[Head2k]

Db posted line charts on more occasions, I believe this is the last one. You might want to check also some preceding and subsequent posts in that thread for some context.

Use midpont or closing price of each bar to construct the line. The bar interval doesn't matter, but it should be small enough so there are not only 10 or 20 bars on the chart. Remember that this is merely an exercise which should help you change the way you think, so don't bother with questions such as whether 5 or 30 or whatever. The interval should be just somewhat proportional to the period you watch.

And by the way. This is not Gringo's thread so I believe there is no need for apologies for hijacking, but on the other hand, it is a specific EOD thread, and general questions should be more likely placed here. Assuming you have already read at least the stickies in the Wyckoff forum.

[BlowFish]

I am not sure of whether this will help MRW (I guess it depends on your background) but a chart is just a method of displaying a sampling of the price data. So by selecting an hourly line on close chart for example you are sampling the continuous price data once per hour and displaying that value. Everything else is discarded. Choosing how you sample the data might allow you to see certain things with greater ease.

[Gringo]

Hi MRW,

Feel free to post whatever and whenever you like. We're all here to get better. Heak2k is right it's our thread here and not personally mine.

[DbPhoenix]

Originally Posted by MRW »

Ok, with apologies again to Gringo, DB, would these line charts be then just a line of closing price for, say, a 5 or 30 or whatever time period?
Or would these be like a tick chart with every trade shown?
Perhaps something like the dot/scatter chart you had up?

Come to think of it, this is probably an unimportnt question to ask - all that would matter, as you've just said, is the flow of prices, so the chart could be constructed any way you'd like.

Having said that, it would be nice to see an example if you'd like to post one!

A line chart is suggested only because the usual charting sites don't offer tick charts. And even some charting programs don't offer the tick option unless you pay extra for it. But a line chart does nothing except connect the price points with a line. If you've never seen a tick chart, I'll be happy to post one, but since none of this really has anything to do with EOD trading, I'd rather this particular arc be discussed in another thread.

Wycoff, of course, did not maintain intraday bar charts. How could he? But then maintaining intraday bar charts is a relatively new phenomenon. Unless he was scalping, he'd find his spot on daily charts, then monitor the intraday action in order to get as close as possible to the point where the stock was "ready" to move and where risk would be minimized (this is something of an oversimplification, but all of this is addressed elsewhere in the Forum), but he wouldn't be using charts; he'd be using P&F, or just keeping track in his head.

(As a sidenote, this is not to say that there's anything inherently superior to using P&F -- or Level II or T&S -- intraday rather than charts, rather that maintaining intraday charts manually in real time is an impossibiliity. Granted there are LII and T&S people who maintain that their approach is more "pure" than charts, but if you want pure, try keeping track of support and resistance on the back of an envelope, which is what many traders did back then.)

In other words, he'd know, as in the case of JPM, that 25.5 was important. If he was going to take his position intraday, he'd then watch what traders did when price approached that level. He'd note where price was straining to advance. He'd watch the volume to see where the balance between buying pressure and selling pressure lay, in effect maintaining a P&F chart in his head. He'd then take his position just under that point where price kept hitting what atto calls "a wall". The idea of waiting for the clock to tick over 5 minutes or 15 minutes before he opened his position would have seemed ludicrous to him, much less wait an hour. What would be the purpose? There is, after all, no "close" during the day, rather a continuous flow of trading activity and price movement.

So why didn't Wyckoff use line charts rather than bar charts for his daily record-keeping? They certainly would have been simpler and faster. But there is a lot of information contained within that daily bar. If you're listening to the market's story, each bar will tell you something of the balance of power between buyers and sellers and how hard each of them tried to advance price or pull it back (contrary to what has been posted elsewhere, it won't tell you anything about activity; the volume bar is responsible for that; it does tell you something, however, about power and desire, albeit only within that particular interval; string those intervals together and you have a continuing story). Wyckoff, however, understood the inescapable fact of continuous price flow. When he looked at a bar, he saw not a bar as a finished product but the waves and currents and eddies of buying and selling pressure that created the bar. If you want to be fanciful, it was not a stick of dead wood with a bump on it here and there but rather a "flash" stick. The bar, for him, was nothing more than a summary of what buyers and sellers did to create it, nor did it have any particular importance beyond its place in the continuous flow of trading activity and price movement. As long as one is sensitive to this flow and in synch with it, he can apply W's approach to his trading without using bars at all, or even charts.

Since intraday bar charts have been around for a generation, those who are less than middle-aged may have difficulty seeing price movement in any other way. Line charts are merely a bridge to the realm of continuous price movement. Your charting program may provide several options -- line on close or open or high or low or a high/low average or a high/low/close average or whatever -- but which you choose is largely irrelevant, including the interval on which the line is based: tick, minute, hour, and so forth. To attach too much importance to how the line is plotted is to generate the same mystique and pseudo-importance that is attached to the bar.

It's not about jogging from side to side for five minutes or fifteen minutes or an hour then jumping ahead and running side to side for another five or fifteen minutes or hour. It's about putting one foot in front of the other, again and again, maybe forward, maybe angling this way or that, maybe turning around and returning to the starting point, but always moving, always one foot in front of the other, sometimes slower, sometimes faster, but always moving.

[MRW]

Thank you once again, DB - and thanks to you all as well, Head2k, BlowFish, and Gringo!

[DbPhoenix]

Originally Posted by Gringo »

JPM:
27.18 is short. Stop loss 28
Take 1/3 profit 25.5

I am looking towards 20 as the possible ultimate target.

So did you take your 1/3 profit at 25.5?

[Gringo]

Hi,

Below is QQQQ chart of 60 min bar interval for better correlation with traders here who use futures. Looking at this one keeps me informed about possible S/R and to keep an eye on reversal or continuation.

Basically, boxes are drawn in tandem (more or less) with DB's NQ chart so that I can better follow what's being talked about in the chat room.

29.5 QQQQ = 1200 NQ (fat grey dotted line)

[Gringo]

Originally Posted by Gringo »

Daily is somewhat confusing for me. I see lower highs and drew a demand line as well. I am taking lower highs to be a sign of weakness and am perceiving (guessing) price to not reach the R around 98 area. This to me is implying that 90 - 98 range as the place to initiate shorts and more specifically 95 to be the point to look for as a daily box has resistance around there. 90 is the midpoint from the weekly chart and could provide resistance as well.

I wrote the above a few days back in this same thread while analyzing AAPL as a possible short candidate.

Now I am amazed at how AAPL hit precisely 95 and reversed. I am also amazed at how JPM was also jumping between S/R lines that were drawn in advance from the boxes. Is this magic or coincidence? Or is this really how better traders end up making money while the rest of us dwell in mediocrity?

There's a fountain of wealth within these Wyckoff Forum threads and I sure am glad to have found it.