Wyckoff's Monster

[green.green]

What is a "high made first"? A high made first means that the high of the day has likely been put in before the low of the day. Today was a good example of a "low made first" day which would prevent an entry for Taylor.

What constitutes "earlier in the day"? I have been using 11:30 EST as my cutoff for all Taylor entries.

What constitutes "confirmation" of a short?

I am using your SLA method for entry. A trend line break and a lower high and I am looking for pullback shorts. We had plenty of trend line breaks today but price never seemed to take out any previous swings.

If we open below 50 and you then look for longs, then why pre-characterize the day as a SSD in the first place?

This is not a pure Taylor trade but something I have been studying. Basically if price opens with enough room below the area for the Taylor short then a shorter-term long can be established. Taylor wouldn't make this trade but he also would hold positions overnight. It tested well when there was at least 20 points between the open and the previous high. Taking this long wouldn't negate the short assuming all other criteria are met.

No trades for the Taylor method today. Tomorrow is a buy day. Taylor allows for both longs and shorts on a buy day. If price is "at or around" (his words) the previous day's high then we can take a short. If price opens around today's low then we can look for a long. I will be looking to initiate a short tomorrow. Price shouldn't exceed 3710 by much if at all.

You can see my support and resistance levels on hourly chart included. I spent most of the day just watching price unfold and practicing SLA.

 

[dbphoenix]

This is not a pure Taylor trade but something I have been studying. Basically if price opens with enough room below the area for the Taylor short then a shorter-term long can be established. Taylor wouldn't make this trade but he also would hold positions overnight. It tested well when there was at least 20 points between the open and the previous high. Taking this long wouldn't negate the short assuming all other criteria are met.

No trades for the Taylor method today. Tomorrow is a buy day. Taylor allows for both longs and shorts on a buy day. If price is "at or around" (his words) the previous day's high then we can take a short. If price opens around today's low then we can look for a long. I will be looking to initiate a short tomorrow. Price shouldn't exceed 3710 by much if at all.

You can see my support and resistance levels on hourly chart included. I spent most of the day just watching price unfold and practicing SLA.

I'm afraid none of this makes much sense. This is not a personal criticism but rather a characteristic of improperly-constructed testing procedures.

To begin with, you haven't defined anything except in the most general terms, terms so general that they permit you to do anything that seems right at the time. This can devastate the account in real time.

Second, you have yet to define the criteria for taking a long or a short. This lack of definition in addition to the lack of control of variables makes the testing protocol essentially useless.

Third, today was a "sell short day" which prompted the Taylor trader to give up a 40pt profit off a long. And tomorrow is supposed to be a "buy day" but you're looking to initiate a short. Since entering any market session with a bias is never wise, I have to wonder just what it is that Taylor does for you as well as what any of this has to do with Wyckoff.

Perhaps a more rigorous testing protocol will point the way forward.

 

[green.green]

I'm afraid none of this makes much sense. This is not a personal criticism but rather a characteristic of improperly-constructed testing procedures.

To begin with, you haven't defined anything except in the most general terms, terms so general that they permit you to do anything that seems right at the time. This can devastate the account in real time.

Second, you have yet to define the criteria for taking a long or a short. This lack of definition in addition to the lack of control of variables makes the testing protocol essentially useless.

Third, today was a "sell short day" which prompted the Taylor trader to give up a 40pt profit off a long. And tomorrow is supposed to be a "buy day" but you're looking to initiate a short. Since entering any market session with a bias is never wise, I have to wonder just what it is that Taylor does for you as well as what any of this has to do with Wyckoff.

Perhaps a more rigorous testing protocol will point the way forward.

First DBP - your comments are always welcome here. I've read enough of your writing to know you are about cutting through the BS. I also know enough about where I am as a trader to listen.

As for your points - I think you've quickly hit the nail on the head (...but I'm so unique...) I've put 3-4 hundred hours into studying Taylor. I was unable in that time to develop a concrete system of entries and exits that forward tested well. I've been trying to fuse Wyckoff and Taylor albeit for less time but I need to stop trying to reinvent the wheel.

The essence is really "point 3" - if I can master what you and Wyckoff teach then I don't need Taylor. There will be enough hours of testing and refining just sticking with your plan. I don't want to get stuck chasing my tail for the next 5 years. I'm going to strive to be a student who listens.

 

[dbphoenix]

The essence is really "point 3" - if I can master what you and Wyckoff teach then I don't need Taylor. There will be enough hours of testing and refining just sticking with your plan.

Well now yes and no. If you literally mean my plan -- the SLA -- rather than "one's" plan, then you have to decide if the fit is right, and you ought to be able to determine that in a couple of weeks. And in the case of the SLA, the testing has been done. There's no need to go through it again. The challenge appears to be following it.

As to what Wyckoff teaches, that, in two words, is "follow price". Simple. And deceptively easy. But maddeningly difficult in real time for those who are unused to it.

As for Taylor, the fundamental problem may be that his method was created to trade commodities, and commodities don't trend, except within the boundaries of a trading range. In that context, buying and selling and selling short make perfect sense since the limits of a trading range ought to be traded via reversals. But equity indices can and do trend for years. However, this little glitch hasn't been noted by any Taylor thread I've ever read, so missing it is not a character flaw.

 

[oraclewizard77]

I would only say that your indicator seems to be useless. If it helps u fine.

 

[green.green]

since the fundamental nature of markets is immutable, those who are able to remove their egos from the equation and address the market on its own terms will be most likely to succeed

Everyone is out searching for the holy grail and DBP has been posting it for years.

I also saw you mention the Phantom of the Pits who I had never heard of. I read his book and liked a lot of concepts - even his wacky ideas on behavior modification. I appreciated his distinction between "wrong" and "not right" and I see you guys both agree on traders taking themselves in and out of the market.

I've been toying with the idea of hand charting a pnf chart of the market or as I do replays. I think it might help me stay more engaged in what price is actually doing. It also might improve my understanding of support and resistance. I wouldn't be using it for entries or formations or anything like that - more of a "walking meditation". I know you have some interest in Zen - I wonder if you have any thoughts beyond give it a try?

 

[dbphoenix]

I also saw you mention the Phantom of the Pits who I had never heard of. I read his book and liked a lot of concepts - even his wacky ideas on behavior modification. I appreciated his distinction between "wrong" and "not right" and I see you guys both agree on traders taking themselves in and out of the market.

I've been toying with the idea of hand charting a pnf chart of the market or as I do replays. I think it might help me stay more engaged in what price is actually doing. It also might improve my understanding of support and resistance. I wouldn't be using it for entries or formations or anything like that - more of a "walking meditation". I know you have some interest in Zen - I wonder if you have any thoughts beyond give it a try?

As for the POP, I haven't looked at that stuff in years, and it wasn't a book. In fact the only thing I remember was the bit about getting out if the market isn't doing what you expect it to do, which is much the same as what Teresa Lo used to say: "If it doesn't move, you don't want to be there."

As for the P&F, why not? Depends on what you think your problem is, if you have one. If bars are screwing you up, you can follow a 1t chart. If that just looks like flypaper and does nothing for you, you can try a line chart. Or range bars. Anything that forces us to see the familiar in a new and different way is always a plus.

 

[gears]

...the bit about getting out if the market isn't doing what you expect it to do, which is much the same as what Teresa Lo used to say: "If it doesn't move, you don't want to be there."

So obviously this is an individual kind of thing, but how do you balance the concept of the market moving in your direction with that of retraces? You've said time and again that the pullbacks are your friends - allowing others to get in on the movement.

I'm going through a hell of a time with knowing when to allow the market room to breathe vs being too lenient… Any advice?

(My apologies for hijacking your journal, green.)

 

[dbphoenix]

So obviously this is an individual kind of thing, but how do you balance the concept of the market moving in your direction with that of retraces? You've said time and again that the pullbacks are your friends - allowing others to get in on the movement.

I'm going through a hell of a time with knowing when to allow the market room to breathe vs being too lenient… Any advice?

(My apologies for hijacking your journal, green.)

Remove your ego from the situation. If you can't observe price objectively while trading and instead hinge everything on where and when you entered, then you'll have to stop trading and go back to observing. If you can observe price without giving a damn what it does, you may learn something about it.

Someone in another journal said that he traded well only after he'd had so many losing trades that he stopped caring. I could hear a big gong being struck.

 

[slugar]

So obviously this is an individual kind of thing, but how do you balance the concept of the market moving in your direction with that of retraces? You've said time and again that the pullbacks are your friends - allowing others to get in on the movement.

I'm going through a hell of a time with knowing when to allow the market room to breathe vs being too lenient… Any advice?

(My apologies for hijacking your journal, green.)

Use the last swing high or low and see if it holds