UK Institute of Financial Professionals

An article by Knight Kiplinger about the “Invisible Rich” struck a nerve with me because this is where my thoughts have been going – living with a purpose, a financial purpose. In my own life, I knew an elderly woman that lived next door to my parents. She did not own a car or even a clothes dryer. She walked to the grocery store then called a cab to take her home after shopping. She hung her clothes to dry. She also walked downtown each month to do her banking, manage her portfolio of CD’s and money market accounts. This was before the internet and such but I doubt if she were here today – she wouldn’t pay for internet access just to save her time. She was a millionaire before there was Microsoft.

Her house served it’s purpose. Her clothes kept her warm and stylish. Her life was simple and comfortable but by no means easy. She was the perfect example of the “Invisble Rich”. It doesn’t matter how long it took to build this kind of wealth – what matters is that she squandered nothing. She thought through exactly where her money would go. She designed her path and then lived it.

I have always said if I somehow come into alot of money I wouldn’t spend it – spend it. I would pay off my debt, pay for a simple efficient home in full, the same with a car – low cost good quality used car paid in full then invest the rest. I wouldn’t want more than security and the freedom to choose the rest. Money and Debt – I’m wrangling a new mindset here as I start out on my own again… from scratch at 45 and still raising two more young children. If I can do it – anyone can.

Popularity Vaykoffa

Popularity Vaykoffa, as an analyst, is quickly growing. Even when he tried to limit the size of the next newsletter, nearly doubling its price, subscribers have brought him $ 60,000 for six weeks. By his own count, he “made a lot of money for themselves and their clients and subscribers, whose number exceeded 200,000,” until his health began to surrender, he turned entirely to publications and advisory services in 1928.

When his method was published as a correspondence course in 1931, he called it “a mixture of what I learned in 40 years of active experience on Wall Street.” His method is based on the law of supply and demand. When demand exceeds the per share offer, prices rise and when the proposal more in demand, prices fall. He compares the tape tickers Stock Exchange with a movie: “Every minute, we show that more – supply or demand.

Method Vaykoffa on a price chart, the volume and their relationships in time tells how the market, the group shares and individual securities react to the battle of the demand-supply. Find turning points – the final peak of the growing market, the last bear market low and intermediate teeth and small moves.

He is guided by the fact that every change in the market consists of waves of purchases and sales, which last for as long as able to attract followers. As soon as the followers of drying up, wave ends and begins a movement in the opposite direction.

Small daily wave formed in the big waves of 3 to 5 – items which, in the end, lined up in the bull and bear market moves to 10 – 20 points or more.

It acts in harmony with the wave, not against it, but only if the wave is significant. His philosophy focuses on the accumulation of shares: Buy on the downward wave, ride the small and medium-increasing waves, until you see a particularly strong, breaking wave. Then sell.

Using the method Vaykoffa involves work in both directions – to cover all shorts and enter into a long bottom, amid the panic and depression, or in an intermediate bearish movement, as well as long to sell all shares and enter into a short at the top of the boom or intermediate bullish move.

Horizontal formation

Charts figures are so detailed, as you want. Odnopunktovye charts describe each complete change of prices – from 57 to 58, to 59. Trehpunktovye charts reflect only changes in the value of three points – from 57 to 60, to 63. Five-and desyatipunktovye graphics are built the same way.

Method Vaykoffa requires some experience to work with one-and trehpunktovymi schedules. Odnopunktovy chart indicates the immediate or short-swing goal, while trehpunktovy chart indicates the general direction of trends and the likely target of large swings.

Odnopunktovy schedule action can be constructed from a vertical or graphics from the list price open, high, low and close to the daily newspaper.

Suppose your action on Monday closed at 50. On Tuesday, it opened at 50, rose to 51 7 / 8, fell to 45 and closed at 48.

Trehpunktovy schedule compresses odnopunktovy, discarding all changes of less than three points. In our previous example, the only trehpunktovoe movement occurs between the maximum and minimum Tuesday.

The general model of graphics figures reveal the accumulation or distribution, clearly indicate the line of support and suggestions and identify periods of growth and decline.

However, the most valuable properties of graphs of figures – is their “horizontal formations, which in many cases indicate the approximate number of points that must move to action or group of stocks. addition, these horizontal education, or area “deadlock”, also help determine when the action met with resistance and reached the end of his movement.

So far we have seen that the vertical and curly graphs show the direction of movement and measure it. To decide when to act, the schedule of waves – the best prompter.

Wave chart

Wave Chart shows us the psychological moment for the purchase or sale. This is the pulse of the market, a condensed view of the development of each session, each stock exchange and an invaluable aid in determining the turning points of small and intermediate swing.

Schedule of waves – a graph of total price of the shares of the five leading industries over the past few months. This group of five from time to time be adjusted so that in a wave chart attended only action – leaders.

We thoroughly discuss the wave graphics after a while, because they understand the need for other concepts.

The construction schedule is essentially a simple task, but it may provide important lessons about market behavior. Do not spend more time charting than their interpretation. The right balance that will come with experience.

Early Vaykoff recommends to build indexes of the market trend charts and graphs Group. Then, when the graphs of the Group offer promising opportunities, go to graphics shapes of individual stocks in this group to decide which of them are in a better position. When you have narrowed the selection to one – two of the best stocks in the group, just look at the vertical graphs of these shares.

Investor / trader

The investor / trader can maintain a large number of graphs Vaykoffa without a plan of action. But the method of logical progression from the graphs of the total market to groups and further to the individual shares. Investor / Trader, practicing the method Vaykoffa limit its work with the schedules so that most of their time is devoted to the study and interpretation of their records. At the same time, they are a sufficient number of charts to give yourself a choice and a broad perspective of trends.

Introduction to the method Vaykoffa begins with a vertical and curved graphs that complement each other. Vertical graphs describe the direction in which the action moving, the group or the market, while the graphics of figures only indicate how far they should go. The construction of these graphs requires only graph paper and the stock price in the daily newspaper.
Vertical graphic record daily high, low and closing price plus the volume of trade in individual stocks, index shares, or groups of leading market indices, depending on their destination.

Lines of price and volume show how during the day passed battle between the bears and bulls, and the closing price indicates the result of this battle. If the closing price is connected by a continuous line, they show a net movement of the market.

Price movements on the vertical graph shows the supply and demand, points of resistance and support, as well as the trend, while changes in the volume describe the intensity of trade and the quality of purchases and sales. However, the price and volume signals on the direction of future movements – when the stock is ready to pounce when the movement reaches its climax today, and what phase – for purchases or sales, you need to go long or short.

Graph figures

Search these critical turning points by the method Vaykoffa is not so much in the strict application of mathematics, but in the knowledge of the psychology of the investor. In the heart of the analysis Vaykoffa is understood that traders and investors are influenced by advice, news, rumors, income analysis, financial statements, the rates of dividends and a myriad of other sources of information. For Vaykoffa not important, encourage them to buy or sell – all the individual steps are reduced to such behavior of the market, if the fluctuations were the result of the investment operations of one man, “composite” of the investor.

Vaykoff imagined this complex investor, because he knew that there is “usually one or more major operator working for each stock. Sometimes a lot “

The first statement of Richard

Anyone who buys or sells stocks, bonds or commodities for profit – a speculator, but only if he enjoys the intellectual foresight. If he does so, he just plays in gambling.
Richard D. Vaykoff (Wyckoff), American pioneer of technical analysis of shares.

The first statement of Richard Vaykoffa studying his method of stock analysis, published in the thirties, was quite simple and specific – forget everything ever used the decision factors. All you need to know is in the table of prices and volumes of shares in your daily newspaper.

With this approach, a return to basics Vaykoff promised to show his students the “real rules of the game, in which so deftly played by wealthy investors with sufficient capital in the market.

Despite the fact that it is difficult to imagine anything, especially the technology stock market, remain viable in the thirties to the present time “method of trading and investing in stocks” by Richard Vaykoffa passed through time, becoming a classic. Although in our computerized time is no shortage of magical techniques, technology Vaykoffa provides a firm basis for the analysis of fundamental relationships among the initial forces of the market. In this respect it is like pearls on a black dress in a woman’s wardrobe. This ornament, which will never become obsolete.

Investing in Stocks

With this approach, a return to basics Vaykoff promised to show his students the “real rules of the game, in which so deftly played by wealthy investors with sufficient capital in the market.

Despite the fact that it is difficult to imagine anything, especially the technology stock market, remain viable in the thirties to the present time “method of trading and investing in stocks” by Richard Vaykoffa passed through time, becoming a classic. Although in our computerized time is no shortage of magical techniques, technology Vaykoffa provides a firm basis for the analysis of fundamental relationships among the initial forces of the market. In this respect it is like pearls on a black dress in a woman’s wardrobe. This ornament, which will never become obsolete.

Look for Vaykoffa – select only those stocks that will move the earliest, fastest and furthest in a bearish or bullish market, limit losses and let profits run, and the most efficient use of investment capital. Can hardly find such a view is outdated.

Universal theory

Furthermore, this universal theory. Its premises are suitable for any free market, whether stocks, bonds, options or commodities.

David Weis of Memphis, editor of the Elliott Wave Commodity Letter, in its trading and analysis products for 15 years, applied the method Vaykoffa. “I opened Pandora’s box,” he says. “I got a way to understand what will happen next,” in contrast to other methods of analysis, which met on his way a broker / analyst.
The client, having earned large sums of money, introduced Weiss to the method Vaykoffa. “I promise you that these principles are well suited to today’s market,” he says.

His only addition to the method Vaykoffa – Elliott wave principle is made for additional vision of prices. I’m not interested in something else, “he explains. “I have nothing more is required.”
Method Vaykoffa also hit and bond trader from Seattle, who found him a few years ago, in mid-career. The trader now managing a portfolio of $ 20 million, found that the submission Vaykoffa on the market seemed to describe his own experiments with market behavior.

“It does not matter whether it be bonds, gold or stocks,” he says, “Vaykoff described is reasonable, in my opinion, way. I’ve been through it, I saw it. “So he took on an analysis of Vaykoffu and its basic relationship to the tops, bases and correction of trends.

RTS

Vaykoff was intrigued by the stock exchange. He studied the market from top to bottom, when the only experience could be the only teacher. His first job in 1888, at age 15, was distribute shares, rushing back and forth on Wall Street, delivering and exchanging securities and payments to brokerage firms. By 1898, he moved to the auditor’s another brokerage firm, and gave his first $ 1,000 of profit on the stock market, selling 300 shares of the company, which released a new product – pneumatic horse collar. The age of 25 he opened his own brokerage office.

He saw the “mad losses on securities, which every year millions of people are not aware of the value of their risk and having a remarkably small knowledge of the market.” He sent letters to its customers every day on market conditions, doing research and publications in a monthly magazine in 1907.

As a broker, he saw behind the scenes game of large speculators, and understood “that there is an opportunity to assess the future course of the market for his own actions … that the actions of the shares reflects the plans and objectives of those who dominate them … that the basic law of supply and demand governs all changes in prices; that the best indicator of the future course of the market – the ratio of supply to demand. ”

He published his first method of technical analysis in 1908, and in 1911, at the insistent request of readers, began publishing the weekly forecasts, using analysis charts of price movements and volume.

Related to the neglect of Vaykoffu analysts use charts as a kind of Rorschach test, in search of formations, which signaled to the purchase, sale or retention. “Tech stock market is not an exact science,” he told his students. “Prices of shares made by the brains of people.” In his view, mechanical or purely mathematical analysis of the graphics can not compete with well-judgment.

Vaykoff also avoided the financial statements, news, earnings reports, and especially rumors, hints and half-baked theories of trade set out in the popular books on the market. ”

In his view, the analyst should be a detective, revealing the forces that influence the fluctuations in price and volume, market psychology, studying the human motivations that drive these movements, and general planning to funding a campaign to capture the action, when the charts show that they are in its most profitable stage.