My Wyckoff journal

If I may, I'd like to comment on some of this, but trying to match reply to quote would take way too much time. But I'll try to be clear as to what it is I'm commenting on.

"Starting over properly" is unimaginably difficult. It's not unlike being told not to think of an elephant. Once one has been told not to do it, one finds it almost impossible to think of anything else.

Perhaps the biggest and most difficult tasks are two sides of the same coin: stop thinking about the money and stop thinking about one's trade. Watching people trade yesterday brought these difficulties front and center. Nearly all the comments had to do with trades and shorts and longs and stops and whether or not one ought to enter or exit or reverse. There was virtually no comment on what price was doing and where and how and why. Therefore, the comments that were made were irrelevant to the task. If you can't examine price movement without thinking about a trade, this will take far longer, and you may not succeed in your efforts at all.

As to the buy/sell thing, I used "buying pressure" and "selling pressure" way back when in order to make the whole demand/supply thing more concrete. Since the understanding of just how auction markets work was so insufficient, getting into bids and asks and how buyers and sellers interact seemed unnecessarily complicated, particularly since the reality of it is so different from what one is led to believe.

But once one begins observing, it becomes apparent that prices rise because buyers are willling to pay the ask. When they are no longer willing to pay it, prices fall. Conversely, prices fall because sellers have to lower the ask in order to get rid of whatever it is they're selling. This also helps to explain and define the "range". The end result of all this is that one begins to realize that it is buyers who are in charge throughout. It is they who decide whether or not they're going to buy and how much they're going to pay. If there are no buyers, there are no trades, and everything comes to a screeching halt. No sellers? There are always sellers, if the price is right. This is incidentally a lesson which a great many economists have not learned, much less business and government leaders.

Similarly, fear is the central emotion, not fear and greed, much less fear and greed and hope. It's all fear. And if one understands fear, he is in a very much better position to exploit the fear of others than if he cannot extricate himself from that particular matrix. If one can trade emotionlessly, he is a better position still. What 40D "sees" in rejections and reversals is a good example of this.

I realize that this may be very different from what you've read or heard or observed, but it is the basis of an auction market. Try replay with these guides in mind and a few lights may come on.
 
Fantastic - thanks for that response.

My first instinct was to ask why if there are always Sellers are there not always Buyers? then I thought of Enron etc...

Anyway, as with fortydraws response there is much to take in. Again thanks, particularly for taking the time over the weekend to reply.
 
Just out of interest, does anyone know of a good primer on time and sales? I'll be keeping the window open over the coming sessions....
 
Just out of interest, does anyone know of a good primer on time and sales? I'll be keeping the window open over the coming sessions....


The primary goal of the T&S exercise, imo, is simply to get a better sense for the continuous nature of the market. That will only come to you through the experience itself, and not someone else's essay based on his or her experience. I happen to think I "read" the market pretty well just watching the Time & Sales, but I really cannot put into words what it is that is giving me that sense. Sure, I could try, but it would likely do you more harm than good.

My only suggestion to you would be the same as I would make if you were watching a chart: First, find the range, and then pay particular attention to what traders are doing as price approaches one or the other extreme. Lastly, in one of his essays, Wyckoff refers to price charts as being a "transposed tape." The T&S is "the tape." In other words, you are still trying to track the same thing: supply and demand. The benefit of the T&S is you remove the whole ohlc of the bar interval construct and your observations engage the market activity as it in fact is: Continuous.

The goal is to get a better sense for the continuous nature of the market.
 
Putting these two in here for quick reference later; they both cover the fundamentals of TC placement and subsequent reading of the trader dynamic (Overbought / Oversold):
By expanding the range you dilute the import of what an excursion outside of it actually means.

From DB:

"You have to get the lines started correctly, as you have done. How price relates to those lines thereafter will tell you whether the instrument is overbought or oversold. Shifting the lines defeats the purpose of drawing them in the first place."

and..

"OK. That's the "money line", the median. The upper and lower limits are not all that critical. They can be slightly off away from the median or toward the median. What matters is the median, since that represents the "value area". And if you can confirm it with a lateral line, as we can here, either along 49 or 50, then you know approximately how far from the median price can travel either way, as it did today with 60 and 40. If it overshoots, again as it did today when it dropped to 30, so much the better, but at least you have some idea of what to expect."
 
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Reading the 'tea leaves' of trader behaviour within the Over Night session.

The first range represents this first effort, the limits being those beyond which traders won't go. These limits constrict in the second, as price gets ready to break away in one direction or the other. If the trader pays attention to what it does and how it does it, he can gain information on what traders have in mind. Here, price does what it typically does, trading 3pts away from the range on the upside and 3pts away on the downside. When trading to the downside, however, it forms a double bottom, which in a sense is a double rejection of that price level.
 
Not wanting this thread to be a bookmark thread, but I had kept these tabs open on my browser since the weekend and it was time to do some housekeeping :)

BTW - this might be useful for others in terms of organising their information...

I archive each post that I get value out of in Evernote. That way it is easily searchable. That then can be outputted as a pdf based on my search so I've got a record of all the useful posts I've seen regarding say Hinges etc

No more missing images when forum updates go through....
 
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