Trading The Wyckoff Way

[Gringo 10]

Longer term chart is confusing me. There are so many lines that I am not sure what is important. 15 min is clearer. I have the S/R but in RT will have to rely on judgement to see which one is important.

 

 

 

2779

2776

2772

2767

2760

2750

 

Gringo

[Gringo 10]

Hinge forming just below 67?

Price is showing some strength as it's not going downwards but the earlier drop was strong. That's what's having me a bit worried about demand being solid.

[Gringo 10]

DL cracked. Lets see if it's a REV or RET.

 

Gringo

[DbPhoenix 42]

Don't overlook that TR from 67 to 72 from early this morning. It's on your chart.

 

Db

[Gringo 10]

I am beginning to think highly of this Wyckoff guy. How did he figure this all out without much precedence? Must be a really observant person.

 

Price still very weak. Unless upward strength shows up.

 

Gringo

[DbPhoenix 42]

When you drop thru a range, $ has much greater difficulty regaining its losses, much less advancing. All those people who bought in that range and didn't sell will now grab the op to do so.

 

After $ dropped out of that hinge you drew, it created a TR early this morning. It rose out of that TR, then found R at the midpoint of that hinge. It then dropped thru the TR and found R at its midpoint on the way back, printing a double top at 70 in the process. That was a legit entry.

 

It's not about lines. It's about buyers and sellers. The lines just point the way.

 

Db

[Gringo 10]

I saw the short around 69 and was ready for it around 68.

Mentally of course.

 

Gringo.

[Gringo 10]

$ showing strength it seems.

 

Gringo

[tomerok 10]

yes but TL is holding

could be a nice hinge forming

 

Tomer

[Gringo 10]

Stop outs because of wider price movement are around 3 points in some cases. Is that reasonable? I am not sure how to reduce it without compromising logical points of exit. Or am I missing something? Usually I exit before the stops are hit but they are there as at times price has moved quite quickly against my position.

 

Doutreval of Dijon: Think of this. A sword is like a bird. If you clutch it too tightly, you choke it - too lightly and it flies away.

Scaramouche

 

I think a stop is something similar as well.

 

Gringo

Edited October 9, 2012 by Gringo

[tomerok 10]

Hinge is more likely a box

 

the test for the down side will tell the story (if it happens.....)

 

Tomer

[tomerok 10]

Stop outs because of wider price movement are around 3 points in some cases. Is that reasonable? I am not sure how to reduce it without compromising logical points of exit. Or am I missing something?

 

Gringo

 

for me it is, even 5 points in some cases..

but the real answer is it depends on your MM plan

 

Tomer.

[tomerok 10]

looks like $ going down..

lets see of it tests the TL again

 

Tomer.

[DbPhoenix 42]

yes but TL is holding

 

What do you mean by "TL"?

 

Db

[tomerok 10]

Trend line

 

down from the open

edit: even further back....

Tomer.

[DbPhoenix 42]

Stop outs because of wider price movement are around 3 points in some cases. Is that reasonable? I am not sure how to reduce it without compromising logical points of exit. Or am I missing something?

 

Gringo

 

There should be no stopouts, only exits. If you're relying on stops, you're relinquishing responsibility for the management of the trade.

 

Your exit should have been around 57, when the downmove was over. What's the need of a stop?

 

Db

[DbPhoenix 42]

Trend line

 

down from the open

edit: even further back....

Tomer.

 

And how is it helping you in RT? The R is being provided by TRs, not TLs, particularly since the latter are being drawn in hindsight.

 

Db

[Gringo 10]

46 and 42 are the next S/R more or less.

 

Gringo

[DbPhoenix 42]

46 and 42 are the next S/R more or less.

 

Gringo

 

I agree. There's really nothing else until 20.

 

Db

[Gringo 10]

There should be no stopouts, only exits. If you're relying on stops, you're relinquishing responsibility for the management of the trade.

 

Your exit should have been around 57, when the downmove was over. What's the need of a stop?

 

Db

 

Db,

 

Exiting with gain isn't an issue. It's when a new position is initiated and there isn't a DL/SL to guide. More or less I use the swing low to place a stop just in case price makes a run for one side or the other. These stops though at times are 2-3 points wide.

 

Gringo

[DbPhoenix 42]

To recap, after the drop to 55, $ created TR bet 55 and 59, midpoint 57. When $ dropped to 52, it rallied and found R at ....... 57.

 

Db

[Gringo 10]

I have 30, 27 and 22 as the next possible levels. The pace has increased for price, chance for some kind of capitulation? I don't have volume anymore so will have to see price behaviour only.

 

Gringo

[DbPhoenix 42]

Db,

 

Exiting with gain isn't an issue. It's when a new position is initiated and there isn't a DL/SL to guide. More or less I use the swing low to place a stop just in case price makes a run for one side or the other. These stops though at times are 2-3 points wide.

 

Gringo

 

Even so, I wouldn't use them exc as catastrophe stops. Once one has placed a stop, he tends to relax and wait for the stop to be hit. This is the wrong course (or he moves the stop to BE, which is even worse). Focus on the price action, even if you have to use a smaller interval. If it doesn't do what you expect it to do, exit the trade. You may miss a profit, but you won't incur a loss.

 

Db

[DbPhoenix 42]

I have 30, 27 and 22 as the next possible levels. The pace has increased for price, chance for some kind of capitulation? I don't have volume anymore so will have to see price behaviour only.

 

Gringo

 

I suggest 30 and 27 are too trivial for a move this strong. But nothing's lost by watching them. When price stops, there's a reason.

 

Db

[Gringo 10]

Even so, I wouldn't use them exc as catastrophe stops. Once one has placed a stop, he tends to relax and wait for the stop to be hit. This is the wrong course (or he moves the stop to BE, which is even worse). Focus on the price action, even if you have to use a smaller interval. If it doesn't do what you expect it to do, exit the trade. You may miss a profit, but you won't incur a loss.

 

Db

 

Oh! I see what you mean. More to think about.

 

Thanks.

 

Gringo