The Wyckoff Method

[Trembling Hand]

Sim trade it
DON'T trade straight off the bat!

Just to double up. I was only ever recommending you SIM Pav. You cannot learn while losing $20 a tick!!

The idea is to expose yourself to as many real time examples in the shortest possible time to gain experience. No need to lose any more than a few bucks a month on live data. That is all.

 

[pavilion103]

Just to double up. I was only ever recommending you SIM Pav. You cannot learn while losing $20 a tick!!

The idea is to expose yourself to as many real time examples in the shortest possible time to gain experience. No need to lose any more than a few bucks a month on live data. That is all.

No worries mate. Sounds good.

 

[pavilion103]

Read it carefully. You have a series of actions that has put the stock into a bullish position. All that is the context.

If that previous action has absorbed supply ?

The Climax , The Shakeout , etc.... He then makes the point then that this rally "on comparatively light volume implies a scarcity of offerings" Confirming the previous indications of a change from weakness to strength by breaking the downward stride.

breaking the downward stride

Now look at this rally. IS it braking resistance ? Is it a breakout ?
No ! Would you expect it to gather a quick following. What about all the lagging indications ? How many bars ? Not enough to create a pattern , or change an indicator. And way below overhead resistance.

Would you not want to see this rally on low volume ?
If there is no likelihood of buyers following this small wave ?
What would volume signify ?

SUPPLY... You have no defined uptrend. Many would say it is in a down trend.
many would expect selling to occur and resume.

But we see small volume on that bar marked "5" after the two previous bars that "5" defines as Absorption and then what of the next down bar closing on the high ? "6" it is unmarked ... Would you say lack of supply here ?

He is reading the action as like a film. he makes definitions that the subsequent action confirms . If this is buying and absorbing of SUPPLY. Then that first rally will be low volume, There is no following by buyers and you are looking for signs the selling is finished. So low volume.

Now at the point where you expect lagging indications to be followed ?
When it does breakthrough the overhead resistance ?

Then you see volume. huge relative volume.
But the price action just keeps powering through.

Motorway

Thanks Motorway, I knew you'd be a huge help.

Those highlighted points stand out to me.

I hadn't considered the fact that the stock won't get a public following until there is already somewhat of an established up trend.

I wrote your notes on that page of my Wyckoff book. Will help me nail this home as I continue to review. Thanks mate.

 

[pavilion103]

Does anyone here use/construct a Wave Chart as illustrated in Section 22M of the Wyckoff course.

I'm interested to know the depth that people use them.

Or is this just a very common sense thing which becomes second nature over time?

 

[joea]

I was having a look around the other day for direction changes in relation to patterns, and come across this
article by Tim Ord.

Basically he shows some rules he developed from Wyckoff.
I thought somebody maybe interested! Part 1.

http://www.tradingmarkets.com/.site/stocks/how_to/articles/-76494.cfm

While I am at it, I purchased a YTE (May/June) magazine because of the articles in it. Thought some beginners may browse it next time they are in the newsagent!
Louise Bedford "The 8 habits of highly effective traders".
Traders Story from Alan Liao who suggests 4 books to read, and his comments on seminars and courses.
Larry Williams
An elderly lady Dawn Bolten-Smith (Don't Fight the Tape) She selects stocks to watch in the future.
Interesting point of it all is the same points keep getting repeated time and time again.
###This is not a promotion of YTE magazine as I buy about one every two years***

joea

 

[Greynomad99]

Not a lot going on with this thread but it looks like a good place to put my post.

I occasionally mention Wyckoff chart patterns in my analysis and as not many are conversant with Wyckoff I thought a short video (a basic overview) might be of interest to some. However, as it is a complex subject and there doesn't seem to have been a post on this thread since Adam played fullback for Jerusalem, I'm not expecting many to view it.

Video - A brief explanation of Wyckoff patterns - Robert Norman Share Charting