Shot in the dark here, but I was hoping you might provide some clarification on the above information. This was posted by you at TL, but the "Trading the Wyckoff Way" thread is closed and I didn't want to clutter the SLA/Intraday thread yet so again - shot in the dark with posting this here.
I've been doing a bit of reading and this seems like quite the nugget of information if I could better understand the intent.
This template might be of help:
This template might be of help. Buying the selling climax is a testicular trade as the trader sometimes/often has little to go on beyond the apparent fact of the climax itself. The information risk is high. But if he's right, he can't ask for a better price. The price risk is low.
The information risk is less on the test because price has something to test, i.e., the apparent climax, but price risk can be more as the test is so often higher (buying a test which is slightly lower is also a testicular trade). But if and when price can get past the last swing high, noted here by the dashed pink line, lower left, the odds are greater that this is/was a genuine climax and secondary reaction (test) and that the upswing is good to go. The information risk is less, but the price risk is greater because he's buying it so much higher than he would have had he bought the climax or, next best, the test.
The obvious difficulty comes in knowing whether or not one is looking at a climax or a test of preliminary support (those successive lower lows on the right; an example of this is also posted to the Volume thread at TL). Dunnigan had this problem as does Ross. And AMT can often provide the context for making this call. But sometimes price will plunge dramatically, as it did the middle of last October, and the only help that AMT can provide is the understanding that a plunge like that can't last. Buying such a plunge is extremely testicular. But, what if one just stands aside until the dust settles and waits for a less-information-risk entry, as in '97 (after the LTC plunge, one had two weeks to buy)? We're up 500pts since October. Who isn't going to be satisfied with that?
Calling these climaxes is not the slam dunk that the Wyckoff "experts" and the VSAans claim it is. If one is part of a collaborative effort, which trading forums used to be twenty years ago and an example of which Gringo provides in his threads, making these calls is far easier. But there is no such thing as a risk-free trade.
Specific questions and specific charts lead to specific examples, of course, but this may do in the meantime.
