npatz_2000
Short

WYCKOFFIAN DISTRIBUTION OUTLOOK FOR SPY

AMEX:SPY   SPDR S&P 500
327 2 6
A possible completion of Phace C of the Wyckoffian distribution phase. Phase A shows the MU (Mark Up Phase) on strong volume . Followed by a PSY (Preliminary Supply) on lower volume , then a BC             (Buying Climax) on stronger volume , indicating a potential slowing of the current trend. This is followed by the AR (Automatic Reaction), which is the first increase in selling seen. Followed by ST             (Secondary Test) of the buying climax high on lower volume , indicating lack of demand by the "smart money" leading to the first significant sell off on high volume establishing the "ICE" AKA support level . This support level is strengthened by the identification of the UTAD (Upthrust After Distribution) wave on high volume , this highlights the Wyckoff law of effort v. result. As you can see there is a large range bar closing at the bottom third and unable to go much higher finding resistance at the previous ST             level. The TR             (Trading Range) is identified by the high of the Upthrust bar and the ICE support level . Price could meander between these two levels for the foreseeable future while the "smart money" continue to distribute their holdings at as high a price as possible before the market rolls over. If this holds true according to anticipated waves and associated volumes as shown then we should expect price to reach the $182.50 level and potentially further depending on the strength of the mark down phase. As stated on the chart, this move may not occur immediately, with a likely trading range occurring prior to FTI             (First time over Ice). Also, it is my interpretation of Wyckoff method that it is more reactionary rather than predictive in nature, requiring confirmation in wave direction and volume . This confirmation would be seen as ND             (No Demand) pullbacks as indicated on the chart at the LPSY (Last Point of Supply) and BUI (Backing Up to ICE) levels, followed by increasing volume on down waves. These would be the first entries in the beginning of a downtrend with further entries in the MD             (Mark Down Phase) on ND             (No Demand) pullbacks. Initial stops would be placed above swing highs and trailed behind these same swing highs. The ideal entry would be a scaling in approach at the levels mentioned with exiting at high volume down waves that could act of SC             (Selling Climax) and a potential reversal. Also, Watch out for a break of the upper range on strong volume as this would negate the distribution phase argument and would likely lead to a continuation of the current uptrend leading to resistance becoming support.
Thank you for the welcome, Bart.

I agree regarding the Weis Wave Indicator. I couldn't find the "true" indicator here at Tradingview as you mentioned. So I am adapting this one. Hopefully it will work out. The "true" indicator uses absolute price change to identify the waves and associated volume which is more useful in my opinion. Adapting this one requires more subjectivity on my part regarding the waves, which I don't love, but it is what it is. I prefer objective, clear cut rules that can be repeated and that has as little subjectivity as possible.

Please keep in mind that I am still learning the Wyckoff method, but it is a method that is logical to me with good risk/reward ratios on high probability swing trades which is what I am looking for. Amazingly I have found little in the way of people who actively trade Wyckoff, as you mentioned. Very few charts on this forum are done in a Wyckoffian method.

Ultimately I plan to trade short term options on entries when I feel confident in my ability to identify the appropriate phases and have more confidence in my entries. I am using this forum to keep my self true and avoid cherry picking entries during my backtesting prior to real money trading. Initially I wanted to day trade the E-mini ES futures market with VSA/Wyckoff, but my work schedule does not allow me to day trade. So I have turned to daily charts and swing trades lasting 1-10 days in length. Making options my preferred initial vehicle to trade these patterns as the risk is defined in the beginning of the trade, plus I don't like overnight gaps, which was the reason I initially wanted to day trade. But as I mentioned this is not an option. I do intend to post frequently as I am working on a screening methodology to find appropriate charts.

I am not sure if Tradingview is the place to gain insight from other traders regarding methodology or just a place to post chart opinions, but I would appreciate any suggestions that members might have regarding trading methods, specifically Wyckoff.

Thanks again for the welcome, and hope to speak to you and other like minded Wyckoffians in the future.

npatz_2000
+1 Reply
Hi,
For a very long time I was waiting and looking for someone who trades along with a Wyckoff's methodology! Finally we got you. :-)
Happy days!
I'm glad you made this post and I hope you will be posting more and often ;-).

As to the Wave indicator you're using. I was looking into it, but it's not what it should be. I asked around few people here, but it looks like TradingView Pine scripting language is not capable to facilitate proper behavior of the Wave Volume indicator. Shame, it'd be great to have it here available online.

Thanks again for posting. Hope to see more from you :-).
Best regards,
Bart S.
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