[VSA] Volume Spread Analysis Part II

[winnie]

Is anyone could tell me where I could get some information on Mr.Richard Wyckoff method ?
Any books or web site about it ?
Thanks for your kind help

[firewalker]

	Quote:	winnie
	Is anyone could tell me where I could get some information on Mr.Richard Wyckoff method ? Any books or web site about it ? Thanks for your kind help

This post would probably be a good starting point:

http://www.traderslaboratory.com/for...205-post1.html

Several documents are attached to the post, one of his books too.

[Bearbull]

	Quote:	winnie
	Is anyone could tell me where I could get some information on Mr.Richard Wyckoff method ? Any books or web site about it ? Thanks for your kind help

Well winnie, you must feel as if you have opened up a hornet's nest here, you have to ignore all this bickering, anyway to be successful in this arena, courage, self reliance, discipline, persistence and hard work are essential qualities. You have to seek out the right knowledge that makes sense to you and you only and then verify in real market, develop your own strategies/tactics and trade management rules. In the final analysis the choice is yours whether to follow the herd or be independent, it is your career and your money on the line.


Leave you with this to ponder over:

1. ES 1, 14th May The strategy regarding short trade was explained away in terms of previous resistance levels of 2nd and 6 May, sign of weakness, upthrust, no demand etc.(post 1178)
“You could see weakness as I pointed out on the 5 minute chart. This was especially clear on the up thrust with high volume (2nd W). I saw the no demand bar at 1, as you pointed out. You could have taken a short trade there, and there would have been nothing wrong with that. Your stop would be above the last high, and if you had sat through all sideways action for the next 40 minutes, you would have been fine. I don't take those because of just that. I saw the up thrust and no demand, but this did not meet my trading plan requirements, so I let it pass. But, its a personal choice.”

2. ES 2 - This is price action on 15th May, study this and then examine 5min charts ,
(note similar times of the day around 1.30-2.30p.m), We have resistance to the left, all the signs of weakness, upthrust, no demand, As per the above strategy, what are the tactics this time????

3. NQ1 - similar exercise for Nasdaq,

and then watch the ensuing price moves. Hope this helps on your educational journey.

[DbPhoenix]

	Quote:	firewalker
	This post would probably be a good starting point: http://www.traderslaboratory.com/for...205-post1.html Several documents are attached to the post, one of his books too.

There is also a section on Wyckoff in my Blog (click below). This consolidates the Wyckoff material into one place, without the discussion that's included in the Wyckoff thread. I suggest, however, that you post any questions you may have to the Wyckoff thread so that others who are interested may benefit.

[Sledge]

	Quote:	mister ed
	OK - I seem to remember you posting something similar a little while back and there wasn't many takers then either.

Well then maybe you and I will have our own offline discussion then
Very nice start to the discussion though. Maybe we can get a few more VSA folks to chime in as well. Thank you sir!

Winnie- keep your eye on this, if the conversation blossoms. It may be a swirl of info in your brain right now, but this conversation will become very helpful once you master the basics to "squeeze pips" out of trades

Sledge

[Bearbull]

Winnie,
Wish I had all this info. available way back in 1998, had to spend years searching

Anyway am off to greener pastures for a welcome break from this business, before I leave here are the charts with what happened next.
It would be easy to explain this away with the help of 60min, 120min etc charts, however when trading realtime, one has to have some advance planning, as to what you want to see at certain price levels, which strategy to apply and tactics to implement that strategy, and what price action would you have to see to negate your original analysis.
Move forward bar by bar on a 5min chart following previous charts and see how you can handle the price action...............it is a different ball game from hindsight analysis

Good Luck

[Gary]

	Quote:	Bearbull
	2. ES 2 - This is price action on 15th May, study this and then examine 5min charts , (note similar times of the day around 1.30-2.30p.m), We have resistance to the left, all the signs of weakness, upthrust, no demand, As per the above strategy, what are the tactics this time????

BearBall,
I tried to follow your chart, but can't. My data is way differnt than what you post. Are you sure you got that date right?

[Eiger]

One reason I have continued to be bullish on the stock market is that it hasn't given us any sign of weakness or change of behavior. It certainly hasn't been the most vigorous rally, that's for sure. But a trend will often continue well beyond where we think it ought to stop. Plus, a successful Spring can be a fairly potent indication of strength. On the SPX chart attached, you can see the longer term Supply Line (in red) and the horizontal resistance line (in blue). You would think that this resistance should have stopped the up move - sell resistance and buy support, right?

Look carefully at the character of the price and volume at this resistance area. It didn't react much. Instead, it held its gains and absorbed the overhanging supply. As it came back down to retest the blue horizontal resistance, and then the red Supply Line, it did so both times on light volume and narrowing spreads -- straightforward VSA principles. It did this while holding the Demand Line of the up trend channel (green line).

Another thing that has keep me bullish is the point & figure chart. The first figure chart (FC) is a 5 point FC of SPX (a pdf file; use the view tab to rotate). I draw this by hand based off the 15-minute chart. It is updated through yesterday. There is a count along the 1280 line that projects up to 1415. This is where we are currently. Now i am not saying that just because the FC had that projection, that the market would go there. But, just like the daily bar chart, the FC shows a fairly orderly sequence of higher highs and higher lows from the Spring in mid-march. No substantial cause developed on the FC to reinforce a significant bearish view. The FC can be useful in many ways.

Currently, the FC is showing we are at a resistance area. There is enough cause to create a reaction consistent with prior reactions, but that would break the current Demand Line on the daily bar chart (green line) and might change the current outlook. That would, of course, depend on the character of the reaction. One of the early Wyckoff/SMI traders used to say that FC count projections were places to "Stop, Look, and Listen" -- meaning you don't just change form bullish to bearish because you hit a FC projection or a resisitance area. You want to assess the market carefully at these areas. Right now, I see no indication of weakness.

There is another projection on both the 5 pt FC and the 3 pt of the 5 pt (or 5 pt by 15 pt FC) that indicates a potential move to the 1480-85 level. Will we get there? Who knows. It is at a level where there was a lot of churning before the market fell, so it would be an area where a lot of supply still exists (dashed line on the daily bar chart). We shall see. I will simply continue to let the market tell me what it will do.

Eiger

[Eiger]

	Quote:	winnie
	Is anyone could tell me where I could get some information on Mr.Richard Wyckoff method ? Any books or web site about it ? Thanks for your kind help

It's best to go straight to the source. Why would you go anyplace else? The Wyckoff/Stock Market Institute was originally founded by RD Wyckoff (as Wyckoff Associates). It has operated continuously since the 1930s. There is over 100 years of Wyckoff information here. The best place to start is with the Course. Here is the link: http://wyckoffstockmarketinstitute.com/

[Gary]

The morning session in ES had good trades. I worked the 3 min chart where things set up best. Yesterday at the end of trading had stopping volume. The morning opened with an up thrust and the market fell off. So weakness was in the background. On the first rally, there were two no demand bars in a row - how sweet can you get it? I took a short on the close. The next rally had another no demand and then an up thrust bar which was a good place to add shorts. (Who says there no such thing as no demand.) I got concerned by the high volume, wide spread and close on the next bar and thought it might be a climax, so all shorts got covered. It did rally and then came off again. The real climax was at 1415. You can see it on the 15 minute chart. I didn't see anything worth trading after that.