Riding the Wyckoff Wave

[zeon]

	Quote:	Bearbull
	Yes I know that, I wanted to bring to your attention the ideal setups as per the VSA tutors, now you can ask them why it did not work that time, same to the candlesticks folks, am sure they will all come up with some justification.

VSA, Wyckoff, ... it doesn't matter much. From what I've seen here there's always an excuse at the end of the day why something else happened. Justification seems to happen no matter what approach.

Thanks for your efforts Bearbull. I do appreciate them.

[gassah]

	Quote:	zeon
	Justification seems to happen no matter what approach.

I don't understand why trades that don't work out need justification. Pros don't get it right 40-60% of the time. I'll look over my trades to see if there was a mistake but the vast majority of the time I can't find anything and just move on. They aren't supposed to work out all the time and I don't get the hangup.

[DbPhoenix]

	Quote:	Bearbull
	Yes I know that, I wanted to bring to your attention the ideal setups as per the VSA tutors, now you can ask them why it did not work that time, same to the candlesticks folks, am sure they will all come up with some justification.

The point of my posts was not to bash either VSA or candlesticks but to illustrate certain principles that are key to understanding Wyckoff's approach. And even though there is little in common between VSA and Wyckoff, there are those who, for whatever reason, won't be able to understand either one. They may, however, be able to make a fortune with a MACD/stochastic combo.

Therefore, let's focus on our business and let others go about theirs. This information is here for whoever chooses to benefit from it. Or not. As for zeon, he's already said goodbye twice, so let's not devote any more thread space to that particular arc.

[DbPhoenix]

For those who are interested, there are fourth and fifth editions of Technical Analysis of Stock Trends up for bid on eBay. These are the last editions that Magee updated himself, before "editors" got hold of the material.

[brownsfan019]

	Quote:	Bearbull
	Yes I know that, I wanted to bring to your attention the ideal setups as per the VSA tutors, now you can ask them why it did not work that time, same to the candlesticks folks, am sure they will all come up with some justification.

As the resident Candlestick guy, I'll tell you that just finding a shape and calling it a reason to trade is exactly why candlestick analysis does not work for some. B/c that's a completely inaccurate way of using them.

Candlestick analysis is not play find a shape even though the majority here who think they know something about them do just that. Context. That's all there is to it.

Back to your regularly scheduled program from DB and boys.

[DbPhoenix]

	Quote:	brownsfan019
	Context. That's all there is to it.

Indeed....

[DbPhoenix]

A couple more points regarding the series of posts I made earlier.

1. The purpose behind drawing these lines is not to make the chart look pretty but to draw the trader's attention to those areas, zones, points, levels, whatever where price action is most likely to provide trading opportunities. Whether one draws lines, boxes, circles, arrows, or big, pointy fingers is irrelevant.

2. Once those areas, zones, points, etc are identified, volume becomes largely a non-event, i.e., one pays attention to it only at those areas, etc where it is most likely to mean something. That this point is so often overlooked is probably why so many people think volume is useless.

For example, using the 1m time bar chart I posted earlier, I've blown up the shaded area:

Until price reaches an area where a trading opportunity is most likely to occur, there's no reason to obsess over the minor ebbs and flows in volume. However, once trading opportunities are on the horizon, what might be considered directionless activity elsewhere suddenly becomes important.

Here, for example, when price comes back to 1966 the second time, the fact of the test is interesting enough. That it cannot make a lower low even with all the volume is even more interesting. The bullish boost at 1329-30 becomes more important because of what has come before, as does the volume recession when price pulls back to 1975. When another bullish boost occurs, beginning at 1352, it is significant, again, because of what has come before. And when price makes an attempt at a higher high at 1401 and volume isn't there, that again becomes significant because of what has become before and provides the "classic" double-top price-volume divergence setup for the short. Without the context, none of this matters, and volume is little more than traders going about their business. With the context, it becomes a high-probability short trade.

[Bearbull]

	Quote:	brownsfan019
	As the resident Candlestick guy, I'll tell you that just finding a shape and calling it a reason to trade is exactly why candlestick analysis does not work for some. B/c that's a completely inaccurate way of using them. Candlestick analysis is not play find a shape even though the majority here who think they know something about them do just that. Context. That's all there is to it. Back to your regularly scheduled program from DB and boys.

Once again I was merely trying to point out to Zeon that the argument he put forward previously on a trendline example which worked on one occasion and not on the other, similar charts can be presented for any indicator, VSA or RSI , CCI, candlestick patterns etc., Even the dragonfly in my example would work at other times as it is actual on a support level (congestion to the left) in which case somebody can point out : look this validates the signal, here is does not simply because the selling is overpowering demand, as simple as that.

I know a thing or two about context and the rest, same with VSA concepts, Wyckoff and Candlestick charting, have been in the business for over 15yrs
Back to you regularly scheduled program on candlestick thread

[DbPhoenix]

An update to the SPX "forest" chart I posted last week (336 and 344). Whether we go up or down from here is a separate concern from gathering data. The permabulls will miss out on the shorts, the permabears will miss out on the longs.

[DbPhoenix]

Regarding the above chart and the others like it, Wyckoff stresses that, in addition to trend and whatever channels may be formed by apparent consistency in the intrusion of demand and supply, one must also look to previous areas of support and resistance, which is what we're doing now. Yesterday there was an upthrust in the Nasdaq and the Dow. There was also an upthrust of sorts in the SPX, but there've been so many over the past few weeks that they are forming their own base .

Whatever these thrusts mean in and of themselves does not matter as much as where they are occurring, i.e., against important, previous support. Therefore, both intraday and EOD traders would do well to concentrate on how price behaves at this particular juncture.