Hi, Anyone here studying Wyckoff? I would like to discuss if you have found or think that there are markets that are easier to trade Wyckoffian style than others. What I mean is if you find some markets with very clear accumulation/markup/distribution/markdown cycles? I suspect there are some markets where it is harder to do Wyckoff analysis and trading, due to lots of false signals and shakeouts and what not, and other markets where all phases are rather clear and simpler to read for the ones educated.
IMO, Wyckoff is applicable to all markets as long as you obtain accurate price and volume data. However, the method does not lend itself to clear analysis in all markets at all times because of the fact that not always accumulation or distribution is present. This is why you´ll have to look around at many stocks or commods to find the best candidates, although the W-method shows you the way to select those.
Thanks, whoispaul, yes I see that acc/distr is not always occurring in every market. I am only wondering if there are markets where wyckoff phases can be seen easily, with classical patterns of acc/distr, when they do happen. I have been looking at SP500 stocks and I find that when I think I see a nice and lenghty phase off accumulation in a range, prices will "jump over creek", i.e. break out, ever so slightly or just a short way and then reverse or go into some random chaos... Or sometimes a range that I think is accumulation just turns into chaotic prices, without any mark up of any sorts.. I would think that if there is plenty of cause (lenghty accumulation range) there would be a nice move or i.e. effect; mark up.
righto, welcome to the club. Cause leads to effect. But the W-method is not supposed to be predictive, but rather anticipatory. As you have stated, in most cases you cant tell if a trading range is accumulation or distribution until you have a spring or terminal shakeout or an upthrust after distribution. And thats why a jump has to have a backup for it to be a jump. Same with the ice story. May I ask if you have studied the method in its completeness?
You have to look at smaller stuff that is small enough for *someone* to be able to mop up the free float. S&P stocks are way too large for that. I tend to regard technical patterns in larger institutionally driven stocks as randomly formed. Try NASDAQ under USD 5-10 with float under 25m. Avoid Pinks and OTCBB as *they* rarely re- accumulate the float even though there is an appearance of a long accumulation range to the causal glance, it's not, it's a dead stock - applies to many NASDAQ stocks also. *They* frequently just form a new shell company or acquire a shell as it is quicker and easier.
Oh I am a newbie, I have read through Wyckoffs original course (from the thirties) ONCE. And read some other material. I have studied Wyckoff only a mere month or so. Obviously this is the major reason for not finding this very easy. Of course I need to study more, and I will. There are many details to consider, I have concentrated on finding trading ranges and then see what has happened after the breakouts. I do understand all examples in books i read. I can find all phases and everything when I know that they are present in the chart I am looking at. This is natural. I find it much harder to see it in "real" charts that are not hand picked to show the phases.
Thanks Mokwit, that makes sense. However isn't there a possibilty that for the S&P stocks there are more of *them*. That a number of "pros" work together, reading the charts and seing each others signals, or seing that some one else is doing the same thing at the same time and with combined effort reaqch the same result as in the smaller stock? Just a thought
Yes, can be. Frequently what looks like manipulation is just the collective conscience of the market dancing the same steps a manipulator would. Then again, that could all be upset by a Pension fund having an investment policy meeting. In terms of making money, which is more predictable, large funds moving in sync or a syndicate that has the float and can only make money by selling it higher than they bought it?. All the stuff from the 1880-1934 period says the same thing, successful trading is about either recognising manipulation and going with it or buying at extremes when the public is force sold or at least at the point of maximum pessimism. Nothing seems to have changed.
I googled Richard D. Wyckoff and found several book by him. I would definitely get few of them, especially 40 years one, love reading about early 20th century trading. What is the best book or manual to get familiarized with his method. I use price and volume heavily in my trading, so always interested in others perspectives on it. As I was researching him, I also saw posts that he completely missed 29 crash, and that his magazine was painting a very rosy picture of early 30s. Thanks, redduke
Mokwit, Thanks for your post, what you write makes good sense. Redduke, anything written by R. Wyckoff himself is probably worthwhile.