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Needing some guidance

  #21 (permalink)
 
rassi's Avatar
 rassi 
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pihadave View Post
Alright team,

Staying on the topic of "needing guidance", can someone tell me if this is a correct Wyckoff setup?

1. Accumulation in the range.
2. Shake out of stop losses
3. Spring (?)
4. Gearing towards a breakout?

... or have I got this concept completely wrong??


Maybe @Grantx can answer?

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  #22 (permalink)
 
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 fminus 
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pihadave View Post
I agree, I worked out pretty quickly that there's endless ways of trading. If you take a textbook style trending chart, trendline traders will see a trendline, price action traders will see S/R levels and candlestick formations, indicator traders will see EMA crossovers/RSI set ups, pattern traders will see continuation patterns etc etc.

I don't want to copy someone's strategy, I want my own, but it always helps knowing what works. For example, seeing that you're also using price action reassures me that I should keep working on my strategy. Also, the fact that every futures trader I chatted to, read about, listened to all talk about market participants and learning when the big players are in control tells me I need to try and work this out..

I can't really give any feedback on the Wyckoff stuff because I've never studied it. But I will shed some light into how I trade and hopefully it will help you. My strategy is as follows:

Everyday I identify levels from the weekly, daily, hourly, and 30 min timeframe and make note of obvious swings. I then open up my market profile and volume profile charts and make notes of areas like yesterdays high/low/open/close, poc, vah/val, and any anomalous volume. I also look for any obvious looking patterns like double tops/bottoms, wedges, etc that may bring some volume. I then close all my charts and take these noted levels and place them on my DOMs (ZN,ZF,ZB,UB,ES). I trade only when price gets to these level areas and I'm reading order flow for either a reversal or continuation. Trade management is another topic for a different day but to summarize, my strategy is to trade where everyone else is trading. Everyone who participates can't be right and I try to participate with the side that is causing the puke out. I trade the traders. Hope this helps.

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  #23 (permalink)
 
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pihadave View Post
Nevermind, the market answered that question for me

Sorry, I don't track ES.. post a chart of what happened/what you saw?

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  #24 (permalink)
pihadave
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fminus View Post
I can't really give any feedback on the Wyckoff stuff because I've never studied it. But I will shed some light into how I trade and hopefully it will help you. My strategy is as follows:

Everyday I identify levels from the weekly, daily, hourly, and 30 min timeframe and make note of obvious swings. I then open up my market profile and volume profile charts and make notes of areas like yesterdays high/low/open/close, poc, vah/val, and any anomalous volume. I also look for any obvious looking patterns like double tops/bottoms, wedges, etc that may bring some volume. I then close all my charts and take these noted levels and place them on my DOMs (ZN,ZF,ZB,UB,ES). I trade only when price gets to these level areas and I'm reading order flow for either a reversal or continuation. Trade management is another topic for a different day but to summarize, my strategy is to trade where everyone else is trading. Everyone who participates can't be right and I try to participate with the side that is causing the puke out. I trade the traders. Hope this helps.

This is interesting.. It's good to know that you look for patterns and levels as that's what I've been doing. As for the DOM, I've tried my best to use learn how to use it before. I understand the theory behind it and how price moves but in real trading it's just so fast and I really have no clue what's going on.

I've watched countless videos and they're all really good at explaining it but watching it during live trading is intense!

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  #25 (permalink)
 Grantx 
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rassi View Post
Maybe @Grantx can answer?

Well I don't know what this chart is but it never kicked off with a deep pullback which is one of the first signs i look for that indicates possible distribution. I would be leaning towards accumulation and resumption of the trend until proven wrong. A lot also depends on the location of this price action and the timeframe.

It is generally very difficult to tell whether these sequences are distribution, accumulation or just a balanced ranging market Thats why it helps to consider a few things like maybe a correlated market and current market sentiment for the instrument you're trading.

You know better than me @rassi whats your view?

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  #26 (permalink)
 
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 fminus 
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pihadave View Post
This is interesting.. It's good to know that you look for patterns and levels as that's what I've been doing. As for the DOM, I've tried my best to use learn how to use it before. I understand the theory behind it and how price moves but in real trading it's just so fast and I really have no clue what's going on.

I've watched countless videos and they're all really good at explaining it but watching it during live trading is intense!

The DOM is pretty overwhelming at first but it's one of those things that once you keep watching it, it doesn't look that fast after a while. In fact, on most days the DOM is painfully slow to watch. The trick to it is, you're not looking at ALL the numbers displayed on the DOM at the same time. In fact 99% of the time I'm ignoring everything but the inside bid/ask and the volume traded there. After a while, your brain will get used to watching the DOM and unusually large bids/offers, icebergs, and certain activity becomes obvious.

I know the idea of just having a DOM up sounds crazy and I personally resisted the idea for many years, until I hit rock bottom and just gave the entire DOM thing a chance before totally giving up. I have found for myself that my pre-conceived notions of what trading should be kept me from being open to and exploring ideas of what trading actually is.

We all have heard stories that prop traders force their new traders to stare at a DOM. When I first heard this many years ago, my first thought was "those poor bastards". But having journeyed where I have journeyed, it makes perfect sense now. My best overall advice to you or anyone still trying to find their way is to figure out what professionals do and to emulate that instead of trying to copy someone's system in a journal thread.

For those that are able to consistently trade off a chart or their entry signal is some oscillator, my hat is off to them because they have mastered a skill I tried for several years and couldn't make work.

In trading, shortcuts lead to the longest path possible.
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  #27 (permalink)
pihadave
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Grantx View Post
Well I don't know what this chart is but it never kicked off with a deep pullback which is one of the first signs i look for that indicates possible distribution. I would be leaning towards accumulation and resumption of the trend until proven wrong. A lot also depends on the location of this price action and the timeframe.

It is generally very difficult to tell whether these sequences are distribution, accumulation or just a balanced ranging market Thats why it helps to consider a few things like maybe a correlated market and current market sentiment for the instrument you're trading.

You know better than me @rassi whats your view?

Thanks for that explanation. What timeframe/tick chart do you generally look for a Wyckoff setup? Would it be more relevant on a longer time-frame such as a 4hr or 2500 tick? The reason I'm leaning toward a pattern-related strategy is due to the fact that I tend to have a keen eye for identifying patterns so I'm trying to play to my strengths.

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  #28 (permalink)
pihadave
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fminus View Post
The DOM is pretty overwhelming at first but it's one of those things that once you keep watching it, it doesn't look that fast after a while. In fact, on most days the DOM is painfully slow to watch. The trick to it is, you're not looking at ALL the numbers displayed on the DOM at the same time. In fact 99% of the time I'm ignoring everything but the inside bid/ask and the volume traded there. After a while, your brain will get used to watching the DOM and unusually large bids/offers, icebergs, and certain activity becomes obvious.

I know the idea of just having a DOM up sounds crazy and I personally resisted the idea for many years, until I hit rock bottom and just gave the entire DOM thing a chance before totally giving up. I have found for myself that my pre-conceived notions of what trading should be kept me from being open to and exploring ideas of what trading actually is.

We all have heard stories that prop traders force their new traders to stare at a DOM. When I first heard this many years ago, my first thought was "those poor bastards". But having journeyed where I have journeyed, it makes perfect sense now. My best overall advice to you or anyone still trying to find their way is to figure out what professionals do and to emulate that instead of trying to copy someone's system in a journal thread.

For those that are able to consistently trade off a chart or their entry signal is some oscillator, my hat is off to them because they have mastered a skill I tried for several years and couldn't make work.

The fact that you hit rock bottom and bounced back is inspiring!

When you say you're ignoring everything but the inside bid/ask, I'm assuming you're meaning the area in the attached pic?

My other question comes down to volatility. I'm in New Zealand so I don't start seeing volatility until 6.30pm onwards NZ time (GMT+12). This would be 12.30am EST time. Would the DOM still be a beneficial method of trading if it's not during the US market hours?

I found when I trade during the day time here the instrument normally behaves strangely (and slowly) and it's hard to be profitable. I have more successful trades in the evenings as London begins to awaken. The US market doesn't open until 2am here so realistically it's not feasible to trade whilst still maintaining a full-time day job.

I know there's definitely some traders out there who trade from charts only but the thing is, they still read the charts in terms of volume to understand when the big players are coming in. I used to chat to one about a year ago and have been trying to get back in touch. Understanding and trading from the DOM would be ideal though, considering that every prop firm and large-scale professional trader uses it.



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  #29 (permalink)
 
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 fminus 
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Yes. The inside bid and offer is the nearest bid and offer.

IMHO the default DOM provided by NT currently is absolutely worthless. If you're using NT, I would look into the Jigsaw DOM of something similar that keeps track of volume printed at the levels split into volume hitting the bid and lifting the offer. This will keep you from having to constantly do math in your head to figure out how much is trading at a level relative to what is showing on the bid/offer.

I also want to caveat and say that I still use charts to identify areas where "something might happen" and footprint charts, but these are all just secondary to my DOMs and use them when I forget how much volume traded at a certain level.

I would recommend you check out some of the webinars hosted by FIO from John Grady (No BS Day Trading), Peter Davies (Jigsaw), or the Axia guys. Hope this helps.

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  #30 (permalink)
 
rassi's Avatar
 rassi 
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Grantx View Post
Well I don't know what this chart is but it never kicked off with a deep pullback which is one of the first signs i look for that indicates possible distribution. I would be leaning towards accumulation and resumption of the trend until proven wrong. A lot also depends on the location of this price action and the timeframe.

It is generally very difficult to tell whether these sequences are distribution, accumulation or just a balanced ranging market Thats why it helps to consider a few things like maybe a correlated market and current market sentiment for the instrument you're trading.

You know better than me @rassi whats your view?

@Grantx your better versed in Wykoff! My view based on this chart alone is I would want to be selling above 1 or buying around 3 depending on how and when we arrived at those levels. I really don’t like tick charts as I’m so used to time based. Please can the OP post a follow up chart of this, same timeframe please.

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Last Updated on February 21, 2018


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