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Old 03-23-2012, 09:53 PM   #2049

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re: Point and Figure Charting: ARCHIVE

I've been thinking about this. I trade spot forex on 20 minute charts mostly day and swing trading. I still haven't settled on a box size but here are my thoughts. Average true range over a big sample might be a help in determining box size. What we want is for our box size to do two things:

1 - show accurate buying and selling waves
2 - show coiling during accumulation/distribution areas that allow us to accurately predict the extent of a price move.

If you determine on your chart (whatever time frame) how wide an average accumulation/distribution area is you would want your box size to be below 1/3 of this distance (maybe 1/4?). If you can determine how big a non-swing generally is (i.e. a price move you consider to be noise rather than a legitimate leg up or down) you would want your box size to be greater than 1/3 of this move size. Obviously its a balancing act but we want to balance removing noise while showing coiling.

Another approach might be to mark out a bunch of trading ranges on your time frame and instrument and try out a bunch of different box sizes until you find the one that seems to project the distance of a price move the best.

I've been busy studying other aspects of the Wyckoff method but if I come up with something more definitive I'll post it in this thread.
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Old 03-23-2012, 10:33 PM   #2050

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re: Point and Figure Charting: ARCHIVE

A proper P&F chart .. catches all the changes of the "Market Price"

So what is the Market Price ?

It is not the movement from Bid to Ask and Back.

That is the necessary Bid Ask Bounce Through the Market Price

A chart catching the BID ASK Bounce is a valid chart.
But not under the proper definition of a P&F chart which always removes Fluctuations that are not of the Market Price.

Such a chart looks like a P&F chart but is better called a Tape Reading Chart.
It will have extensive sideways movement ( sometimes you need to use with very low priced stocks )

Your aim is to pick up the flow of information and recognize
Esp Asymmetrical Information ..
That changes the "Market Price"

This does exist at the BID Ask Bounce BUT along with a lot of noise

A proper P&F chart will filter out the necessary Bouncing through the changes of the Market Price (The market price of interest to YOU.)

A good start is to use 2x the Bid Ask Spread, 5x and 10x ( then 20 , 50 , 100 etc )

Then examine the chart to see if it achieving its and your purpose.

When you double the box Size
everything will change detail by on average a factor of 4 ( 2^2)
Time Volume Fluctuations etc ( THAT ARE FILLING YOU BOXES )

Everything ! ( except for the non random aspects )
( it is interesting to keep say these three charts and note divergence )

This is with One Box reversal charts. which is where you should scale your chart from.
then use the three box reversal with each of the Box sizes in coordination )

EG So you decide to use 5X the spread

So your charts are a 5 X 1 , 5 x 3

and if you then want the 10 x 1 , 10 X 3 etc

Time and Volume will look after themselves
Both will scale with resolution

So do not scale your chart with Time or Volume (IMO)
Scale it with size of moves and the structure of the chart .. ( Hint -->The ratio of Horizontal to vertical)

Then you can add and work with Time and Volume ( recommended esp Time )
to the extent you want..

You will only learn by doing
and a lot of theoretical things will then make sense.

P&F and Tape Reading Charts have a long history

With High Priced Stocks etc
some thought can be given to using LOG charts

defining the Bid Ask in multiples of %
( But no good at all for low priced securities which need a stepped Scale )

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Old 03-26-2012, 01:09 PM   #2051

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re: Point and Figure Charting: ARCHIVE

Ok, thanks for the info guys. I will work with that for a while.
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Old 04-10-2012, 10:44 PM   #2052

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Re: Trading Software

Stockcharts.com doesn't give a true Wyckoff PnF chart. I'd be interested to here of those using software that does.
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Old 04-11-2012, 01:32 PM   #2053

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What is the Best Way to Identify The Wyckoff Phases

what is the best way to identify The wyckoff phases ?
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Old 04-11-2012, 09:45 PM   #2054

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Re: What is the Best Way to Identify The Wyckoff Phases

Have you read the original Wyckoff Course?

Last edited by DbPhoenix; 03-08-2013 at 05:05 PM.
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Old 04-13-2012, 10:29 AM   #2055

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Anybody Currently Trading with Wyckoff Methods?

Hello everyone,

I have noticed that most of the work published in this blog (by DB et al) on wyckoff trading was published back in 2008-2009 and there has not been much activity over the last 2 years.

I am interested in the method but have a basic question; Is this methodlogy aplicable today, in 2012 and if so in which markets?

I have often read that the principles of supply/demand will always prevail but is this true, with all the automatic and algorythmic trading out there?

I am very interested in hearing from those of you who are currently trading using wyckoff methods.
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Old 04-13-2012, 07:33 PM   #2056

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Re: Anybody Currently Trading with Wyckoff Methods?

I trade using Wyckoff principles in the forex market. These principles work as much today as they did 100 years ago. VSA which is a derivative method of trading is gaining popularity and has many successful practitioners.

As for markets - it works in all markets with sufficient liquidity which represents interest from the composite operator. Basically stay away from penny stocks and instruments which have been trending sideways for an extremely long time.
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