Lecture Notes for David Weis’ Lesson

How to monitor the trend?

In an uptrend when the up volume waves begin to shorten in “LENGTH, TIME and VOLUME” and the selling waves begin to increase in “LENGTH, TIME and VOLUME,” you know that the sellers are gradually overcoming the buyers.

 

“THE HEAVIEST VOLUME OF ANY UP WAVE IS THE LAST ONE.

 

When you see UHV up bar in up trend, if it’s genuine strength you must see immediate test bar within 5 bars, and then M moves sideways for some time.

 

“You need to find a trade rather than seek a trade.”

 

Mark Douglas (psychologist) who wrote the book “Trading in the Zone” said:

  1. Trading is a probabilistic endeavor, M moves are probabilities not certainties.
  2. Anything can happen.
  3. No one knows what’s going to happen.

 

When you’re in an uptrend and suddenly the length and time and volume of a down wave is greater than that of up wave, there is a CHANGE IN BEHAVIOR.

 

 

When you see a change in behavior, where do you enter a trade?

There are 2 ways to enter a trade:

  1. After a pull back, when you see a reasonable place to enter the market.
  2. After a low is broken, when you have a wave which changes the behavior.

 


 

Introduction

Trading is not an easy endeavor. In fact, it is the hardest thing in the world. However, as it is important to one’s financial well-being, the time spent to become a successful trader is well worthwhile. (I consider investing long-term trading, so do not single it out)

 
 

In this notebook, I will document some of my analysis and trade selections. It is in free form and can cover anything related to trading. Writing down things can keep my mind focus on what’s happening in the trading world.

 
 

I focus on intermediate to long term trading, using daily and weekly data. Sometimes intraday data is also used to observe market forces, actions and reactions, to better time entries and exit.

 
 

Methods include Wyckoff, Drummond, Schabacker, Bollinger, Darvas et al. The goal is to achieve positive expectancy with good risk/reward ratio.