Richard Demille Wyckoff Method
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Thread: Richard Demille Wyckoff Method

  1. #1
    Well its been a while since I posted a new thread. Well here I'm finding myself wanting to make better contribution.

    A bit about me

    My intro to trading

    I began trading forex a couple years ago, once I realized that my daytrading stocks was minimal because of insufficient funds to exchange infinite roundtrips in the stock market. I immediately joined a trading forum/chatroom. I began learning all about trading, as much as I could. Free movies, Free Webinars, and absolutely free pump n ditch stocks to say the least (I didnt even touch these, I was only here to learn the various tools used to exchange markets). After I realized I didn't possess the minimal day trader standing funds in my account. I have done research and came accross Forex.

    My Intro to forex

    I started seeking out more about this forex currency. To make a long story short it brought me into babypips (I learned everything I needed to know about trading at the time from babypips). I found out I could exchange currencies with minimal money thanks to leverage.

    My Forex trading experience

    I ended up opening my very first demo account. Did great on this until I realized that I was ready to start a new account about 3 weeks later (big mistake that was). I attempted approaches, all types of indiors, this, that, and a bit of everything only to dismiss my account. Too much emotion, didnt know about levereging properrly, and impatient. I started another account a much larger account $2K drew it down to about $700, then I built it back up to $2001K back and was so happy I thought I finally got the big picture. I repaired my account from $700 to $2K in less than a few weeks. Boy oh Boy, I had been Mr. Hot Shit... lol; however a few weeks after my dismay I had been humbled... I drew my account to $500 because I had been cocky, overlevereged and overtrade. A total year and a half had gone by throughtout my trading forex into acheive failure standing. Upset, furious, mad, spending 1000's of hours staring at charts, looking for the holy grail I couldnt come to grip with reality and my readily disillusioned trading.

    Where trading took a turning point for the better for me.

    After so much frusteration, I chose to get rid of indiors, emotions, and and decided to truly observe the market for what it really is. I had a friend I had been trading with via skype and we would share ideas and thoughts. Both of us were fed up at this stage and I told him one day... Man I'm done. I want a rest for about a month and collect my thoughts and concentrate on how I was planning to examine charts and determine what the market was really doing. Viewing throught the smoke and mirrors. My friend agreed and stated he was likely to do the identical thing. We kept in touch and attempted to mentor each other. (I'm a self tought trader and so was he. We never paid for training except for the money which we dropped)... I researched, and studied PA, on FF, on the Internet and everywhere I could think of. I was ready to jump back into trading...

    This is the end my friend

    I called my friend, said guy I'm jumping into trading, so I am ready to go. I stated I'm trading naked (priced just charts no indiors). Once I threw off all my indiors and began trading, I realized where my trading went wrong (aside for being over leveraged). I really started to observe the market for what it really is. I revealed a friend of how I've begun trading and I found a ton of success on this. Not rich success but success in trading. I told him I lowered my leverage, and began investing in a new smaller account and trading much smaller lots. Below is an example of a chart I showed him and I sent him several examples of these trades that I had been carrying:

    He began seeing my entries and he explained man how and what exactly are you doing to make those trades, I stated that its just the way I began seeing the market. He responded well guy that resembles Wyckoff. I'm asked who the heck is that? He responded its Jack Wyckoff. Look him up. I looked him up and to my dismay I saw Jack Wyckoff Trading method charts. I'll post those in the following reply to provide a concise summary of who he is.






  2. #2

  3. #3
    My Plan UJ on M1.
    Whether I'm right taking profit or I'm wrong I cut reduction.

  4. #4
    So I started exploring this Wycoff man and looked in his charts like the ones attached here. The top one is the accumulation demand stage (buying stage), the 2nd one is the supply supply phase.

    So he showed me those 2 charts and that I was very intersted since this is how I started seeing the market after a while.

    Jack Demille Wycoff was probably among the greatest traders known. There are others but for the purpose of the thread we will not focus on anything else than Wycoff trading.

    Ill post a bit about Wycoff on another reply to break up the reading a few.


    ************************************************** **************************************************
    Note: time frames for these setups depend on the fad change you wanna ch, intermediat, longer duration or shorter duration. It functions for each of those time frames however you must use top analasys eg daily, h4 m5.

    My entries consiste of m1 chart after I've looked at monthly - daily - h4 - h1 - m5. Monthly is not required however I do like to see a larger picture
    ************************************************** ************************************************** ***


  5. #5
    Richard Demille Wyckoff (born November 2, 1873; died March 19, 1934) was a stock market authority, had his own magazine Magazine of Wall Street (founded1907), along with an editor for Stock Market Techniques.

    Richard was most likely one of the best all time traders. He studied Volume analasys, weak, and strong markets to derive his meathod, which basically is following money and order flow.

    Wyckoff implemented his approaches from the financial markets, and climbed his account such he eventually owned nine and a half acres plus a home next door to the http://en.wikipedia.org/wiki/General_Motors' http://en.wikipedia.org/wiki/Industrialist, http://en.wikipedia.org/wiki/Alfred_Sloan Estate, in http://en.wikipedia.org/wiki/Great_Neck,_New_York (http://en.wikipedia.org/wiki/Hamptons).
    Since Wyckoff became richer, he also became altruistic concerning the people http://en.wikipedia.org/wiki/Wall_Street experience. He turned his attention and passion to eduion, teaching, and in publishing expos?s such as ?http://en.wikipedia.org/wiki/Bucket_shops and How to Prevent Them?, which were conducted at New York's http://en.wikipedia.org/wiki/The_Saturday_Evening_Post starting in 1922.
    Continuing as a trader and eduor from the stock, commodity and bond markets throughout the early 1900s, Wyckoff was curious about the logic behind market action. During conversations, interviews and analysis from the traders of his time, Wyckoff augmented and recorded the methodology he exchanged and edued. Wyckoff worked together and studied them all, himself, http://en.wikipedia.org/wiki/Jesse_Livermore, http://en.wikipedia.org/wiki/E._H._Harriman, http://en.wikipedia.org/wiki/James_R._Keene, http://en.wikipedia.org/wiki/Otto_Kahn, http://en.wikipedia.org/wiki/J.P._Morgan, and many other large operators of the afternoon.
    Wyckoff's study claimed many common features among the best winning stocks and market campaigners of this moment. He studied these market operators and their operations, and determined by which risk and reward had been optimal for trading. He highlighted the positioning of stop-losses constantly, the importance of controlling the risk of any specific transaction, and he demoned egies used to campaign inside the huge trend (bullish and bearish). The Wyckoff technique can offer some insight as to how and why professional pursuits buy and sell securities, while evolving and scaling their market campaigns together with concepts like the Composite Operator.
    The teachings of Wyckoff are still edued in the Golden Gate University in San Fran. http://www.ggu.edu/about/faculty/fac...y/henry_pruden
    Wyckoff was comprehensive in his analysis of this trading range. One tool which Wyckoff supplies is the Composite Operator's concept. Simply, Wyckoff felt that a seasoned judge of this market should regard the entire story that appears on the tape as though it had been the expression of one mind. He felt that it was an important tactical and plogical benefit to stay with this participant that was omnipotent in harmony. By trying to trace his footsteps, Wyckoff felt we're better prepared to develop our portfolios and net-worth.

    Private

    Wyckoff married three times: first in 1892 to Elsie Suydam; second to Cecelia G. Shear, and third to Alma Weiss. Wyckoff billed in 1928 his second wife, Cecelia G. Wyckoff, whom the press dubbed a http://en.wikipedia.org/wiki/Prima_Donna of Wall Street, had wrested control of the Magazine of Wall Street by Mr. Wyckoff by cajolery. The press celebrated separation ended in an agreement where he received a million dollars of their magazine company's bonds.

    Source: http://en.wikipedia.org/wiki/Richard_Wyckoff

  6. #6
    In order to understand the markets you need to understand the subsequent and you must, must, I repeat should know the following:

    1. $ $ $ and addiction drives emotions. The market can become an addiction and also to input the market is driven most often than not by cash hungry minds such as potentially yourself and my self.

    Eliminate emotions, eliminate$$ and eliminate addiction. You ask how? I have written up a topic that will cover these basis all. Please read through this fully and digest it and exercise the techniques.

    Https://www.forexsoutheast.asia/gene...g-happens.html

    Disregard the name in the link above as it applies to this rule number 1.

    2. Throw out your indiors. Get it into mind they lag, reveal false movements, and you're depending on computations verses your eyes and your perspective of the market.

    3. Start learning a bit about Volume and understanding markets and liquid markets. I wont go into topic here but I shall leave you this connection since it is a pre-requesit to understing how price moves. It is simple, an increase in volume should parallel into an increasing market, and also an increase in volume should parallel into a declining market. Please see the attachment which I submitted an edited version here.

    Compare this on the first picture in submitting #2

    Ok yes I know on the Wycoff charts there are alot of stages and cycles. You dont have to memorize all that nevertheless it is very good to understand. Your eye will begin seeing these installments of staring for these setups, after a few hours. I am going to post the Wycoff stages meanings.

  7. #7
    http://blog.stocktradingnotes.com/20...umulation.html


    Phase A -- In phase A, source has been dominant and it appears that finally the fatigue of supply is becoming evident. The coming exhaustion of supply or selling is evidenced in preliminary aid (PS) and also the selling climax (SC) in which a widening spread often climaxed and where heavy quantity or panicky selling from the public is being consumed by larger professional pursuits. After these intense selling pressures are expressed, and automatic rally (AR) follows exactly the selling climax. A prosperous secondary evaluation on the drawback reveals less selling which about the SC and with a narrowing of spread and also decreased volume. A prosperous secondary evaluation (ST) should stop around precisely the exact same price level as the selling climax. The lows of the SC and the ST and the high of this AR set the boundaries of this trading range (TR). Lines may be attracted to help focus attention on market behaviour.

    It's likely that phase A will not incorporate a dramatic expansion in volume and spread. However, it is better if it will, because the more dramatic selling will clean out more of the sellers and pave the way for a more pronounced and sustained markup.

    Where a TR signifies a reaccumulation (a TR within a continuous up-move), you will not have proof of PS, SC, and ST. Rather, phase A will look more like phase A of the basic Wyckoff distribution schematic. However, phase A still signifies the place. Trading range spans B through E generally unfold in precisely the exact same fashion as within an initial base region of accumulation.


    Phase B -- The Purpose of phase B is to build a cause in prep for the next effect. In phase B, supply and demand are for the most part in equilibrium and there is not any decisive trend. Although clues to the future course of this market are often more mixed and evasive, a few useful generalizations could be made.

    At the first phases of phase B, the price swings are inclined to be rather wide, and quantity is usually greater and much more erratic. As the TR unfolds, provide gets weaker and demand stronger as professionals are consuming source. The closer you get to leaving the TR or into the finish, the greater volume tends to diminish. Support and resistance lines usually contain the price action in phase B and will help define the testing process which is to come in phase C. The penetrations or deficiency of penetrations of this TR allow us to gauge the quantity and quality of supply and demand.


    Phase C -- In phase C, the stock goes through testing. It's during this testing phase that the wise money operators determine whether the stock is ready to enter the markup phase. The stock may begin to come from this TR on the upside with higher tops and bottoms or it may go through a drawback spring or shakeout by breaking previous supports until the upward climb begins. This latter test is favored by most traders because it does a much better job of cleaning out the remaining supply of feeble holders and creates a false impression as to the management of their greatest move.

    A spring is a price move below the support level of a trading range which immediately reverses and moves back into the range. It's an example of a bear trap because the drop below service appears to indie resumption of the downtrend. In fact, though, the drop marks the end of the downtrend, therefore trapping the overdue sellers, or bears. The magnitude of supply, or the strength of the sellers, can be judged by the thickness of the price transfer to new lows and the relative degree of quantity because penetration.

    Until this testing process, you cannot be sure the TR is accumulation and hence you must wait to have a position until there is sufficient proof that markup is all about to begin. If we have waited and followed the unfolding TR carefully, we have arrived at the point where we could be quite confident of the probable upward move. With supply seemingly exhausted and our risk point pinpointed, our probability of success is good and our reward/risk ratio favorable.


    Phase D -- If we're right in our analysis and our time, what ought to follow today is the constant dominance of demand over supply as evidenced by a pattern of progress (SOSs) on expanding price spreads and increasing quantity, and responses (LPSs) on smaller spreads and diminishing volumes. If this pattern doesn't occur, then we're advised not to add to our place but to look to close out our initial position and stay on the sidelines until we have more conclusive evidence that the markup is starting. If the markup of your stock progresses as described to this point, then you will have additional chances to grow your position.

    Your aim here has to be to start a position or add to your position since the stock or commodity is about to leave the TR. At this point, the force of buildup has built a fantastic potential as measured by the Wyckoff point-and-figure method.

    In phase D, the markup phase blossoms as professionals begin to move in the stock. It's here that our best chances to improve our place exist, in the same way the stock leaves the TR.

  8. #8
    http://blog.stocktradingnotes.com/20...tribution.html


    Phase A -- In Phase A, requirement has been dominant and also the first significant evidence of demand getting exhausted comes in preliminary distribution (PSY) and in the buying climax (BC). It often happens in broad price spread and in climactic volume. This is usually followed by an automatic response (AR) and then a secondary evaluation (ST) of this BC, usually upon diminished volume. This is the reverse of phase A in accumulation.

    As with accumulation, phase A in distribution price may also end without climactic actions; the sole evidence of exhaustion of demand is decreasing spread and volume.
    Where redistribution is concerned (a trading range inside a bigger continuing down-move), you will observe the quitting of a down-move with or without climactic action in phase A. However, in the remainder of the trading range (TR) for redistribution, the guiding principles and analysis in stages B through E is going to be the same as inside a TR of a distribution market top.


    Phase B -- The construction of this cause Occurs during phase B. The things to be made here in phase B are the same as the ones created for phase B in accumulation, except clues may start to surface here of the supply/demand balance moving toward provide instead of demand.


    Phase C -- One of those ways phase C shows itself following the standoff in phase B is from the sign of weakness (SOW). The SOW is usually accompanied by considerably increased spread and volume to the downside that seem to split the standoff in phase B the SOW may or may not ?fall through the ice,? but the subsequent rally back to a ?final point of distribution? (LPSY), is usually unconvincing for the bullish situation and likely to be followed by less disperse and/or volume.

    Last point of distribution provides you your very last opportunity to exit any remaining longs and your first inviting opportunity to exit any residual longs and your first inviting opportunity to take a brief position. An even better place could be about the rally which tests LPSY, since it could provide more evidence (diminished spread and volume) and/or a more tightly defined danger point.

    An upthrust is the contrary of a spring. It is a price movement above the resistance level of a trading range which quickly reverses itself and moves back into the trading range. An upthrust is a bull trap -- it seems to indie a beginning of an uptrend but in reality marks the close of the up-move. The magnitude of the upthrust can be set by the area of the price movement to new highs and the comparative level of volume in that motion.

    Phase C may also show itself with a pronounced move up, breaking through the highs of this trading range. This is shown as an upthrust after distribution (UTAD). Like the terminal shakeout in the accumulation schematic, this provides a false impression of the direction of this market and allows further distribution at elevated prices to new buyers. Additionally, it leads to weak holders of short positions surrendering their positions to stronger players just before the down-move starts. Should the move to new high ground be on increasing volume and comparative narrowing spread, and price returns to the typical level of closes of this TR, this could indie lack of sound demand and confirm the breakout to the upside failed to signify a TR of accumulation, but rather a formation of distribution.

    Successful understanding and analysis of a trading range enables traders to spot special trading opportunities with possibly very positive reward/risk parameters. When analyzing a trading range, we're first seeking to uncover what the law of demand and supply is revealing to us. However, when individual moves, rallies, or reactions are not revealing with respect to demand and supply, it is important to remember the law of effort versus result. By comparing rallies and reactions inside the trading range into each other in terms of price spread, volume, and time, further clues could be discovered regarding the inventory's strength, standing, and likely future course.

    Additionally, it may be useful to apply the law of cause and effect. In the dynamics of a trading range, the force of accumulation or distribution provides us the origin and the possible opportunity for significant trading profits. Forex range will even give us the capacity, with the use of point-and-figure charts, to project the extent of the eventual move out of this trading range and also will help us ascertain if those trading opportunities favorably meet or surpass our reward/risk parameters.


    Phase D -- Phase D arrives and shows itself after the evaluations in phase C show us the past gasps or the final hurrah of demand. In phase D, the signs of distribution becoming dominant increases either using a rest through the ice or using a further SOW into the trading range following an upthrust.

    In phase D, you're also given more evidence of the likely direction of this market and the opportunity to take your first or additional short positions. Your very best opportunities are in rallies representing LPSYs before a markdown cycle starts. Your legging in of this set of places taken within stages C and D represents a calculated approach to protect capital and maximize profit. It is important that additional short positions be added or pyramided only if your first places are in profit.


    Phase E -- Phase E signals the unfolding of this downtrend; the stock or commodity renders the trading range and also provide is in management. Rallies are usually weak.

  9. #9
    So what I have posted so far is all that a trader should really need. It takes time to obsorb these things discussed. Recall dont overtrade, patience to the setup, Money direction, and confirmation. I will be contributing more to this thread as time permits, I wont have the ability to post consistently it will be off and on but this is precisely what I wished to begin and watch it grow. This thread is open to talk, and market analasys and how we can help eachother:

    Rules:

    1. If you post admiration other people
    2. I won't tolerate disrespecting others
    3. Do not post simply to post with arbitrary comments - you may post related to this subject and current discussions about market sentiments and setups.
    4. Do not ask me or speak about signs.
    5. Do not ask me if you've never traded how to trade. This is a more sophistied thread. If you need trading fundamentals go here http://www.babypips.com/school/ or hunt other parts of Forexsoutheast.asia.com
    6. No question is a stupid question - If you answer someones question as you'd want to get treated, cure them.
    7. Post charts in case you've setups. In case you haven't anything to show for it, do not post entrances and exits.


    Okay I'm tired, I hope this is the beginning of something good.

    P.S. Yes this is the actual deal and this is how you follow the genuine market and ride with the big dogs.

  10. #10

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