This is a Response to an Article on Bitcoin using Wyckoff Rules:
FIRST: I have copied and pasted this chart in comments below for easier reading. Those who follow me are aware TV will scrunch everything up together . Which forces me to copy and paste in in comments when I have lots of text bubbles
Now to the publication...
Recently, there was an article posted by Bitcoin Schmitcoin of "Bitcoin Magazine" using rules made by Wyckoff which gave many in the Cryptocurrency Troll box the impression we are on the verge of doom to $3,000 or below. The "purpose" of this publication is to "inform" those familiar with the article about Wyckoff's rules regarding "Distribution Schematic #1: Wyckoff Events and Phases."
You will see in my chart how I believe I have "corrected" his "error" in regards to Phase "D" being as wide as he has drawn in his chart in the following article: bitcoinmagazine.com/...ckoff-distributions/
NOTE: You might have to copy and paste the link in your address bar of your browser for it to navigate to that website. Although, TV could have that bug fixed now.
I believe my text bubbles speak for themselves in response to his article.
Here is a link provided in the article with a "brief" explanation of a few different schematics he charted out as examples. You're doing yourself a disservice NOT to read it. Trust me... stockcharts.com...school/doku.php?id=chart_s...
Wyckoff DID have Three Laws pointed out in the previous link:
Three Wyckoff Laws:
Wyckoff’s chart-based methodology rests on three fundamental “laws,” which affect many aspects of analysis, including: determining the market’s and individual stocks’ current and potential future directional bias, selecting the best stocks to trade long or short, identifying the readiness of a stock to leave a trading range, and projecting price targets in a trend from a stock’s behavior in a trading range. These laws inform the analysis of every chart and the selection of every stock to trade.
1. The law of supply and demand determines the price direction. This principle is central to Wyckoff’s method of trading and investing. When demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. The trader/analyst can study the balance between supply and demand by comparing price and volume bars over time. This law is deceptively simple, but learning to accurately evaluate supply and demand on bar charts and to understand the implications of supply and demand patterns takes considerable practice.
2. The law of cause and effect helps the trader and investor set price objectives by gauging the potential extent of a trend emerging from a trading range. Wyckoff’s “cause” can be measured by the horizontal point count in a point-and-figure chart, while the “effect” is the distance price moves corresponding to the point count. This law’s operation can be seen as the force of accumulation or distribution within a trading range—and how this force works itself out in a subsequent trend or movement up or down. Point-and-figure chart counts are used to measure a cause and to project the extent of its effect. (See “Point and Figure Count Guide” below for an illustration of this law.) .
3. The law of effort versus result provides an early warning of a possible change in trend in the near future. Divergences between volume and price often signal a change in the direction of a price trend. For example, when there are several high-volume (large effort) but narrow-range price bars after a substantial rally, with the price failing to make a new high (little or no result), this suggests that big interests are unloading shares in anticipation of a change in trend. .
Now to the publication...
Recently, there was an article posted by Bitcoin Schmitcoin of "Bitcoin Magazine" using rules made by Wyckoff which gave many in the Cryptocurrency Troll box the impression we are on the verge of doom to $3,000 or below. The "purpose" of this publication is to "inform" those familiar with the article about Wyckoff's rules regarding "Distribution Schematic #1: Wyckoff Events and Phases."
You will see in my chart how I believe I have "corrected" his "error" in regards to Phase "D" being as wide as he has drawn in his chart in the following article: bitcoinmagazine.com/...ckoff-distributions/
NOTE: You might have to copy and paste the link in your address bar of your browser for it to navigate to that website. Although, TV could have that bug fixed now.
I believe my text bubbles speak for themselves in response to his article.
Here is a link provided in the article with a "brief" explanation of a few different schematics he charted out as examples. You're doing yourself a disservice NOT to read it. Trust me... stockcharts.com...school/doku.php?id=chart_s...
Wyckoff DID have Three Laws pointed out in the previous link:
Three Wyckoff Laws:
Wyckoff’s chart-based methodology rests on three fundamental “laws,” which affect many aspects of analysis, including: determining the market’s and individual stocks’ current and potential future directional bias, selecting the best stocks to trade long or short, identifying the readiness of a stock to leave a trading range, and projecting price targets in a trend from a stock’s behavior in a trading range. These laws inform the analysis of every chart and the selection of every stock to trade.
1. The law of supply and demand determines the price direction. This principle is central to Wyckoff’s method of trading and investing. When demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. The trader/analyst can study the balance between supply and demand by comparing price and volume bars over time. This law is deceptively simple, but learning to accurately evaluate supply and demand on bar charts and to understand the implications of supply and demand patterns takes considerable practice.
2. The law of cause and effect helps the trader and investor set price objectives by gauging the potential extent of a trend emerging from a trading range. Wyckoff’s “cause” can be measured by the horizontal point count in a point-and-figure chart, while the “effect” is the distance price moves corresponding to the point count. This law’s operation can be seen as the force of accumulation or distribution within a trading range—and how this force works itself out in a subsequent trend or movement up or down. Point-and-figure chart counts are used to measure a cause and to project the extent of its effect. (See “Point and Figure Count Guide” below for an illustration of this law.) .
3. The law of effort versus result provides an early warning of a possible change in trend in the near future. Divergences between volume and price often signal a change in the direction of a price trend. For example, when there are several high-volume (large effort) but narrow-range price bars after a substantial rally, with the price failing to make a new high (little or no result), this suggests that big interests are unloading shares in anticipation of a change in trend. .
Comment:
Comment:
Don't get me wrong, I like the article using Wyckoff rules and sharing it to the world. I simply want to make sure everyone does not assume we will have doom and gloom. It's possible... sure. Anything is possible. However, it's VERY important to obey Wyckoff's Three Laws.
Comment:
Please read the following article I have already posted previously. It's important in order to understand what is on that chart.
stockcharts.com...school/doku.php?id=chart_s...
stockcharts.com...school/doku.php?id=chart_s...
Comment:
Another source with limited info about Wyckoff explaining "Accumulation Schematic #1: Wyckoff Events and Phases." Some of you may already be familiar with it. Those who are not, it's a good read. At least some of it. That's when I was first beginning to study Wyckoff when I saw this thread on bitcointalk. Please ignore my "ignorance" back then.
bitcointalk.org/index.php?topic=1498...
bitcointalk.org/index.php?topic=1498...
Comment:
There was one more SOW (Sign Of Weakness) I should have added to the chart. I'm referring to Phase "D." I marked it with a Royal Blue Text Bubble. Yet, we overcame that "Sign of Weakness" when we lifted off from approximately $3k to our current location where we are currently contending with that resistance to determine the extent of supply and/or demand.
Comment:
An update with THIS chart used in this publication to show "price movement" since the last posting of this chart. Thought I should post an update since we have a new Daily Candle.
Comment:
Update from the 4h Chart:
It's quite possible we "TEST" $3,463 before a chance for a longer term PIVOT to the upside. The top indicator has a Blue line that has not quite made it to 20% yet. Does it have to go to 20% or below? No!
The RSI on the very bottom indicator is rock bottom and shows signs of coming up but will it result in a longer term pivot? Not quite convinced yet.
It's quite possible we "TEST" $3,463 before a chance for a longer term PIVOT to the upside. The top indicator has a Blue line that has not quite made it to 20% yet. Does it have to go to 20% or below? No!
The RSI on the very bottom indicator is rock bottom and shows signs of coming up but will it result in a longer term pivot? Not quite convinced yet.
Comment:
Wanted to point out a wedge we may stay inside for a while.
Comment:
It's NOT going to stay in the wedge:
Comment:
360m (6h) TF:
Comment:
After looking at it more in lower TF's, there's still a "possibility" we go back up and stay within the wedge.
Comment:
Higher TF's still screaming "Sell."
Comment:
Update with indicator only:
Comment:
The previous indicator chart was the 720m (12h) TF. The following is the Daily TF.
I believe we found bottom and I'm sticking to it.
I believe we found bottom and I'm sticking to it.
Comment:
60m TF update with indicator only:
Comment:
Posting a higher TF to see if you see what I'm seeing. Here's the 3 Day TF (kind of middle of a Weekly TF). The Purple Ghost has been on it's way up with the 3 Day. The green line is also turning upside. This looks like we found bottom. "Odds are..."
My ARI indicator in the middle shows the magenta colored ARI getting well within territory to confirm a bottom. It already is in that territory if you were to ask me.
We found bottom and I'm sticking to it.
My ARI indicator in the middle shows the magenta colored ARI getting well within territory to confirm a bottom. It already is in that territory if you were to ask me.
We found bottom and I'm sticking to it.
Comment:
4h Update:
Comment:
Comment:
IMPORTANT NOTE:
DO NOT ASSUME we MUST do Phase E into a BEAR mode. PHASE E CAN GET CANCELED OUT IF SIGN OF WEAKNESS IS CANCELED IN PHASE D BY THE DEMAND OVERCOMING THE SUPPLY.
David
DO NOT ASSUME we MUST do Phase E into a BEAR mode. PHASE E CAN GET CANCELED OUT IF SIGN OF WEAKNESS IS CANCELED IN PHASE D BY THE DEMAND OVERCOMING THE SUPPLY.
David
Comment:
Description of Phase E [Per the article I provided a link to in this publication:
Phase E: Phase E depicts the unfolding of the downtrend; the stock leaves the TR and supply is in control. Once TR support is broken on a major SOW, this breakdown is often tested with a rally that fails at or near support. This also represents a high-probability opportunity to sell short. Subsequent rallies during the markdown are usually feeble. Traders who have taken short positions can trail their stops as price declines. After a significant down-move, climactic action may signal the beginning of a re-distribution TR or of accumulation.
Phase E: Phase E depicts the unfolding of the downtrend; the stock leaves the TR and supply is in control. Once TR support is broken on a major SOW, this breakdown is often tested with a rally that fails at or near support. This also represents a high-probability opportunity to sell short. Subsequent rallies during the markdown are usually feeble. Traders who have taken short positions can trail their stops as price declines. After a significant down-move, climactic action may signal the beginning of a re-distribution TR or of accumulation.
Comment:
Maybe this will explain better what I'm trying to convey with my previous IMPORTANT NOTE two posts above this post:
Comment:
There is much more knowledge to absorb concerning Wyckoff rules that can explain this better. However, we'll keep it with the way I explained it here based on the what knowledge followers have seen in regards to Distribution Schematic #1. I'm trying to keep it simple for now, so to speak.
Comment:
We're getting very close to breaking out of that AQUA colored wedge in this chart:
And the black colored wedge in my Wyckoff chart:
Yes, we would like to see it "confirmed" at approximately $4,150. However, was that supposed to have everyone out of the trade waiting for it to climb up to $4,150 for confirmation? No, not in my opinion. That's what trailing stops are for.
If it doesn't confirm this particular run up , it does not mean "doom" back down to $3,000. It's a simple delay in my opinion. Let's not get into "doom" price points without more data. My opinion...
And the black colored wedge in my Wyckoff chart:
Yes, we would like to see it "confirmed" at approximately $4,150. However, was that supposed to have everyone out of the trade waiting for it to climb up to $4,150 for confirmation? No, not in my opinion. That's what trailing stops are for.
If it doesn't confirm this particular run up , it does not mean "doom" back down to $3,000. It's a simple delay in my opinion. Let's not get into "doom" price points without more data. My opinion...
Comment:
I circled in BLACK "why not to" assume "Doom & Gloom" if we do not breakout of this wedge yet.
Yes, the 4h and 6h appear to be close to exhaustion going up this particular run up with a possibility of coming back down soon. Even so, I do not believe it goes down below $3,590. Some say as low as approximately $3,000. I'm sorry, but I just don't see that. There was WAAAAAAAY too much consolidation this month (September) for that to occur in my opinion. That would allow too many to get back in who made the wrong decision. Just don't see that happening.
Yes, the 4h and 6h appear to be close to exhaustion going up this particular run up with a possibility of coming back down soon. Even so, I do not believe it goes down below $3,590. Some say as low as approximately $3,000. I'm sorry, but I just don't see that. There was WAAAAAAAY too much consolidation this month (September) for that to occur in my opinion. That would allow too many to get back in who made the wrong decision. Just don't see that happening.
Comment:
We are very close to the point of reckoning now:
Comment:
A reminder of the purpose of a Spring and/or Shakeout By Wyckoff:
Note: Springs or shakeouts usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. However, springs and terminal shakeouts are not required elements: Accumulation Schematic 1 depicts a spring, while Accumulation Schematic 2 shows a TR without a spring.
Note: Springs or shakeouts usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. However, springs and terminal shakeouts are not required elements: Accumulation Schematic 1 depicts a spring, while Accumulation Schematic 2 shows a TR without a spring.
Comment:
TR = Trading Range
Comment:
Comment:
Sorry for so many posts. This is the last one for a while.
It's "possible" we may have begun our Spring early. We'll know in time. It could have something to do with the Bitcoin Jesus talk of split/fork in November for another 1 for 1. Not sure. Time will tell.
It's "possible" we may have begun our Spring early. We'll know in time. It could have something to do with the Bitcoin Jesus talk of split/fork in November for another 1 for 1. Not sure. Time will tell.
Comment:
This is mainly for my own personal reference to look back upon. Even though the purple ghost in the 120m TF might appear exhausted to the downside, the green line came down once again. This shows collocation (harmony) with the 4h TF which has a bit more room to come down even though it's currently at 9%. If you look back in history, its gone deeper than 9% before. So, possible for it to come down more.
The 30m TF green line wants to move up. However, I believe it will continue to come down till the blue line in the 30m reaches 20% at a minimum. My opinion. Will it continue to come down? It appears so but we will know more certain when this purple ghost in the 4h updates in 3 hours 20 minutes.
I've been awake since 4:30pm yesterday. It is currently 7:37pm the next day. So, I'm about to get some sleep. It may be 8 to 12 hours before another update comes your way.
Happy Trading,
David
The 30m TF green line wants to move up. However, I believe it will continue to come down till the blue line in the 30m reaches 20% at a minimum. My opinion. Will it continue to come down? It appears so but we will know more certain when this purple ghost in the 4h updates in 3 hours 20 minutes.
I've been awake since 4:30pm yesterday. It is currently 7:37pm the next day. So, I'm about to get some sleep. It may be 8 to 12 hours before another update comes your way.
Happy Trading,
David
Comment:
I just go a "crossing up" alarm (hand bell). Which meant, this baby broke out!
I see no more sign of weakness. Can more news come to affect it? Sure, it's possible. However, I'm still believing much of what is coming out of China is a ploy to accumulate more Bitcoin by their government.
As for the US and the rest of the world: WE WILL NEED BITCOIN in the coming collapse. Mark my words. How many will have gold or silver laying around to spend when this FIAT system collapses? Very little! We need FIAT... TRUST ME!!!
I see no more sign of weakness. Can more news come to affect it? Sure, it's possible. However, I'm still believing much of what is coming out of China is a ploy to accumulate more Bitcoin by their government.
As for the US and the rest of the world: WE WILL NEED BITCOIN in the coming collapse. Mark my words. How many will have gold or silver laying around to spend when this FIAT system collapses? Very little! We need FIAT... TRUST ME!!!
Comment:
I sure thought this might go lower according to Godmode. However, Wyckoff notes on Springs and Shakeouts had me doubting Godmode's 4h TF as being "exhausted." One can see now it is also helpful to use logic and try to determine the motives of price movement, etc... and not to rely solely on indicator tools we have on TV. Just saying...
A reminder again of Wyckoff Spring/Shakeout:
Note: Springs or shakeouts usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. However, springs and terminal shakeouts are not required elements: Accumulation Schematic 1 depicts a spring, while Accumulation Schematic 2 shows a TR without a spring.
A reminder again of Wyckoff Spring/Shakeout:
Note: Springs or shakeouts usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. However, springs and terminal shakeouts are not required elements: Accumulation Schematic 1 depicts a spring, while Accumulation Schematic 2 shows a TR without a spring.
Comment:
Comment:
Correction made to the "TOP" end of the TR. I was more focused on the bottom end and forgot to adjust the top end.
Comment:
A look at it on the Daily .
The Daily (1440 minutes):
The Daily (1440 minutes):
Comment:
The Daily is probably the LOWEST TF one should use Wyckoff rules. The Weekly works out better and more accurate. However, as I said before, crypto is in LIGHT SPEED currently.
Comment:
Another example from May, 2017:
Comment:
I should have posted this earlier in regards to "double bottom."
Comment:
This is the Daily (1440 minutes) to provide a look at our progress in Phase "D" and to show we've handled this "Sign Of Weakness" (SOW) in Phase "D" quite well under the circumstances. What circumstances? The negative news out of China.
Referring to the indicator at the very bottom: The Aqua and Green lines signaling we're approaching exhaustion in the 360m TF. However, the Red and Blue lines still have room to come down to the 20% or below mark. Not that they have to come down to 20% and below. It's just that the volume has to increase quite a bit for us to come up out of this slow slump to the downside.
It's looking possible we may go down to one of the magenta colored price points I posted in order to "find" the demand (support) needed to provide momentum to bust through this lower red resistance line shown the Wyckoff chart above.
Referring to the indicator at the very bottom: The Aqua and Green lines signaling we're approaching exhaustion in the 360m TF. However, the Red and Blue lines still have room to come down to the 20% or below mark. Not that they have to come down to 20% and below. It's just that the volume has to increase quite a bit for us to come up out of this slow slump to the downside.
It's looking possible we may go down to one of the magenta colored price points I posted in order to "find" the demand (support) needed to provide momentum to bust through this lower red resistance line shown the Wyckoff chart above.
Comment:
LET ME EMPHASIZE SOMETHING:
The Aqua and Green lines HAVE APPROACHED EXHAUSTION!!! Do we have confirmation of this? NO!
I'm simply pointing out we still have "some" downside pressure. I can see it in the 120m TF to the far right.
The Aqua and Green lines HAVE APPROACHED EXHAUSTION!!! Do we have confirmation of this? NO!
I'm simply pointing out we still have "some" downside pressure. I can see it in the 120m TF to the far right.
Comment:
We are currently heading upside. Yes, the 240m TF shows "potential" exhaustion to the upside at the moment. However, the 360m and 720m are leaning more on the side of more upside on the way. This is my opinion.
The Gray Ghost line inside the indicator on the bottom is showing signs of potential downside exhaustion occurring on the Daily (1440m) TF. We may be seeing the beginning stages of that downside exhaustion in the lower TF's posted above:
The Gray Ghost line inside the indicator on the bottom is showing signs of potential downside exhaustion occurring on the Daily (1440m) TF. We may be seeing the beginning stages of that downside exhaustion in the lower TF's posted above: