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...
.."If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said: `There is nothing in the Universe but mathematical points of force."...
William D Gann
.."Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected"..
George Soros
..“It is much harder to sell stocks correctly than to buy them correctly.” Because of the emotional aspect of trading, if a “stock went up, the average investor would hold because he wants more gains – he’s exhibiting greed. If the stock declines, he also holds on and hopes the stock will come back so he can at least sell and break even – he’s hoping against hope”..
Bernard Baruch
.."The first rule is not to lose. The second rule is not to forget the first rule"
Warren Buffett
.."Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it"..
Warren Buffett