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Price Volume Analysis Trading with the Essentials

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Old 08-04-2009, 11:12 PM
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blue The Wyckoff Thread

Hello friends,

After seeing the response to the earlier thread on this subject (poll thread/survey thread), I am convinced that there are some interested members here who would like to try Wyckoff method. So let us make a begining. We shall move slowly so that we learn as much as possible.
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Old 08-04-2009, 11:13 PM
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First of all, let me make a few things clear.

This is not a get rich quick method. So do not expect that you read something about Wyckoff here and there, build an “indicator” quickly and start making money. No, that is not going to happen.

But what will you learn in this method? You will learn why and how the price moves. You will learn the internals of stock price movements. You will learn how price, volume and time are interconnected and how they produce the movement in stock price.

This method requires patience. Rather tons and tons of patience. But let me assure you, the more effort you put, more interesting will be your learning experience and I will not be wrong if I go to the extent of saying that you will be addicted to this method. I can also assure you that your trading will improve a lot if you properly learn this method.

My purpose of starting this thread is to initiate that student within you. Nudge you to learn the basics of Wyckoff method and to see that after going through these basics, you will get that “hunger” to search for more information and to find them out and share them here at inditraders for the benefit of all. Also, to prompt the seniors of this forum to take the batten from me and to continue the education about advanced concepts in this method.

Wyckoff method is more suited to swing trading rather than scalping or other forms of extreme short term trading methods. Infact, best results can be obtained by swing traders who follow Wyckoff method and who trade on daily charts or still higher timeframe charts.

Let me remind you that there are tons and tons of free materials available on web about this method. Do not forget to take advantage of these free materials.

If you are still interested to learn more, there is a website www.wyckoffstockmarketinstitute.com Wyckoff institute is founded by legendary Richard Wyckoff himself. They are offering course, lecture tapes etc., but for a stiff price. Do not forget to check the archive section and Craigs corner section of aforesaid website. They contain some excellent free materials. Kindly go through it. Similarly, I cannot restrain myself from mentioning Traders Laboratory, which also contains excellent materials. Go through the posts of DBPhoenix there. DB is the real master. Aussie stock forums also contains some excellent posts by Motorway. If I have missed any (I am sure I might have missed many) Wyckoff resources, kindly post them in a separate thread initiated by me today. Let it be an instant reference.

Last but not least, a caveat emptor. I am not an expert on Wyckoff method. Nor have I taken the course offered by Wyckoff Institute.
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Old 08-04-2009, 11:14 PM
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O. K. How do we start? We shall start with Wyckoff Wave.

Wyckoff wave is a hypothetical stock chart drawn by a Wyckoff student denoting various stages of stock price movements. Please see the attached pdf. file. Also attached is another pdf. file, which contains definition of many terms used by Wyckoff traders.
Attached Files
File Type: pdf Wyckoff Wave.pdf (12.5 KB, 439 views)
File Type: pdf Wyckoff Terms and their definitions.pdf (40.5 KB, 353 views)
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Old 09-04-2009, 12:38 AM
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Originally Posted by rsi View Post
Wyckoff method is more suited to swing trading rather than scalping or other forms of extreme short term trading methods. Infact, best results can be obtained by swing traders who follow Wyckoff method and who trade on daily charts or still higher timeframe charts.

Dear Iyer,

Wyckoff's way of trading and his way of analysis is applicable to day trading fully.Infact,there is a very few analytical tool to go for day trading without Wyckoff.

Now about the third post of yours > very good tabulation.But a few vital pioints are missing in the table.

1.Wyckoff's use of Point and Figure chart was a little different than the general one. i)He used a one point reversal PnF chart,rather than the usual 3 pont reversal chart. ii)He used PnF chart for anticipating/measuring the up/down moves after breaking from a trading range.

2.Wyckoff's method's most contributing part is his volume interpretation.The tabulation is missing Wyckoff Optimism/Pessimism Index,which is a type of On Balance Volume type indicator.His Effort vs. Result hypothesis was instrumented in that indicator.

Please continue with your good work.

Thanks.
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Old 09-04-2009, 01:35 AM
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it will be more helpful if known members post charts with wyckoff analysis, take todays nf chart, big white candle which is unusual, does wyckoff method detects whether this bar is a exhaustion bar and wd it be selling climax or continuation of trend ? commentary on real life example wd be more helpful to understand various wyckoff principles IMHO
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Old 09-04-2009, 03:39 AM
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Originally Posted by alex View Post
it will be more helpful if known members post charts with wyckoff analysis, take todays nf chart, big white candle which is unusual, does wyckoff method detects whether this bar is a exhaustion bar and wd it be selling climax or continuation of trend ? commentary on real life example wd be more helpful to understand various wyckoff principles IMHO

second with alex.
@rsi : Consider us a dumb -dumble guy in this analysis, any type of real time example will be quick-learn approch.
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Old 09-04-2009, 04:31 AM
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does volume price analysis suggest weakness as suggested by lines price volume divergence or consider right edge of the chart to suggest retracing price on less volume so strength?
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Old 09-04-2009, 07:28 AM
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Originally Posted by hari09omkar View Post
Dear Iyer,

Wyckoff's way of trading and his way of analysis is applicable to day trading fully.Infact,there is a very few analytical tool to go for day trading without Wyckoff.

Now about the third post of yours > very good tabulation.But a few vital pioints are missing in the table.

1.Wyckoff's use of Point and Figure chart was a little different than the general one. i)He used a one point reversal PnF chart,rather than the usual 3 pont reversal chart. ii)He used PnF chart for anticipating/measuring the up/down moves after breaking from a trading range.

2.Wyckoff's method's most contributing part is his volume interpretation.The tabulation is missing Wyckoff Optimism/Pessimism Index,which is a type of On Balance Volume type indicator.His Effort vs. Result hypothesis was instrumented in that indicator.

Please continue with your good work.

Thanks.

Dear Hari,

You are correct. Thanks for correcting mistakes in that tabulated pdf. file. Wyckoff was using one box reversal method in PnF chart. That was his unique method. Because that would give signals quite early rather than the usual 3 box method.

I was trying to point out that one may not find Wyckoff method useful for scalping.

Members please take note of what is pointed out by Hari here about that pdf. file.

Last edited by rsi; 09-04-2009 at 07:33 AM.
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Old 09-04-2009, 07:37 AM
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Originally Posted by alex View Post
it will be more helpful if known members post charts with wyckoff analysis, take todays nf chart, big white candle which is unusual, does wyckoff method detects whether this bar is a exhaustion bar and wd it be selling climax or continuation of trend ? commentary on real life example wd be more helpful to understand various wyckoff principles IMHO

Bar by bar analysis is the hallmark of VSA rather than Wyckoff. You may be aware that VSA is an offshoot of Wyckoff.

Wyckoff would ask his students to note buying and selling in waves. One wave occuring after another.

Oh! The moment I say wave, please do not start thinking about Elliott Waves. It has nothing to do with Wyckoff.

We shall discuss about this in later stage.
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Old 09-04-2009, 03:11 PM
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Please keep the Wyckoff Wave and Wyckoff Terms pdf file handy. You will need them often.
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