[DbPhoenix]

Originally Posted by 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

[Upthrust86]

Originally Posted by DbPhoenix »

Wyckoff, however, didn't base his approach on geometry but on behavior ... 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.

Surely Wyckoff identified more patterns than the hinge in his work, no? The climax is a pattern just as much as the hinge, and probably more so. The climax has a certain set of characteristics that form a pattern in volume, spread and close, and it is based on trader behavior. The same can be said of the secondary test.

[gassah]

Good looking bounce off the top of the lower range for the SP500 today. It appears the upper range is back in control for now.

[That One Guy]

Am I, on the right path to reading price and volume. Saw a hard push down, at 11:26 leading to a bit of a light demand push up. Then, we see buyers putting in effort getting decent results to take price back up to the median level. As soon as price finds this area, I see no effort and no results to get back above it, which would show potential for more demand. Sure enough price falls off a cliff making new lows. Just how I read that in real time, no trade was taken, since I'm concentrating on listening to the market not trading it currently.

[DbPhoenix]

On a day like today, i.e., a trend day, it's easy to come up the wrong conclusions regarding volume since the smaller waves are pretty much irrelevant to the larger.

The key here is shorting resistance at 2005. After that, all you have to do is follow the line of least resistance by means of trend lines and swing points. Typically, price will move sideways during lunch on days like this, and it did so today. Since it rose above a prior swing point only once, at 1300 (ET), you needn't do anything more than just wait and watch your profits increase.