Swan87's Trading Journal

Swan87

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Hello to everyone! With this journal I want to make my trading logical, reliable and planned .

I want to be a full time trader and trade for a living. The most comfortable for me is daytrading. I will trade US stocks, using daily, 15 min, 1 min charts.

As I try to learn to trade the Wyckoff way (original), I will use his principles. At least, will try to use his original principles (as I admit, that I can use his knowledge not in a proper way).

I will post here my trades, my thoughts, comments and so on.

As a primer method I will use SLA method designed by DbPhoenix. I have found SLA as pretty good instrument to tell a story "what the market is doing and what can be expected?"
I will be very grateful, if SLA and Wyckoff students and master (;)) will help me to improve my mistakes.
 
Trading rules

Something is wrong with my understanding of this method. Why I am still with this method? Well, at the beginning of learning how to trade, I was amazed that people makes their trading decisions, based on some sort of MA or some indi signals. I've tried it also, and as expected, that did'nt work. Then I have learned VSA. That were more interesting, though not so prfitable, or I didn't understand this way of trading perfectly. Now, this is the 4th year of styding Wyckoff method (original). I guess, right now, I am at a state, when I know everything and even can explain to people principles, but unable to use them. Or better to say don't know where I should use them and where I shouldn't. So with this in mind, I wll use only some of them at the very beginning of a TJ. Then I will add more and more (if the need arises) to my system.

Rules:
1. I will track supply and demand with SLA method. It will help me to be on the right side of the market, to take reasonable trades and not to take stupid ones.
With the help of SPY I will use only favorable momets for shorts or longs.
Favorable momens in the market for shorts or longs:

-if demand/supply line has been broken, I will use retracement as an indication for potential trades.
2016-03-02_0045.png2016-03-02_0051.png2016-03-02_0054.png2016-03-02_0055.png

-if price has touched demand line and moved higher, retraced a little bit and went even higher - indication of potential long trades. The same for short trades.
2016-03-02_0057.png2016-03-02_0058.png2016-03-02_0100.png

2. Comparative Strength and Weakness.

3. 50% corrections of important moves as technical indications of strength or weakness. Limits of important Trading Ranges.

For now thas all. As I have already said, will add more if there will be a need.



“The journey of a thousand miles begins with a single step.”

― Lao Tzu
 
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Perhaps you'll find the Wyckoff course material easier to understand and use since the TL days as I've cut it from 500p to a little over 80.

Remember that the SLA is based on Wyckoff's work and that both take a top-down approach. The SLA was written with futures in mind and begins with the weekly and works its way down. Wyckoff, however, was focused on stocks and commodities. To get to those stocks, however, he began with the trend of the market, then found the strongest groups, then the strongest stocks in those groups. Beginning with stocks without accomplishing what leads up to the stocks means a lot of wasted time and effort.

As for the instrument, if it's stocks, you needn't go further than the daily to determine the trend of the market. Analyzing anything less serves no purpose. If the instrument is futures, then the futures are the market, and those are approached as explained in the SLA pdf and in the SLA Book (the SLAB): weekly, daily, hourly, down to whatever interval you prefer to trade.

So if you intend to trade stocks, 1m charts of the SPY or even the SPX serve no purpose. Determine the trend of the market, find the strongest groups, etc, as explained in the Group Charts section of the Wyckoff thread, post 29 and following. This is also addressed in the "Burrow" section of your book. Whether or not the SLA will be helpful with stocks remains to be seen as stocks are subject to gapping. Futures are a different path. I don't recommend trading both. After three years of study, it should not take you long to decide which path is the most appropriate.

Db
 
Hello to everyone! With this journal I want to make my trading logical, reliable and planned .

I want to be a full time trader and trade for a living. The most comfortable for me is daytrading. I will trade US stocks, using daily, 15 min, 1 min charts.

As I try to learn to trade the Wyckoff way (original), I will use his principles. At least, will try to use his original principles (as I admit, that I can use his knowledge not in a proper way).

I will post here my trades, my thoughts, comments and so on.

As a primer method I will use SLA method designed by DbPhoenix. I have found SLA as pretty good instrument to tell a story "what the market is doing and what can be expected?"
I will be very grateful, if SLA and Wyckoff students and master (;)) will help me to improve my mistakes.
Looking forward to your posts.... Good initiative..
 
Perhaps you'll find the Wyckoff course material easier to understand and use since the TL days as I've cut it from 500p to a little over 80.

Remember that the SLA is based on Wyckoff's work and that both take a top-down approach. The SLA was written with futures in mind and begins with the weekly and works its way down. Wyckoff, however, was focused on stocks and commodities. To get to those stocks, however, he began with the trend of the market, then found the strongest groups, then the strongest stocks in those groups. Beginning with stocks without accomplishing what leads up to the stocks means a lot of wasted time and effort.
Determining the trend will help me to be on the right side of the market. The strongest and weakest groups and stocks wil help me to identify the best probabilities, where the greatest demand or supply pressure can be found. Am I right?

And as I trade intraday, it will help me to find stocks which are in a strong bullish or bearish position, so there will be more demand/supply interest within a day. In those stocks which are not moving at all, great forces can't be expected intraday.

At present days mine Prop trading firm offers me to trade "news stocks" or stocks with reports. Where activity can be expected.
So if you intend to trade stocks, 1m charts of the SPY or even the SPX serve no purpose. Determine the trend of the market, find the strongest groups, etc, as explained in the Group Charts section of the Wyckoff thread, post 29 and following. This is also addressed in the "Burrow" section of your book. Whether or not the SLA will be helpful with stocks remains to be seen as stocks are subject to gapping. Futures are a different path. I don't recommend trading both. After three years of study, it should not take you long to decide which path is the most appropriate.
After I will determine the strongest groups and stocks, Isn't it logically to track intraday buying and selling waves to determine which are the best to move today? Comparing buying and selling waves of SPY with stocks on 1 min chart.
 
Determining the trend will help me to be on the right side of the market. The strongest and weakest groups and stocks wil help me to identify the best probabilities, where the greatest demand or supply pressure can be found. Am I right?

Yes.

And as I trade intraday, it will help me to find stocks which are in a strong bullish or bearish position, so there will be more demand/supply interest within a day. In those stocks which are not moving at all, great forces can't be expected intraday.

Not necessarily. Stocks trade for only a quarter of the day. If you're trading for ticks intraday, there's really no point in going to the trouble of determining sector, group, and market strength.

At present days mine Prop trading firm offers me to trade "news stocks" or stocks with reports. Where activity can be expected.

No comment.

After I will determine the strongest groups and stocks, Isn't it logically to track intraday buying and selling waves to determine which are the best to move today? Comparing buying and selling waves of SPY with stocks on 1 min chart.

As to the last, if whatever you're trading is highly correlated with the movements of SPY or the SPX, perhaps. But there's a lot going on intraday in the SPX that has little to nothing to do with stock movement.

Db
 
Determining the trend

Wyckoff approach.

Weekly.
From the 15 of December we are in a trading range. I haven't seen any whooping up maneuvers before this trading range. Only minor climax moves, the lows of which are on 13th of October 2014 and 24 of August 2015. As I see it, price can't go lower 181 level, each time price has been meeting enough buying to reverse. Volume was high, but there were no result on the downside (no follow through). Last time price were unable to equal previous high level. That indication should be regarded as one of the potential signs of supply. Anyway, price is in a range, from this point of view I should be in a neutral position.
spy_week.png

Daily.
From the 30th of December till 20th of January market has declined sharply. Price has met previous support with signs of Selling climax. This selling climax has less volume if it will be compared with previous climax. Then I see two attempts to test this Selling climax. First test occurred from 25-28 of January, where we see TR out of which price went higher. After meeting supply from previous rally top, price declines. The second test has occurred on the 8th of Feb. During decline volume were not increasing. There is less volume on ST. Next day price rallies, which is the first sign of a bullish behavior. On the 10th we see higher top and higher bottom. On the 11th situation is a little bit critical for me. Price went lower, but it hasn't went lower than previous support, volume has raised and with increased volume on this day, price were unable to push lower. Next day price goes higher and approach supply line from the 4th of Feb. For me this situation is still critical. As I don't see signs that this small leg down has ended or has been exhausted. The best place to go higher - yes, that is the best place, as we have price risk at a minimum. To be sure that this market is more probable will go higher from this place - no, confirmation or any worthwhile sign of demand hasn't occurred for me still. On the 16 we see that downward stride is broken.This is confirmation, that secondary test has been exhausted and we more probably will see more rally. From this point, I see, that we have seen signs of SC and secondary test (successful as price went higher) and I can say that we are probably in an uptrend which should be confirmed by ability to rise higher than previous rally. From 12 till 17 we see rally on decreasing volume, I guess it is due to scarcity of supply at this level. Though I don't understand fully what scarcity means (that's more likely one of the signs of bullish behavior, which increase our level of confidence) and how I can benefit from this situation. What I see, is that price has raised from the lows after the test (if price is rising, then demand is greater than supply, at least at this level.) From 18 until the present I see, that price is struggling to go higher at a point where previous rally has met supply, though it goes. Price has confirmed that we are in an uptrend. So positions must be on the long side.
That was an effort to tell a story from the Wyckoff point of view, as he did it.

Wyckoff Daily.png

SLA approach.

Weekly
After the brake of Demand line, price hasn't made confirmed retracement. It is better to say that price is in a TR, so, no SLA approach will work here.

SPY_Week_SLA.png

Daily.
From the Straight Line Approach method, we are in an uptrend, since demand line still is not broken and price goes higher. I will pay attention on the nearest level 200. As this represent top of a previous Trading range. At this place reaction can be expected. By this reaction we can judge what market will do next. For now price is rising to 200.

SPY_SLA_analyses.png


I am not a professional on Wyckoff approach (but I am desire to be). SLA approach tells me, that weare in an uptrend, so trades must be on the long side.


P.S.: I was thinking about my thoughts and my knowledge about Wyckoff approach. May be I choose questions which are not of any help at this or those situations. I mean , I look for answers where this answers won't give me any important information.
What kind of questions should I ask, when price declining, rising. stand still?
 
Stocks trade for only a quarter of the day. If you're trading for ticks intraday, there's really no point in going to the trouble of determining sector, group, and market strength.

Db

What do you mean a quarter of the day? They are active a quarter of the day or price is moving with interst during a quarter of the day? Don't quite get.

The aim is to trade from 1 point to 5 points a day. At least 1 point a day. WIthout leaving trades overnight.
 
I am not a professional on Wyckoff approach (but I am desire to be). SLA approach tells me, that weare in an uptrend, so trades must be on the long side.

You tell the Wyckoff and SLA stories quite well, better than many who have been "studying" these in a casual way for years. "Scarcity" means a lesser number of shares being offered, not so many that they will dampen or overwhelm demand.


P.S.: I was thinking about my thoughts and my knowledge about Wyckoff approach. May be I choose questions which are not of any help at this or those situations. I mean , I look for answers where this answers won't give me any important information.

What kind of questions should I ask, when price declining, rising. stand still?

If you're referring to the SLA, just follow the rules: is price trending or ranging? If it's trending, track the trend with either demand or supply lines (what Wyckoff called "support" and supply lines). If it's ranging, either trade reversals at the limits or wait until price exits the range. There's really no need to overthink this.

Same questions, more or less, with Wyckoff, though he includes volume in his analyses and the SLA doesn't. For that I suggest you study the Volume Studies pdf (post11) as well as the material on his analysis of the NYT Average (post 5) and his analysis of Anaconda (post 39).

Db
 
What do you mean a quarter of the day? They are active a quarter of the day or price is moving with interst during a quarter of the day? Don't quite get.

The aim is to trade from 1 point to 5 points a day. At least 1 point a day. WIthout leaving trades overnight.

They also gap, sometimes dramatically. Futures don't. In any case, neither Wyckoff nor the SLA has anything to offer the scalper, so you may find yourself more conflicted more often than you expect.

Db
 
They also gap, sometimes dramatically. Futures don't. In any case, neither Wyckoff nor the SLA has anything to offer the scalper, so you may find yourself more conflicted more often than you expect.

Db


:eek: ok. Thank you! More questions I ask more confused I become :D Right now I don't even know, am I on the right track to trade intraday or I am scalper now with stocks that don't moves intraday. :cheesy:

Anyway, I guess it will be better to continue and to show what I am willing to do with all of that.
 
:eek: ok. Thank you! More questions I ask more confused I become :D Right now I don't even know, am I on the right track to trade intraday or I am scalper now with stocks that don't moves intraday. :cheesy:

No way to know until you try it, but it would be better to trade on paper for a while.
 
Comparative Strength and Weakness

I will try to make Comparative Strength and Weakness analyses. I will make research to find stocks which will move faster, farer and sooner.

SP500 chart
Trend is still up.

Market.png

Sectors

This chart shows performance of sectors comparatively to the market (SP500).
The most leading sectors are Utilities and Consumer staples. This chart shows that the most agressive sector is Utilities. I have made a chart, where I compare Utilities and Cons. Staples with SP500 Index. From this I can see, that Cons. Staples have ability to resist from selling pressure. Since the beginning of 2015 we can see Trading Range, meanwhile Utilities sector had periods of weakness, stability and strength. Utilities sector is not making new high, while Cons. Staples is making all time high.

Sector Perf stockcharts com.png

I have chosen XLP (Cons. Staples) as a leading sector.

XLP XLU Comp SaW.png

Latter, I have chosen 1yr period for sectors using Investing.com. Here I can see that Cons. Staples sector is for sure leading one. Hmm. Need to think about modern tools, as Wyckoff haven't been using them (It wasn't possible)

1yr prefm Sectors.png

Next step is to determine leading stocks. Major stocks in this sector are: PG KO PM CVS MO WMT PEP WBA COST CL. Leading stocks are MO PM KO as they have shown the best performance.

Leading stock in XLP.png

As I have determined leaders on the bull side, next step will be to determine the worst performing sector or loosers.It was easy to determine the worst sector. Energy sector.

Worst sector.png

Major stocks in this sector are: XOM CVX SLB PXD OXY EOG VLO PSX HAL KMI
Top losers: EOG VLO CVX

loosers stocks in XLE.png


In case the market will trend up or down, or will be in potential preparation, I will pay attention to this stocks and sectors. Some stocks can be in an oversold or overbought position, so, in that case, I will use stocks which haven't come fully into line with the decline or advance in the leaders.

At the end of this analyses I haven't completed my goals. I need stocks, which will go faster, farer, sooner today or at the nearest date. Those leaders and losers don't tell me that they are the hottest stocks. I guess, I need to reread 22M or even "The Day Trader's Bible". Or to pay attention to those areas or situations, where interest from the higher TF will be bigger.
 
Comparative Strength and Weakness

One more effort to make Comparative Strength and Weakness analyses.

"One of the best indications of the future course of a group or a stock its
comparative strength when the rest of the market is weak, or its comparative
weakness in a strong market."


Richard D. Wyckoff

Cyclicals XLY - Neutral
Sector moves similar to the market. No decisive indications of Strength or
Weakness.
XLY.png

Technology XLK - Neutral
XLK.png
Materials XLB - Weaker from a broader view. Neutral on a smaller scale.
XLB.png
Energy XLE - Weaker
Weaker than the market. Down trend. Price don't participate fully on up waves. Approaching downward stride line.
XLE.png
Healthcare XLV - Weaker
XLV.png
Financial XLF - Weaker
XLF.png
Utilities XLU - Stronger
XLU.png
Cons. Staples XLP - Stronger
XLP.png
Industrials XLI - Stronger
XLI.png
 
They also gap, sometimes dramatically. Futures don't. In any case, neither Wyckoff nor the SLA has anything to offer the scalper, so you may find yourself more conflicted more often than you expect.

Db

i agree with many of your posts, but not this statement. Im a scalper and extremely well versed in wyc. as a scalper, i find the knowledge extremely helpful contextually
 
to me that is a TTT failure which then breaks dy res. in fact, pretty sure on m1 the fail of the third attempt higher would be a sell a few pips from the top. not a dissimilar trade from this one in fact
 

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i agree with many of your posts, but not this statement. Im a scalper and extremely well versed in wyc. as a scalper, i find the knowledge extremely helpful contextually

Remember, though, that Wyckoff defined "scalper" differently than we do (Studies in Tape Reading).
 
One more effort to make Comparative Strength and Weakness analyses.

I suggest you use Stockcharts.com. They do all this for you and the charts are closer to the proper aspect ratio. The more squashed your charts are, the more difficult it will be to see the swings.

Db
 
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