The Wyckoff Spring An In-depth Look at a High Odds Trade Dr Gary Dayton www.TradingPsychologyEdge.com Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Disclaimer IT SHOULD NOT BE ASSUMED THAT THE METHODS, TECHNIQUES, OR INDICATORS DISCUSSED IN THIS PRESENTATION WILL BE PROFITABLE OR THAT THEY WILL NOT RESULT IN LOSSES THERE IS NO ASSURANCE THAT THE STRATEGIES AND METHODS PRESENTED WILL BE SUCCESSFUL FOR YOU, OR THAT YOU WILL BECOME A PROFITABLE TRADER THE PAST PERFORMANCE AND RESULTS OF ANY TRADING SYSTEM OR TRADING METHODOLOGY ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS YOU SHOULD NOT TRADE WITH MONEY THAT YOU CANNOT AFFORD TO LOSE EXAMPLES DISCUSSED AND PRESENTED IN THIS PRESENTATION ARE FOR EDUCATIONAL PURPOSES ONLY THESE ARE NOT SOLICITATIONS OF ANY ORDER TO BUY OR SELL DR GARY DAYTON AND TRADINGPSYCHOLOGYEDGE.COM AND ALL AFFILIATES ASSUME NO RESPONSIBILITY FOR YOUR TRADING RESULTS NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSESS SIMILAR TO THOSE DISCUSSED IN THIS PRESENTATION THERE IS A VERY HIGH DEGREE OF RISK IN TRADING YOU ARE ENCOURAGED TO CONSULT A CERTIFIED FINANCIAL ADVISOR BEFORE MAKING ANY INVESTMENT OR TRADING DECISION HYPOTHETICAL, HINDSIGHT, OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS UNLIKE AN ACTUAL PERFORMANCE RECORD, HYPOTHETICAL, HINDSIGHT, OR SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING ALSO, SINCE SOME OF THE TRADES DISCUSSED IN THIS PRESENTATION HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED AND/OR SHOWN Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Overview Key elements of a Spring Conceptual map of Spring Background conditions to look for When Springs fail Key entry considerations Where to exit Trade Setup specifications Additional examples Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Key Elements of a Spring Key idea: Lower prices are rejected Key elements: Support established A rally off of support Price returns to dip below and then goes back above support Extent of supply assessed: Width of spread or range Close Amount of volume Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Conceptual Map of a Spring Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Classic Spring Springs: Typically occur late in the trading range Strong market participants make a definitive assessment of supply before rallying the market Also allows for the strong participant to gather additional stock from weak participants at low prices Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Classic Spring Example Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Another Classic Example Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Classic Example Weekly Chart Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved More on the Classic Spring Supply exhausted Danger point identified When volume moderate on the Spring, it may be tested Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved But Isn’t This In A Downtrend? Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Could This Chaos Really Be A Spring? Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Yes! Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Additional Support Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Additional Support Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Additional Support Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Power Buy with a Spring Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved A Second Spring after Power Buy with Spring Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Power Buys with Springs in SPY Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved More Recent Examples Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved More Recent Examples Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved ‘Live’ Spring Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Summary Elements of a Spring Conceptual map Background conditions When Springs fail Entry options Exit options Setup criteria Additional tips & examples Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Feedback Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved Thank You! “If you traded only Springs, you could well.” David Weis www.TradingPsychologyEdge.com Copyright © 2010 Gary Dayton & Peak Psychology, Inc All Rights Reserved