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Wyckoff Trading Method
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Wyckoff Trading Method

  #731 (permalink)
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muscleman View Post
Maybe I should start to read a few wyckoff books.... I only had limited knowledge from viewing Dr. Dalton's webinars.
As I understand, that 1350 level is an important high, and when price run to there, volume is decreasing, so that should imply the resistence is likely to hold. Then we see a small down bar with increasing volume, so that should be the short entry, right?

Old Highs (or any level) that have shown either high or low volume, rejection of price action, or absorption are significant. They are areas that need to be overcome for price to continue. The overcoming can happen well before the level (in this case 1350).

What we see here is price over running this level on the daily then coming back to test it- On the daily any shorts were absorbed and price advanced- we are not seeing much bar range and for me this is a sign that one force is definitely in control (demand in this case). The increase of volume at A is a transfer of risk. Wyckoff would say effort vs results, we have the effort to move price down lower but no result to do so, in fact price reverse after the high volume candle, and only one thing can do that Demand. Volume can decline on the rally as this is the dominant force. You don't need a lot of volume to continue a trend when the opposing force is weak.

In saying this in terms of wave structure this down wave was the first significant downwave we have had since Christmas- thus you need to red flag it for a possible change in behavior. We know now this was not the case, however at the time it could have been significant.

So nothing on your chart would make me want to take a short as yet.

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  #732 (permalink)
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traveller View Post
Excellent Books.

Personally I would read Undeclared secrets of the stock Market rather than Master the Markets, also by Tom Williams- it just cuts through all the Trade guider references and outlines the main concepts in a clear structure. MTM tends to be about a particular product- that of Tradeguider. However if you decide to go the VSA route (which I would not recommend) Tradeguider (Google it) has hundreds of resources (often free), videos, courses, information and of course the program.

Regards

see thats the odd part to me.. i seem to be more intrigued by the VSA part that dalton covers, even tho he is using a mix of methods..

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  #733 (permalink)
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madLyfe View Post
see thats the odd part to me.. i seem to be more intrigued by the VSA part that dalton covers, even tho he is using a mix of methods..

Ahh now you have bought up a good point.... The teacher in Bar action is very important. Bar action is Bar action- it is discretionary, once you start to fit a program around it then here is where you run into issues! Bar action is also second to that of market structure! It is moments in time made from 5 components (range, close, volume, time and pressure according to Wyckoff), where as the structure is the operating principals- combine these and you have a very powerful tool for reading the markets in real time.

Volume Analysis will only give you part of the puzzle in my opinion (and I totally agree it will give you enough that you can trade successfully- and many people do using VSA, Wyckoff or any other version). But the structure of the market is very important.

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  #734 (permalink)
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traveller View Post
Ahh now you have bought up a good point.... The teacher in Bar action is very important. Bar action is Bar action- it is discretionary, once you start to fit a program around it then here is where you run into issues! Bar action is also second to that of market structure! It is moments in time made from 5 components (range, close, volume, time and pressure according to Wyckoff), where as the structure is the operating principals- combine these and you have a very powerful tool for reading the markets in real time.

Volume Analysis will only give you part of the puzzle in my opinion (and I totally agree it will give you enough that you can trade successfully- and many people do using VSA, Wyckoff or any other version). But the structure of the market is very important.

I've looked at most of the Wyckoff/VSA structural concepts, the most effective and reliable one I have personally found in my backtesting is the low volume test.

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so whats going on down here? it looks like there are no more sellers, but there doesnt appear to be any buyers either?

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  #736 (permalink)
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muscleman View Post
Hi everyone,
I am a newbie to futures trading. I am considering using wyckoff method for intermediate term trading based on daily charts. Here is an ES daily chart. From the white circle that I outlined, we are testing that important resistence, and volume is quite low. Doesn't this mean we should go short there according to wyckoff? In the past 3 years' daily chart, I have seen a lot of times where we test an important high with low volume, and then later just move slowly up. Could anyone tell me what is wrong with my analysis here please?



When you have an uptrend established, lighter volume rallies are not considered bearish unless they lead to a supply bar to the downside (meaning high volume and wide bar length). Light volume rallies in uptrends is considered to be a lack of supply versus a lack of demand. Closes on these small bars at resistance can give us a clue as well. The key, as always, is trend.

Gary

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  #737 (permalink)
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madLyfe View Post
so whats going on down here? it looks like there are no more sellers, but there doesnt appear to be any buyers either?

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The area that you're looking at on a larger time frame (daily chart), is at an area of support. The chart you showed doesn't show demand at this point, but may react due to the larger time frame support.

Gary

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ES weekly and daily charts

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  #739 (permalink)
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Placebo View Post
I don't know about others but its not one single book which does justice to his methods. Its actually a combination of reading several ones. I'd recommend the following in the beginning.

1. Charting The Stock Market The Wyckoff Method - Jack Hutson
2. The Three Skills of Top Trading (Read The Part on Schematics and Tests) - Dr Hank Pruden
3. Master The Markets - Tom Williams

Hope This Helps

Cheers

Thanks a lot!

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is a test different than a retest?



muscleman View Post
Hi everyone,
I am a newbie to futures trading. I am considering using wyckoff method for intermediate term trading based on daily charts. Here is an ES daily chart. From the white circle that I outlined, we are testing that important resistence, and volume is quite low. Doesn't this mean we should go short there according to wyckoff? In the past 3 years' daily chart, I have seen a lot of times where we test an important high with low volume, and then later just move slowly up. Could anyone tell me what is wrong with my analysis here please?


Muscleman,

Eight months had expired before ES price action approach the area in question. This may explain your question.

Can a person really call this a retest? And yes, it's testing the 1350 area again. So is a test = to a retest?

Eight months of price action, fundamental pressures, political and everything thing else has taken place so the ES is likely a different animal as it approaches the 1350 area again, IMO.

I don't really have a set TIME rule when price test an area and then returns to re-test the same price area. Maybe Gary F or a better Wyckoff guru could shed light when too much time has elapsed before a retest loses it's significance.

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