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Leo Karl wrote:
>
Snip-Snip-Snip
>
> If "indicators and moving averages are not used", while "chart reading is
> stressed", does that mean the method is amenable to computerized analysis
> (e.g. Metastock)? Since Wyckoff himself (1873 - 1934) developed his methods
> prior to computers, was it a "lot of work" because computers were unavailable
> to him, or is it a judgmental system more akin to pattern analysis than
> numerical analysis? I guess I don't understand how a system based on price
> and volume doesn't use indicators, and why I haven't seen any "Wyckoff
> Indicators" that have been developed over the years.
Snip-Snip-Snip
Leo,
After the trading day tomorrow, I will send you some comments from Mr.
Pruden's text that he used in his workshop. I have that material at my
office, and I am receiving this post at my apartment. You can certainly
use the MetaStock program to aid you in most any type of technical
analysis. But understand that there are other ways of doing TA other
than the 60-90 canned indicators that MS lists. I used to look for the
Holy Grail in a moving average or some great indicator until I had an
instructor named McLauren advise that there are only two things that are
real: price and volume. Everything else is, as the name suggests, an
i-n-d-i-c-a-t-o-r. If you will look at the datapane in the Downloader,
you will see date-O-H-L-C-Vol-OI. That is all that is real. The 60-90
indicators attempt to manipulate that data to suggest a course of action
that price might take. Would it not be more expedient to let the price,
open/close relationship and the volume (the amount of effort required to
move price "n" points over "x" periods) be the basis to suggest when to
place a trade?
Mr. Richard Estes, a regular respondent to this List, has expressed the
real basis of trading for profit several times. He is much more
eloquent (and brief) than I am. Richard, will you address some of Leo's
questions?
>
> Let me try to explain. Most of us at some time in our lives have done
> traditional "work" for which we were paid (rewarded) by receiving a specific
> number of dollars in exchange for our time in producing some product or
> service. For example, one hour of digging ditches gives me $10.00, while for
> one hour of legal work I pay maybe $150.00. With trading, it's much more
> difficult to know what more "work" one can do to make more money. Do you read
> more books; look at more charts; write more explorations? Since sometimes
> those efforts are rewarded, and sometimes not, the rewards from ones work
> efforts are often illusive.
=============
Leo, perhaps you have answered your own question. Your rewards will be
not from the number of hours you work, but from the quality of those
hours. When you offer yourself for employment, you are, as you have
stated, selling your time for a specified price. The only way that I
can see that you can increase your earnings are to offer more hours for
sale or increasing the value of those hours. What if you only studied
those charts that produced successful results. I mean really studied
them. It would appear to me that soon, you would learn to recognize
what a successful pattern would look like. Also importantly, you would
learn to recognize when a pattern was beginning to fail, and know when
to quit the trade. When I place a trade, I do not know if it will
work. I know that I have a 50-50 chance of being right. What is
important to me, is when to recognize that the trade is wrong and get
out with as little damage as possible. The great sin is not in being
wrong, but in staying wrong.
==========================
The market is like a bad parent who rewards and
> punishes his children without regard for the child's best effort.
===========================
The market doesn't even know you are there, your name, or what side of
the trade you are on. Nor does it care. The market does not know Leo or
Al or anyone. It is there. If we wish to take from it, we must learn
it's ways. Then we will be rewarded. The market does not inflict
punishment. As Bill Williams of the Profitunity Trading Group says,
(sic) "You must learn to want what the market wants". When we can get
rid of our bias's, our pre-conceived notions, and read what the market
is telling us, then we will be rewarded.
==========================
> I think I need a better understanding of what "trading" work really is -- and
> maybe what it is not.
========================
This last statement is indicative that you are ready to learn to trade.
Sorry about the long response. What I have expressed is what I have
learned and what works for me. I am not being judgemental nor do I care
to be argumental. Just trying to help.
Al Taglavore
>
> Leo
>
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