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December 17, 2016 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 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 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! www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved Disclaimer 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 OVERCOMPENSATED 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 www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved MY BACKGROUND AND EXPERIENCE www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved WORKSHOP OUTLINE www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved SWING TRADING USING THE WYCKOFF METHOD December 17, 2016 Outline of today’s material (1): Introduction Your definitions of a swing trade • How 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 you use for selecting the best swing trades? • How much experience you have with swing trading? 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 and profit in the shortest period of time using proper leverage and reflecting your personal risk aversion  Optimal Trade www.WyckoffAnalytics.com Technical characteristics of an ideal swing trade selection (Accumulation) Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved SWING TRADING USING THE WYCKOFF METHOD December 17, 2016 Outline of today’s material (2): www.WyckoffAnalytics.com Synchronicity with the market trend (“Which direction”) • Swing Trading in sync with the market trend • Swing Trading against the market trend • Swing Trading in a non-directional environment Types of traders and their best entry and exit points (“Who”) 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 Selection process using Stockcharts.com features (STEP #2) • 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 Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved SWING TRADING USING THE WYCKOFF METHOD December 17, 2016 Outline of today’s material (3): Selecting swing trading candidates from a pool of long-term industry groups (STEP#3) • 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 10 Selecting swing trading candidates based on structural analysis (STEP#4) • Wyckoff structural position (“Where”) • Case Study: MNST • Conventional and alternative Wyckoff trading range labeling • Change of Character as a directional tool 11 www.WyckoffAnalytics.com Supply and Demand Confirmation (STEP#5) • Supply absorption (“When”) • Active demand signature – institutional interest • Decreased volatility as a filtering tool Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved SWING TRADING USING THE WYCKOFF METHOD December 17, 2016 Outline of today’s material (4): 12 www.WyckoffAnalytics.com Swing Trading Tactics and Trade Management (STEP#6) (“How”) • 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 ã SKX 14 Q&A session Copyright â 2016 Wyckoff Associates, LLC All Rights Reserved SWING TRADING DEFINITIONS www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved Exercise: SKX (3.1) Questions to answer: Is there an Institutional Interest and Participation? Is the Footwear group exhibiting leadership? Is SKX a leading stock exhibiting leadership? www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved Exercise: SKX (3.2) Questions to answer: What is Wyckoff labeling since the last consolidation? What are the Supply and Demand signatures? What does Relative/Comparative Strength analysis suggest? Is there a POE and, if yes, then where is the SL level? If not, then what needs to happen first? www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved STOP FOR DISCUSSION www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved Exercise: SKX (4) Questions to answer: Draw a trend channel Show the movement of the Stop-Loss Discuss the gap action in late July www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved Q&A session THANK YOU AND HAPPY TRADING!!! www.WyckoffAnalytics.com Copyright © 2016 Wyckoff Associates, LLC All Rights Reserved SOLUTION SLIDES TO SKX EXERCISE Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (1.1) We are here on 2/11/15 Questions to answer: Is there a prior Institutional Interest and Participation? A: Yes, price has advanced more than 100% on a steady Institutional buying wave from early 2014 Is the Footwear group exhibiting leadership? A: It was one of the leading groups in late 2014, losing its leadership in a stepping stone consolidation Was and is SKX a leading stock in the Footwear group? A: Yes! Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (1.2) Question to answer: Compare the structures and strength of peers SKX has been trending up and is in a possible intermediate stepping stone consolidation Look for structural entry points if relative strength allows NKE has been a consistent leader for this group and could be considered for a swing trade Further comparison of SKX and NKE is required SHOO has increased more than seven-fold since uptrend started in 2009 The last leg up produced ~47% annualized return, showing slowing momentum CROX has been trading in consistent range and is not exhibiting any strength Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (1.3) Questions to answer: What is the long-term structure for SKX? Trend or consolidation? A: Long-term range with the low in 2012 significantly higher shows structural strength The price has recently committed above long-term resistance and shows an ability to stay at a higher price level What is the direction of the intermediate trend? A: Up Where is the position of SKX in the intermediate trend? A: Stepping Stone trading range Possible Re-accumulation Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (1.4) Questions to answer: What is Wyckoff labeling for the last consolidation? A: see labeling on the chart Possible Phase C What are the Supply and Demand signatures? A: Supply is contracting, Demand is increasing on a breakout move – bullish What does Relative/Comparative Strength analysis suggest? A: RS is starting to outperform in a stepping stone structure Is there a POE and, if yes, then where is the SL level? If not, then what needs to happen first? A: POE on the close of the last bar in a possible Phase C Stop loss is below $53, which is a significant Supply point AR SC ST ST UA UA LPS LPS Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (2.1) Questions to answer: Is there an Institutional Interest and Participation? A: Yes, price has gapped up on increasing Demand showing that big institutions are buying Also, the price is holding after the gap, suggesting there is no selling pressure from big interests Is the Footwear group exhibiting leadership? A: Very much so Was and is SKX a leading stock in the Footwear group? A: Yes! Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (2.2) SOS UA UA BU AR LPS SC ST ST in Ph B LPS Questions to answer: What is Wyckoff labeling for the last consolidation? A: see labeling on the chart Phase D What are the Supply and Demand signatures? A: Supply is contracting even further, Demand is consistent and contracting with prices advancing – bullish What does Relative/Comparative Strength analysis suggest? A: RS is in an established uptrend Is there a POE and, if yes, then where is the SL level? If not, then what needs to happen first? A: POE on the close of the last bar after the BU Stop loss is below $63, which is the low for the gap-up day Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (3.1) Questions to answer: Is there an Institutional Interest and Participation? A: Yes, price is steadily going up and there is no selling pressure from big interests Is the Footwear group exhibiting leadership? A: Very much so Was and is SKX a leading stock in the Footwear group? A: Yes! Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (3.2) SOS UA UA AR SC ST LPS ST BU LPS Questions to answer: What is Wyckoff labeling for the last consolidation? A: see labeling on the chart Phase E What are the Supply and Demand signatures? A: Supply is insignificantly increasing, yet the prices are holding – Effort slightly increases, but no Result bullish What does Relative/Comparative Strength analysis suggest? A: RS is in an established uptrend Is there a POE and, if yes, then where is the SL level? If not, then what needs to happen first? A: POE on the close of the last bar Stop loss is below $68, which is the low two support levels away Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved Solution Slide: SKX (4) Moving Stop-loss Questions to answer: Draw a trend channel Show the movement of the Stop-Loss Discuss the gap action in late July A: The gap could be an exhaustion move up into an overbought area indicating at least a possible start of a change of character Overbought Original Stop-losses Copyright © 2015 Wyckoff Associates, LLC All Rights Reserved