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TAPE READING AND ACTIVE TRADING
“He (or she) must study the various swings and know where the market and the various stocks stand. One must recognize the inherent weakness or strength in the prices and understand the basis or logic of movements. He (or she) should recognize the turning points of the market.” — Richard D. Wyckoff
TABLE OF CONTENTS
INTRODUCTION
The Law of Supply & Demand
Stop Orders
The Immediate Trend
General Rules
Tape Reading and The Longer Swings
JUDGING THE IMMEDIATE TREND
The Use of the Wave Chart
Buying and Selling Waves
Judging Turning Points
Tape Reading and the Immediate Trend
Selecting Market Leaders
BUYING AND SELLING WAVES
Relationships of Waves
The Wave Chart
Detecting Critical Points
Selection of Leaders
How to Construct the Wave Chart
Support and Pressure
Price Trend
Activity
Volume
Volume and Activity Analysis
Increases in Activity
One-Point and Three-Point Figure Charts
How to Coordinate the Wave Chart
Selecting Market Leaders
The Law of Supply and Demand
TRADING AREAS AND HOW TO PROFIT FROM THEM
Ranges of 3 to 5 Points
Volume on Rallies and Reactions
Boundaries of Trading Ranges
Establishing a Position
THE TAPE READING CHART
The Tape Reading Chart
Three Vital Charts
Study of J. I. Case
HOW TO DETERMINE BUYING AND SELLING POINTS
The Wave Chart and the Market’s Technical Position
The Tape Reading Chart with the Wave Chart
Buying and Selling
Anticipation of a Change
JUDGING STRENGTH OR WEAKNESS BY HALF-WAY POINTS
Half-Way Points
Floating Supply Reduced
Disciplined Training
HOW TO KEEP THE PERCENTAGE IN ONE’S FAVOR
Stop Orders
Risk at 1/2 to 1 Point
Commissions and Overhead
The Law of Supply and Demand
TRADING ON INITIAL ACTIVITY
A Stock Becomes Active
The Tape Reading Chart
Vertical Line Charts
JUDGING THE MARKET BY TESTS AND RESPONSES
The Composite Operator
Testing Groups
Activity and Latent Buying Power
The Law of Supply and Demand
THE BEST STOCKS FOR ACTIVE TRADING
Primary Requirements
Secondary Requirements
Leadership
Volatile Issues
STOP ORDERS AND OTHER VITAL POINTS
The Use of Stop Orders
Judging Efficiency
Time Limits
Qualifications
Trading
CHART STUDIES
Phillip Morris Reaction Bottom May 16-18, 1973
Phillip Morris Rally Top May 22-24, 1973
Polaroid Reaction Bottom May 16-18, 1973
Polaroid Rally Top May 24, 1973
Xerox Reaction of March 23, 1973
IBM with Five Leaders May 16-25, 1973
RECORDED LECTURES
Philosophy
Wyckoff Method
Charts
Intra-Day Chart
Responsiveness
Stop Orders
Trading Positions – Markup
Trading Positions – Markdown
Trading Positions – Trading Ranges
Setting Up Shop