Getting to Grips with DbP/Wyckoff

[barjon]

Hi Kleft

Yes, thanks for that (sorry late reply but Cheltenham intervened).

I don't dispute anything you say which (in common with a few other things) introduces a note of "judgement" into SLA. That runs somewhat contrary to the "just follow the rules" stance that is oft quoted.

It doesn't surprise me that judgement must come into play and I wasn't intending venom in saying "expert trader" (although I was getting irritated by DB's writing off as beginner or fearful anyone not following his line of thought). I was trying to draw the distinction between "obey the rules" and the breaking of them by "the trader" when it happens to suit (always more obvious in hindsight than real time, of course, although I know DB tries to work from the left hand edge in his explanations).

 

[barjon]

Cheltenham intervened - Sprinter Sacre, lovely to see him back - so where are we in relation to last week's post http://www.trade2win.com/boards/tra...getting-grips-dbp-wyckoff-12.html#post2719646

After an initially volatile then rangy week it finished on a new high for the up move and results in a new, fanned, DL. Clearing, but not yet clear, of the 6200+ area mentioned last time but the break of the weekly SL is looking more convincing. I'd like to see us clear of that year end stumbling block before trading a retracement, but I might small position an earlier one so long as the daily DL is not broken. If it is (DL broken) AMT comes back into consideration.

 

[barjon]

Unable to trade yesterday so not short as I should be after the extremely weak opening brought AMT back into play.

Gonna have to give it another rest, I think, so won't pick up on here for a bit.

 

[Kleft]

I was trying to draw the distinction between "obey the rules" and the breaking of them by "the trader" when it happens to suit (always more obvious in hindsight than real time, of course, although I know DB tries to work from the left hand edge in his explanations).

I wouldn't go as far to say there are times when you should break the rules, it would suggest one has a crystal ball and can differentiate between the times it is right to stray into the weeds and when they should stick to the path, as a trader never knows what will happen next there is a degree of judgement that comes into consideration. This judgement comes from observation, studying and understanding.

I don't mean to sound like a parrot perched on DB's shoulder, the SLA is a primer, a reset for damaged traders and blueprints for someone new to the markets, it lays the foundations on which to build upon.

If one follows the SLA in its basic form and remains disciplined enough to follow it they will become profitable traders, but, the SLA in its basic form is not going to net the big gains that are often available (most trades will be killed off on a stride break exit rule in the first or second ret after entry).

The PDF covers a lot of topics and these are to build on the SLA and give a trader a better understanding of what is happening and what to expect from certain behaviours. It is designed more to make a trader think of reasons to stay in a trade as opposed to looking for reasons to get out, the discussions on the various threads also allude to ways of staying in a trade. (stride break number)

There are elements that have been mentioned, a box of tricks, certain things that might supersede SLA - AMT, understanding what they are and how they work requires observation and study, these are things that will trigger an exit when price is still in stride or push a hold when stride is broken, once you understand them you can add them as a string to your bow ( If you understand them they will seem obvious on the hard right edge as opposed to hindsight).

If price is approaching an area where direction is likely to change (AMT) tighten up on management, if price is moving away from an area relax and give it a little room, so what if a 7 point trade gets closed out for a couple of points, this is about making yourself available to those trades that go >15 points.

Study, pay attention to behaviour, take copious amounts of notes, get an idea of how a trade that works works and how a trade that fails, fails.

I'm not involved as much on the SLA thread (intraday perspective) as I am trying to straighten out my own kinks and I don't want to distract those working on the basics with my ramblings to much.

 

[barjon]

I wouldn't go as far to say there are times when you should break the rules, it would suggest one has a crystal ball and can differentiate between the times it is right to stray into the weeds and when they should stick to the path, as a trader never knows what will happen next there is a degree of judgement that comes into consideration. This judgement comes from observation, studying and understanding.

I don't mean to sound like a parrot perched on DB's shoulder, the SLA is a primer, a reset for damaged traders and blueprints for someone new to the markets, it lays the foundations on which to build upon.

If one follows the SLA in its basic form and remains disciplined enough to follow it they will become profitable traders, but, the SLA in its basic form is not going to net the big gains that are often available (most trades will be killed off on a stride break exit rule in the first or second ret after entry).

The PDF covers a lot of topics and these are to build on the SLA and give a trader a better understanding of what is happening and what to expect from certain behaviours. It is designed more to make a trader think of reasons to stay in a trade as opposed to looking for reasons to get out, the discussions on the various threads also allude to ways of staying in a trade. (stride break number)

There are elements that have been mentioned, a box of tricks, certain things that might supersede SLA - AMT, understanding what they are and how they work requires observation and study, these are things that will trigger an exit when price is still in stride or push a hold when stride is broken, once you understand them you can add them as a string to your bow ( If you understand them they will seem obvious on the hard right edge as opposed to hindsight).

If price is approaching an area where direction is likely to change (AMT) tighten up on management, if price is moving away from an area relax and give it a little room, so what if a 7 point trade gets closed out for a couple of points, this is about making yourself available to those trades that go >15 points.

Study, pay attention to behaviour, take copious amounts of notes, get an idea of how a trade that works works and how a trade that fails, fails.

I'm not involved as much on the SLA thread as I am trying to straighten out my own kinks and I don't want to distract those working on the basics with my ramblings to much.

Hi kleft, thanks again

The sort of judgements I mean are the sort of thing I mentioned in my earlier post 79 http://www.trade2win.com/boards/trading-journals/209116-getting-grips-dbp-wyckoff-8.html#post2629380. Whilst I know that observation and experience aids those judgements they still need to be made.

In my response to db on the other thread I pointed to a 3 point break - which was quite large in the context of the move - which was happily ignored. Later on, though, there is trading action well within a 3 point break albeit that there were valid reasons for such action. Judgement again.

 

[Kleft]

Hi kleft, thanks again

In my response to db on the other thread I pointed to a 3 point break - which was quite large in the context of the move - which was happily ignored. Later on, though, there is trading action well within a 3 point break albeit that there were valid reasons for such action. Judgement again.

I'm not exactly sure what you expect price to do once a trade is triggered, or what your tolerance is when it comes to adverse PA, as you said one could just exit the stride break, wait for a ret and enter again rinse and repeat in which case you are following the plan which is your job.

DB may have different objectives, tolerances and level of understanding so why worry about what anyone else is doing, from my POV the pullback is not that large, it doesn't even come back 50%, yes it might hurt as it comes back to entry but that puts the focus on the PNL rather than the PA.

If there is a valid reason to take action and your plan permits it you should take action, I can accept the risk of opportunity and if the trade doesn't work out I'm ok with that, seeing trades going without you will make you focus on how to stay in and eventually, hopefully you can come to terms with that risk.

You need to work out what you would do in this scenario, if you want play it spandex tight you will be a sub 10 point trader (nothing wrong with it but it is a lot of work to make your broker happy)(1 minute TF) few trades will go far before a stride break snaps them. If you want to get on those bigger trades you will have to accept certain realities about PA.

Read the price of admission and look for 50 examples of 50 point + moves that take over an hour (look for grinding PA) look at how price behaves around the entry and recoils that make you think about hitting the exit. Play them out in replay if it helps, this will hopefully give you a realistic expectation of how price is most likely going to behave.

I don't think there is a specific answer to your questions that I can give you that will solve anything, beyond the basics you need to define certain rules for yourself as you will be the one trading your plan.

I've attached some of my study notes as a hint if things you could think about, beyond this I don't think there is anything else I can say that would answer your questions.

 

[barjon]

Thanks once again, kleft

I'm not unfamiliar with such judgement nor averse to making them - I've been trading ok for well over thirty years (potential trend continuation after retracement).

During those years I've made several attempts with Wyckoff, always with the same conclusion - price progression is much more easily explained in hindsight than it is in real time. What I liked about SLA was establishing context and using a fairly simple set of lines as a guide. So I'm using it as a a background template if you like, both for exploring Wyckoff again and in relation to my bread and butter stuff.

In essence, I regard all analysis as merely giving one a reason to trade - the main job is taking adequate advantage when it goes well and limiting the damage when it doesn't.