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SWING TRADING USING THE WYCKOFF METHOD December 17, 2016 Outline of today’s material 1: • How do you define a swing?. • Easily identifiable - Selection • Starts directional movement righ

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December 17, 2016

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SWING TRADING USING THE WYCKOFF

METHOD

December 17, 2016 Today’s Schedule:

8:30 – 10:20 am - Part I 10:20 – 10:30 am - Break 10:30 – 12:30 pm - Part II 12:30 – 1:15 pm - Lunch 1:15 – 2:50 pm - Part III 2:50 – 3:00 pm - Break 3:00 – 4:30 pm - Part IV

Video recording: These workshop sessions are being recorded in four segments, which will be made available to you on a password-protected page within a few days These recordings are intended for your personal use only Please respect the proprietary, copyrighted nature of the materials and do not share or distribute your password or the slides

You should have received four separate GotoWebinar links, one for each part of the workshop Please log in to each part of the workshop about 5 minutes before the above-noted start times so that we can remain on schedule

Workshop slides : You should also have received a pdf file of the slides to facilitate note-taking and chart annotation Please feel free to take notes during the workshop, but also be ready to engage in the discussion

Breaks: There will be three breaks today, as noted above Please return to your computer and log

in on time for each part of the workshop!

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 SWING TRADING!

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This workshop and all presentations, slides and discussions today are for educational purposes only; they should not be construed as investment advice of any kind Roman Bogomazov (“Presenter”) is not a registered investment advisor or broker-dealer and does not purport to recommend any securities to buy or sell

Presenter assumes no responsibility or liability for your trading and investment results You understand and acknowledge that there is a very high degree of risk involved in trading securities 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 Presenters are not indicative of future returns by that trader or system, and are not indicative of future returns which will be

realized by you 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 BE DESIGNED WITH THE BENEFIT OF HINDSIGHT NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES

SIMILAR TO THOSE SHOWN.

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MY BACKGROUND AND EXPERIENCE

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WORKSHOP OUTLINE

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SWING TRADING USING THE WYCKOFF METHOD

December 17, 2016

Outline of today’s material (1):

• How do you define a swing?

• What is your preferred timeframe for a swing trade?

• Do you swing trade long-only or both long and short?

• What technical criteria do you use for selecting the best swing trades?

• How much experience do you have with swing trading?

• Easily identifiable - Selection

• Starts directional movement right away – Readiness

• Moves with high velocity – Momentum

• Covers a lot of one-directional distance – Trend

• Gives clear entry and exit points – Trade Management

• Outperforms the market and peers - Leadership

• Presents optimal Reward-to-Risk opportunity – Risk Management and Reward/Risk Optimization

• Creates largest net result and profit in the shortest period of time using proper leverage and reflecting your personal risk aversion  Optimal Trade

4 Technical characteristics of an ideal swing trade selection (Accumulation)

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December 17, 2016

• Swing Trading in sync with the market trend

• Swing Trading against the market trend

• Swing Trading in a non-directional environment

7 Market trend definitions (STEP #1)

• Case Study: S&P500 E-mini

• Visual Quantitative definition of Change of Character for Distribution

• Visual Quantitative definition of Change of Character for Accumulation

• Leadership (“What”)

• Top-Down screening

• Other Scanning tools

• Previous Leadership – Prior Institutional Participation

• 52-week highs: Local Relative/Comparative Outperformance – Institutional Sponsorship

• Heatmaps: Unified industry peers strength confirmation – Institutional Buy Program

• IBD50

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December 17, 2016

• Why swing trade a leading stock/industry group?

• When to start swing trading stocks in a leading industry group?

• Case Study: Airlines Industry Group (ALK, LUV, JBLU and UAL)

• From Macro to Micro views

• Selecting swing trading candidates in an established long-term trend of a leading industry group

• Strength analysis

• Wyckoff structural position (“Where”)

• Case Study: MNST

• Conventional and alternative Wyckoff trading range labeling

• Change of Character as a directional tool

• Supply absorption (“When”)

• Active demand signature – institutional interest

• Decreased volatility as a filtering tool

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December 17, 2016

• Review of points of entry in emerging and established trends

• Review of stop-loss techniques and exit strategies

• Switch Technique: Opportunities for day-traders

• Review of points of exits

13 Case Study Exercise

• SKX

14 Q&A session

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SWING TRADING DEFINITIONS

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SWING TRADING DEFINITIONS

Your Definitions for Swing Trading

• How do you define a swing?

• What is your preferred timeframe for a swing trade?

• Do you swing trade long-only or both long and short?

• What technical criteria do you use for selecting the best swing trades?

• How much experience do you have with swing trading?

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All swing trades selections, entries and exits are based on technical signals for

optimal swing trading using the Wyckoff Method However, entries and exits are

based on weekly closing prices, and are therefore not identical to those that

would have been obtained with trading on a daily timeframe.

Three swing trades have kept you in the market for 448

days for an Average Annualized Return of 160.2%.

Question: Can you find similar swing trades in the remaining 882 days of the

long-term trade and, if so, how would that influence your portfolio return?

Comparison of Long-Term Investing vs Swing Trading

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GENERAL CHARACTERISTICS OF

AN IDEAL SWING TRADE

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General Characteristics of an Ideal Swing Trade

• Easily identifiable

-Selection

• Starts directional movement

right away – Readiness

• Moves with high velocity –

Momentum

• Covers a lot of

one-directional distance – Trend

• Gives clear Entry and Exit

Points – Trade Management

• Outperforms the market

and peers - Leadership

• Presents optimal

Reward-to-Risk opportunity – Risk

Management and

Reward/Risk Optimization

• Creates largest net result, $

in the shortest period of

time, using proper leverage

and reflecting your personal

risk aversion  Optimal

Trade

CAUSE -Selection

Local RS Outperformance -Selection& Leadership

Supply Absorption and Higher Lows -Readiness

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Technical Characteristics of an Ideal Swing Trade Selection (Accumulation)

• Strength prior to Phase |C|

• Sweet Spot as a Comparative Strength indicator of future outperformance

• Unified industry peers’ strength confirmation –

Institutional Buy Program

• Wyckoff Structural Position ( WHERE )

• SOS rally – transition from Phase |C| to |D|

• Phase |E| Trend

• Apex and Teepee formations – Velocity Accelerators

• Change of Character as a directional tool

• Supply and Demand Confirmation ( WHEN )

• Supply Absorption

• Active Demand Signature – Institutional Interest

• Springboard as a timing tool

• Supply and Demand Signature

• Price Signature

• Synchronicity with the Market Trend ( WHICH DIRECTION )

• Swing Trading in sync with the Market Trend

• Swing Trading against the Market Trend

Question: How do we know WHAT stock to select,

in WHICH direction it will move, and WHEN and

WHERE to open a swing trade?

POE Why here?

Why up?

Why this stock?

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Case Study: MNST Optimal Swing Trades (1)

- At each Point of Entry, why are we choosing

THIS STOCK to swing trade?

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SELECTION OF A SWING TRADE

CANDIDATE:

SYNCRONICITY WITH THE

MARKET

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Synchronicity with the Market Trend (which direction)

• Swing Trading in sync with the Market Trend

• Swing Trading against the Market Trend

Case Study: MNST Optimal Swing Trades (2) – Synchronicity with the Market

Question:

What is the Market environment during the best swing opportunities?

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Synchronicity with the Market: Swing Trading against the Market Trend

Question:

What is the Market environment during the best down swing opportunities?

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TYPES OF TRADERS AND THEIR BEST ENTRY AND EXIT POINTS

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All-too-typical Question from a Swing Trader

Typical Question: How can I swing trade this stock at this spot?

Response: What time frame do you use for swing trading? (Swing Trading Time Frame = Average holding period of a winner)

Typical Answer: Up to a month

Response: You are too late for any meaningful profit potential based on recent price advances in the market and the stock.

BETTER QUESTION : How can I be in the same type of large swing the next time, considering my swing trading time frame?

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LONG-TERM INVESTOR LONG-TERM SWING TRADER SHORT-TERM SWING TRADER Average holding period More than 6-9 months 2-3 months to 6-9 months 2-5 days to 1-2 months

Trends in consideration Secular trends with

cyclical lows

Cyclical trends with short-term

counter moves

Short-term trend swings

Best entry points Secular and cyclical lows

Best add-on entry points Cyclical lows Counter-trend reactions and

stepping stone trading ranges

Breakouts from reaction lows

Aggressive buying Confirmation of SOS+BU Confirmation of SOS+BU Short-term breakouts

Any stepping stone trading range

Any stepping stone trading

range

CHoCH

Cyclical CHoCH Any short-term CHoCH

Entries, add-ons and exits for Investors and Swing Traders during secular/cyclical bull markets

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MARKET TREND DEFINITIONS Case study: S&P 500 E-mini

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Market Definitions: Case study – S&P 500, 2000-2003

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Sequence of Change for Accumulation:

- Consolidation

- Volatility goes down

- Bullish CHoCH (quantify by % move relative to all down moves in the TR)

- Normal reactions on BUA that show further volatility decrease

- HHs + HLs

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Sequence of Change for Distribution:

- CHoCH (largest move down in ALL of the

reactions in a cyclical move up)

- Consolidation

- Volatility goes up

- Bearish CHoCH

- LHs + LLs

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Question: What is the current market trend?

Answer: Long-term UP, Intermediate UP, short-term UP More interesting question: What opportunities are available to trade in the current market environment?

Answer: Only short-term UP swing and intraday trades + possible selection for short-term down swing trades (these are more advanced trades as you would be trading counter main trend)

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SELECTION PROCESS USING STOCKCHARTS.COM FEATURES

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Stockcharts.com Top-Bottom Selection Path – Part 1

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Stockcharts.com Template – Part 1

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SCANNING

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Scanning for Prior Leadership

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Scanning for Prior Leadership

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Short-term Relative Outperformance Filter

Short-term Footwear Industry Group Improvement Which stock is a leader in this group?

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Following Momentum Stocks

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SCTR from Stockcharts.com

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SWING TRADING A LEADER IN A

LONG-TERM TREND

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Why swing trade a leading stock/industry group?

1 Resumption of a long-term trend (high probability of absolute outperformance)

2 Resumption of leadership (high probability of relative outperformance)

3 Anticipation of a momentum move due to institutional buying (rapid markup likely if your analysis of leadership, structure, and thematic buying is correct)

Swing trading a leader: The logic behind swing trading a leading stock/industry group

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1 When a Trend is established: HHs/HLs, CHoCH, SOS+BU, stride of a trend defined by a MA

2 When Leadership is defined: HHs/HLs, CHoCH, Breakouts of Relative Strength

3 When Institutional Participation in the direction of a new trend is increasing: Increase in Effort signature, strong momentum behind up swings

Swing trading a leader: When to start swing trading stocks in a leading industry group?

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FINDING AND FOLLOWING

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Leadership: leader vs laggards

Key point: Once the group Leader is in a strong structural and relative strength position, we can look for the group’s laggards to rally with or after the leader and even to outperform it during certain periods!

Leader

Tiêu đề	Swing Trading Using the Wyckoff Method
Trường học	Wyckoff Associates, LLC
Chuyên ngành	Finance
Thể loại	Workshop
Năm xuất bản	2016

Định dạng
Số trang	128
Dung lượng	12,71 MB