If You Can Draw A Straight Line . . .
- Thread starter dbphoenix
- Start date
- Status
My notes the FTSE this morning. This is from my personal journal. I'm going to continue this process until I feel I'm being as objective as I can and maybe being more sensitive to what buyers and sellers are trying to achieve.
I've already noticed a tendency to have a bias. For example yesterday I was convinced the NQ would bounce at 90 or even 80. I then had feelings of frustration at the market not doing what I expected.
Context
Overnight price gradually drifted down from the previous days range to start testing the top of the range between 6560 and 6600.
Observations - First 2 Hours
1. At the open price whipsawed around the 6607 area (previous support). It was noted that even though the action just looked choppy there was a tendency for price to sag and it was gradually making LHâs and LLâs
2. Sellers took the plunge at 8:20 and forced price down for a test of support at 6600, this was an unimpeded journey for sellers with no break of the demand line.
3. On reaching the 6600 support area, buyers took the bull by the horn and violently pushed price back up rapidly to midpoint of the opening congestion area in a couple of minutes..
4. With a retrace back only to the 50% area, buyers look like they are going to push price back out of this area. However even after making a HH, price stalls and is pushed back down decisively with no retraces to the support area of 6600. I imagine there was a lot of break even trades here with buyers thinking they were on the march only to have price come straight back at them.
5. Sellers have now punctured this support area and are now sitting just below it, with no obvious signs of a fight back on the part of buyers apart from a meager test of 6600. Price is now gradually making LHâs and LLâs. There is now no obvious support until the midpoint of 6582.
6. Even though it looked like sellers were about to push price down into no mans land below, buyers resumed their fight but still failing to make much progress with the failure to make gains after making a HH and LL. Seller promptly push it down again, making a LH and LL.
7. Sellers make a new LOD, but this time buyers come in force. Just after 9:30 a the longest single bar in 50 minutes pushes price up. A small retrace and price does not look back until it smashes through 6607 30 minutes later, with no break of the DL and small retraces.
8. Buyers manage to push price right up past the initial congestion area and smash the HOD.
I've already noticed a tendency to have a bias. For example yesterday I was convinced the NQ would bounce at 90 or even 80. I then had feelings of frustration at the market not doing what I expected.
Context
Overnight price gradually drifted down from the previous days range to start testing the top of the range between 6560 and 6600.
Observations - First 2 Hours
1. At the open price whipsawed around the 6607 area (previous support). It was noted that even though the action just looked choppy there was a tendency for price to sag and it was gradually making LHâs and LLâs
2. Sellers took the plunge at 8:20 and forced price down for a test of support at 6600, this was an unimpeded journey for sellers with no break of the demand line.
3. On reaching the 6600 support area, buyers took the bull by the horn and violently pushed price back up rapidly to midpoint of the opening congestion area in a couple of minutes..
4. With a retrace back only to the 50% area, buyers look like they are going to push price back out of this area. However even after making a HH, price stalls and is pushed back down decisively with no retraces to the support area of 6600. I imagine there was a lot of break even trades here with buyers thinking they were on the march only to have price come straight back at them.
5. Sellers have now punctured this support area and are now sitting just below it, with no obvious signs of a fight back on the part of buyers apart from a meager test of 6600. Price is now gradually making LHâs and LLâs. There is now no obvious support until the midpoint of 6582.
6. Even though it looked like sellers were about to push price down into no mans land below, buyers resumed their fight but still failing to make much progress with the failure to make gains after making a HH and LL. Seller promptly push it down again, making a LH and LL.
7. Sellers make a new LOD, but this time buyers come in force. Just after 9:30 a the longest single bar in 50 minutes pushes price up. A small retrace and price does not look back until it smashes through 6607 30 minutes later, with no break of the DL and small retraces.
8. Buyers manage to push price right up past the initial congestion area and smash the HOD.
the point was , having a plan and planing a trade without knowing whats ahead of you is a different ball game.. or is it ?
ofcourse depending on your core plan , and your ability to cope with realtime price action .. and the psychological effects wich may arise
during the action...
l surfing needs experience , knowledge and stability
its not easy to see a price breaking a DL and retracing to the 50%mark without knowing if it gets rejected or not.. wheter u trail your stop towards the level or not.. .. a persons mind can be a tricky b...tch when the heat is on...
I've put together a pdf with all the sections from the Wyckoff course that Db outlined over at TL - Wyckoff Lite.
Unfortunately its just bigger than 1mb so I cant upload it here, and it wont compress below 1mb either.
If anyone would like a copy for their study, pm me with your email address and I will send you a copy.
Here is the table of contents I've put together:
Wyckoff Lite â Method of Tape Reading
Forward - Section 1
Supply and Demand - Section 2
Judging the Market by its own Action - Section 3
Buying and Selling Waves - Section 5
Determining the Trend of the Market - Section 7
Volume Studies - Section 14
The Significance of Trend lines - Section 15
Refinements - Section 21
Stop Orders - Section 23
General Instructions and Cautionary Suggestions - Section 24
Market Philosophy - Section 25
I'll be using this as a basis for study and the threads here and over at TL.
Unfortunately its just bigger than 1mb so I cant upload it here, and it wont compress below 1mb either.
If anyone would like a copy for their study, pm me with your email address and I will send you a copy.
Here is the table of contents I've put together:
Wyckoff Lite â Method of Tape Reading
Forward - Section 1
Supply and Demand - Section 2
Judging the Market by its own Action - Section 3
Buying and Selling Waves - Section 5
Determining the Trend of the Market - Section 7
Volume Studies - Section 14
The Significance of Trend lines - Section 15
Refinements - Section 21
Stop Orders - Section 23
General Instructions and Cautionary Suggestions - Section 24
Market Philosophy - Section 25
I'll be using this as a basis for study and the threads here and over at TL.
I went over to TL to review an old post in the Wyckoff forum, and I saw I had a couple of PM's wondering where I have been and whether I was OK. I am doing well. I closed my long NQ soon after the open on Monday, and I did not trade yesterday.
I am working on an EOD trading plan, and I have been spending a lot of time doing replay on daily and hourly charts of stocks, indexes, and futures. I am leaning heavily toward selecting one, or perhaps a small handful of futures markets to trade for the swings rather than individual stock issues.
When I was day trading stocks, stock selection was not too much of a problem - scan for what was moving in the premkt, and then watch to see what it did after the open. I was only going to own it for a few minutes or maybe even a few hours, but by the end of the day, I had no more care about what it did. Holding a stock overnight, for days, weeks, or even a few months feels different to me. During my replay, I have found times where even large capitalized stocks, like IBM, can have large gaps. If I am long a stock that gaps up, that would be nice. But If I am long a stock that gaps down, that would be not so nice.
Futures, especially the index, energy, and metals futures seem to trade nearly 24 hours. And I would be a small trader - one contract in most cases would be sufficient for now.
I find that when I am doing this part of the process, I do best by avoiding the day to day message board stuff. Besides, I have my Wyckoff course, as well as the Book that Shall not be Named always at hand for reference, so it is more nose to the grindstone for me, at least for the next week or so.
I did read back over the last few pages of posts. One thing I want to say is that DbPhoneix is right: This is work. It is enjoyable work, but to get this method there is work that must be done. I did not just sign in to elitetrader in June and "get this" the next day. I had already had almost a year where nearly the only market related stuff I studied was written by Wyckoff or DbPhoenix. And I spent a lot of time both when I started out and over the last three months in the Wyckoff forum.
If you want a trading plan that is "If price does X, then buy - sell when price does Y," this isn't it. It may appear that way at times, and looking at some of my posts and my charts I know It can seem like that. But looking at a chart that has everything marked and is posted after the activity is completed is not the same as having followed that activity and taken those actions as price was unfolding. This is why DbPhoenix stresses observing, either in real time or by using market replay or scrolling a chart bar by bar, slowly, from left to right.
And I would add that you have to be engaged and thinking and observing with a specific purpose - to learn what traders are doing and why they are doing what they are doing. Your purpose is not to identify where you would buy, where you would sell, where you would short, where you would cover. That all comes about as a result of you first coming to understand what and why price moves as it does, especially as it encounters areas of activity that had been significant in the past, i.e. at the highs and lows of various movements.
I am working on an EOD trading plan, and I have been spending a lot of time doing replay on daily and hourly charts of stocks, indexes, and futures. I am leaning heavily toward selecting one, or perhaps a small handful of futures markets to trade for the swings rather than individual stock issues.
When I was day trading stocks, stock selection was not too much of a problem - scan for what was moving in the premkt, and then watch to see what it did after the open. I was only going to own it for a few minutes or maybe even a few hours, but by the end of the day, I had no more care about what it did. Holding a stock overnight, for days, weeks, or even a few months feels different to me. During my replay, I have found times where even large capitalized stocks, like IBM, can have large gaps. If I am long a stock that gaps up, that would be nice. But If I am long a stock that gaps down, that would be not so nice.
Futures, especially the index, energy, and metals futures seem to trade nearly 24 hours. And I would be a small trader - one contract in most cases would be sufficient for now.
I find that when I am doing this part of the process, I do best by avoiding the day to day message board stuff. Besides, I have my Wyckoff course, as well as the Book that Shall not be Named always at hand for reference, so it is more nose to the grindstone for me, at least for the next week or so.
I did read back over the last few pages of posts. One thing I want to say is that DbPhoneix is right: This is work. It is enjoyable work, but to get this method there is work that must be done. I did not just sign in to elitetrader in June and "get this" the next day. I had already had almost a year where nearly the only market related stuff I studied was written by Wyckoff or DbPhoenix. And I spent a lot of time both when I started out and over the last three months in the Wyckoff forum.
If you want a trading plan that is "If price does X, then buy - sell when price does Y," this isn't it. It may appear that way at times, and looking at some of my posts and my charts I know It can seem like that. But looking at a chart that has everything marked and is posted after the activity is completed is not the same as having followed that activity and taken those actions as price was unfolding. This is why DbPhoenix stresses observing, either in real time or by using market replay or scrolling a chart bar by bar, slowly, from left to right.
And I would add that you have to be engaged and thinking and observing with a specific purpose - to learn what traders are doing and why they are doing what they are doing. Your purpose is not to identify where you would buy, where you would sell, where you would short, where you would cover. That all comes about as a result of you first coming to understand what and why price moves as it does, especially as it encounters areas of activity that had been significant in the past, i.e. at the highs and lows of various movements.
Hi Db,
In the 1930 analysis by W, Dec 30 is given as a day for entry. Could Dec 24 be considered a buy entry as well?
I do understand the Dec 30 entry and how it's better than Dec 24th entry. However, in real time the Dec 24th comes earlier and we don't know whether the lower entry of Dec 30th with more confirmation of supply exhaustion was to come in the future. Price could very well have gone higher from Dec 24 onward which was not the case.
What I am trying to determine is that why W bypassed Dec 24, and why I am seeing it as a viable entry. Am I not waiting for supply to exhaust? or is it simply a matter of personal preference and risk tolerance to let price drift a bit lower? Could it be my lack of reliance on volume that's the missing link?
Thank you.
Gringo
p.s. This issue did crop up in the SLV analysis that I was doing in this thread. The entry was a bit premature and had to deal with lower drift in price before serious demand showed up. So the decision to engage and when to engage is as pertinent today as it was at the time of the Great Depression.
In the 1930 analysis by W, Dec 30 is given as a day for entry. Could Dec 24 be considered a buy entry as well?
I do understand the Dec 30 entry and how it's better than Dec 24th entry. However, in real time the Dec 24th comes earlier and we don't know whether the lower entry of Dec 30th with more confirmation of supply exhaustion was to come in the future. Price could very well have gone higher from Dec 24 onward which was not the case.
What I am trying to determine is that why W bypassed Dec 24, and why I am seeing it as a viable entry. Am I not waiting for supply to exhaust? or is it simply a matter of personal preference and risk tolerance to let price drift a bit lower? Could it be my lack of reliance on volume that's the missing link?
Thank you.
Gringo
p.s. This issue did crop up in the SLV analysis that I was doing in this thread. The entry was a bit premature and had to deal with lower drift in price before serious demand showed up. So the decision to engage and when to engage is as pertinent today as it was at the time of the Great Depression.
- Status