Gary Dayton WyckoffSpring 2010 5 2 PDF

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.
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.
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
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
Conceptual Map of a Spring
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
Classic Spring Example
Another Classic Example
Classic Example Weekly Chart
More on the Classic Spring
 Supply exhausted
 Danger point identified
 When volume moderate on the Spring, it may be tested
Spring with a Test
Going Beyond the Classic: Background
 Background more important than light volume retest (spring
bar)
 Strong Trend – path of least resistance
 No significant indication of weakness
 Obvious buying at the support level
 Established Trading Range
 Heavy volume and no downside follow through at the Spring
Background
Background
Spring with Heavy Buying
A Pair of Springs
Not Every Dip is a Spring
Not Springs
When Springs fail
 Downtrend
 Significant weakness in background
 Inability to rally away from the danger point
When Springs Fail
When Springs Fail
When Springs Fail
When Springs Fail
When Springs Fail
Entry Considerations
 On the Spring
 On a test of the Spring
Exit Considerations
 Trail Stop
 Higher time frame resistance
 Scale out
 Indicator value
 Fixed profit
 Scratch: Inability to rally away from the danger point
Trade Setup Specifications
Additional Spring Tips & Examples
 Springs occur across all time frames

 Trading Ranges
 Use Multiple Time frames
 Up Trending Markets
Weekly Spring
Weekly Spring in IWM
The Daily View of IWM
Springs in a Trading Range
Using Higher Time Frame Support
JBL Daily Part 1
JBL Daily Part 2
ISRG Daily Part 1
ISRG Daily Part 2
But Isn’t This In A Downtrend?
But Isn’t This In A Downtrend?
Could This Chaos Really Be A Spring?
Yes!
Additional Support
Additional Support
Additional Support
Power Buy with a Spring
A Second Spring after Power Buy with
Spring
Power Buys with Springs in SPY
More Recent Examples
More Recent Examples
‘Live’ Spring
Summary
 Elements of a Spring
 Conceptual map
 Background conditions
 When Springs fail
 Entry options
 Exit options
 Setup criteria
 Additional tips & examples
Feedback
Thank You!
“If you traded only Springs, you could do well.” David Weis
www.TradingPsychologyEdge.com

Gary Dayton WyckoffSpring 2010 5 2 PDF

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The Wyckoff Spring

An In-depth Look at a High Odds Trade

Dr. Gary Dayton

 Key elements of a Spring

 Springs occur across all time frames

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