The Wyckoff Method

Stock Jock · 14 March 2011

motorway said:
yes and no.
https://wyckoffstockmarketinstitute...s_id=9&zenid=ea3b54f758b0b0e45c7468c0f08b45f7

motorway

Yes. I see. The formula is quite simple for the OP Index. That might be quite difficult to make as an indicator in most trading platforms, because it involves summing up the volumes of intraday activity and displaying them on a daily chart. Both are different time frames even though with computerized data its possible to do this with all the 1 minute data for a day, whereas he only took a sample of five volumes.

I'll take a look at the others Even's lectures, but what do you think about the similarities I've mentioned of the others items on my list? Your reply of "yes and no" is a little ambiguous for the entire list.

motorway · 14 March 2011

Stock Jock said:
Yes. I see. The formula is quite simple for the OP Index. That might be quite difficult to make as an indicator in most trading platforms, because it involves summing up the volumes of intraday activity and displaying them on a daily chart. Both are different time frames even though with computerized data its possible to do this with all the 1 minute data for a day, whereas he only took a sample of five volumes.

I'll take a look at the others Even's lectures, but what do you think about the similarities I've mentioned of the others items on my list? Your reply of "yes and no" is a little ambiguous for the entire list.

Maybe this gets close==>

http://www.willain.com/

http://www.willain.com/content/EffectiveVolume.html

http://www.effectivevolume.eu/EV.html

Say a bit more later

Motorway

Stock Jock · 14 March 2011

Thanks for the links. This is interesting.

The Effective Volume is calculated by using a formula which is a modified version of Larry Williams' A/D (Accumulation/Distribution) formula.

tech/a · 14 March 2011

I like Todd Kreugers stuff

Stock Jock · 14 March 2011

tech/a said:
I like Todd Kreugers stuff

There's a few other very knowledgeble individuals who follow in the footsteps of Richard D. Wyckoff, but their trading analysis and strategies are somewhat different. Some forum members, in this forum and other forums, get them confused as being Wyckoff's method. Motorway has the best thread on Wyckoff that I've seen.

Tom Williams
Volume Spread Analysis (VSA)

Todd Kreugers
Wyckoff Candle Volume Analysis (WCVA)

Tim Ord
Science of Price and Volume

motorway · 14 March 2011

Stock Jock said:
Your reply of "yes and no" is a little ambiguous for the entire list.

Imo it has to do with a few things
One is Interpretation of Volume & price action

Convergent , Divergent ...yes

But it is harmonious and inharmonious where Wyckoff analysis is different to what you tend to see with RSI or OBV etc. Or volume analysis. or most else...

Note the name.. optimism / pessimism ( not accumulation/Distribution )

A new high in the OP index ( and it is not seen as an indicator but a volume index. It trends has support & resistance zones etc)

Is not a "Buy" signal if it is inharmonious with the instrument ( that is both might well be making new highs but at a different times ) this is a sign of a possible turning point.

Also the OP index is built from the intra day waves of buying and selling and not fixed time intervals and technometer and force indexes too..

This different interpretation of Volume etc That is seen in Wyckoff is because of a particular defintion of what a Trend is.

Yes we have trend lines . series of highs and lows etc
(or SOS and LPS)

But the particular definition that matters in relation to Wyckoff is this

The Trend is the line of least resistance.. Ok what does this mean ?

Where do we see this line on the chart ? ( careful .

An interesting way of looking at Volume was Paul Levine's Midas

http://www.stocksharepublishing.com/products/premPlugin_MIDAS.html
tried to do away with the static time frames..

Another interesting Volume indicator is
Negative volume index and Positive volume index.

POINT IS THIS Are you looking back or forward ?
You maybe read volume or an indicator very different depending on your answer.

Accumulation versus Optimism ? ( They are not the same )
Distribution versus pessimism ?

Maybe A falling OBV in a range could be a buy signal ? ( absorption ? )

Motorway

Garpal Gumnut · 14 March 2011

I do like the Wykoff Method.

It makes so much sense re market action and the drivers of buyers and sellers.

gg

Stock Jock · 15 March 2011

motorway said:
Maybe this gets close==>

http://www.willain.com/

http://www.willain.com/content/EffectiveVolume.html

http://www.effectivevolume.eu/EV.html

From the links you gave me, I found this at http://www.effectivevolume.eu/

The Effective Volume (EV) method is first and foremost a statistical method for detecting institutional accumulation/distribution at the stock level.

Which part of my question was your answer directed to?

The Effectivevolume web site. How to monitor insiders and institutional investors.

I'm not sure what you wanted me to find at this website. This seems to be an entirely different trading method. I'd like to stick with Wyckoff.

motorway · 15 March 2011

Stock Jock said:
From the links you gave me, I found this at http://www.effectivevolume.eu/
I'm not sure what you wanted me to find at this website. This seems to be an entirely different trading method. I'd like to stick with Wyckoff.

You were asking about indicators ==>I

I'm taking a guess at the common indicator equivalents to the SMI indicators and I would appreciate anyone else's input on this.

So I was pointing you to indicators for you to consider

Indicators would have to cover these three areas

demand supply
cause and effect
effort and result

OK consider Willain's active boundaries

There is a link here to cause and effect

http://www.willain.com/content/ActiveBoundaries.html

But yes it is not wyckoff , different yes .

This seems to be an entirely different trading method

I would not say entirely different.. But it is not Wyckoff.

But then neither are

common indicators

.

I'm not sure what you wanted me to find at this website

Idea's to work with.

If you want to go down an indicator path.

Motorway

Stock Jock · 15 March 2011

You are truely the "Oracle of Wyckoff"

joea · 23 November 2011

Hi.
For those interested in Wyckoff, there is a site.
www.readtheticker.com
On the home page, down the bottom, click, indicator library.
In the library you have:
16 the wyckoff method
19 the wyckoff method improved 1
20 the wyckoff method improved 2

In the book section it has books associated with Wyckoff.

just a thought
joea

Wysiwyg · 23 November 2011

Thanks for that Joea. On the left side of the page at this website is a scanned copy of The Game in Wall Street. Motorway posted this before somewhere but I can't find it.

With the new book out by David Weis, it is available here apparently while elsewhere they say it won't be available till 2012. Before purchase I would like to know approximately how much of the book focuses on Wyckoff Waves.

pavilion103 · 25 November 2011

Just wanted to confirm if the David Weis book is in fact available now. It seems strange that it would be

joea · 25 November 2011

pavilion103 said:
Just wanted to confirm if the David Weis book is in fact available now. It seems strange that it would be

pav
As far as I know its only a pre-order.
If you click a book on the site below, it directs you to Amazon.
Says after the 25th Dec.
joea

patchau · 25 November 2011

On ebay in the US. says 4 available.

http://www.ebay.com.au/itm/Trades-H...820?pt=US_Nonfiction_Book&hash=item1c1d42a78c

joea · 18 December 2011

Hi.
Has anybody developed the correct code for Volume Wave similar to attached image?
In Metastock or BullScript.
joea

Timmy · 19 December 2011

joea said:
Hi.
Has anybody developed the correct code for Volume Wave similar to attached image?
In Metastock or BullScript.
joea

Sort of. I use Investor R/T.
I tried to program the 'Volume Wave' indicator but it was too hard (for me).
So I sent an email to Chad at Investor R/T and about 2 minutes later he wrote it and sent it to me.

I have copied your post into these two threads, hopefully you can get some replies re MStock and/or BullCharts:

Can someone please help with Metastock formula?

Bullcharts

joea · 19 December 2011

Timmy said:
So I sent an email to Chad at Investor R/T and about 2 minutes later he wrote it and sent it to me.

Timmy
I can assure you that Chad did not write the code for that indicator in 2 minutes.
It is a complex indicator with a trap in it.
I have the code for both the indicator and the price trend line, but its written in another code type.
I was just wondering if I got a bite.!!
joea

Timmy · 20 December 2011

joea said:
I was just wondering if I got a bite.!!

Bite me.

motorway · 20 December 2011

Richard==>

THE WAVE CHART OF TAPE READINGS was designed and originated by me, in 1916, in connection with my personal operations in the stock market. It is made to provide a condensed picture of every vital development in every stock market session. It gives a graphic representation of the day's tape action which enables us to study the market's behavior at leisure, just as if we were watching the ticker continuously and setting down every essential impression.

Thus, the Wave Chart is an invaluable aid whereby we may detect changes from technical weakness to strength, and vice versa, and so determine the turning points not only of the minor but also of the intermediate swings. Richard D Wyckoff

David==>

"When I first learned about the Wyckoff method it was told to me in hushed tones---almost whispered so no one else could overhear it. It was one of the better kept secrets of the time.Why? It worked. It was not automatic. It was not mumbo-jumbo. It worked thru hard work and study. Making and maintaining hand-made charts was indispensable. For many years, I kept hand-made hourly bar charts of silver, bonds, and soybeans.

By plotting 7 bars per day, I observed 7 x as much behavior as on a daily. (And I kept daily charts by hand.). Later I devised a method for making intraday wave charts of futures and learned a great deal more about volume. How price movement does not unfold in equal units of time---something Wyckoff obviously understood---it unfolds in waves. Price is not distorted by being chopped up into equal units of time but intraday volume is. And so on. The main lesson is to do the work of reading and re-reading parts of the course----especially Chapter 7. Like many who get involved in technical analysis I searched other methods. I was fascinated by Elliott Wave.

Any advantages I gained from knowing EW are tiny compared to knowing Wyckoff. I have dabbled in cycles but only those of the broadest sort encompassing years or decades-- an intellectual pursuit, like building yearly bar charts of cash commodities encompassing 100 years or more, that has little to do with trading. I have few books on market analysis. I am no longer a Seeker. I do not seek new methods as I know what works. I do not seek trades, I find them. David Weis

There is complete Description of Wave Charts in Richard Wyckoff 1931 Course.

I would make this point. Richard Wyckoff was the master of Volume Analysis.
Too many focus on volume to the exclusion of other aspects that are as Important.

There is Price , Time and Volume. All seen in relation to Position.

Note this quote form His 1932 tape reading Course..

"You must always be on the lookout for a change in this immediate trend.
It is likely to change its direction from one to three times in a single session.
This is how you detect the change.

In an up trend, it happens when the selling waves begin to increase in time and distance, or the buying waves shorten.
Either or both will be an indication of the change in the immediate trend."
Richard D. Wyckoff, Tape Reading Course, 1932

Also note a Question he answered in 1912 to a reader in the Magazine of Wallstreet.

The reader was very impressed with VSA and asked about using volume and price like that.

Richard impressed upon him that other vital factors were just as significant and just as Important as Price and Volume.. Especially the time Element.

A proper wave chart even an EOD one is Built from the intra day waves.
To what extent using EOD data will work would depend on how much information is being lost in each particular case. Sometimes it might not matter.
Sometimes it maybe would matter a lot. esp maybe around turning points.

A wave Chart .. Displays The Price ( Spread/range ) , Time ( Duration ) ,Volume and Activity ( Number of transactions ) of each buying and selling wave.

And in as far you understand the market ? YOU WILL THINK IN WAVES.

Motorway

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