Simulated Trades and Analysis

[pavilion103]

Yes, I know what you mean, I need a few more hours in a day.

Have you noticed that the harder you work at it the luckier you get

Tell me about it! I come home from work and try to set aside a solid 3 hours a few nights a week. Even at work I'm on the forums looking at stuff!
I started with a 5 year rough plan. Working towards that! Slowly slowly.

 

[pavilion103]

I have a few more. Would love some feedback on these also.

STX - note there IS resistance further to the left of the chart back in July/Aug 2011. This volume, however is not close to the magnitude of the recent ultra high volume bar.

I'm finding difficulty working out where to place the entry/stop to get a suitable R:R and maximise my potential return.




BRM - volume has built up consistently. It has pushed through a high volume marker on significant ultra high volume. Today is a no supply bar. Maybe it could be wise to wait this one out just a little longer. If I was to enter now I'd have a buy-stop above the high of today/yesterday.



MAH - This one has managed to push higher and now looks like a small consolidation on decreasing volume, possibly pausing in preparation for another move. No overhead resistance. I'm not sure if that reversal/upthrust at the top is supposed to scare me off though.

 

[Trembling Hand]

I'm finding difficulty working out where to place the entry/stop to get a suitable R:R and maximise my potential return.

A quick scroll up to most of your other charts show you are picking patterns where the stocks are approaching previous resistance or have with considerable work popped a bit. So you are playing classic breakouts.

From my perspective they always offer either a poor R:R or if you place tight stops under a significant recent bar a poor win rate, small stops get hit more often, especially as the ranges expand considering the set up.

Again from my perspective playing trades that move off bases or pullbacks allow much more practical set ups (ie. you can actually make money over 100 trades). You have three outcomes,

1. You get stopped out.
2. You get a run up to old highs/resistance. And therefore get to move your stop to BE.
3. You get a run up to old highs/resistance that then turns into a breakout trade which you then have a great R:R

 

[motorway]

A quick scroll up to most of your other charts show you are picking patterns where the stocks are approaching previous resistance or have with considerable work popped a bit. So you are playing classic breakouts.

From my perspective they always offer either a poor R:R or if you place tight stops under a significant recent bar a poor win rate, small stops get hit more often, especially as the ranges expand considering the set up.

Again from my perspective playing trades that move off bases or pullbacks allow much more practical set ups (ie. you can actually make money over 100 trades). You have three outcomes,

1. You get stopped out.
2. You get a run up to old highs/resistance. And therefore get to move your stop to BE.
3. You get a run up to old highs/resistance that then turns into a breakout trade which you then have a great R:R

good insight !

Pav.......consider where is the SPRINGBOARD !



Motorway

 

[tech/a]

A quick scroll up to most of your other charts show you are picking patterns where the stocks are approaching previous resistance or have with considerable work popped a bit. So you are playing classic breakouts.

From my perspective they always offer either a poor R:R or if you place tight stops under a significant recent bar a poor win rate, small stops get hit more often, especially as the ranges expand considering the set up.

Again from my perspective playing trades that move off bases or pullbacks allow much more practical set ups (ie. you can actually make money over 100 trades). You have three outcomes,

1. You get stopped out.
2. You get a run up to old highs/resistance. And therefore get to move your stop to BE.
3. You get a run up to old highs/resistance that then turns into a breakout trade which you then have a great R:R

good insight !

Pav.......consider where is the SPRINGBOARD !



Motorway

Excellent.

 

[pavilion103]

A quick scroll up to most of your other charts show you are picking patterns where the stocks are approaching previous resistance or have with considerable work popped a bit. So you are playing classic breakouts.

From my perspective they always offer either a poor R:R or if you place tight stops under a significant recent bar a poor win rate, small stops get hit more often, especially as the ranges expand considering the set up.

Again from my perspective playing trades that move off bases or pullbacks allow much more practical set ups (ie. you can actually make money over 100 trades). You have three outcomes,

1. You get stopped out.
2. You get a run up to old highs/resistance. And therefore get to move your stop to BE.
3. You get a run up to old highs/resistance that then turns into a breakout trade which you then have a great R:R

Yeh I have fallen back into that trap upon reflection.

I will continue to test my ideas as I go.

I definitely want the majority of my trades to be on the springboard and return a strong R:R. I will also look for those opportunities where breakouts occur on good absorption volume and establish some more concrete entry rules for those.

 

[Boggo]

A half dozen from tonights data where I wouldn't mind seeing you guys apply a bit of VSA analysis to.

BND - CCU - GBG - HGO - PEK - NFE.

Nothing too shabby in that lot really Pav, PEK is the winner today though.

 

[pavilion103]

Nothing too shabby in that lot really Pav, PEK is the winner today though.

Yeh I saw that. PEK was a great one!

Did you get on any?

 

[Boggo]

Yeh I saw that. PEK was a great one!

Did you get on any?

Yes, CCU, where you are using VSA as secondary analysis I am using EW, in this case the weekly chart EW analysis is textbook so far

Edit - looks like my order for BND just got filled at the close, had intended to remove that !

Reaching 1.20 area would be nice.

(click to expand)

 

[pavilion103]

I'm looking at the PEK chart now. It's gapped up through strong resistance. I'll be interested to see how this plays out in the following days.

 

[Trembling Hand]

Yeh I have fallen back into that trap upon reflection.

I will continue to test my ideas as I go.

I definitely want the majority of my trades to be on the springboard and return a strong R:R. I will also look for those opportunities where breakouts occur on good absorption volume and establish some more concrete entry rules for those.

An under looked process in someone trying to learn TA/trading is losing the forest for the trees as far as how the market unfolds over time. You can spend your 10,000 hours looking at charts of breakouts an/or whatever setups but by the nature of hunting for these you are building in a survivorship bias. You will look at a chart like SYR for example and think "arh thats what I want". Then go about finding that pattern and endless explaining the why's it did this and why's it didn't do that. Rationising every move, every bar maybe without context.

But the bottom line or maybe the starting point is timing. The time as to when to risk money. Spending sometime on working for example the process of a chart like SYR compared to or within the context of what was happening to the broader market. With this one for me December action was telling given the overall market context.

Just a fell thoughts.

 

[pavilion103]

An under looked process in someone trying to learn TA/trading is losing the forest for the trees as far as how the market unfolds over time. You can spend your 10,000 hours looking at charts of breakouts an/or whatever setups but by the nature of hunting for these you are building in a survivorship bias. You will look at a chart like SYR for example and think "arh thats what I want". Then go about finding that pattern and endless explaining the why's it did this and why's it didn't do that. Rationising every move, every bar maybe without context.

But the bottom line or maybe the starting point is timing. The time as to when to risk money. Spending sometime on working for example the process of a chart like SYR compared to or within the context of what was happening to the broader market. With this one for me December action was telling given the overall market context.

Just a fell thoughts.

I'm not sure what you mean with that last part Trembling Hand. Are you referring to when the December market was falling sharply but the stock was not (relative strength)? Please correct me if I'm wrong.

I must admit that I do see charts like that one and think, all I need is a couple of those wins here and there to make my trading truly profitable. It seems particularly in my testing and simulation that the 5-7R trades come along every now and then and really add to the profitability.

Keep in mind that I am very much still learning and more than open to input from others, in fact I strongly welcome it and ask for it. I am an open book and well aware that the input from yourself and other more experienced traders is very valuable for me at this stage of my development.

 

[motorway]

STX - note there IS resistance further to the left of the chart back in July/Aug 2011. This volume, however is not close to the magnitude of the recent ultra high volume bar.

You are looking at Support and Resistance like everyone else.

Not like Wyckoff

what is more important
something that happens in a moment
or something that perseveres through time for an amount of time ?

The collapse of say the Gilliard Gov or of the Roman Empire ?

You correctly looking at the upthrust high

But where is support and resistance ?

What of the many bars to the right of that bar
Where price traded for a significant period of time ?

Why was the behavior there not more Important and any change originating out of that area more important ?

Later Wyckoff refers to this as the "Creek".. The flow of supply through time.

Old highs and lows are only just that.
Sure they are important points to gauge.

But they are not where the Spring Board IS or to be found.

Motorway

 

[pavilion103]

Thanks Motorway,

Are you saying that I should be placing higher consideration on congestion zones, rather than one-off ultra high volume bars, at prices where there has been little trading (other than that one-off bar)?

And when price trades near/in these congestion zoned that is when I should really be attentive and look at the spread and volume in terms of VSA to see how the stock behaves at these pivotal points?

 

[Boggo]

I'm looking at the PEK chart now. It's gapped up through strong resistance. I'll be interested to see how this plays out in the following days.

Some interest in PEK again this morning after yesterdays sell off.

RED and ZYL on the close watch list now too.

 

[Trembling Hand]

I'm not sure what you mean with that last part Trembling Hand. Are you referring to when the December market was falling sharply but the stock was not (relative strength)? Please correct me if I'm wrong.

Yeah not a well put point of veiw on my behalf, still a little foggy :silly:

Just trying to point out that any chart outcome has as much to do with the overall market as much as the individual setup.

Don't spend all your time learning/looking for chart setups and ignoring how markets as a whole move. If you can understand where we are at as a market, to use the current vernacular risk on or risk off, you will develop a far greater understanding of when to start risking money on trades and when to be patient, when to chase and when to wait for pull backs, when to let a profit run and when to take what you can get.

Without this understanding you will end up buying breakouts just as they turn to failed breakouts and you will be buying support just as they are about to turn into failed support.

IMO.

 

[pavilion103]

Yeah not a well put point of veiw on my behalf, still a little foggy :silly:

Just trying to point out that any chart outcome has as much to do with the overall market as much as the individual setup.

Don't spend all your time learning/looking for chart setups and ignoring how markets as a whole move. If you can understand where we are at as a market, to use the current vernacular risk on or risk off, you will develop a far greater understanding of when to start risking money on trades and when to be patient, when to chase and when to wait for pull backs, when to let a profit run and when to take what you can get.

Without this understanding you will end up buying breakouts just as they turn to failed breakouts and you will be buying support just as they are about to turn into failed support.

IMO.

Very good point.

I am currently reading and re-rading Wyckoff. He talks a lot about the relative strength of a stock compared to the overall market/index.
I guess not even just the relative strengt, but it's important to consider where the market is at and how it is behaving.

This is my process for identifying stocks:

1. Load up chart of XAO (add to any analysis I have on it).
2. Undertake my scans and any other sources for charts to look at at night.
3. Add any interesting charts to watchlist and look over the ones I am analysing on my watch lits presently.
4. If it looks good:
a) consider it's relative strength to the XAO
b) ensure the weekly chart also looks favourable
c) ensure I can get good R:R from a potential trade.

I do fall into the trap of taking shortcuts on nights when I'm pressed for time. It's best if I just don't trade if I don't follow my process.


I think I'm like a house at the moment. I've poured the concrete, laid the frames but am just adding a brick at a time. I'm heading in the right direction but just need to make some of these principles more solid in my psychy. It's easy for me to go back to buying around a breakout area and looking at simple support and resistance, but I know that the more Wyckoff I read, the better I get. It isn't so much about learning new material,but drumming in the stuff I've already read.

 

[motorway]

In looking at relative strength

It is not using ratios and look back periods .
It is looking at what is being bought in weakness.
what is being sold into strength .


On congestion .. consider what does a trend emerge from ?
What does a trend dissipate into to.

What is your task ?


Wyckoff is about the method... So do not neglect the figure chart studies
EVEN if you never use a Figure chart !


what does he say

The most valuable feature of Figure Charts.
It is in these horizontal formations, or congestion areas, on the figure
chart that we find the greatest aid: (a) in determining how far a stock should
go; (b) when it meets opposition, viz., when it has about reached the end of
its move; and with the help of the vertical chart (c) determining the trend,
and (d) when a stock is on the springboard.

The most valuable feature is not TOPS and BOTTOMS
It is the ZONES of congestion. Because that is where trends start !

The figure chart will display congestion like no other chart.
That is why he uses it.

But that is not the point. The point is no matter what , the congestion areas are very important. Does not matter how you look at the market or what you are using to look at it.

Consider the difference between EFFORT and CAUSE.

Effort is volume , the amount of volume. Its gives a heads up at turning points !
Cause is the driver of trends. The figure chart changes direction every time demand or supply is exhausted.That demand and supply is exhausted ,No matter what the volume , is what matters .

A wall falls over when the forces holding it up are exhausted.
The amount of force at any time does not matter.
What matters is that there is Exhaustion.

Identify that and you know the wall will collapse.

Effort can never identify Cause
and without a Cause there are NO TRENDS.

A cause is tied to this idea of Exhaustion



Consider in a congestion zone
demand and supply are balanced

Each swing up and down is momentarily exhausting one and then the other .
So given an aggregate of such swings ? Given a congestion zone ?

==>Many things start happening.

And then it is time to watch EFFORT.

But the congestion zone is important.
Because that is where the trend is born
Where the Springboard is to be identified.


Not Tops and Bottoms.

Motorway

 

[motorway]

Consider Wyckoff's continual use of the present tense

when it meets opposition

When price becomes congested

THAT is SUPPORT or RESISTANCE.

When price leaves congestion

That is overcoming Support or resistance.

Lines you may draw ?

Are drawn by you. and are not "internal" to the market itself.

Motorway

 

[pavilion103]

Thanks for taking the time again to post.

A lot to digest there.

As I said, I am reading and re-reading the Wyckoff course. This is the hard work that is required.

It helps to have people looking at my analysis and pointing this out.