been through the exact same material and it's looked upon as hostile. If somebody in my field (medical) acted that way after coming out of residency with another person who had years of experience they'd be laughed at and ignored. That rarely happens though because you'd have to be a fool not to pay attention to somebody who's been around the block.

You guys made a valiant effort and have probably helped winnie at least.

[firewalker]

This is how I see it. Haven't gone through the whole thread yet, but I suspect similar charts have been posted before. Big hinge formed in January/February, which broke out to the downside. The midpoint of the hinge seems to be the starting point of a move up. Since the March low we haven't really seen anything other than higher highs and higher lows. The red supply would indicate than price isn't even overbought. And, as illustrated in your post, the demand line has taken a steeper angle. I'm not sure what all of this means 'in the big picture' but I can't deny the fact that (a) the bulls have regained two thirds of the move down in a relatively short period and (b) the March low looks like a re-test of the selling climax in January, and (c) the downtrend line is broken.

Originally Posted by DbPhoenix Regarding the various "upthrusts" and why they didn't make good shorts today, it may help to set aside overhead resistance for the moment and look at the trend, or "stride".

The blue rectangle is where I expected some sort of pause, and in fact I believed the upthrust two days ago to be a sign of rejection. That's why the U-turn yesterday came as a relative surprise and got me trading on the wrong side.

Originally Posted by DbPhoenix One of the few rules-of-thumb that appear to hold up is that one can't expect one trend day to follow another in the same direction. There has to be a rest of some sort at some point, even if it's only a turn in the opposite direction (e.g., the /\/ pattern we've followed the past three days).

Whenever a nice trending day presents itself, I suspect the next day to be more of a ranging one and am cautious about intraday reversals. Lately however, it seems there's only one way of catching the whole range, and that's by leaving at least something of your position on till the end of the day. Yesterday was pretty straightforward imo, if you got the right entry from the start that is... Red dot is short entry(*).



Price started off in the right direction, but paused immediately. The congestion led to a change in the demand/supply equilibrium, on which price reversed and I stopped myself out for a small loss. I'm still wary of SAR, so I stood aside and waited for a later entry but I don't like taking trades late in the day. I also had +/- 1990 as support.

I've circled a setup from my early days. Upthrust (or a shooting star in candlestick analysis) at potential resistance. High volume too, if you plot it. Doesn't this constitute as a short signal as per VSA? Anyway, demandline not broken, so it's a lower probability trade.


______

(*) My actual entry was on the YM, but the principle is the same, I used an NQ chart because that's the instrument you trade.

[DbPhoenix]

Originally Posted by firewalker This is how I see it. Haven't gone through the whole thread yet, but I suspect similar charts have been posted before.

Unfortunately, the thread may already be too long. It's unreasonable to expect newcomers to plow through hundreds of posts, many of which may not even be especially pertinent. Splitting all of this into multiple threads is a possibility, particularly if its popularity continues (it's become the most-viewed thread in the TA forum, after VSA).

I've circled a setup from my early days. Upthrust (or a shooting star in candlestick analysis) at potential resistance. High volume too, if you plot it. Doesn't this constitute as a short signal as per VSA?

Given the several varieties of VSA, I really can't say. However, VSA and Wyckoff have little to do with other. VSA is about bars; Wyckoff is not. VSA also takes an entirely different view of the market environment than Wyckoff does. This is not unlike the difference between those who obsess over candlestick patterns and candlestick names and candlestick shapes and those who see candlesticks as illustrations of market dynamics and price flow.

Wyckoff would have you "ride the wave". As long as you got in at the correct point, you'd ride the trend until it was broken, or at least changed its character. If you didn't get in at the correct point, you'd still have to be aware of it and determine any subsequent entry based on where that correct entry was, then trade as though you were pyramiding. The market doesn't know whether or not a trader missed the correct entry and couldn't care less. Thus the landscape doesn't alter itself for him just because he wasn't around when the low-hanging fruit was ripe for the picking. Entering later also carries implications for the width of the stop, and though one may feel like a Grade A putz for having missed the correct entry on a trend day, standing aside may be the best option for the account balance.

[DbPhoenix]

Originally Posted by firewalker Lately however, it seems there's only one way of catching the whole range, and that's by leaving at least something of your position on till the end of the day.

Addendum: about this, see post 207.

[DbPhoenix]

Knowing how much people love my cajas famosas, here is what I'm looking at now. Those who've followed from the beginning will recognize this as an amalgam of several POVs previously posted.

[gassah]

Wondering if the US $ will resume the downtrend?

There appear to be simultaneous potential FX setups to possibly take advantage of this on the dailies:

Longs:

• AUDUSD breaking out?
• EURUSD springing?
• GBPUSD off support?

Short:

• USDJPY top of channel

[DbPhoenix]

Given the popularity of this thread and that it has reached a length that discourages all but the most devotedly curious from reading all of it, and due to the variety of topics contained within this one thread, James has graciously allowed us to tranform the thread into a forum.

As a forum, the essentials can be made into Stickies and easily found and accessed. And the various aspects of Wyckoff's approach can be discussed separately, making life easier for those with special interests. Gassah and I are the moderators and will be initiating threads that are of interest to us. However, anyone who wants to pursue some particular aspect of Wyckoff's approach is welcome to open a new thread himself.

Now that the thread has "opened up", it will now be closed. Anyone wanting to copy and paste a post or two to begin a new thread on that topic is welcome to do so.