Getting to Grips with DbP/Wyckoff

[dbphoenix]

Ah, we've gone off-piste so far as SLA is concerned Very pertinent and nice though.

You're past the primer level. Those few who stick with this and are able to focus on the market rather than themselves soon learn how to evaluate potential ops as I've described above. Those who can't, can't (see p. 33, "A Final Note").

:idea: Just a thought when tracking indices. With such huge volumes changing hands at pre and post market auctions aren't these the major thing to sort out S/R?

You'd have to assess that according to the instrument. Generally speaking, you'd have to look at the S&R for each of the underlying and amalgamate them. It's simpler and easier to focus on the instrument, which is itself an amalgamation. Pre- and post-market trading in stocks continues to develop and expand. As that continues, we will eventually get to a point where all the opening thrashing around is reduced to a whimper. Even now there are days when the "open" is a non-event.

What is more important, however, is to understand that when and as you trade, you trade with different groups of traders, each of whom will enter the scene as you shift from one interval to another. EOD traders aren't going care about your 1m or 5m or even 15m charts, much less a tick chart. The 5m people think that anything under 5m is "noise" and ignore it. The weekly people may not even care about the daily charts (they think that trading daily charts is like telling time by the second hand on your watch). This is why certain levels, such as the previous day's high or low, sometimes "work" and sometimes don't, or why the opening range high sometimes "works" and sometimes doesn't: it all depends on which group is watching what. It also explains why most of what amateur traders think of as "support and resistance" is pretty much bunk.

The SLA pretty much bypasses all of that, except with regard to ranges, which is a great relief to everybody concerned.

 

[dbphoenix]

Here's my thoughts for trading FTSE tomorrow.

Don't become too enamored of channels. Except for the weekly and possibly the daily, they don't last long enough to provide trading opportunities, except in hindsight, and focusing on them will more likely cause you to miss trading opportunities because they didn't have what you thought should be the proper relationship to whatever channel you think you see.

A simple supply line, or demand line, is sufficient (review the charts I've posted to this thread: no channels).

 

[barjon]

Don't become too enamored of channels. Except for the weekly and possibly the daily, they don't last long enough to provide trading opportunities, except in hindsight, and focusing on them will more likely cause you to miss trading opportunities because they didn't have what you thought should be the proper relationship to whatever channel you think you see.

A simple supply line, or demand line, is sufficient (review the charts I've posted to this thread: no channels).

Good point. I was actually looking to see if there was any semblance of a channel - there isn't really with no other touch on the demand line except where I took it from.

I'm pretty uncomfortable trading channels anyway and not much better with horizontal ranges.

 

[dbphoenix]

About the FTSE.

If you're going to trade it tomorrow, I suggest you review Appendix A on hinges. As the range narrows with no breakout, they can be very frustrating.

 

[barjon]

well, I'm in hinge notwithstanding on M1 pullback

 

[barjon]

well, I'm in hinge notwithstanding on M1 pullback

From an SLA point of view it broke the trendline for a loss of about 4 points. Iheld to a stop below the open and increased my loss to 17 points. Clever boy

 

[Splitlink]

Are you using Windows 10 for your charts, Jon? I can't get on with it at all, when wanting to send charts across.

Anyway, I took on board what db said about not trusting channels under the daily TF, but having had such a good (lucky, no doubt, is a better word) week, last week, I have decided to stay with the hourly channel until I come a cropper. I have, just drawn in my hourly TL,so am not in a trade, for the present.

 

[Splitlink]

Now, I can, but am waiting for something that I can call a breakout on lower TFs

 

[Splitlink]

Long at 96. I'll give it r10 points.

 

[barjon]

Are you using Windows 10 for your charts, Jon? I can't get on with it at all, when wanting to send charts across.

Anyway, I took on board what db said about not trusting channels under the daily TF, but having had such a good (lucky, no doubt, is a better word) week, last week, I have decided to stay with the hourly channel until I come a cropper. I have, just drawn in my hourly TL,so am not in a trade, for the present.

No, still steam driven me, Split.

I use Greenshot to capture the bit of the chart I want, then file. What's your problem? Doesn't the T2W manage attachments bit pick it up or what?

 

[Splitlink]

No, still steam driven me, Split.

I use Greenshot to capture the bit of the chart I want, then file. What's your problem? Doesn't the T2W manage attachments bit pick it up or what?

Don't jump the gun, Jon! I haven't got out of my Windows document file, yet!

I'm using Save Screen on the keyboard. It goes to Documents, OK but, then, I need to erase my account details, etc. so as to send the chart, I'll get it sorted. in time. They say that Linnux is difficult bt not on Screen Save, it isn't. Linnux gives the ability to crop the bit that you want before it gets sent to Documenes. Then I could send it straight to T2W.

 

[barjon]

About the FTSE.

If you're going to trade it tomorrow, I suggest you review Appendix A on hinges. As the range narrows with no breakout, they can be very frustrating.

When I posted my prep thoughts I mentioned it seemed to have broken out of the hinge (downward) on the daily. I suppose that's just "maybe" and needs confirmation?

 

[barjon]

................... then, I need to erase my account details, etc. so as to send the chart, I'll get it sorted. in time. ..............

Yeah, that's why I use Greenshot - it's free download.

 

[Splitlink]

There is another hourly, lower down at about 12 and 35, that I have drawn. I'll see what happens, there.

Don't want to clutter your thread with my Windows problems. Let's leave it. There is a Windows thread. I'll find that.

 

[barjon]

From an SLA point of view it broke the trendline for a loss of about 4 points. Iheld to a stop below the open and increased my loss to 17 points. Clever boy

...as it develops

 

[Splitlink]

That has not worked well. for me, either. Two long trades, there, one at par, the other a loss.

Back to the drawing board.

I see your chart, Jon. I am working for an up breakout there so that I can stay long for the rest of the day. I want to spot the day's high, or low. Wouldn't we all! I hear you say.

 

[barjon]

...as it develops

...and more

 

[dbphoenix]

From an SLA point of view it broke the trendline for a loss of about 4 points. Iheld to a stop below the open and increased my loss to 17 points. Clever boy

I wouldn't call it an "SLA point of view" as you're attempting to apply it to a gap. By doing so, you're leaving out a substantial amount of information, essentially flying blind. Try applying the SLA to the futures.

It would be helpful if you were to include the time axis.

 

[barjon]

I wouldn't call it an "SLA point of view" as you're attempting to apply it to a gap. By doing so, you're leaving out a substantial amount of information, essentially flying blind. Try applying the SLA to the futures.

It would be helpful if you were to include the time axis.

Yes, appreciate that. The gap, however, does mean that the previous downtrend was broken. It was something I was meaning to ask which is if the very low activity out-of-hours in the futures provided information that you were willing to hang your hat on.

What I'm trying to do here is not just a straight try at trading SLA, but using it as an attempt to see and understand what is happening. Whilst I agree that context is very important in terms of taking the most appropriate opportunity isn't it the case that any trend you find should exhibit the characteristics of SLA? The two failures in a row tells you when to stand to one side.

 

[dbphoenix]

Yes, appreciate that. The gap, however, does mean that the previous downtrend was broken. It was something I was meaning to ask which is if the very low activity out-of-hours in the futures provided information that you were willing to hang your hat on.

What I'm trying to do here is not just a straight try at trading SLA, but using it as an attempt to see and understand what is happening. Whilst I agree that context is very important in terms of taking the most appropriate opportunity isn't it the case that any trend you find should exhibit the characteristics of SLA? The two failures in a row tells you when to stand to one side.

Yes, the previous downtrend is broken, but whatever long there may have been is "long gone". Therefore, one has to start afresh with what occurs after the gap, and there is nothing in your chart other than a short.

As for a "straight try", if one modifies the SLA or uses only elements of it, then he must essentially start over, which is why I included Developing A Plan in the book. There are, for example, no channels here, so attempting to trade off what one believes are channels amounts to more or less a random trade.

As for "two failures in a row", perhaps there should have been no failures at all. I don't know what you're looking at so I can't say.