[namstrader]

Here is an example.

[DbPhoenix]

Originally Posted by namstrader »

Here is an example.

Not to rain on anyone's parade, but this is all veering further off the subject of this thread, and is only partly relevant to Wyckoff. Those who are interested in indicators, Fibonacci, etc. will likely have better luck elsewhere in the Technical Analysis Forum.

[Bearbull]

Db, To keep the Wyckoff forum alive,
Nice hinge formation on Nasdaq on Friday, and a profitable breakout

I prefer the breakout of the hinge on increasing vol. If you traded, what are your thoughts/comments on entry and trade management.

[firewalker]

Originally Posted by Bearbull »

Db, To keep the Wyckoff forum alive,
Nice hinge formation on Nasdaq on Friday, and a profitable breakout

I prefer the breakout of the hinge on increasing vol. If you traded, what are your thoughts/comments on entry and trade management.

Your chart has no timeframe on it, but am I right to conclude that you've drawn the hinge from the day before, leaving out the overnight and this is a 2 or 3-min chart?

If you don't mind me saying, the volume on the breakout doesn't seem spectacular imo... in fact it's hardly higher than two bars before.

There was a nice hinge on the ES earlier this week, and this one led to a meaningful move in the opposite direction (see attached charts one is a 5-min, the other a 1-min chart).

Your hinge is a continuation pattern, and although I can't say I have done enough study on this to make it conclusive, it does look as like those are more common. Any thoughts about that?

[nycdweller]

Firewalker, what exactly do you look for when watching volume? Thank you.

Originally Posted by firewalker »

Your chart has no timeframe on it, but am I right to conclude that you've drawn the hinge from the day before, leaving out the overnight and this is a 2 or 3-min chart?

If you don't mind me saying, the volume on the breakout doesn't seem spectacular imo... in fact it's hardly higher than two bars before.

There was a nice hinge on the ES earlier this week, and this one led to a meaningful move in the opposite direction (see attached charts one is a 5-min, the other a 1-min chart).

Your hinge is a continuation pattern, and although I can't say I have done enough study on this to make it conclusive, it does look as like those are more common. Any thoughts about that?

[DbPhoenix]

Exits from hinges are not always dramatic and they're not always easy to recognize in real time, much less trade in real time. Most often, one has to take the breakout on faith that it will be successful, and if he's read it correctly, it likely will be.

However, price often comes back to the midpoint or apex, as it does here. Therefore, if one is going to maintain a tight stop, he has to be ready to re-enter if price retraces then resumes the advance.

[atto]

Originally Posted by DbPhoenix »

Exits from hinges are not always dramatic and they're not always easy to recognize in real time, much less trade in real time. Most often, one has to take the breakout on faith that it will be successful, and if he's read it correctly, it likely will be.

When you say breakout, are you referring to the breakout of the two lines that form a hinge (the "wedge" area), or of a previous swing high?

I've found that breakouts of swing highs can be a more reliable entry, because often, a possible developing hinge can turn into a springboard for a longer congestion area (which is easy to see in retrospect, but harder real time). That said, a breakout entry here obviously does give up some price movement. If the hinge is small enough (often on a much faster timeframe), I frequently can place stops below the midpoint to allow for a re-test. For most other hinges, I do see myself re-entering often due to that midpoint retest. I've also noticed a false breakout in the opposite direction of the eventual movement is fairly common.

[firewalker]

Originally Posted by nycdweller »

Firewalker, what exactly do you look for when watching volume? Thank you.

Preferably a slow and gradual dry-up, after which volume "explodes" and price reacts. It doesn't always work out that nice, as dbphoenix mentioned and Bearbull illustrated, but I prefer to wait for something clear-cut.