Supercharge your trading investment account using wyckoff volume spread analysis

Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis Danny Younes Copyright © 2017 Danny Younes All rights reserved ISBN-10: 1542517133 ISBN-13: 978-1542517133 CONTENTS Foreword Why I Wrote This Book Introduction How the Markets Really Work 14 How, When & Why Markets Go Up and Down 18 What are Options 25 The Key to Using Options to Generate a Monthly Income 40 Minimize Risk = Buy Insurance 50 Basics of Technical Analysis 70 How Wyckoff / Volume Spread Analysis Can Assist You in Your 84 Trading Decisions Covered Call / VSA Stock Selection Criteria 109 How to Find Trading Candidates Using the TradeGuider End of Day Software 130 10 Trading Plan 11 The Future of Volume Spread Analysis 140 158 DEDICATION To my amazing wife, Georgette and my three children Nicholas, Jacob and Joshua Thank you for giving me the strength to keep on keeping on You guys are my rock FOREWORD Foreword by Gavin Holmes, Author, “Trading in the Shadow of the Smart Money” I had the good fortune to connect with the Author of “Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis” Danny Younes, several years ago, as an aspiring student of the works of the great traders and investors, Richard D Wyckoff and the late Tom Williams who passed away just before this book was published Danny became a customer of TradeGuider Systems, the company that owns the Wyckoff / Volume Spread Analysis trading and investing methodology that Danny shows you in this book Danny attended many courses and webinars and was personally coached by Tom Williams and myself, so I am extremely proud of his achievement with this work which I know Tom would have been extremely proud of as well As an author myself, I know how difficult actually writing a book is, but I can say without a doubt that Danny has produced in this work one of the finest books on the Wyckoff / Volume Spread Analysis trading method currently available In “Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis” Danny goes well beyond the basic principles of the Wyckoff / Volume Spread Analysis method, by introducing trading strategies using options that can be used once a stock has been located as a possible buy or sell based on accumulation and distribution As with anything in life, you need to be motivated to achieve your goals, and Danny reminds us of this in each chapter with very poignant quotes from Les Brown, Eric Thomas, Tony Robbins and Steve Jobs Trading and Investing in the financial markets has never been easier to access thanks to the internet, and more and more retail traders are getting involved from all over the world In the book, Danny explains in detail the traps that get the uninformed “herd” traders into bad positions and shows through detailed charts and news clippings how the mainstream media is used to wrong foot this group into making very poor trading and investment decisions Danny’s experience trading options is extensive and he explains in great detail strategies that you can use right now to grow your account and mitigate your risk by insuring your positions, something many traders and investors will be totally unaware off The book is easy to read and the charts clearly show the key principles that all traders and investors should understand before they risk real capital in the markets Danny generously shares with us his personal trading plan at the end of the book and this really brings the book together perfectly so the reader can take immediate action on the knowledge they have received Like me, Danny’s mission is to enlighten and help the uninformed traders and investors who get fleeced by Smart Money if they not have the correct knowledge In “Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis” Danny has achieved that objective in a clear, easy to understand book that evens the odds for the retail trader and investor and lifts the fog on how the financial markets REALLY work I hope you enjoy the book as much as I did and I have already taken two strategies from the book for use in the Wyckoff / Williams Investment Portfolio Hedge Fund that I am running Gavin Holmes 27/12/2016 WHY I WROTE THIS BOOK There are various reasons why I wrote this book but there is one main reason and that is to assist the retail trader From my experience the retail trader always loses out and it’s my mission to educate as many people as I can There are two road blocks that face the retail trader: The financial markets are manipulated I will explain in my book why the markets are manipulated but more importantly how you can identify when the markets are being manipulated and how to trade in harmony with the professional traders, often referred to as the “Smart Money” The other reason is that many educators that teach retail traders how to trade the financial markets use indicators that are lagging and most investors are getting into poorly conceived trades based on these indicators Indicators such as MACD, RSI or Stochastics are based on mathematical formulas and when they notify you of an entry the markets more often than not, will the very opposite These educators mean well with the education they supply to their customers, however, there are some customers who make in trading It is now recognised there is a large number of traders and investors that not make it in the markets, consistently blowing up one’s account It comes down to being disciplined and having the belief in the strategy that you are trading and most traders and investors not have that belief and enter trades that are poorly conceived When I started, I was getting into poorly conceived trades, when pricing action broke out of consolidation I would get in on a trade I would see an increase in volume, the MACD indicator will tell me ‘it’s a buy’ only to find pricing action going the other way I needed to find a solution to this issue that I was having and I came across TradeGuider TradeGuider opened my eyes to how the financial markets really work and I am grateful that we have crossed paths One thing I have in common with the CEO of TradeGuider, Gavin Holmes is that we want to spread the word around the world about how the markets really work and to educate as many retail traders as we can I also wanted to pay tribute to the late Tom Williams, the inventor of Volume Spread Analysis, who through his work has certainly assisted many traders around the world with their trading His dream of computerizing the Wyckoff method of trading has certainly come to fruition over the last fifteen years and it’s through his work I can bring you this book Thank you, Tom, for sharing your wisdom, you will be missed, may you rest in peace I hope you gain a lot of value from this book and that it assists you in your trading If you have any questions or you want to know more about the trading method that I discuss in this book, please email me, danny@tradeguider.com At the start of every chapter I have provided you with motivational quotes from the likes of Les Brown, Eric Thomas, Tony Robbins and Steve Jobs Their words propelled me to write this book and I hope their words will also inspire you to fulfill your dreams INTRODUCTION “The truth that will set you free, it’s the truth you don’t want to hear You’ve got to change, you’ve got to take responsibility for your stuff You’ve got to clean your act up You’ve better get your life together; you’ve got genius in you Challenge yourself, push yourself, make yourself come up with something Use your imagination So what, you fell flat on your face, so what Learn from the experience and start again, don’t count yourself out Forget about the mistakes yesterday, forget about all your failures yesterday, forget about all you had, that’s not important Only thing that we have is right now What you will find is that you will know more than you realize that you know That you're more creative and more resourceful that you realize that you are See the universe responds to the man or woman that refuses to be denied That business that you want, that dream that you have of controlling your destiny, that is yours, that power to create that is yours, that’s available to you, but you have got to be willing to stand there and face disappointment, not have support, be lonely, doubt yourself sometimes, be rejected again and again and again, become bankrupt if necessary If it’s difficult so what, if it’s inconvenient, so what, don’t sentence yourself to a lifetime of being miserable, a lifetime of being broke, a lifetime of being unhealthy, a lifetime of being in a relationship that is no longer fulfilling to you You are a human being, don’t volunteer your life that way Your life has too much value to the universe, you’ve got something to contribute, you’ve got something to give, but the challenge is to hold on, and if you hold on tenaciously, I say the universe is on your side.” – Les Brown When it comes to investing in the stock market, the most popular strategy is the Buy, Hope, and Pray Investors buy an instrument and hope it moves in your direction to make money There is no certainty in this strategy and when it comes to investing, I want to put the probabilities in my favour and get as close to certainty as I can Buying and holding stocks is so 1980s, because it's a time bomb waiting to go off I want you to think about the following, if you buy a parcel of shares: Do you make money if the stock price goes up? Do you make money if the stock price goes down? Do you make money if the stock price goes sideways? There is only one scenario where the investor will make money and that is if the stock price goes up So why investors invest this way? They have only one-third of an opportunity in making money The one thing it comes down to is that most investors are not educated You don't know what you don't know There is another interesting fact that I want to share with you Most investors invest in the stock market where they have 100% risk, meaning there is a possibility that they may lose 100% of their money There is that chance that a stock that you’re investing in, can fall very sharply or in some cases, I have seen companies that have been delisted from an exchange Take for example at the height of the financial crises we had Lehman Brothers file for bankruptcy, and other bankruptcies prior to the GFC such as WorldCom and General Motors just to name a few Let's face it, most retail investors invest in the stock market with their hard earned after tax dollars which they cannot afford to lose Still, they invest in the stock market with 100% risk and this doesn't faze them It doesn't faze them as they don't look at trading from a risk management point of view They only think about it from a profit taking point of view and completely ignore the downside Did you know that you can save so much heartache and money if you purchased an insurance policy on your shares? Let me share with you a reallife example which I think will hit home for you Prior to the Global Financial Crisis (GFC), BHP Billiton Limited (BHP) on the Australian Stock Exchange (ASX) reached the highs of AUD$45.30 Let's say you entered this stock at AUD$45.30 because it broke a resistance level The stock is on a magnificent run and you fear missing out on this fabulous up move and everything seems to be positive for the stock You see articles about the company stating "Shares in BHP Billiton have jumped on fresh speculation, a Chinese investor is eyeing up to a 9% stake in the company China is the biggest consumer of iron ore and the move would help China secure supplies of key raw materials, such as iron ore and oil, needed to fuel its booming economy" The news is positive on BHP, and you invest in the stock thinking you are on a sure winner me to identify a change in behavior in the markets is: SOS 137 Potential Climatic Action SOS 74 Potential Climatic Action SOS 57 Two Bar Reversal SOS 45 Shakeout SOS 36 Bag Holding SOS 83 Potential Selling Climax SOS 99 Reversal Over Two Bars SOS 135 Stopping Volume either the Weekly, Daily or 4-Hour charts, this is a sign that professional money is entering the markets This is not a sign for me to enter the market, I need to wait for the trending system to align to the upside When the high probability VSA indicators appear, I will set my trigger point and this is the area that I will look for SOS indicators to enter a position Waiting for the price to break above the trigger point allows time for the diamond trending system to align to the upside and hence will provide me with higher probability setups Once pricing action has broken above the trigger point, I will look for SOS VSA indicators such as Tests or No Supply on low volume to enter a position Once these indicators appear I will wait for confirmation with the next bar being an up bar Tests occur because professional money is checking to see if there are further sellers in the market A test is successful when there is low volume and the close of the test is in the middle to high of the range This gives us our higher probability setup for an up move in the stock No Supply tells us that there are no more sellers in the market and that price is likely to progress upwards If pricing action is currently in an uptrend within a trend channel, and there are no obvious signs of weakness, I will look to enter the market at the bottom if there is decreasing volume testing the lower trend channel and a confirmed Sign of Strength indicator Trend channels highlight areas where pricing action is oversold and these areas are where I may find high probability setups The indicators that I will look out for are: SOS 30 Test in a rising market SOS 99 Reversal over two bars SOS 199 & 198 No Supply SOS 134 No Supply / Test SOS 96, 116, 146 Test SOS 198 No Supply Fundamental Entry Fundamental analysis is looking at the potential impact of economic (external) and company (internal) events that may impact the price of the stock Rules I will always know the business of any company in which I am considering a trade entry Reason I will know the type of national and international economic events and circumstances which are likely to impact on my stock I will avoid stocks that are due to go Call option premium is decreased as ex-dividend within the first month of there is an expected price drop in the my planned trade premium as the stock hits the exdividend date Stocks are more unpredictable after the ex-dividend date A spread of 15c or less between the bid/ask of the call option is desirable I am entering a stock and options position and I recognize options liquidity (how commonly they are traded) is the key factor in determining the spread (the difference between the bid and ask price) should be a part of my decision-making process The wider the spread the more likely this will impact on my expected profit margins Becoming aware of the underlying short-term market conditions should be a learning goal of mine moving forward I may choose to enter a smaller position than I would have National and international economic and geopolitical events and announcements have a significant impact on the market sentiment which over 75% of stocks mirror the otherwise done if entry criteria are met or I may choose not to open a new position if there is a big economic event imminent direction of the overall index (S&P500) Major market moving announcements include US non-farm payrolls (monthly employment), and GDP figures as examples I will avoid stocks with an earnings announcement in the current expiration period When companies report earnings, there are often wild price swings, which are risks that not serve me in my investing Option Position Entry I know that I can choose where to place my options positions but these should be aligned with my trading purpose and the strategy Rules Reason I will sell an At-the-Money (ATM) or closest Out-ofthe-Money (OTM) call option on entering the stock position The Covered Call strategy is taught as a cash flow strategy and therefore that is the purpose of the strike price placement (with a yield in excess of 3%) plus the ability to capture capital growth in the stock I will enter my put option (for insurance) no less than 10% below the current share price This provides me with the risk capped with all the positions entered I can choose to place the put option at a lower strike price Although this will reduce my potential return it will increase my risk protection Position Sizing I recognize that position sizing will only preserve my trading capital but can ultimately positively affect my profit and my desired trading purpose I position size using the following set of rules: Rules Reason I will trade no more than Major market movements a maximum of open caused by macroeconomic positions at any time events e.g interest rates, geopolitical statements/events to affect the whole market Making decisions across many positions is difficult The maximum risk is no more than 10% for any one position I will commit no more than 20% of my trading capital to any one trade Protects against company risk from adverse events After the trade Rules Reason At the end of the trading day, I will examine all my trades and ensure that they are all recorded I will annotate the charts of all my setups and record why I entered the trade and why I exited the trade I will also write down the emotions that I had during the trade I will also check that I executed my trades according to my trading plan The only way to grow as a trader is to journal all your trades, documenting every aspect of your trade and look back over them By doing this you will see if you are following your trading plan and you will quickly learn from your mistakes Also documenting your emotions so you notice how you feel whilst in the trade will go a long way to containing your emotions I will guard against overconfidence and ensure that my attitude remains consistent Check to see that I did everything as well as I could Remind myself that executing the trade in accordance with my plan is more important than the outcome of the trade You need to ensure that your emotions are consistent When on a winning streak, it’s very easy to become cocky and you will be more likely to enter a poor trade Contain your emotions because it’s very important that you execute good trades based on your trading plan I will devote 10 hours a week to trading I will also devote 2.5 hours a week to educating myself on trading by reading books and watching educational videos Very important to keep up your knowledge of the markets up with self-education and learn how other traders have mastered the markets 11 THE FUTURE OF VSA “What I like you to right now, I want you to think about your dream and envision it I don’t know what that dream is that you have I don’t care how far-fetched it might appear to be I don’t care how disappointing it might have been, as you’ve been working toward that dream Here’s what I know, that dream that you are holding in your mind, that it’s possible Some time we can’t say that I can that, but what we can say that it’s possible, that I can have my dream As we run toward it, as we work toward it day and day out Most people don’t work on their dreams why, they stop growing, they stop working on themselves, they stop stretching, they stop pushing themselves These are not risk takers Most people have done all that they are ever going to do, they raise a family, they earn a living and then they die People who are running towards their dream, life has a special kind of meaning In the process of working on your dream you will have a lot of pain, a lot of setbacks, a lot of disappointment, a lot of defeats In the process of doing that, you will discover some things about yourself that you don’t know right now What you’ll realize is that you are more powerful than you can ever begin to imagine Align yourself with people that can encourage you, people that can empower you, people that you can grow from, people that you can learn from Look at your life and look at where you want to go, don’t worry about your circumstances, don’t worry about your age You see it’s time now, if you want to make this your decade you have to start saying yes to your life, start saying yes to your dreams, yes to your unfolding future, yes to your potential Right now, the future is unfolding for you right now, your future is unlimited for you right now, no one knows where you can go, we have the power to change our personal history, changing the directions of our lives, changing our thoughts, changing where we want to go, exploring new horizons So, as you begin to look at this decade and affirming this is your decade, as you set goals that will make you stretch and bring out the best in you As you begin to remove the negative toxic people from your life As you decide to take chances in life That’s one of the things that’s very important This god said that if you’re not willing to risk, you cannot grow If you cannot grow, you cannot become your best If you can’t become your best, then you cannot be happy If you can’t be happy, then what else is there.” – Les Brown The biggest break-through in trading using the Wyckoff / Volume Spread Analysis methodology has been made by TradeGuider TradeGuider’s aim was to simplify trading for their customers and allow them to find opportunities quickly and easily and not just any opportunities, but only those opportunities that will have a high probability of success Allow me to introduce to you the VSA Smart Center Pro which will take your trading to the next level VSA Smart Center Pro was designed with the trader in mind, whether you are an intraday trader or a swing trader you will be able to locate trades quickly and easily One of the ways I use the VSA Smart Center Pro is that it scans multiple instruments in the Forex Market Out of the instruments that I trade, 25 different currency pairs, (VSA Smart Center Pro can monitor hundreds of instruments at one time), VSA Smart Center pro monitors these instruments for me Based on the settings that I have set, and you can customize the VSA Smart Center Pro to suit your trading style VSA Smart Center Pro will alert me via an audible alert when an instrument is in trend alignment Why I want the VSA Smart Center Pro to alert me when there is trend alignment in an instrument? When you get trend alignment in multiple timeframes, these instruments are more likely to give you higher probability setups Like they say in the trading world, the trend is your friend Once we have trend alignment, the VSA Smart Center Pro will alert me of a VSA principle in the timeframe that it appears in All that is required of me is to go to the chart and look at the setup and if it fits into my trading style, then I take the trade Just think if you were searching for trade setups on 25 different currency pairs and looking through each of the timeframes, how much time would you spend doing this? Figure 72: VSA Smart Center Pro Panel The image above is the VSA Smart Center Pro and you can see that I am monitoring instruments in this panel It shows me the different timeframes and how they are trending; red = downtrend, green = uptrend and grey = consolidation When an instrument is in trend alignment, (based on my settings, that 60% of the timeframes need to be in trend alignment), an audible alert will sound and the instrument will flash, black and white Once I click on the instrument it will show me whether it’s in an uptrend or downtrend If it’s in a downtrend the red box to the right will be checked, in an uptrend the green box to the left will be checked Figure 73: VSA Smart Center Pro Trend Alignment The image above is showing me that GBPUSD is in trend alignment to the downside All timeframes are trending Now with it being checked it will sniff for me when a VSA principle appears in any of the timeframes and it will alert me via audible alert and show me on the timeframe the number of the VSA principle Figure 74: VSA Smart Center Pro VSA Principle Identified The main features of the VSA Smart Center Pro are: ü Automatically scans, locates, and alerts the trader / investor to the most important Wyckoff / VSA set ups, that are aligned with trend ü The Wyckoff / VSA SMART VSA Center Pro trading system can monitor hundreds of charts in all markets in a singular moment ü The Wyckoff / VSA SMART VSA Center Pro trading system will clearly identify congestion and will not send alerts, to keep you out of poor trading conditions ü The Wyckoff / VSA SMART VSA Center Pro trading system can be completely customized to your personal trading style, so is suitable for scalp traders, swing traders and long term investment managers The reason for this, is it only works in the timeframes you set it in ü When an alert is triggered that has trend confirmation backing it up, the software delivers an audible alert for that instrument ü The Wyckoff / VSA SMART VSA Center Pro trading system will save you considerable time as it scans and locates the trades / investments for you to take trades and invest as the markets unfold in real time or longer term investment positions ü The Wyckoff / VSA SMART VSA Center Pro trading system simplifies the trading process to make successful trading easier, by finding key places where "Smart Money" are positioning their moves so you can trade in harmony with them ü The Wyckoff / VSA SMART VSA Center Pro trading system works intuitively in the background so you don't have to spend hours looking at charts The system does this automatically for you ü The Wyckoff / VSA SMART VSA Center Pro trading system results in more trading candidates that can identify the key Wyckoff VSA Principles that trigger trades based on hypodermic volume (which Wyckoff explained was very important) followed by very low volume at the same price level in the future This is called a VSA Sequential trade setup, and is used with the SMART VSA Center Pro Scanner to identify the best Wyckoff trades that are setting up in the timeframes you're monitoring S: Scans multiple timeframes in multiple markets M: Monitors the alignment of the different trending and volume tools A: Alignment – Scan for timeframe and trend alignment R: Retracement levels identify entry points T: Trades triggered with scanned VSA Signals If you would like to know more or discuss your options with the VSA Smart Center Pro you get in contact with me: danny@tradeguider.com You can also find out more information and watch a live trading webinar performed by Gavin Holmes using the VSA Smart Center Pro to take live trades in the market Click on the following link https://www.tradeguider.com/smart_package.asp to find out more ... the finest books on the Wyckoff / Volume Spread Analysis trading method currently available In ? ?Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis? ?? Danny goes well... Author, ? ?Trading in the Shadow of the Smart Money” I had the good fortune to connect with the Author of ? ?Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis? ??.. .Supercharge Your Trading & Investment Account Using Wyckoff / Volume Spread Analysis Danny Younes Copyright © 2017 Danny Younes All rights