Wyckoff

Just finished reading Richard Wyckoff's "Day Trader's Bible" (shouldn't it have been "Traders'"?).

Stunningly good and useful stuff, but...

The difference between 'then' and 'now'....

There were so relatively few stocks to 'keep an eye on' then and just one stream of news/info - the ticker.

Now, there are quite literally thousands of stocks and multi-streamed quoting and news updates.

Even if you just take a subset of 'the leaders' there are 20 times as many now as there were then.

Apart from the obvious hints and advice which are as true/useful now as then, can there really be any comparison of the markets of today with back then?

Keeping a mental note of the blocks going off on Reading, Union Pacific and Steel is one thing - just how many would you be looking out for today? And could you really do it all mentally?

I'm just wondering if there are traders 'out there' who do concentrate on a few stocks and work in a similar manner to Wyckoff back then.

Tony,
Within my limited knowledge of the subject the closest current parallel I can find is the way guys like Mr C and Naz work with Level 2.

Cheers

To a degree, yes, but not exactly as Wyckoff describes and only in a market where the market structure and size, regulatory environment and wealth distribution resembles pre 1934 US markets. I am looking at about 50 stocks (T&S set to screen out orders below a certain size) and looking for something that should not be there e.g big block in small stock, blocks being bought strongly at a breakout point, or obvious painting of the tape (caution! finite window). Also looking at both the speed of the tape and the especially the direction of blocks and whether or not they are being crossed and whether we are in that little mini cycle. In individual stocks that are being panic sold you can pretty much call the entry point from the action of the tape. Basically in terms of taking action I'm looking for a chart pattern to be confirmed by the tape or the tape to be confirmed by a chart pattern. Look for both to enter - buying solely on the tape being painted is a recipe for disaster - beware the exit ramp. Others I know carefully track the average acquisition cost of manipulators in certain 'sponsored' stocks and then estimate from experience their exit and buyback points. I also look at DOM and T&S on HSI futures in order to run with the stop runners rather than against them and obviously to identify realtime rather than purely historical chart resistance. Buying and selling pressure remains as valid as ever but in the absolute strict sense of what was done in the 20's it seems not so relevant today, although I suspect Level 2 traders are (were?) judging order flow and pressure intuitively. I know someone who trades off the CNBC ticker but I think he has the capability to draw mental charts in his head from years spent in the pits. Not sure that the time invested in studying Old Masters in an attempt to exactly replicate what they did would have been repaid in modern US markets except during the internet boom in small fee float stocks (watch free float turnover). Gann and Wyckoff whose writings allow you to track changes in the US markets over time were both tape readers in the twenties, but pretty much said don't bother in later, post 1934, writings. It seems this was due to there being too many issues too large to be moved by manipulators and also due to the absence of syndicates/pools. Wyckoff mentions in some of his writings that he is (sometimes?) looking out for the activities of the big players and not just buying and selling pressure relative to movement. I think Wyckoff continued to watch the tape but his comments were related to short term scalping as being less viable than longer term positions. Much of what the Old Masters wrote is however timeless and better than most modern books. HTH

I may have said this elsewhere but I monitor around 140 stocks at a time which is manageable with software that is available today.


Paul

chump said:

Tony,
Within my limited knowledge of the subject the closest current parallel I can find is the way guys like Mr C and Naz work with Level 2.

Cheers

Click to expand...

Thanks Chump. But I was really thinking of traders who are still alive today.

mokwit said:

Buying and selling pressure remains as valid as ever but in the absolute strict sense of what was done in the 20's it seems not so relevant today,

Click to expand...

Not sure I understand.

Tony,
Are you saying Mr C and Naz are not alive.....LOL ..might explain why Alan seems quiet at the moment.....

Cheers

Ps and I used the word "closest" ,because I don't think there is an exact example (at least that I have found).

Sorry Chump, thanks for picking up on my comment. No, of course I didn't mean they weren't alive. I meant any famous traders alive today.

Trader333 said:

I may have said this elsewhere but I monitor around 140 stocks at a time which is manageable with software that is available today.

Click to expand...

But Paul, you're not analysing the T&S on all 140 at the same time are you? If I recall correctly you're looking at current price against certain criteria - not the actual run of prints.

Wyckoff was very much into looking at the size of orders and the price on 'the tape' which is the equivalent of T&S today. And he was primarily interested in the leaders which were no more than a dozen stocks at most. With training, most people could handle the T&S on a dozen stocks...but 140 - I don't think so. Unless the s/w you use does something along those lines...?

Tony,

Yes you are right in that I am not looking at T&S on 140 stocks.


Paul

Glad you like the book Tony

Maybe looking at the leaders in a particular sector may help - looking at the sector rather than the whole market. Dow Jones also publish various real time sector index which may be of use. So you could study say intc and klac nvls etc and compare to the Philadelphia Semis Index (SOX)

As a side point, you may find futures markets are more similar today in the way they tick to the stock markets of old - but this is a guess.

When people say they've been reading Wyckoff, do they usually mean: the day trader's bible?
Amazon offers these other three:

1. Stock Market Technique, No. 2 (Stock Market Technique) -- by Richard D Wychoff; Paperback (Rate it)
Buy new: $15.26 -- Used & new from: $14.75
2. Stock Market Technique, No 1 (Stock Market Technique) -- by Richard D. Wyckoff; Paperback (Rate it)
Buy new: $11.01 -- Used & new from: $10.75
3. How I Trade and Invest in Stocks and Bonds (Contrary Opinion Library) -- by Richard D. Wyckoff; Paperback (Rate it)
Buy new: $15.00 -- Used & new from: $12.24

and more. But I didn't find "the day trader's bible" there, it seems to be an e-book - sold for less than $10 on ebay. Is it in the public domain?

Are there one or two books by Wyckoff that get you to the essence of his ideas?

Thanks,
JO

Day traders bible e book = Studies in Tape Reading by "Rollo Tape" book. - this is the one people usually mean or the study course that whoever has the rights to sells for USD 000's.

JO

Charting The Stockmarket - The Wyckoff Method edited by Jack Hutson is a good primer. It's $15 from Stocks & Commodities Magazine at www.Traders.com

jon

Anyone here taken the Wyckoff course offered by the 'Wyckoff Stock Market Institute'? I heard that Tom Williams took it early in his career. Seems the course lasts for 9 months (!) and involves exams (!!).

http://technical.traders.com/Produc...dbname=courses\courses&tablename=course_quest

pratbh said:

Anyone here taken the Wyckoff course offered by the 'Wyckoff Stock Market Institute'? I heard that Tom Williams took it early in his career. Seems the course lasts for 9 months (!) and involves exams (!!).

http://technical.traders.com/Produc...dbname=courses\courses&tablename=course_quest

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Yes, I have taken the course. There must be others as well.

erie

And your verdict is....

pratbh said:

And your verdict is....

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Took the course for information and learning purposes. It is not the be all and end all for trading. One still has to study market action and have a plan. I believe in being well read.
The course is very involved and one needs to be motivated to do it all.

hope that answers your question

erie

gassah said:

pratbh said:

Anyone here taken the Wyckoff course offered by the 'Wyckoff Stock Market Institute'?

Click to expand...

I think the course is the best material out there and have a board devoted to it at http://groups.yahoo.com/group/wyckoff-smi

nic

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Does one still have to pay $850 in order to get his hands on Wyckoff's original course?