This board is about “Timing the Trade" while using important Wyckoff concepts for Swing/Momentum trading.
The Wyckoff methodogy has been around for nearly a century. There are many important concepts that were introduced in the early 20th century that can assist the speculator in making good trading decisions. There are also concepts that were introduced that IMO no longer have the relevance and importance that they did many years ago.
Successful Wyckoff speculators need to answer two crucial questions if they hope to obtain superior results. “What is the most important thing to know?” is the first question and “What is the most important decision to make?” is the second. The answer to the first is what is the trend and position of the market. The answer to the second is to determine what stock, if any, offers the best opportunity for speculation, once the trend and the position of the market is determined.
To assist in making the appropriate decision, Wyckoff users frequently follow a five-step process.
1) Determine the trend and position of the market and then decide if they should be long, short or neutral.
2) Determine which stocks are stronger or weaker then the trend of the market.
3) Determine which of these stocks offers the best potential for the time frame of one’s speculation – long, intermediate or short term. The emphasis in my trading and on this board will be trading for the short to intermediate term. A stronger emphasis will be placed for very short term trades.
4) Determine which stocks are most ready to move, those on the “springboard” as Wyckoff often advised.
5) Timing the speculation in the appropriate stocks when the market is oversold or overbought. When the market is oversold, buying stocks that meet all of the above criteria is suggested during or at the beginning of an uptrend move. When the market is overbought, shorting stocks that meet all of the above criteria during or at the beginning of a down trend move.
By following the abovementioned five steps in an orderly manner, Wyckoff speculators can dramatically increase the likelihood of entering a speculative position during the mark up or mark down phase. It is during the mark up or mark down phase that the objective to “make the most in the least amount of time” can be realized.
It's important to recognize that there are a number of factors that I use in my trading that are not Wyckoff. Over the years I have found concepts advocated by Wyckoff that haven't worked very well for me. Additionally, I have added a number of other important factors that I believe are very important.
Many things have changed in the markets over the years. Many Wyckoff students don't believe that to be the case. I disagree with them and believe that dismissing ideas that no longer play an important role in the markets, as well as introducing new ideas into the trading process will only improve a traders performance.
Disclaimer: Information concerning the market and any stocks mentioned are not recommendations to buy or sell. I may have positions in stocks that are mentioned. I make no warranties, expressed or implied, as to the fitness of the information for any purpose, or to any results obtained by anyone using the information. In no event shall I be liable for any direct or indirect damages resulting from the use of the information. Any decisions made by anyone using this information should be made solely on the basis of their own due diligence. |
