Price and Volume

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Looks like it, though there wasn't that much demand to saturate since volume wasn't much higher than it had been on the attempt 25m earlier. Limp, you might say. Even so, it's higher than the immediately preceding bar, so there's something going on there. Even if you're not sure what, look at the result of that effort, a close near the low of the bar.

If you're going to short lower highs, this is one of the things to look for.
 
I didn't want to let another day go by without thanking you for sharing your insights. My limited familiarity with Wyckoff methods has gotten a well needed boost with your own work, which thankfully

(1) uses modern English trading terms (no creeks and ice, lol); and
(2) adds candlesticks to the mix, which on their own say so much and for me enhance interpretation of price action. I never really cottoned to bar charts and find them less useful after years of candle charts.

Your comment about having been taught "big volume is good and little volume is bad" is so true. Wyckoff's "effort vs. result" goes a way towards righting that.

I'm admittedly a pattern/geometry/Andrews junkie, but have always included a volume component, and understanding your journal isn't about indicators, find a Chaiken Money Flow overlay on Volume helpful to me.

Finally, I did wonder how gaps figure into your work, seeing that they represent areas where there is no price/volume exploration. That gaps "eventually" get filled is the typcial view, but I have found the filling to be interesting, with the gap edges (close/open/tails) useful price markers for support/resistance.

best, Ana Maria
 

As for the "modern English", we're getting on a hundred years now since Wyckoff was plying his trade, and a lot of fans have added their own interpretations of his work over the years. If you go back to his original work, you won't find the jargon, the indicators, the exclusionary complexity. What you find is an extraordinary focus on the truth, i.e., how the law of supply and demand is illustrated in price and volume as a result of trader behavior, i.e., the participants in an auction market. Everything else is secondary. Or Tertiary. Or even completely irrelevant.

I'll grant you that Wyckoff is not exactly a model of simplicity, and there are a number of aspects of his approach which I don't think are especially necessary. Of course, it's not up to me to declare that they're useless, but I've studied his material with a focus on what I believe is the core of it, i.e., illuminating the demand/supply dynamic. Everything else is, to me, just noise, though it may not be noise at all to somebody else. To revert to complexity by adopting a new jargon set, as well as indicators and patterns (neither of which he could stand), wouldn't make much sense to me.

As for gaps, I've looked at all sorts of statisitcs and methods and tactics and strategies and none of it's really amounted to much. Everybody expects the PDC, for example, to provide S or R of some sort, so everybody expects the price to visit that level. I'm more interested in what happens if it doesn't, and the only guide I have is what's happening with price and volume. And by focusing on PV, you don't have to get into a lot of here's what you do with a breakaway gap and here's what you do with an exhaustion gap and here's what you do with a continuation gap blah blah. Ridding oneself of his preconceptions may be more difficult than memorizing a truckload of tactics depending on how he has classified a particular gap, but it's the only thing that makes sense to me.

As for candles, I think Wyckoff would have loved them. But who knows? :D
 
Quote from JackDaniel:

I wish I had been thinking along the lines of
what Ana said about "effort vs result" today
when the marubozu I've circled came up.
I was obsessing over the fact that the volume
was a bit less for that candle and forgot about
what it took to make that candle happen.

Marubozus in general confuse me.
Sometimes they are important and other times
they are not. I know a few days ago DB you
mentioned that formation is less important
if they are late in the move. But I'm also
sometimes worried if I know enough to
judge whether the wick (tails) are to big or not.
And when they are, we get into large
hammers or shooting stars.

I don't want to make a big deal out of this one
thing though. These methods are starting to
make sense to me. But it's hard to forget some
of the stuff from before, or at least leave it
behind and clear your head.

Deciding where to get in once you see what's
happening is a whole other thread I'm sure.

jd
More...

As I've suggested more than once, if you'd like to start a journal and explore various strategies and tactics, I'll be happy to contribute to it. But since I don't want to get into strategy here, all I can suggest for the time being is that you're thinking about it too much.

Look at the marubozu as a big finger pointing THIS WAY!! How and where you enter is a matter of tactics and risk tolerance and so on. And the maru is sometimes reversed. But if you hit or stall at or detect exhaustion at R or S and you get a marubozu in the opposite direction, you're probably wise not to try to trade against it. As for the tails, there shouldn't be any, though I don't get too excited over a tick or two, depending on the length of the bar. After all, if it's a 9pt bar with a couple of ticks on the end, so what? Use your judgement. Read the activity.

In the meantime, print out all the charts (17 so far) if you haven't been doing so already and review them. Then review them again. And again. Go over old charts from February and January and November. Find the marubozus and see when they result in something and when they don't. Then create some guidelines for yourself that you can test going forward.

As for being late in the move, the later they are, the higher the possibility that they're signalling exhaustion. But don't ever underestimate a marubozu. It may just be signalling a range expansion. Therefore, you'd look for more than just one little signal that a reversal was in the air; you'd demand a lot more.
 
The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.

-- T F Woodlock
 
032404

The second step for a trader is to determine one's place in the current trend.

NQ holding at S; YM and ES dancing above S, forming dojis today


Beware the marubozu,

and shun the frumious widerange bar :eek:
 

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I'm glad I didn't go out and get that unabridged dictionary... heheh..

OKOK.. I guess, this is a RARE strategy recommendation from DB?? To avoid entering during times or greater volatility? (Wide Range Bars)
 
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