I'd say you are far more qualified to answer than I am! Thanks DB.
My Wyckoff journal
- Thread starter damnpenguins
- Start date
LOL! Gatecrashers!
Thanks for that you two. Comic relief, instruction and trolling all in one. Priceless!
Have taken note of this from 40D in terms of context regarding opportunities.
Doing all of this observation and replay its easy to get suckered in to thinking every reversal at a level is worth taking and not be thinking about filtering them based on measures of quality.
It stands to reason that the greater the number of eyeballs on the level, the greater the level of participation. By choosing better levels you increase the odds of being on the side of good Quality Supply or Demand rather than that of lesser informed traders.
Just more stuff to chew on.
Just wanted to say as well that this question has prompted a lot of work behind the scenes from me.
I've replayed a large number of the Climaxes I captured in my backtesting and have gained a lot out of the exercise in terms of understanding the dynamics of the behaviour behind them. Once I understood more of what was happening in terms of the transfer of quality as Wyckoff put it, they started leaping out at me on the screen.
I'm amazed at how valid Wyckoff's teachings remain in the modern era. But then it makes complete sense as the basic human emotions behind trader behaviour haven't changed....
edit: the post FOMC spike has obliterated the scale of the prior volumes on this chart, so the climactic volume looks quite small. but it is still there.
Yes, this is the case. Wyckoff looked at bigger picture with accumulations taking many days or weeks. These accumulations, and distributions by the way, are fairly easily seen as "congestion" on charts. A form of this can sometimes be seen on the intraday charts as well with the trader needing to trade at overbought/oversold areas that are showing momentum with respect to the larger trend. But yes, overall--Wyckoff looked at much longer frames.
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It's been a while since the last update. I'll start posting my observations soon.
So what have I been up to?
The focus has been on observing price and trader behaviour. I've replayed a lot of sessions, and reviewed a lot of the rejections of levels I collected In the backtesting. As per DB's suggestions, It was important that I didn't do this from the perspective of finding entries, but rather focusing on the behaviour of traders, and the dynamic between [Demand] and [Supply].
It took quite a while before I stopped looking for entries, and started focusing on Price. But I can clearly remember the moment, and everything changed from that moment on. Reading price became 'fun' again once I'd removed the burden of being right...
Because of that I've since been able to get a lot better at identifying that moment in time when the balance shifts between Supply and Demand. For example when willing [Buyers] become either unwilling to follow price higher, or unable regain lost ground. Based on what I've been seeing, there is always a point in time where this shift occurs.
From memory, 40D has referred to what he sees on the T&S window as a flip . I'm not at the point where I can get much more than an epileptic fit from T&S, but I can now see it when it happens on a tick chart or the right hand tick on a bar chart. I've documented and replayed this occurrence many many times recently....
It might seem that I'm talking about the same thing just using a different term. But once I see the behaviour and have determined that the balance between [Buyers] and [Sellers] has shifted then the entry point itself becomes a secondary concern.
Semantics to some but it's a massive shift for me personally because I now have confidence in what I'm seeing....
Anyway - onto the replays.
So what have I been up to?
The focus has been on observing price and trader behaviour. I've replayed a lot of sessions, and reviewed a lot of the rejections of levels I collected In the backtesting. As per DB's suggestions, It was important that I didn't do this from the perspective of finding entries, but rather focusing on the behaviour of traders, and the dynamic between [Demand] and [Supply].
It took quite a while before I stopped looking for entries, and started focusing on Price. But I can clearly remember the moment, and everything changed from that moment on. Reading price became 'fun' again once I'd removed the burden of being right...
Because of that I've since been able to get a lot better at identifying that moment in time when the balance shifts between Supply and Demand. For example when willing [Buyers] become either unwilling to follow price higher, or unable regain lost ground. Based on what I've been seeing, there is always a point in time where this shift occurs.
From memory, 40D has referred to what he sees on the T&S window as a flip . I'm not at the point where I can get much more than an epileptic fit from T&S, but I can now see it when it happens on a tick chart or the right hand tick on a bar chart. I've documented and replayed this occurrence many many times recently....
It might seem that I'm talking about the same thing just using a different term. But once I see the behaviour and have determined that the balance between [Buyers] and [Sellers] has shifted then the entry point itself becomes a secondary concern.
Semantics to some but it's a massive shift for me personally because I now have confidence in what I'm seeing....
Anyway - onto the replays.
You know I was always the kid hiding behind his desk when the teacher asked a question Don't you?
To me this is a transfer of quality - Selling Climax, secondary test with lower Volume, all revealing a transfer of poor quality supply to good quality demand.
I'll go and hide under that desk again whilst you mark my paper
