I’ve been studying the markets and trading for the last two years and I’ve decided to finally start a trading journal. For anyone interested in following I thought that my first post should be an overview of my methodology.
First – about me – I used to be a professional poker player for eight years. When the Department of Justice decided to shut down on-line poker for US players I had to hang it up. I was a 35 year old with a huge hole on my resume and no interest in working for someone. I had also heard and read that poker players tend to possess the mental and psychological skills required to become successful traders. I decided to take the plunge.
So I decided I wanted to become a day trader and I did the next logical thing. I went to the library and read every book they had on trading. A lot of it was very repetitive and most of the material didn’t resonate with me. I instinctually know I wanted to find something that was simple and discretionary but everything I read was about indicators or patterns or Fibonacci. None of this resonated with me so I kept digging and started reading the works of traders that were successful before the computer came on the scene.
This brought me to Gann, Dow, Livermore, Andrews and Wyckoff. Andrews’ median lines and Wyckoff both appealed to me and I began studying their original material and derivations exclusively and I haven’t looked back. (For those interested you can find Andrews’ original course here: Original Alan H. Andrews Course Material...cleaned up and transcribed.........NQoos-TradingNaked ( and Wyckoff’s original course here:
In the course of research and study I came across Timothy Morge’s site: Market Geometry - Home ( as well as David Weis’ material (his site is: Learn the Richard Wyckoff Method of Trading from David H. Weis (). After studying Morge’s material I decided pitchforks weren’t useful for day trading. (I still use them on higher timeframe analysis). This helped me to settle on David Weis’ material and the use of his Weis Wave. (Here is a webinar with Weis that recently occurred: .
For me – this was it. The Weis Wave in combination with a Wyckoffian study of price action was enough for me to feel like I finally understood the markets. There is already a popular thread on Big Mike’s using a very similar methodology. (Wyckoff Speculator: .
I settled on one market for study (the Nasdaq futures – symbol NQ) and began to refine my methodology. I will post charts and ideas in this thread as time allows. I thought I would add a glossary of terms that will help someone who is new to Wyckoff understand how I view the market. Some of these terms were never used by Wyckoff and have come out of his students or the VSA offshoot. I will also use some metaphors that David Weis uses regularly. If you read something clever most likely I picked it up from David Weis and all credit should go to him.
The Wyckoff Method – An Overview
In the Wyckoff Method – the student is most interested in the relationships between the spread of the bars (or range - how tall a bar is from top to bottom), the close of the bar and the volume. Volume is considered an indicator of activity and a close study of volume will allow the student to see imbalances between buyers and sellers.
The student must also study the structure of the market and it is the proper use of horizontal support and resistance lines, diagonal supply and demand lines and the use of trend channels that allows a student to properly frame the market. Mr. Weis likes to talk about the “story of the lines” and without the understanding and use of these basic tools the student will hopelessly flounder. With proper lines drawn the market will come to life.
In my methodology I use a daily chart to look for areas of major support and resistance and the major trend, a two hour chart to look at the intermediate trend and support and resistance levels and a 512 tick chart with a …