Stock Market Trading Strategies – Step Two of the Wyckoff Method

Step two of the Wyckoff method is very simple, but yet so very important in achieving consistent success in the market.

Wyckoff teaches us to always trade stocks that are in harmony with the market. The trend of the market as indicated by the Wyckoff Wave indicates the line of least resistance. It reflects the direction in which most of the individual issues are moving. Traders who take positions that are in harmony with the line of least resistance are more likely to experience positive results than are traders who try to fight the trend. It is always better to have the market working for you than against you. There are always individual issues that make huge moves against the trend, but these are relatively rare.

The odds of finding one of these counter trend wonders are much smaller than are the odds of selecting an issue that is going to perform as well or better than the trend of the market.

Trading in harmony with the market means taking long positions when the market as measured by the Wyckoff Wave is in a defined up trend channel.

It means taking short positions when the market is in a defined down trend channel. When the defined trend is neutral or a trading range, trading in harmony with the market can mean standing aside and let the bulls and bears battle for control of the action, or consider opportunities on both sides of the market.

However, Wyckoff discourages being in positions on both sides of the market at the same time. Theoretically, trading both sides at once while the market is in a trading range is possible, but it is emotionally difficult. Whenever emotions enter the picture, the odds of making costly mistakes increases.

To avoid these errors make a commitment to never be long and short at the same time.

Just because the trend of the market and that of an individual issue are pointed in the same direction does not mean that the trader automatically has a green light to take a long position if the trends are pointed upward or a short position if the trends are pointed downward.

Remember what Wyckoff teaches in step one of the Wyckoff method. Knowing the position of the price in the trend is as important as knowing the direction of the trend. Situation where the market and an individual issue under consideration for a long position are both located near the top of their up trend channels should be avoided in favor of those where the positions are near the bottom of the trend channels. When short positions are being considered in down trends, it is best to locate those situations where both the market and the individual issue are positioned near the top of their down trend channels. If trading ranges are going to be traded, look for those instances where both the general market and the individual issue are positioned near the very top or the very bottom of their trading ranges.

An important concept in applying step two of the Wyckoff method is relative strength and/or weakness. Although most individual issues will be in the same trend as the general market and many of them will even be in the same position in their trends as the market, not all of these are the best candidates for new positions. All up trends and down trends are the result of a series of trusts in the direction of the trend separated by corrections. Some individual issues that are in harmony with the market from the stand point of the direction in which their trends are pointed will make relatively larger thrusts and experience relatively smaller corrections than the market as a whole.

These are the issues that are most likely to have the best potential to produce a profitable trade. Relative strength or weakness can be measured as soon as the first thrust in a trend has been completed. This will likely be even before the trend channel has been clearly defined. Those issues that have made larger thrusts than the market are the ones that should be watched closely as the prices make their first correction. The issues that have made the largest thrusts relative to that made by the market and that then make the smallest corrections relative to the market are most likely to perform well on the next thrust in the direction of the trend. These are the stocks that deserve the most consideration for new positions. This technique can also be used later in the development of an advance or decline when there are additional thrusts and corrections to consider. Those issues that most consistently out perform the market are most likely to produce a profitable trade.

The concept of relative strength and weakness can be helpful in locating trade candidates when the market is in a defined trading range. If the market is in a trading range, most individual issues will also be in trading ranges. However, some will be in up trends and some will be in down trends. Those that are trending up or down are relatively stronger or weaker than the market. These are the issues to consider first when looking for new positions. However, consideration must always be given to the position of the market in its trading range and the individual issue in its up or down trend. If both positions do not favor the likelihood of a rally or reaction, opening a position in that individual issue is discouraged. After the stocks that are trending up or down, attention can be directed to those that like the market are also in trading ranges. Here again, the positions of both the market and the stock are important issues to consider before opening a position.

The merits of trading in harmony with the market may seem obvious. However, most traders are exposed to a stream of market noise from brokers, friends, relatives, co-workers and the media. This bombardment of frequently conflicting information and misinformation can cause a trader to get distracted from those things that are really important. Step two of the Wyckoff method is one of those really important things. It along with the other four steps of the method are the best foundation on which to build a successful market operation.

© The Jamison Group, Inc.: Trade the Stock Market- Step two of the Wyckoff Method

What You Should Know About Buying a Realtor’s List For Marketing

They have tried it in the past and it has not generated the results they expected.

They believe that purchasing a Realtors list for marketing is too costly.

If they had the time to research it further most would find both of the reasons listed above could be misinterpreted information.

For those who did not get the results from the list that the were expecting, the reason likely had more to do with the marketing than it did with the list. The key to successful marketing is consistency of message and frequency of message. It can take 20 or more contacts with prospective customers before they make a decision to buy. For Realtors, it can take even longer if your service competes directly with one with which your target already has an established relationship.

Check your marketing message to be sure that it’s addressing the pain, issues, and concerns of the people on your Realtors list. Realtors will buy from you if the benefits that you provide will solve their problems. The key is for you to keep your message in front of them so when their pain motivates them, your message will be there.

If you have not considered buying a Realtors list because of the cost, you may find that you can recover the cost of the list by attracting just a few new Realtors as customers. How much are you willing to spend to attract a new customer? That depends on the lifetime value of a customer. Would you spend a few hundred dollars to attract a customer who, over their lifetime will generate thousands in revenue? Of course you would. That’s why knowing the lifetime value of a customer is so important.

A friend recently bought a home and received a beautiful landscape painting of a nearby park as a thank you gift from their Realtor. The artist was a local area resident that had found a unique way to market their artwork to new area residents as well as find a new and loyal repetitive customer base of Realtors.

This savvy artist decided that showing in local art fairs wasn’t generating enough revenue and decided to try a direct marketing campaign with the help of a Realtor. If you are a local area business you may be in a similar situation as this artist. You know who your existing customer base is but how do you find new customers as they enter the community?

You could spend hours each week researching new home purchases, blanket or ‘canvas’ market to the community, or just throw the whole marketing budget into printed advertisements of one kind or another.

As our artist friend found, purchasing a Realtors list from a marketing list provider was a much better use of her limited advertising budget. Her marketing message was directed to the exact people she had identified as both potential repeat customers; Realtors, and potential new customers; new home owners. By taking the time to develop and execute a marketing strategy, identifying an exact target market of Realtors, then narrowing this list to a specific area her cost to purchase a Realtors list was not only less expensive then the entrance fee for one art show, but provided a great value also

Direct Mail Services Costs

Due to the umpteen benefits that Direct mail offers, various businesses are willing to implement the direct marketing techniques. However, majority of business are unaware about the direct mail services costs and hence refrain from practicing. Here is a primer of the services costs.If you have a tight budget then it is better to opt for a simple postage service which will cost you just 12.7 cents for a bulk direct mail marketing campaign. The colored postcard which is often used as a tool for direct marketing is the less expensive and easiest to mail. However, you would have to pay a slightly higher price for other forms of direct marketing such as brochures, catalogs, mailers and newsletters.The cost can also vary as per the mailing list. It can cost you around $20-200 per thousand addresses. The cost of the mail service also depends on the quality of the direct mail campaign. If you want to have a classy mail marketing campaign made up of glossy letters and catalogs then the cost can increase than a simple postal mailing service.This was some of the basic information about the service costs. In an average, thousand mails can generate as much as 20 leads to you. There are plenty of postal direct marketing services who excel in providing direct mail services and that too at affordable rates. If you are really considering making it big on the online world then you would have to execute a direct marketing campaign. For more information on direct mail check out offline arbitrage