Wyckoff was a pioneer in the technical analysis of the stock market in the early 20th century. He established the Stock Market Academy in 1930. The main course is to introduce how to identify the dealer’s process of collecting chips and the process of distributing chips/judge. Second and third, in the basic law of “causality”, the horizontal P&F count within the trading range represents the cause, and the subsequent price changes represent the result.
Fourth, fifth, the relationship between price and volume on the candlestick chart to analyze the relationship between supply and demand. This law sounds simple, but it takes a long time to practice in order to accurately grasp the volume and price. I heard that Wall Street financial institutions are using Wyckoff’s trading method to judge the trend of the stock market and look for opportunities. So what exactly is Wyckoff’s theory? Today, I will introduce to you the famous Wyckoff transaction method.
The background of the birth of Wyckoff theory
Wyckoff’s theory was proposed by Richard Wyckoff. He was a pioneer in the technical analysis of the stock market in the early 20th century. He and Dow Jones, Gunn, Elliott, and Merrill Lynch are considered the five giants of technical analysis.
Wyckoff is good at summarizing his years of failures in stock investment, and is committed to introducing individual investors to the rules of the game in the market and the impact of large funds behind them.
In 1930, he established the Stock Market Academy. The main course is to introduce how to identify the dealer’s process of collecting chips and the process of distributing chips. Till, there are still many professional traders and institutional investors applying Wyckoff’s method.
Two Five Steps of Wyckoff Analysis
(1) Determine the current state of the market and possible future trends. Judging the current market trends and future trends can help us decide whether to enter the market and go long or short.
(2) Choose stocks that are consistent with market trends. In an uptrend, choose stocks that are trending stronger than the market. In a downtrend, choose stocks that are weaker than the market.
(3) Choose stocks whose “reason” equals or exceeds your minimum target. An important part of Wyckoff’s trading selection and management is his unique method of using long-term and short-term trading point forecasts to determine price targets.
In Wyckoff’s basic law of “causality”, the horizontal P&F count within the trading range represents the cause, and subsequent price changes represent the result.
(4) Make sure that the stock is ready to move.
(5) When the stock market index reverses, there must be contingency measures Three-quarters of the stocks are moving in line with the market. Grasping the market trends can increase the success rate of transactions.
You need to have a certain quality and have the right mentality to become an expert in stock trading. You not only need to overcome nature-to learn about stock trading, but you also need to overcome yourself-to overcome innate psychological obstacles such as deep-rooted fear, hope and greed, and gradually develop the right attitude.
So, what is the right mindset to improve stock trading?Follow these five steps to win:
You can earn Money in trading is made from finding a important trend of market. losing Money in trading happens by missing or staying on the incorrect side of trends. Therefore, the Real Question is how do we guard and maintain our trading capital … herein one of parts which is called ‘Consolidation market’ OR “Choppy market”
Meaning of ‘Consolidation’ OR “Choppy”
[sws_blockquote_endquote align=”left” cite=”” quotestyle=”style02″] Simply, Consolidation is known as trade in range which not crossing or breaking range. The fluctuations of an stock’s price inside a clear pattern or boundary of trading levels called as ‘Consolidation OR Choppy’ In technical analysis. Choppy level of stock price is commonly known as a period of unpredictable , which ends when the price of the stock cracks the limited boundaries. Periods of Choppy market is known in charts covering when time interval. [/sws_blockquote_endquote]
Lots of traders are making more money whenever his or her setups happen, then again give their profits made into losses whenever the market runs towards CONSOLIDATION OR CHOPPY secessions, aren’t they?
Now, if you find Choppy secession of market, this information will keep you in Profit and you be came one of Profitable Traders.
Yup, Choppy markets chop up your profits. Occasionally understanding whenever do not to trade is really as worthwhile as knowing whenever to trade.
. Understanding your trading plans and trade and whenever to trade is your “offense.” Understanding whenever do not to take your trading plan is your “defense.”
. To winnings at the trading game one need both a Good offense and a Good defense.
[sws_pullquote_left]But, simply as notable, it also shows you how to predict the end of choppy conditions and the beginning of new trends … therefore getting you early into new mega trends! [/sws_pullquote_left]
As I properly describes it, this one is likely to be the best you can chance to create trading strategy for the coming major opportunities in stock market. Lots of traders study about a trading technique by reading a book or purchasing a trading system, …
[list style=”square”][list_item]Can you be sure if the technique will really work for you?[/list_item][list_item]Do you jump right in to the market with real rupees and start trading away?[/list_item][/list]
Some traders perform, and that is an costly way to learn that a system is not for you. Initially let’s review various of the key data tips that can be collected and calculated in the back test process.
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There is usually a surge of investors looking to make the most of tax-free investment. The stock market show’s huge gains. An increasing number of investor tempts to invest in equity, rather than the other alternative like money market instrument…so where should be invested what is safe or risky? But… but… but…Alas…! No answer for that but surely to stop you from making common Mistake usually an investor dose. Investor should be all time panic, should keep ass on fire or crossing the fingers after investment decision…nope just you need..! To take precaution of not repeating other’s mistake?
1) Decision of right price and right time when to invest ..?
Buying just because it has been a big falter or riser recently.
Investing thrives on only one golden principle – buy low, sell high. Most new investors make mistakes in telling what is low and what is high, especially in a
m where decisions are based on various factors and technical parameters. Buyers buy at prices that they think is low enough – the same prices that seem high enough to the seller. Now, you can see that different conclusions can be drawn from the same market information. So, it’s very important that you study how to make decisions based in market parameters before jumping in. Before investing at all, you must know the right price for you to enter, the right time for you to invest, the amount of risk to take.
Buying an investment just because it is going up might sound silly but this is precisely what impulse investors do. Similarly, bargain hunting among shares or funds that have fallen heavily might seem tempting but quite often bad news begets more bad news – only buy in if you truly want to own it for the long term.
2) Putting all your eggs in one basket
Diversification is the best tool in investment and yeah all make most mistake here only
Another common investing mistake that beginners make is investing 100% of their money in a single type of asset. This is far from being a good decision. Most investors even go through the pain of investing in stocks in several industries and sectors. However, this is not true diversification because you are still focused on paper assets.
As a beginner, you should always commit less capital into any market you plan to invest in. This will help you study the market better with time. Once you have better knowledge of that market and you are more familiar with how things work, then you can afford to take bigger risks. To be truly diversified, you should invest in paper assets (stocks, bonds, insurance) and hard assets (Real estate, gold, businesses).
3) Falling in love with an investment
.You might be stuck following a certain sports team for life but there is no need to become emotionally attached. same way I have seen investor investing in those company who’s product, service he avail or following there attachment .so being emotional regarding company is foolishness rather being practical regarding is your investment is smartwork so do smart trading rather being emotional fool
4) Not learning the basics
Learning new thing in life is best habit.” we know age is not bar for learning new thing be always on your toes & get update yourself”
You will find may self proclaimed investors who don’t understand basic investment terms like support and resistance, volume, P/E, market cap, all time high, 52 week high, stock index, all time low, and so on. Always take your time to learn and understand these basics. The more you understand them, the clearer it becomes to you that the market is very complex.
5) carving for quick gains
Most new investors enter into the market because they expect to start making huge profits within a few months. This desperation leads them to making many mistakes, which eventually force them out of the market.
In investing, there are no quick gains, as profits accumulate over a long time. This could be more than 20 years. In fact, to most experienced investors, a short-term investment is one that is set for less than 3-4 years. So, if you are finding a means to get rich overnight, don’t consider investing.
6) Being too short term
.You should invest for a three to five year time horizon as a minimum – so there is no need to react to every market fluctuation. When constructing a portfolio it often makes sense to hold off buying. There is nothing wrong with dripping money into the markets or buying on the dips once your chosen investments have been identified.
7) fail to take opportunity’s
.There is nothing wrong with banking a profit, especially if an investment exceeds your expectations. Use profits to diversify your portfolio or to rebalance it. Re-balancing or buying into areas that have been struggling recently is often known as contrarily investing. This style often needs patience to work but can be very rewarding, but as detailed above, don’t buy just because it has been a big falter.
8) Not having enough time to monitor your investments properly
Usually a investor face the problem of monitoring there investment and so higher fund manager. But money is your concern and wealth so keep keen eye on you portfolio and check on it regularly
To have a portfolio of shares it is our view that you probably need at least 20 – so you will need a lot of time to monitor them. Funds need less monitoring, but you should certainly check them at least every six months.
..9) Being afraid of making a mistake – and doing nothing
“Being conservative is a good attribute to possess,but you being among one of those people who don’t do anything at all. Even when opportunity knocks man still has to get up and answer the door.”
This is the most foolish behavior of any investor being afraid of mistake better not to invest and is often heard people saying stock market is speculation should not invest in stock market better to keep long in bank or post-office etc
10) Doubling up on risk
A common mistake is having too much of a portfolio facing in one direction. For instance investing in mining funds and Chinese equities may bizarrely offer little diversification. As the mining sector is dependent on Chinese growth it may mean the two rise and fall virtually in tandem. Similarly, owning funds which have big stakes in shares you already hold.
It’s fun to think about a new business idea or trading concept or personal life goal — the visualization phase is the exciting part — but as soon as the hard, gritty work of getting traction comes into play, a lack of self discipline means sudden lost interest. Many people live their entire lives this way, pepping themselves up with routine daydreams but never accomplishing anything. It’s really terrible!
On a meta level, the perspective of “Granny’s rule” means understanding, on a deep intuitive level, that all worthwhile successes require “eating the carrots before you get desert”… putting in the sweat equity and the diligence as a matter of first-priority habit, with a stone-cold focus on earning the rewards, not collecting passively via hope or dumb luck. “As you sow, so shall you reap.”
. As a bonus, here are the summarized 21 “Eat that Frog” principles. Can you use any of these to step up your game?
1) Set the table. Decide exactly what you want. Clarity is essential. Write out your goals and objectives before you begin. .2) Plan every day in advance. Think on paper. Every minute you spend in planning can save you five or ten minutes in execution. . 3) Apply the 80/20 Rule to everything. Twenty percent of your activities will account for eighty percent of your results. Always concentrate your efforts on that top twenty percent. . 4) Consider the consequences. Your most important tasks and priorities are those that can have the most serious consequences, positive or negative, on your life or work. Focus on these above all else. . 5) Practice the ABCDE Method continually. Before you begin work on a list of tasks, take a few moments to organize them by value and priority so you can be sure of working on your most important activities.
6) Focus on key result areas. Identify and determine those results that you absolutely, positively have to get to do your job well, and work on them all day long..
7) The Law of Forced Efficiency. There is never enough time to do everything but there is always enough time to do the most important things. What are they?.
8) Prepare thoroughly before you begin. Proper prior preparation prevents [piss] poor performance.
.9) Do your homework. The more knowledgeable and skilled you become at your key tasks, the faster you start them and the sooner you get them done.
.10) Leverage your special talents. Determine exactly what it is that you are very good at doing, or could be very good at, and throw your whole heart into doing those specific things very, very well.
.11) Identify your key constraints. Determine the bottlenecks or chokepoints, internally or externally, that set the speed at which you achieve your most important goals and focus on alleviating them.
.12) Take it one oil barrel at a time. You can accomplish the biggest and most complicated job if you just complete it one step at a time.
.13) Put the pressure on yourself. Imagine that you have to leave town for a month and work as if you had to get all your major tasks completed before you left.
.14) Maximize your personal powers. Identify your periods of highest mental and physical energy each day and structure your most important and demanding tasks around these times. Get lots of rest so you can perform at your best. .
15) Motivate yourself into action. Be your own cheerleader. Look for the good in every situation. Focus on the solution rather than the problem. Always be optimistic and constructive. . 16) Practice creative procrastination. Since you can’t do everything, you must learn to deliberately put off those tasks that are of low value so that you have enough time to do the few things that really count. . 17) Do the most difficult task first. Begin each day with your most difficult task, the one task that can make the greatest contribution to yourself and your work, and resolve to stay at it until it is complete. . 18) Slice and dice the task. Break large, complex tasks down into bite sized pieces and then just do one small part of the task to get started. . 19) Create large chunks of time. Organize your days around large blocks of time where you can concentrate for extended periods on your most important tasks. . 20) Develop a sense of urgency. Make a habit of moving fast on your key tasks. Become known as a person who does things quickly and well. .21) Single-handle every task. Set clear priorities, start immediately on your most important task, and then work without stopping until the job is 100% complete. This is the real key to high performance and maximum personal productivity.
Stocks are categorized as defensives based on parameters which are the measure of the stock-price change compared to the overall stock market change, the return on equity (ROE) . Defensive stocks naturally have a beta of less than 1. A beta of 1 means the stock price moves at the same rate as the overall market, whereas a beta of less than 1 would mean that the stock would move up and down.
[sws_blockquote_endquote align=”says Parikh” cite=”” quotestyle=”style02″] The stock’s average ROE of the last five years should be higher than 25% [/sws_blockquote_endquote]
The stock should have an eye-catching dividend yield and the company should have a history of firm dividend payments. A dividend yield of greater than 3-4% on a consistent basis would be a good measure.
There are many people who try to go for government treasury bonds because they think that these are the best plan for future. They always get reward from these plans. But here too, there is some amount of risk that is associated with the stock market. Therefore defensive stock investing means taking affordable risks in the market. In defensive stock investing you need to check how much you would be able to spend on your investment in the stock market without cutting any costs of your daily costs. It would be best for you if you can ask a good stock broker. He would be able to guide you the little bit information about stock market. Being in the professional field of stock market for several years, he would have much knowledge of the market. Even if you wish to go for day trading, then you can ask him as there are many investors who fear of financing in such type of exchange as they study it very risky.