Starting a trading journal based on my understanding of Wyckoff's work

moreina

Member
67 2
We continue from yesterday's chart. After a climax at the bottom price starts to range before showing signs of pushing to the upside. We determine this because:
1. Price is supported at the halfway point between the bottom of the previous down swing and the high of the technical rally.
2. Price has started to rejected the midpoint of the minor reaction's and is starting to pull away to the upside.
We go long here.
A1jlSBZ7


Buying pressure pushes price up then eventually forms a double top, shifting the intermediate trend into neutral. Under normal circumstances this would be enough for us to exit our long but since price is transitioning from bearish to bullish and there is a high nearby we stay put and watch for a violation of the support points. Buying pressure proceeds to push price all the way to the upper boundary of the trading range where it forms another double top. Here we exit as soon as the double top becomes clear, for a gain of 21 points.
Trades: 1, Wins: 1
e8AcWSRk

Price drops through the midpoint of the entire upswing, putting the bullish nature in doubt, and putting the intermediate trend in a bearish state. It tries to rally but is turned away at the reaction's midpoint, which happens to be in the area of the midpoint of the upswing, also putting the line of least resistance down, and we go short.
4L8hw1zz

A quick reversal brings price back to resistance, putting the intermediate trend back to neutral, then breaks to the upside. We close our short for a loss of 17 points.
Trades: 2, Wins: 1, Losses: 1, PnL: 1.23
28qosv5U

Selling pressure then overwhelms buying pressure right where we exit, and price drops as we anticipated, though we were not able to hitch a ride.
9B90eaJJ
 
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moreina

Member
67 2
Today we start with price having made a temporary reversal from yesterday's bullish swing. The selling wave hits previous support then retraces 100% from the last push down. Intermediate bearish, minor trend bullish. This is point A, which is also the halfway point of the entire bearish swing and so acts as the line of least resistance for the trend.

Price then acts as if it were going to drop and continue the bearish trend but instead quickly reverses and pushes past the resistance point. The intermediate trend is now, at the very minimum neutral, while the minor trend is strongly bullish, and the line of least resistance seems to be up. We anticipate a continuation of the previous upswing since the bearish trend was quite short and did not really reverse the previous advance by much. We go long here.
3t2PlUBK

Price instead immediately reverses putting the intermediate trend back into a bearish state, and the minor bullish trend is also cancelled and also bearish. We close the long for a loss of 20 points and flip short here.
Trades:1, Losses: 1
VGWa2NUp

Price plays a joke on us and stops just a little bit lower than where we entered our short, at B, then proceeds to retest the previous swing high at A before settling down at a higher level. We exit our short for a loss of 13 points.
Trades: 2, Losses: 2
vbSQuC69

Rising support points make us bullish, though we wait for a clearer indication given that this will be the last trade we make today and that we've already incurred two losses.
What we've been able to observe so far is that the violation of the midpoint and subsequent retest of previous support on the 5 min chart indicates a minor trend change in the longer-term time frame but it leaves the long-term intermediate trend unchanged. Therefore in keeping harmony with the overall trend, a "true reversal" would either be:

1) a violation of said support point (here it's the start of the last buying wave denoted by the blue dotted line), or
2) by an intermediate upward trend on the 5 min that fails to breach the previous high and reverses (this would put the intermediate trend on the long-term chart neutral), followed by a breach of the support point that started the second intermediate swing.

A continuation on the other hand would be indicated by the downward trend on the 5 min going neutral, which happens here at point B, followed by a breach of the previous swing (point A) or by a small reaction that is supported higher (the low after the high of C). Following this logic our long entry should have either been

1) after the halfway point between point A and B was breached ( aggressive entry), or
2) the low after point C, where we closed our short.

Given that we missed both, we enter on what seems to be a breakout.
pevjo18h

We close our long when price forms a double top for a gain of 7 points. We're in the red, but hopefully we've come closer to understanding how the true flow of price flows and how to stay on the trending side.
Trades:3, Wins:1, Losses: 2, PnL: -4.7
MeuupCXr

Shortly after our close price rebounds and tests the upper bounds and reacts to the midpoint. Reaction seems to be over so we go long in what is our last trade of the day.
9DKBuuZN

A short-lived advance followed by another shift to neutral clues us in to exit our long, for another loss of 7 points. We'll take today's observations to tomorrow's session and see how we do then.
Trades: 4, Wins:1, Losses: 3, PnL: -5.7
8JCpqQlF
 
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moreina

Member
67 2
Premarket action. Price formed a hinge and broke out to the upside, letting us draw in a new trend line. Towards the end of the session it started ranging at the top, putting the intermediate trend into neutral and stepping out of our trend line. Selling pressure seems to be lessening so we remain bullish.
n1IIuf3i

Shifting to the 5 min chart we don't really see anything of note in terms of price action or volume so we wait for the open to see how things will develop. Intermediate trend is neutral, minor trend is bearish, line of least resistance is up. Halfway of the last upswing is 14846 so we could retest that if price drops out of the range.
NrmJlZW6

Buying pressure pushes price back to the upper bounds of the small range, where price tests the midpoint briefly before rebounding. We go long here because:
1. Upward stride seems to be intact
2. No price action or volume event seems to indicate a reversal.
3. Support found at the halfway point of the last selling wave indicates that an imbalance to the bull side is now in effect.
vktTM5jh

The intermediate trend seems to be shifting to neutral but we hold the long for now, as opposed to our previous strategy of closing out as soon as this happened and perhaps even going short, since the selling wave has not reached the same length as the previous one, and there are no signs of an impending reversal, i.e. no preliminary supply as of the moment.
s7Q1sbSV

The ride seems to be over as we've made a lower high and price has now retraced past the halfway point of the last buying wave. This last buying was shorter than the previous one, and the previous one was shorter than the one before it so we don't expect a further move up without some sort of reaction first. We close out our long for a gain of 20 points.
Trades:1, Wins:1
62y6m8qn

Selling pressure pushes price down to lower bounds of the range, intermediate trend neutral, minor trend bearish. Here there is a failed attempt to go lower making the minor trend bullish. Since there have been no convincing signs of a turn, we take this sign as an opportunity to re-enter our long without waiting for the intermediate trend.
4yQyxzY6

Price rallies, retraces, then fails to make a higher high. We get out at break even.
Trades:2, Wins:1, BE: 1
dci2wZg0

Buying pressure immediately overcomes selling pressure in what seems to have been a test. Price rallies back to the median set by the selling wave that broke the previous intermediate bullish trend and sits there for a while before taking off from there. We try again on the long side because we still don't see any signs of a serious setback for buyers. It's not the best position since we're in the middle of a trading range but the price action has narrowed indicating that the move should be directional.
lVEwYya5

Price rallies all the way to the upper edge then comes back down to the midpoint. We exit as soon as we see that it starts to break through, for a loss of 8 points.
Trades: 3, Wins: 1, Losses:1, BE:1, PnL: 2.5
ZDhIZfo4

10 minutes later we get a reversal in the same area, with what seems like more active participation. The higher low makes the intermediate trend bullish. We put in our last trade of the day and go long once again.
662KBTRV

Buying pressure manages to push price up again to the upper edge but falters and starts to retrace more than halfway. We exit for a small gain of 2 points.
Trades:4, Wins: 2, Losses: 1, BE: 1, PnL: 3
ad5egeXZ

Reviewing the action here we probably should have stopped after the second trade when it was clear that there wasn't enough buying pressure to continue the move, but no selling pressure either.
 

srm888

Junior member
16 3
Hi Morina, you mention your trading is based on Wykoff's work, I believe this is based around volume isnt it? if so, could you recommend any of the books?

Thanks
Sean
 

moreina

Member
67 2
Hi Morina, you mention your trading is based on Wykoff's work, I believe this is based around volume isnt it? if so, could you recommend any of the books?

Thanks
Sean
Hi @srm888

Wyckoff's approach is based on supply and demand, and so by definition volume must be taken into account, but it's only one component of his approach. You need to look at what price did with that volume. Wyckoff placed a lot of importance on support, resistance, duration and distance of the buying and selling waves, etc.

The only book I can really recommend is Wyckoff's own work. It's called The Richard D. Wyckoff method of trading and investing in stocks: A course of instruction in stock market science and technique. There are a few copies floating around on the internet.

You can also browse around the threads and posts by @dbphoenix . He's by far the most knowledgeable and experienced Wyckoff trader I know, in Wyckoff's original approach. A lot of people used a modified Wyckoff approach, which is where the common Wyckoff schematic comes from. I don't know so much about that since I try to stick to the source material.
 

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moreina

Member
67 2
Starting the session at the resistance area formed by the intraday action the day before. The daily seems to have recovered its bullish nature and the 30 minute charts show both intermediate and minor trend to be in a bullish state. As of now, unless we see something significant here, the only trade would be on the long side it it decisively breaks through or if it starts to retrace.
y5pG687t

Price gaps up, drops down and take out the latest low, putting the 5 min intermediate trend into question, then rebounds of previous support. At this point it seems that the 5 min has aligned itself with the larger trend and so we go long on the bounce, with our stop loss at 15381.
LcvWqpbA

Price rallies then immediately reverses with significant volume, pushing back down into the resistance area. On the 5 min chart we now have a broken stride, some supply evident from the previous day at the same level, and what amounts to a terminal markup. This is enough for us to close our long position and flip short, with the expectation that price will stop somewhere around 15311. Our stop loss is around the 15436 giving us about 31 points of risk to 94 points of potential gain.
Trades: 1, Losses: 1
g3kZlAUg

Price drops, forms a high, then a lower low, allowing us to draw our trend line. Price breaks its stride but doesn't come as high as the previous high so we stay in.
x7o2MmJ5

Price breaks the previous low and so we draw another trend line. At this point we can also move our stop to breakeven. Selling pressure lets up a little bit later and price then breaks the trend line once again but fails to even come close to the previous high, signalling further weakness. We expect the decline to start picking up steam now. There is also no sign of support anywhere.
C4wlqhAh

Volume starts to increase, signalling the participation of buyers, slowing the decline, then all trading activity vanishes at the bottom, which coincides with the previous daily high. We've had about a 54 point decline at this point from our initial entry and we can now expect price to make some sort of serious effort to rally. We could take our profits here, since the larger time intervals are still bullish and we can now expect the smaller 5 minute interval to fall in line. We choose however to stay in since our trend line is still intact and we don't see any evidence of serious buying on the 5 minute.
Fcrgfqic

Price rallies as expected, gets turned away at the trend line, then forms a higher low just under the trend line. We can expect that even a small rally here would break the downward stride. Coupled with the fact that we have formed a higher low, and we are bouncing off the previous daily high, is enough for us to take our profits and run. We will wait and see if the sell off will continue or if a bullish move will start to appear.
Trades: 2, Wins: 1, Losses: 1, PnL: 10.5 (10.5 points gained for every 1 lost)
Tqlh7KGD
 
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moreina

Member
67 2
There was a sell-off the daily interval that brought price back down past the resistance area that we previously drew in. Though the intermediate trend is now neutral with a slightly bearish bias, there is an opportunity for a quick trade on the long side since the last push down showed a change of character and buyers coming in to support price. Price now breaches the afore-mentioned resistance area and retraces, which is where we go long.
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D2JRUJuR

nMcgonhA

Prices continues on it's bullish trend for a bit then reverses, taking out the last low before the latest high with higher volume. This warns us that we are probably at the end of the upswing and we exit when price continues past the low. Gain of 17 points.
Trades: 1, Wins: 1
ghB4OJs8

Price bounces off the resistance line but we don't take the long. This is because the overall retracement is quite shallow, making it a minor fluctuation and therefore a bit more prone to whipsawing.
rlDJYZ1k

Price retests the highs twice, with a strong rejection on the 2nd retest hinting that the balance has now shifted towards the sell side. We go short.
0BfvdDLA

Price drops slightly then reverses and takes out the last high. Our stop is hit at 15559 for a loss of 20 points.
Trades: 2, Wins: 1, Losses: 1
3VM6HhU4

Price rises and forms a series of higher highs and higher lows, letting us draw a trend line. The trend line is then broken and price retraces roughly 50% from the start of the move, which also coincides with the last low. No signs selling pressure at the top, so we go long here.
9lZZToXl

Price rises then breaks the upward stride so we get ready to exit on a breach of the latest low. Selling pressure doesn't seem to be present and price recovers. We exit here as we are about to call it a day for a gain of 52 points.
Trades: 3, Wins: 2, Losses: 1, PnL: 3.45
A1P3aVng
 
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moreina

Member
67 2
We start the day with a retracement of the downmove from the 23rd. Supply entered at the 50% RET level but price continued it's way up and is now hovering below the last area of resistance. The plan now is to go long if price breaks the resistance level, or go short if breaks down from here.
ev0gIyIS

Price gaps up on the open then proceeds to drift down to the resistance area and seems to bounce there, reversing resistance into support. We go long here with a stop at 15571.
6W7JPJkK

Price immediately reverses and dips down and hits our stop for a loss of 16 points.
Trades:1, Losses: 1
hwHqDcw1

Selling pressure then starts to come in more seriously and breaches support, retraces, and follows through. We enter short on the follow through. We expect price to stop or hesitate around 15526.
gbApmUeF

Price retraces slightly more than 50% but so far respects the supply line drawn in. We are prepared to exit for a small loss if price turns around and breaks the last high formed.
b8G7FR3S

Price drops back down and goes slightly lower than the previous level but quickly rebounds. Buyers then keep price at support but fail to hit the ask at higher prices and the buying pressure starts to fade away. Price starts to compress between the support level and the supply line. Failure to bid the price up suggests weakness and a continuation of the downward movement though price can also suddenly explode from here so we move our stop to just above the last swing high at 15557.
9tgWhY5x

Buyers pull their bids at support and price falls through, then immediately rebounds and takes out the last swing high, where we proceed to close for a gain of 12 points.
ckI0CRqb

Price retraces and seems to bounce off the last swing high, which would mean resistance shifting into support and confirming an intermediate bull trend, and telling us to go long here. The reason we don't is that we haven't seen anything so far to suggest that a reversal would have any lasting power so we choose to wait and see what happens, and decided to enter short on a failure of the attempted bull move. This happens almost immediately and we go short as planned.
g3xc4lyb

Price fails to follow through on the downside and we start to get ready to exit our short if it plays out that we made a mistake. One more attempt to rally takes place but makes a lower high, indicating three failed rallies with succeeding lower tops, suggesting weakness. Price then attempts once more to rally with an increase in volume. Everything now hinges on what happens next, if price is capable of rising on this increase in transactions we will need to scratch our short and flip long.
ZqdANi8k

Price seemed to fall through but quickly stops and reverses. We close out our short for a loss of 13 points and go long.
Trades: 3, Wins: 1, Losses: 2, PnL: -2.41
Wdl7thZo

Price still fails to go anywhere and we close out or long when we see increasing volume pushing price down. Another loss of 13 points.
Trade:4, Wins: 1, Losses: 3, PnL: -3.5
pgtgyV3Q

In hindsight we got caught in chop and we would have been better served in not trading after our second short didn't work out and just wait until price exited the range. A good rule of thumb to identify choppy conditions before we pay the price is the failure of a reversal followed by a failure of a continuation.
i2SsXO1r
 

moreina

Member
67 2
The daily shows price ranging and having some trouble with 15655.
ETY3rB64

The 30 minute as well shows price in a trading range, currently it seems to have breached the 50% RET from the last downward move and is proceeding to retest the high. If we can get in on a RET on the 1m we'll go long. We use the 1 minute because the distance between the midoint and the other side seems to be too tight for a 5 minute interval.
wHdMNynC

We get our opportunity on what looks to be a pyramid setup, and we go long at 15613 with a stop at 15606.
lTBHNc7v

Price creates a range, seems to breach the upper bounds, then reverses and goes back in to the range. We exit here for a gain of 11 points though we don't go short yet.
Trades: 1, Wins: 1
gPxsWseN

We missed the succeeding drop as price goes back down into the previous range that was formed on the daily. We enter long at what seems to be a turning point. Given that the 30 minute interval has started trending downwards this is a countertrend trade with a possible target of half the selling wave.
ljVSUzlF

Price rallies up to the previous swing high. We exit when the last swing low is taken out for a gain of 21 points.
Trades: 2, Wins: 2, Total points gained: 32
JrYPQu9l
 
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moreina

Member
67 2
We start today with what seems to be another failed retest of resistance. The daily shows an established range and the 30 minute shows the failing retest.
2FeZAhMw

FlYL2AsU

To our surprise the 5m chart shows what seems to be a successful breakout and RET so we go long with a stop at 15628.
sEfSvWB6

Price fails to hold on to the higher area and breaks down, and we get out at breakeven.
Trades:1, BE: 1
My7v88qI

Price eventually dives back down through the resistance area and we go short.
TVe3OLO6

Selling pressure dies down and price forms a higher low, so we mark out the potential support area, while also marking out a resistance area that's immediately taken out while also breaking the downward stride. Our stop is hit for a loss of 7 points.
Trades: 2, Losses: 1, BE: 1
to3r77ER

Price then proceeds to pop back through the resistance area and retrace, so again we go long.
ofpmMvKi

Buyers push price up to 15700, significantly higher than the previous high before price starts to drift down and form a series of lower lows. On the break of the second lower low we exit for a gain of 17 points.
Trades: 3, Wins: 1, Losses: 1, BE: 1, PnL: 2.42
6JAac4do
 
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moreina

Member
67 2
Missed the lucrative opening drive as price drops all the way to the bottom of the range. The speed of the drop suggests it's oversold and we're waiting for a sign to go long at the bottom.
VYv7Hdvw

Price breaks its downward stride and starts to range at the bottom. There seems to be a false breakout at the bottom and we enter long there. Because of the way its behaving at the bottom, i.e. no rally so far, we plan to flip short if price does follow through with the break with a sell stop at 15451.
W85RAEsa

Price rallies up to the midpoint of the range and starts futzing around before acting like it wants to go back down. We exit here for a gain of 5 points.
Trades:1, Wins: 1
VddDeRCj

Price breaks down and we go short at the break.
6itrJY2U

Price drops, forms a lower low and lower high, and proceeds downwards. We expect it to reach 15270 or thereabouts, which is the lower end on the 4 hour chart.
vtCtXEAI

qFQGsS2e

Price breaks its downward stride while at the same time displaying a change of character in the form of increased volume on the rally, as opposed to the previous rallies we've seen so far. We exit here for a gain of 88 points.
Trades: 2, Wins: 2
GebR0yHF

Price has now traveled almost all the way to the swing low and given the speed of the decline we expect some sort of reaction around here.
gcaZbZRI
 
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moreina

Member
67 2
So far the amount of points before a break (of a high or low) is considered confirmed has been arbitrary, and the amount of points price breaks the trend lines has not been accounted for. When price breaks a trend line, unless it breaks the last swing or there is increased volume in the move, it's largely ignored as a signal for exiting the trade. This means that some money has been left on the table and may even have caused changes in analysis, much the same way that a change of character because of volume warns us of an important change.

So after looking at multiple ranges and breaks of trends and of support and resistance, I've come up with the following number of points price is allowed to move against the trend line and S/R before a counter move is considered valid. Of course, this does not take into account other factors which may cause us to exit or enter earlier.

Break of trend lines: >= 15 -> continuation
Break of S/R in a range: >= 10 -> continuation
SL: 6 points above/below danger point
 

moreina

Member
67 2
Price gaps up above the previous high, retraces, and seems to be bounce off the previous swing high. We go long here with a stop at 15440.
QMD3HtRC

tTTiDcfn

Price seems to have found resistance and seems to want to flow downwards instead of continuing on up. We exit here for a gain of 8 points.
Trades: 1, Wins: 1
aVXIoM8R

Sellers take price back down inside the mini range but then seem to lose interest and price breaches resistance once again, retraces, and makes a higher high. We go long once again with a stop at 15465.
YGzQSFYA

Our stop is almost immediately hit and we're out for a loss of 15 points.
Trades: 2, Wins: 1, Losses: 1, PnL: -2
At the open Price immediately rebounds off the previous swing low, confirming support and once again breaches resistance. We again go long on a RET on the 1m and now shift to the 5m chart. Stop loss at 15458.
e77pe515

Price forms a minor hinge before buying pressure pushes price upwards and we start to trend. Price then breaks our trend line by more than 15 points and we exit, as per the rules we set last night, for a gain of 44 points.
Trades: 3, Wins: 2, Losses: 1, PnL: 3.46
FYVQDWdY
 
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moreina

Member
67 2
Today we'll be going through the last 2 days with the 5 minute chart to practice identifying trending vs ranging states of price. We'll use only the 5 minute chart, without any help from higher time intervals, for this exercise.

We start out on the 12th of June with price breaking out of a range and pressing up forcefully, the angle of ascent forming a second fan.
OuD2dgxV

Price keeps on accelerating and forms an even steeper angle of ascent. This is the point where usually there is some sort of major reaction as this rate of price increase can rarely be sustained.
UnPucD1N

Price breaks the trend line, warning us that the climb might soon be over. Price recovers without coming close to the previous low and makes another attempt at the high where it promptly fails again after a very minor breach. This is the beginning stage of either a reversal or a ranging state. We draw a resistance line and observe what happens from here.
VjCxWjDy

Another failed attempt tells us that price is at the very least in a neutral state, however the fact that price hasn't made a lower low so far also hints at the fact that there is no real selling pressure at the moment.
NNpdy5jg

Price breaks the second trend line, rejects resistance once again, and proceeds to form some form of support. We are now officially in a trading range. A break on either side would signal either a reversal or a continuation. Until then price is ranging.
pSNL8SYR

Selling pressure causes price to breach support in what seems to be the end of the ranging state and the start of a trend downwards.
aVexh0QO

The downward stride is checked almost as soon as it started. We draw in a support line on the break of the trend line, though no resistance is confirmed as of yet.
o7dPtf71

We get a sudden thrust up which would have told us that a continuation of the primary move seems to be underway, before turning into a shake out and piercing our support line at the bottom. A failure to follow through here would make us assume that we have entered chop.
zoSsLYJz

There's a quick follow through followed by a rally and a return to a ranging state.
lVto7Y4i

Price wanders around aimlessly for a bit before attempting to break out to the upside and return to a rending state.
JedTjGT2

A higher high and higher low are formed, price is now trending to the upside and we can draw a trend line.
UxwMy7mL

Price hits its head on the previous resistance area, form support, tries again to breach resistance.
c3eQHTeh

Price breaks through support, signalling a reversal and confirming the importance of the resistance area. At this point we draw a box from the lowest point that the previous reversal reached, to the highest point of the attempted continuation, and label this entire area a trading range. The distance end-to-end is 62 points, making tradeable though we would probably have to use a smaller interval than the 5 minute. For the purposes of the 5 minute this is a no-trade zone trading range.
b9aWijsj

What happens here illustrates the importance of defining trending and ranging states before taking any trade, as without it we would have continually taken trades and gotten continually stopped out. This way, we just wait until price decides to go either up or down before committing ourselves.
icfQ48F5

Price attempt to break to the downside then promptly reverses at the edge of our box, another trend aborted. On the 1 minute we would have taken this long, on the 5 minute we sit still.
K8PyfZ05

Price reverses right away and heads back to support. At this point we notice that there seems to be a concerted effort to kick-start a trend inside the range, as evidenced by two downward swings and the rallies reversing at the 50% RET area. A break of support here would put the line of least resistance down.
fqVoFyR4

Selling pressure forces price lower, confirming the trending state. Immediately it reverses, retracing 100% of the downswing. A break of the last swing high would signal a reversal.
AI8kH0bw

A reversal does take place and price is now trending upwards.
rtBPxiDS

Price is rejected around the midpoint of the previous range, drops back to the bottom of the previous swing, nullifying the upward trend and putting us in a continuation for the downward swing, and forms support. The failure of the reversal followed by the failure of the continuation puts us back into chop, and we draw another box around the price action and go back to a ranging state.
1QNq48Io

Price rolls around for a long while before breaching resistance and retracing, we're back in a trending state. The following are the points where we would have gone short (first 3 trades) and where we would have been stopped out. Again, this is assuming we would stick only to the 5 minute chart, which would leave us sitting on our hands most of the time, and not shift to a smaller interval to trade the extremes. We would have shorted and been stopped out 3 times for a loss of 66 points, and gone long on the 4th trade.
a1NbM4V2
 
 
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