I'm studying the Wyckoff system of price action trading. Currently I'm observing and taking notes during market hours. I expect to be doing so for many more weeks. Odd hours and weekends I'm backtesting ideas and working on my trading plan. I have a history and I've spent more than I want to remember on methods, courses and paid mentoring. I even "studied" (or so I thought) Wyckoff before. With other words - I've already been at this for a very long time. I guess that means the cards are stacked against me. I welcome criticism as well as positive feedback. After all, that's why one posts on a public board. I reserve the right for an occasional off-topic post for myself, so please stay on topic. trip
Who or what is a "wyckoff"? Nah, just kidding I've tested some of it. And, would love to hear your take as you move along in your journal. Best to you!
niko and nth, thanks. As you may have noticed, the name of this journal changed a couple of times. Sorry for any confusion and thank you Magna for helping out. My first choice - even though it reflected what I am trying to accomplish - did not fully comply with the ET rules of conduct. So to speak. "In the beginner's mind there are many possibilities; in the expert's mind there are few." -- Suzuki I guess I am all set then.
My focus is on intraday trading (NQ) using the 1m bar period (or lower) chart. That's where I am doing my "observing". Zooming out, one can take a look at the scenery that surrounds our lite patch in space-time. This is a weekly chart going back a few years. It's easy to see what the direction of the major trend is. Up. In that trend, price just made a new high. The speed with which price rises has accelerated since last summer (steeper demand line). If a diagonal line is drawn to represent the midpoint between the channel lines, and if that line represents the mean that price swings about on it's way up, this is an "oversold" condition. I would not be surprised if price lingers here for a while - in the context of weekly bars that easily range 50 or more points - or starts a swing back down to the mean in the coming week or weeks. We're pretty close to 3700 which is well within range before a down swing. Wyckoff aside - how long is an accelerating multi-year move like this sustainable? Click on the chart for a non-scaled version.
On the daily price has made a steep swing for a new high. There's nothing in previous price history to keep price from going to at least 3700 - apart from it closing in on the upper extreme of the "AMT range" (as I currently understand AMT). From the daily I would not be surprised if the coming week starts out indecisive with smaller intraday ranges even if price edges higher. It's a bit early for a decisive down swing - but who knows. Click on the chart for a non-scaled version.
Finally, this is where I will be paying extra attention come Monday unless something alters the picture overnight. If 3660 holds I will be on the lookout for longs; if it breaks price will fall back into the previous range and I will look for a short setup. If price goes down I expect the move will be choppy and slow considering what's on the left. As always - click on the chart for a non-scaled version. So there's my first attempt. Be gentle.
What exactly will you be on the lookout for? What are your criteria for determining (a) whether or not there is a long to be had and (b) how to get it? Ditto. What exactly will you be on the lookout for? What are your criteria for determining (a) whether or not there is a short to be had and (b) how to get it? What is on the left? What are the upper and lower limits of the range? What is the mean? What behavior can you anticipate at the limits and at the mean? From the beginning of the last stage, maybe 8mos, a year. Just depends on when sellers run out of buyers.
That was sloppy wording on my part. Sorry. If 3660 holds I will not be on the lookout for longs, I will assume that the line of least resistance is up. I will then enter long if any of my defined entry "pictures" show up. I have the following alternatives: Enter on the first retrace after: a breakout of a range a breakout of a hinge In these cases the new demand or supply line is anticipated as it can not be drawn yet (unless one starts the line in the range/hinge) and I am prepared to scratch the trade quickly. Enter on the first or second retrace after: a break of a demand or supply line The reason for also considering the second retrace is that the first retrace in the new trend might occur before the demand or supply line is broken (usually depending on how steep the broken line is). I am still backtesting and many things are still unclear and how to handle this is one of them. The "profile" of the retrace is another thing I am still looking at (deep, shallow, more of a pause like a small congestion and so on). They look different depending on the buying or selling pressure I think. A bounce at support or resistance is usually the same as an opportunity to enter at the break of a demand or supply line a few minutes later and I do not (for now anyway) have any specific rules for them. So to answer the question: I know there is a long to be had when price continues up and then makes a retrace that will allow me to enter. It already tested 3659 and is going up but then again, come Tuesday it may look different. Right now the answer would be the same as above (but for a short). If I look to the left I see what I did try to illustrate (badly, I guess). There is a 20 point range with a mean of ~49. The range ended with something that might be a hinge (I don't have enough experience to classify it as such; it might be chop) with a mean of ~53. Upper limit of the range is 59 and lower limit is 38. If price returns into this range I am anticipating some hesistance at the upper limit, then a move down that gradually slows until we reach the mean. There might be some temporary back-and-forth movement at the mean of the could-be hinge at 53 along the way. Since price has spent much time in this range before I anticipate most "action" to be slow or grinding. A short entry would be at the upper limit (using one of my three defined entry rules). I would avoid entering in any direction close to the mean (but I do not yet have statistics on these "pictures"). I have not mentioned exits. Right now they are at the break of the demand or supply line. I've just started to investigate strategies for scaling out. Thank you for taking your time and for the questions.