This is a proprietary indicator, part of the RTT Indicator set.Important Disclaimer: None of the proprietary indicators give specific signals of BUY and/or SELL prices or signals for investment decisions. They do however bring your attention to price action for further analysis only. Any BUY or SELL decision is purely your own responsibility. Please understand that we find favor with our proprietary tools, but they do not work all the time, nothing is 100% accurate. Please review our terms of use.
Richard Wyckoff law of 'Cause and Effect' is a simple 'step' formation. RTT Steps is a quick visual of the steps in a chart and thus a measure of Richard Wyckoff 'Cause and Effect' law in action.
The more obvious the 'step' the more friendly the chart is to Richard Wyckoff logic, for the simple reason the law of 'Cause and Effect' is working well.
This is a custom indicator within the readtheticker.com site.
The settings below for RTT Steps is (Monthly, 2,0.1,6,2.5, BUll) Reaction 65%. These settings are based on Monthly OHLC data drawn on a Daily line chart close data. Readtheticker.com allows some indicator to draw at different time frames (ie Monthly indicator on Daily data, Weekly indicator on Daily data).
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A video on the subject:
This is what the monthly chart looks like with the same settings as above: RTT Steps (Monthly, 2,0.1,6,2.5, BUll)
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More with RTT Steps, how to scan for steps to trade!
You can create and LONG or SHORT momentum model:
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RTT Steps is the best tool for the Wyckoff Trend study, much better than moving averages.
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Consider this chart with RTT Steps, do you see true support and resistance provided by the RTT Steps indicator.(Symbol: !INDU, Price data is quarterly). Question: Would you buy after the 1987 crash? Answer: Yes!
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NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net
Investing Quote...
...“Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.”...
Jesse Livermore
...“To me, the 'tape' is the final arbiter of any investment decision. I have a cardinal rule: Never fight the tape!”...
Martin Zweig
Novice Traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade they should be taking 1 to 2 percent risks.
Bruce Kovner
..“Because of the extreme challenge, one must commit full attention to it.” Market speculation is “no different than trying to be a successful doctor or lawyer … you simply must devote yourself full-time to the study of your craft”...
Bernard Baruch
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Kenneth Chang