INTRADAY TRADING USING THE WYCKOFF METHOD Course slides Ebook

INTRADAY TRADING USING THE WYCKOFF METHOD • Wyckoff Phase Analysis • Wyckoff Accumulation Trading Range Events • Wyckoff Distribution Trading Range Events • Swing Reversal Concept • Mont

METHOD

SWING TRADING USING THE WYCKOFF

METHOD

March 19, 2016

Today’s Schedule:

8:30 – 10:20 am - Part I10:20 – 10:30 am - Break10:30 – 12:30 pm - Part II12:30 – 1:15 pm - Lunch1:15 – 2:50 pm - Part III2:50 – 3:00 pm - Break3:00 – 4:30 pm - Part IV

Video recording: This workshop will be recorded for further distribution to workshop participants These recordings are intended for your own use only

Please respect the proprietary, copyrighted nature of the materials and do not share or distribute them

Workshop slides: The PDF slides file will be available to you Make a lot of notes, but be ready to engage in the discussion

Lunch: Lunch break is from 12:30 to 1:15 pm Please return on time!

Evaluation form: We will ask you to complete an evaluation form after the workshop.We would greatly appreciate your feedback to help improve the workshop for future presentations

Most importantly:

HAVE A GREAT EXPERIENCE LEARNING ABOUT WYCKOFF INTRADAY

TRADING!

Roman Bogomazov (“Presenter”) is not a registered investment advisor or broker-dealer and does not purport to

recommend or suggest any securities to buy or sell You understand and acknowledge that there is a very high degree of risk involved in trading securities Presenter assumes no responsibility or liability for your trading and investment

results You and you alone are responsible for your own trading and investment decisions and results

It should not be assumed that the methods, techniques, or indicators presented will be profitable or that they will not result in losses Past results of any individual trader or trading system published by Presenter are not indicative of future returns by that trader or system, and are not indicative of future returns which will be realized by you In addition, the indicators, strategies, articles and all other features of Presenter's products are provided for informational and

educational purposes only and should not be construed as investment advice Accordingly, you should not rely solely on the Presenter’s information in making any investment Rather, you should use the Presenter’s information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding

investments You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND DO NOT INCLUDE

BROKERAGE AND OTHER FEES, OR SLIPPAGE ALSO, IN SIMULATED PERFORMANCE RESULTS NO TRADES HAVE ACTUALLY BEEN EXECUTED, AND THEREFORE THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACTS OF A VARIETY OF MARKET FACTORS, SUCH AS LACK OF LIQUIDITY SIMULATED TRADING PROGRAMS, IN GENERAL, CAN ALSO

INTRODUCTION

MY TRADING TRAINING AND TEACHING EXPERIENCE

- Certificate in technical market analysis and MS in Finance, both from GGU

- Passed Level I and II CMT designation exams

- Series 7 designation

Trading experience:

- I consult for hedge funds and other financial institutions on trading strategies and implementation

- I have been trading for the last 20 years I have traded stocks, options, futures, and forex

- I trade two strategies: (1) a short-term swing/intraday strategy, based on momentum of a swing;

(2) longer-term swing trading of stocks based on the Wyckoff methodology

Teaching and coaching:

- Teaching FI354 and FI355 Wyckoff classes online at Golden Gate University

- Teaching an Advanced Wyckoff Trading Course (AWTC), Wyckoff Practicum Trading Course (WPTC) and conducting weekly Market and Stocks Outlook (MASO) sessions with Wyckoff Associates, LLC

INTRADAY TRADING USING THE WYCKOFF METHOD

WORKSHOP OUTLINE

INTRADAY TRADING USING THE WYCKOFF METHOD

• Wyckoff Phase Analysis

• Wyckoff Accumulation Trading Range Events

• Wyckoff Distribution Trading Range Events

• Swing Reversal Concept

• Monthly EURUSD structure

• Daily EURUSD structure

• 240 minutes EURUSD structure

• 30 minutes EURUSD structure

• Points of Entry

• Different trading sessions

INTRADAY TRADING USING THE WYCKOFF METHOD

Outline of material for today (page 2):

4 Selection of the Momentum Stocks for Day Trading

• Leadership with momentum stocks

• Identification of the Daily Swing Bias

• Identification of the Daily Chart Trend

• Identification of the Daily Swing Structure

• Resumption of the Leadership Trend on a lower time frame

5 General Guidelines and Rules for Day Trading Momentum Stocks

6 Intraday Comparative Selection and Points of Entry

• Daily Swing Bias

• Comparative evaluation of the first 30 minutes of a session

• Intraday points of entry

7 Intraday Trades vs Intraday Switch to a Swing Trade

• Long-term price analysis

• Daily swing reversal

• Predominant intraday trend

• Intraday points of entry

• Comparison between intraday and swing trades

SWING TRADING USING THE WYCKOFF METHOD

Outline of material for today (page 3):

8 Intraday Switch to a Swing Trade - I

• Intraday point of entry switch to a swing trade

• Intraday points of entry

9 General Guidelines and Rules for Trading E-minis

• Rules and Guidelines

• Exercise

10 Trading Intraday Price Structure

• Case Study #6: ES

• Daily Swing Bias analysis

• Daily chart structural analysis

• Exercise: Combining intraday structural analysis with intraday swing reversal entries

11 Intraday Switch to a Swing Trade - II

• Case Study #7: ES

• Daily structural analysis

• Intraday price structure

The Wyckoff Method Main

Structural Concepts

+ Reversal of a Swing Concept

“The Creation of a Trend”

CHANGE OF CHARACTER (CHoCH)

WHEN does a trend change into consolidation?

HOW can we identify this change in environment?

INTENTIONS BEHIND PHASES (Accumulation)

STRUCTURAL ANALYSIS: What are Wyckoff Phases?

SUPPLY & DEMAND

in TR

MARKUP out of TR

Wyckoff Buy ZoneCHoCH

CHoCH

ELEVEN WYCKOFF TRADING

RANGE EVENTS(Accumulation)

1 PS – preliminary support, where substantial buying begins to provide pronounced support after a prolonged down-move Volume and

the price spread widen and provide

a signal that the down-move may be approaching its end.

2 SC – selling climax, the point at which widening spread and selling pressure usually climaxes and heavy or panicky selling by the public is being absorbed by larger professional interests at prices near the bottom At the low, the climax helps to define the lower level of the trading range.

3 AR – automatic rally, where selling pressure has been exhausted A wave

of buying can now easily push up prices, which is further fuelled by short covering The high of this rally will help define the top of the trading range.

4 ST – secondary test, price revisits the area of the selling climax to test the supply/demand at these price levels If a bottom is to be confirmed, significant supply should not resurface, and volume and price spread should be significantly

more significant “creek” of supply that will have to be crossed before the market’s journey can continue onward and upward.

6-7 “Springs” or “shakeouts” usually occur late within the trading range and allow the dominant players to make a definitive test of available supply before a markup campaign will unfold If the amount of supply that surfaces on a break of support is very light (low volume), it will be an indication that the way is clear for a sustained advance Heavy supply here usually means a renewed decline Moderate volume here may mean more testing of support and a time

to proceed with caution The spring

or shakeout also serves the purpose

of providing dominant interests with additional supply from weak holders

at low prices.

8 “Jump” – continuing the creek analogy, the point at which price jumps through the resistance line; a bullish sign if the jump is achieved with increasing speed and volume.

9 SOS – sign of strength, an advance on increasing spread and volume, usually over some level of resistance

10-11 BU/LPS – last point of support, the ending point of a reaction or pullback at which support was met Backing up to an LPS means

a pullback to support that was

STRUCTURAL ANALYSIS: What are Wyckoff Accumulation Events?

ELEVEN WYCKOFF TRADING

RANGE EVENTS(Distribution)

1 (PSY) Preliminary Supply, where

substantial selling begins to provide pronounced resistance after an upmove

Volume and spread widen and provide a signal that the upmove may be approaching its end.

2 (BC) Buying Climax, the point at which

widening spread and the force of buying climaxes, and heavy or urgent buying by the public is being filled by larger professional interests at prices near a top.

3 (AR) Automatic Reaction, when buying is

pretty much exhausted and heavy supply continues to appear, an AR follows the BC

The low of this selloff will help define the bottom of the Trading Range (TR).

4 (ST) Secondary Test(s) revisit the area of

the BC to test the demand/supply balance at these price levels If a top is to be confirmed, supply will outweigh demand and volume and spread should be diminished as the market approaches the resistance area of the BC.

5 (SOW) Sign of Weakness will usually occur

on increased spread and volume Supply is

dominant Our first “fall on the ice” holds

and we get up try to forge ahead.

6 The ICE is an analogy to a wavy line of

support drawn loosely under reaction lows

of the Trading Range

7 (MSOW) Major sign of weakness, a

pronounced break through the ice that will likely be followed by attempts to get back above it A failure to get back above firm support may mean a “drowning” for the market.

8 (LPSY) Last Point of Supply After we test

the ice(support) on a SOW, a feeble rally attempt on narrow

spread shows us the difficulty the market is having in making a further rise Volume may

be light or heavy, showing weak demand or substantial supply It is at these LPSY’s that the last waves of distribution occur before markdown begins.

9 Return to the ICE After a break through

the ice, a rally attempt is thwarted at the ice’s surface (now resistance) The rally meets a last wave of supply before markdown ensues LPSY’s here are good places to initiate a short position or to add to already profitable ones.

10 (UTAD) Upthrust After Distribution

Similar to the Spring and Terminal Shakeout

in the trading range of Accumulation, a

UTAD may occur in a TR of distribution It is a more definitive test of new demand after a breakout above the resistance

line of the TR and usually occurs in the latter stages of the TR.

11 (UT) as a ST (added by Roman) A violent

rally to the upper boundaries of the range with subsequent failure down into the trading range.

STRUCTURAL ANALYSIS: What are Wyckoff Events?

Distinction: Definition of a swing (based on the reversal bar pattern)

1 Identify the last significant bar (SBar – big spread, close shows commitment to a trend)

2 Look for a reversal bar that closes below/above of the true range of a Sbar (Rbar –

commitment to an opposite trend)

3 The distance between the highest and lowest points is a swing

*There are quite a few methods of identifying a swing in real-time! Some of the most

popular are comparison of counter-moves and penetration of pivot lows/highs

- Last significant bar of a swing

- Reversal bar

- Swing

Swing Reversal Concept

CASE STUDY #1:

INSTRUMENT:

- Euro Dollar Currency Pair (EURUSD)

TIME FRAMES:

- Monthly (Long-term Price Structure)

- Daily (Swing Price Structure)

- 240 Minutes (Point of Entry Zone)

swing structure and intraday structure are all in sync!

Buying Climax

Automatic Reaction

Secondary Test

Last Point of Supply

In Phase

|C|

High-Probability Point of Entry Zone on a Monthly Time Frame

Secondary Test

Sign of Weakness

in Phase |B|

USE WYCKOFF STRUCTURAL ANALYSIS

TO IDENTIFY A HIGH-PROBABILITY

POINT OF ENTRY ZONE

Phase A Phase B Phase C

Selling Climax

Buying Climax

Automatic Reaction

Secondary Test

Upthrust After Distribution

Automatic Rally

SecondaryTest

Exit is based on the Change of Character (CHoCH) behavior

Possible multiple exit points around CHoCH Bar and Secondary Test.

High-Probability Point of Entry Zone

on a Daily Time Frame

Selling Climax

Automatic Rally

Secondary Test

Upthrust After Distribution

Phase A Phase B Phase C Phase D

Last Point

of Supply

Sign of Weakness

High-Probability Point of Entry Zone

on a 240-minute Time Frame

USE WYCKOFF STRUCTURAL ANALYSIS TO IDENTIFY A HIGH-PROBABILITY POINT OF ENTRY ZONE ON A LOWER TIME FRAME

Selling Climax

Automatic Rally

Secondary Test

Upthrust After Distribution

Phase A Phase B Phase C Phase D

USE WYCKOFF STRUCTURAL ANALYSIS TO IDENTIFY A PROBABILITY POINT OF ENTRY ZONE ON A LOWER TIME FRAME

HIGH-Selloff during European session

Selloff during European session

Reaction starts during European session

Major Sign of Weakness

Last Point

of Supply

US session Potential POE – US session Potential POE – European session

CASE STUDY #2:

INSTRUMENT:

- Amazon (AMZN)

TIME FRAMES:

- Daily (Swing Price Structure)

- 60 Minutes (Intraday Price Structure and Points of Entry)

Questions to discuss:

- Which stocks would you choose for intraday trading?

- What are the preferred daily structural positions for stocks you select to day trade?

Selling Climax

Leadership Resumes

Secondary Test in Phase|B|

Sign of Strength Rally

Phase A Phase B Phase C Phase D

Last Point of Support in Phase |C|

Backing Up Action

Sign of Weakness in Phase |B|

Current Structure is under consideration for

an Intraday/Swing trade

USE WYCKOFF STRUCTURAL ANALYSIS TO IDENTIFY A HIGH-PROBABILITY

POINT OF ENTRY ZONE ON A LOWER TIME FRAME

Supply contracts

Uptrending Relative Strength – Leadership remains

Leadership

High-Probability Point of Entry Zone for an

Intraday/Swing trade

USE WYCKOFF RELATIVE STRENGTH ANALYSIS TO IDENTIFY A HIGH-PROBABILITY

POINT OF ENTRY ZONE ON A LOWER TIME FRAME

Exit based on the Change of Character behavior

IDEA #2:

Established term uptrend in a

intermediate-momentum stock is a good place to day trade!

General Guidelines and Rules for Day Trading Momentum Stocks

US session

Pre - Market General Guidelines and Rules (for

momentum stocks):

#1: Define a current Daily Swing Bias

#2: Trade a full-size position in the direction of the Daily Swing Bias and trade a lighter position during a counter-trend move

#3: Define an intraday structural position, if possible

#4: Define the intraday bias based on the intraday structural position Go

to a full-size position based on the intraday structural position, even if the Daily Swing Bias is in the

opposite direction

#5: Define the Pre-Market boundaries (support and resistance structure)

#6: Buy an intraday reversal near support and sell an intraday reversal near resistance

#7: Define boundaries of the lunch period – 9:00-11:00 am (Pacific Time) – and use them as a Stop-Loss

reference

#8: Do not open an intraday position

Daily Swing Bias – UP

Swing Reversal near Support - POE

Swing Reversals near Support - POE

SOS

BUA

LPS in Phase |C|

Intraday Comparative Selection

CASE STUDY #3:

INSTRUMENT:

- QQQ and FANG stocks

TIME FRAMES:

- Daily (Swing Bias)

- 5 Minutes (Points of Entry)

IDEA #4: Day trade the stocks that are exhibiting comparative outperformance early in a session

Daily Reversal

Daily Reversal

Daily Reversal Daily Reversal

Daily Bias - UP

Daily Bias - DOWN Daily Bias - UP

Daily Bias - UP

Daily Bias - UP

Daily Bias - DOWN

Daily Bias - UP

Daily Bias - UP

Break to the downside after

7:30am Look to short.

Break Below 30 mins Support – POE short

Structural Reversal after 11am

Look to buy.

Stronger than peers and market - Buy

Daily Bias - UP

Daily Bias - DOWN

Daily Bias - UP

Daily Bias - UP Reversal Look to buy.

Higher low on reversal shows

that GOOGLE is stronger than

peers and market - Buy

Daily Bias - UP

Daily Bias - DOWN

Daily Bias - UP

Daily Bias - UP Reversal Look to buy.

Stronger than peers

and market - Buy

Reversal after 11am

Look to buy.

Daily Bias - UP

Daily Bias - DOWN

Daily Bias - UP

Daily Bias - UP

Reversal Look to buy.

Stronger than peers and market - Buy