Handout For Videos

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 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!
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 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.

MY BACKGROUND AND EXPERIENCE

WORKSHOP OUTLINE

SWING TRADING USING THE WYCKOFF METHOD
December 17, 2016
Outline of today’s material (1):
1. Introduction
2. Your definitions of a swing trade

• 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?
3. 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
4. Technical characteristics of an ideal swing trade selection (Accumulation)

December 17, 2016
5. 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
6. Types of traders and their best entry and exit points (“Who”)
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
8. 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

December 17, 2016
9. 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. Supply and Demand Confirmation (STEP#5)

• Supply absorption (“When”)
• Active demand signature – institutional interest
• Decreased volatility as a filtering tool

December 17, 2016
12. 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

• SKX
14. Q&A session

SWING TRADING DEFINITIONS

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?

Comparison of Long-Term Investing vs. Swing Trading
Swing Trade #1 Swing Trade #2 Swing Trade #3
Notes: Swing Trade #3

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. Long-Term Trade
Swing Trade #2
Long-Term Trade
Swing Trade #1
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?

GENERAL CHARACTERISTICS OF
AN IDEAL SWING TRADE

General Characteristics of an Ideal Swing Trade
• Easily identifiable -
Selection
• Starts directional movement
right away – Readiness
TREND Exits - TM
• Moves with high velocity –
Momentum
• Covers a lot of one-
directional distance – Trend
• Gives clear Entry and Exit POE- TM
Points – Trade Management
• Outperforms the market
and peers - Leadership CAUSE - Selection
• Presents optimal Reward-
Momentum
to-Risk opportunity – Risk
Management and Supply Absorption and Higher Lows - Readiness
Reward/Risk Optimization
• Creates largest net result, $
in the shortest period of
time, using proper leverage
and reflecting your personal
risk aversion  Optimal
Trade
Risk Management and Reward/Risk Optimization

POE=28.50, SL=26.50, Risk=$2
Ave. Exit=$40, Ave. Profit=$11.50
Reward/Risk=11.50/2=5.75
For intraday POE and Daily Exit:
Reward/Risk=12.35/0.30=41!!!
Note: We will discuss this intraday optimization later on
Local RS Outperformance - Selection & Leadership

TECHNICAL CHARACTERISTICS OF
AN IDEAL SWING TRADE
SELECTION

Technical Characteristics of an Ideal Swing Trade Selection (Accumulation)
Question: How do we know WHAT stock to select,

in WHICH direction it will move, and WHEN and
WHERE to open a swing trade?
• Leadership (WHAT)
• Previous Leadership – Prior Institutional
Participation POE
• Local Relative/Comparative Outperformance – Why here?
Institutional Sponsorship Why up?
• Strength prior to Phase |C| Why this stock?
• 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

Case Study: MNST Optimal Swing Trades (1)
Swing Trade #1 Swing Trade #2
Swing Trade #2
Swing Trade #1
Question:
- At each Point of Entry, why are we choosing
THIS STOCK to swing trade?

SELECTION OF A SWING TRADE
CANDIDATE:
SYNCRONICITY WITH THE
MARKET

Case Study: MNST Optimal Swing Trades (2) – Synchronicity with the Market
Synchronicity with the Market Trend (which direction)
• Swing Trading in sync with the Market Trend
• Swing Trading against the Market Trend
Question:
What is the Market environment during the best swing opportunities?

Synchronicity with the Market: Swing Trading against the Market Trend
Question:
What is the Market environment during the best down swing opportunities?

TYPES OF TRADERS AND THEIR
BEST ENTRY AND EXIT POINTS

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?

Entries, add-ons and exits for Investors and Swing Traders during secular/cyclical bull markets
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 trends with short-term Short-term trend swings
cyclical lows counter moves
Best entry points Secular and cyclical lows Cyclical lows Counter-trend reaction lows
(below 20% or 10-20% lows) (10-20% lows) (1-5% lows)
Best add-on entry points Cyclical lows Counter-trend reactions and Breakouts from reaction lows
stepping stone trading ranges
Aggressive buying Confirmation of SOS+BU Confirmation of SOS+BU Short-term breakouts
Any stepping stone Any stepping stone trading

trading range range
Exits Secular and cyclical Cyclical CHoCH Any short-term CHoCH
CHoCH
MARKET TREND DEFINITIONS
Case study: S&P 500 E-mini

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

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


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






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)

SELECTION PROCESS USING
STOCKCHARTS.COM FEATURES

Stockcharts.com Top-Bottom Selection Path – Part 1




Stockcharts.com Template – Part 1



SCANNING

Scanning for Prior Leadership

Scanning for Prior Leadership

Short-term Relative Outperformance Filter
Short-term Footwear Industry Group Improvement

Which stock is a leader in this group?

Following Momentum Stocks

SCTR from Stockcharts.com



SWING TRADING A LEADER IN A
LONG-TERM TREND

Swing trading a leader: The logic behind swing trading a leading stock/industry group
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: When to start swing trading stocks in a leading industry group?
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
FINDING AND FOLLOWING
THE LEADERS:
From Macro to Micro Views
Case study: Airlines Industry Group

(ALK, LUV, JBLU and UAL)

Leadership: leader vs laggards
Leader
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!
Leadership: Structural and Volume analysis - ALK
MSOS
Phase A Phase B Phase C Phase D
UA BU
AR
SC ST
ST as SOW Test of Spring/SO = LPS
Spring/SO
Questions:
Why does volume (effort) increase going into Phase |C|?
Why does volume (effort) decrease after Phase |C| as price travels up?
Is ALK in a strong structural position and showing good relative strength (vs the market)?
HHs
What should happen next with price?
HLs

Leadership: Structural and Volume analysis - LUV
Phase A Phase B Ph. C Phase D
AR
STs in Ph. |B|

SC ST
Test of SO = LPS
Shakeout
LHs
LLs

Leadership: Structural and Volume analysis - JBLU

UA UA
AR
LPS
LPS
SC ST ST
Question:
What does the decrease in volume (effort) going
into Phase |C| mean from a leadership point of
view?
LHs
LLs

Leadership: Structural and Volume analysis - UAL
Phase A Phase B Phase C
Stepping Stone Re-Accumulation Trading Range
LHs
LLs

SELECTING SWING TRADE
CANDIDATES IN AN ESTABLISHED
LONG-TERM TREND OF A LEADING
INDUSTRY GROUP

Selection: Short-term relative outperformance
October Low October Low
Select! September Low
September Low
October Low
October Low
September September Low

Low
Selection of a swing trading candidate:

Look for a leader to continue its relative outperformance or look for laggards that suddenly start to
outperform a leader or at least move in sync with it.
Exit
+ 71% + 39% Exit
Exit
+ 30% Exit
+ 57%
Result: Preceding long-term as well as short-term comparative strength leads to outperformance by the leader -- ALK.
*Note: The exits for the underperforming peers are synchronized with that for the outperforming stock.

April Low September Low
April Low
September Low
Select!
Selection of a swing trading candidate:

Look for a leader to continue its relative outperformance or look for laggards that suddenly start to
outperform a leader or at least move in sync with it.
Exit
Exit
+ 53%
+ 100%
Exit
Exit
+ 54% + 42%
Result: Preceding short-term comparative strength leads to outperformance by a former laggard (now a leader) – LUV
*Note: The exits for the underperforming peers are synchronized with that for the outperforming stock.

CANDIDATE:
STRENGTH ANALYSIS

Case Study: MNST Optimal Swing Trades (3) – Selection
Prior Institutional Participation
Local RS/Comparative Outperformance
We are here. Any signs of previous

Leadership or Institutional Participation?
• Previous Leadership – Prior Institutional Participation

• Local Relative/Comparative Outperformance – Institutional Sponsorship
• Strength prior to Phase |C|
• Sweet Spot as a Comparative Strength predictor of future outperformance
• Unified industry peers strength confirmation – Institutional Buy Program
Local RS/Comparative Outperformance

Case Study: MNST Optimal Swing Trades (4) – Institutional Buy Program
Visualization pages password: wyckoff123
POE#1

Case Study: MNST Optimal Swing Trades (5) – Structural Position of Peers
DPS: Overextended Upswing. Only a short-term trade is possible in PEP: Close to a Stepping Stone Re-accumulation Trading Range. In a
the direction of the swing. potential SOS rally. Wait for the Back-Up action.
CCE: Overextended Upswing. Needs to Re-accumulate in a Stepping MNST: In an Uptrend after significant Re-accumulation Stepping
Stone Trading Range to give us a trading opportunity. Stone Trading Range. In a Backing-Up action – Perfect position!

Case Study: MNST Optimal Swing Trades (6) – Institutional Buy Program
Stronger than the Market?
POE #2

Case Study: MNST Optimal Swing Trades (7) – Sweet Spot Concept

YES

YES

Case Study: MNST Optimal Swing Trades (8) – Sweet Spot Concept

YES

YES
SWEET SPOT (SS):

Strength on the rally and
strength on the
subsequent reaction – the
next upswing should
outperform the market!!!
Stronger
Stronger

CANDIDATE:
STRUCTURAL ANALYSIS

Case Study: MNST Optimal Swing Trades (9) – Wyckoff Long-Term Structural Position
Questions:
- What is the current trend?
- What environment are we currently in for this stock?
Stepping Stone
Trading Range
Stepping Stone Trading Range
Zone of Original Accumulation
Institutional Interest and Participation

Case Study: MNST Optimal Swing Trades (10) – Wyckoff Long-Term Structural Position
POE #2
POE #1
Questions:
- At POE #1, is the stock at the optimal Wyckoff structural point?
- What are Wyckoff Phases in the trading range?
- What are Wyckoff Events in the trading range?

STRUCTURAL ANALYSIS: What are Wyckoff Phases?
INTENTIONS BEHIND PHASES (Accumulation)
STOP BUILD CAUSE TEST MARKUP MARKUP

SUPPLY & DEMAND in TR out of TR
CHoCH
CHoCH
Wyckoff Buy Zone

ELEVEN WYCKOFF TRADING RANGE the market’s journey can continue
onward and upward.
EVENTS 6-7. “Springs” or “shakeouts” usually
STRUCTURAL ANALYSIS: What are Wyckoff Accumulation Events? (Accumulation) occur late within the trading range
and allow the dominant players to
1. PS – preliminary support, where substantial make a definitive test of available
buying begins to provide pronounced support after supply before a markup campaign
a prolonged down-move. Volume and can unfold. If the amount of supply
the price spread widen and provide that surfaces on a break of support is
a signal that the down-move may be very light (low volume), it will be an
approaching its end. indication that the way is clear for a
2. SC – selling climax, the point at sustained advance. Heavy supply here
which widening spread and selling usually means a renewed decline.
pressure usually climaxes and Moderate volume here may mean
heavy or panicky selling by the more testing of support and to
public is being absorbed by larger professional proceed with caution. The spring
interests at prices near or shakeout also serves the purpose
the bottom. The low of the climax of providing dominant interests with
helps define the lower level of the additional supply from weak holders
trading range. at low prices.
3. AR – automatic rally, where selling 8. “Jump” – continuing the creek
pressure has been exhausted. A wave analogy, the point at which price
of buying can now easily push up jumps through the resistance line; a
prices, which is further fuelled by bullish sign if the jump is achieved
short covering. The high of this rally with increasing speed and volume.
Helps define the top of the trading 9. SOS – sign of strength, an
range. advance on increasing spread and
4. ST – secondary test, price revisits volume, typically up to and over
the area of the selling climax to resistance at the upper boundaries of
test the supply/demand at these the TR.
price levels. If a bottom is to be 10-11. BU/LPS – Back up/last point
confirmed, significant supply should of support, the ending point of a reaction
not resurface, and volume and or pullback at which support was
price spread should be significantly met. Backing up to an LPS means
diminished as the market approaches a pullback to support that was
support in the area of the SC. formerly resistance, on diminished
5. The “Creek” is a wavy line of spread and volume after an SOS.
resistance drawn loosely across rally This is a good place to initiate long
peaks within the trading range. There positions or to add to profitable ones.
are minor lines of resistance and a
more significant “creek” of supply
that will have to be crossed before
SCHEMATICS OF ACCUMULATION WYCKOFF TRADING RANGE PHASES:
Conventional Accumulation Trading Range

STRUCTURAL ANALYSIS: What are Wyckoff Distribution Events? ELEVEN WYCKOFF TRADING
7. (MSOW) Major sign of weakness…A
RANGE EVENTS pronounced break through the ice that will
(Distribution) likely be followed by attempts to get back
above it. A failure to rally above firm
1. (PSY) Preliminary Supply, where support may mean that the market will
substantial selling begins to provide “drown.”
pronounced resistance after an upmove. 8. (LPSY) Last Point of Supply After we test
Volume and spread widen and provide a the ice (support) on a SOW, a feeble rally
signal that the upmove may be approaching attempt on narrow spread shows us the
its end. difficulty the market is having in making a
2. (BC) Buying Climax, the point at which further rise. Volume may be light or heavy,
widening spread and the force of buying showing weak demand or substantial
climaxes, and heavy or urgent buying by the supply. It is at these LPSYs that the last
public is being filled by larger professional waves of distribution occur before
interests at prices near a top. markdown begins.
3. (AR) Automatic Reaction, when buying is 9. Return to the ICE. After a break through
pretty much exhausted and heavy supply the ice, a rally attempt is thwarted at the
continues to appear, an AR follows the BC. ice’s surface (now resistance). The rally
The low of this selloff will help define the meets a last wave of supply before
bottom of the Trading Range (TR). markdown ensues. LPSYs are good places to
4. (ST) Secondary Test(s) revisit the area of initiate short positions or to add to already
the BC to test the demand/supply balance profitable ones.
at these price levels. If a top is to be 10. (UTAD) Upthrust After Distribution
confirmed, supply will outweigh demand Similar to the Spring and Terminal Shakeout
and volume and spread should be in the trading range of accumulation, a
diminished as the market approaches the UTAD may occur in a TR of distribution. It is
resistance area of the BC. a more definitive test of new demand after
5. (SOW) Sign of Weakness will usually a breakout above the resistance
occur on increased spread and volume. line of the TR and occurs in the latter stages
Supply is dominant. Our first “fall on the of the TR.
ice” holds and we get up try to forge ahead. 11. (UT) as a ST (added by Roman). A
6. The ICE is an analogy to a wavy line of violent rally to the upper boundaries of the
support drawn loosely under reaction lows trading range with subsequent failure back
of the Trading Range. into the TR.

SCHEMATICS OF DISTRIBUTION WYCKOFF TRADING RANGE PHASES:

Case Study: MNST Optimal Swing Trades (11) – Conventional Wyckoff Labeling
POE#2
Sign of
Strength (SOS)
Automatic
Rally (AR) Back Up (BU) POE#1
Last
Point of
Secondary Support
Test (ST) (LPS)
Selling
Climax (SC)
Phase A Phase B Phase C Phase D Phase E

Case Study: MNST Optimal Swing Trades (12) – Alternative Wyckoff Labeling
Question:
- Where do you see a Change of Character on this chart? POE #2
Sign of
Strength
(SOS)
Back Up (BU)
POE #1
Automatic
Rally (AR)
Last
Point of
Support
Secondary (LPS)
Test (ST) in Phase D
Ph. B Phase C
Secondary
Selling Test (ST) in Phase B
Ph. A
Climax (SC)
Phase A

Case Study: MNST Optimal Swing Trades (13) – Change of Character (CHoCH)
Up trend is
beginning
Question:
- Where do you see a Change of Character on this chart? CHoCH POE #2
Sign of
Strength
(SOS)
Back Up (BU)
POE #1
Last
Point of
Support
(LPS)
CHoCH Phase D
Up swing is over
CHoCH
Down swing is over
Phase A

Case Study: MNST Optimal Swing Trades (14) – Wyckoff Labeling of Daily TRs
Sign of
Strength
SOS
(SOS) UT
BC BU
ST POE #2
LPS
AR Back Up Area (BU)
Buying
Climax (BC) Upthrust
Action (UA)
Automatic
Rally
(AR)
POE #1
Selling Secondary Last Point of

Climax (SC) Test (ST) Support (LPS)

CANDIDATE:
VOLUME ANALYSIS

Case Study: MNST Optimal Swing Trades (15) – Volume Signature
Supply and Demand Confirmation (when)

• Supply Absorption
• Active Demand Signature – Institutional Interest
• Springboard as a timing tool
• Supply and Demand Signatures
• Price Signature POE #2
Back Up Area (BU)
POE #1
Question:
- Is Supply being absorbed through a trading range structure?

SUPPLY AND DEMAND ANALYSIS: Supply, Supply, Supply
SUPPLY Signatures for Different Wyckoff Phases (Accumulation)

Supply Signatures in 2013-2014 Trading Range
A
B
C
A
B
C

Case Study: MNST Optimal Swing Trades (16) – Volume Signature
Questions:
- Is Supply being absorbed through a trading range structure?
- Is there a significant presence of Demand that shows
Institutional Interest and Participation?
POE #2
Back Up Area (BU)
POE #1
9
1
0
2 4 5 1
1 6 7
1
1
3 2

Case Study: MNST Optimal Swing Trades (17) – Volume and Price Signatures
Volume and Price signatures: 10. Supply is the highest in the whole
1. A healthy reaction happens on structure but the price is not reacting Springboard Area #2 – High
moderate volume – No big presence of to downside a lot – possible Probability Entry Point
Supply, possible Re-accumulation range consolidation as a BU action.
2. Highest Supply in reaction and price 11. Short-term increase and long-term
rallies – stopping point for reaction, decrease in Supply since the gap –
possible SC for Re-accumulation range possible Phase C signature for the BU
POE #2
3. Supply contracts with price testing SC trading range.
low – Local Secondary Test action 12. Further decrease of Supply at the
(bullish) higher low – absorption of Supply and
4. Volume off the bottom with Demand a Springboard position. Back Up Area (BU)
increasing and price reacting
aggressively – previous SC support is
confirmed (bullish)
5. Highest Supply spike with price
swinging up after – However, Demand
prevails by pushing price up after the
Supply spike (bullish)
6. Consistent and increasing Supply POE #1
signature – a new point of fear
suggesting possible Phase C testing
(bullish)
7. Supply contracts from 6 to 7 with prices Springboard Area #1 – High
making higher lows – Absorption of Probability Entry Point
Supply and first Springboard position
(very bullish short-term)
8. Highest Demand after point 4 with 9
prices gapping up and consistent
Demand – Springboard position
1
(extremely bullish) 0
9. Demand Spike with price traveling and 2 4 5 1
committing above previous significant 1 6 7

1
1
high – proof of Institutional Interest and 3 2
Participation. Possible Supply on the

same volume signature. Expect a mean
reversion trade by professionals from 8
here.
Question: Which stock has the lowest volatility during 2012 consolidation and what does it mean for the next move up?

Future Leadership based on Volatility
Previous Leader New Leader

WYCKOFF POINTS OF ENTRY

Wyckoff Points of Entry: Phases, Wyckoff Events, and Actual Entries
Question:
Look at the chart and identify potential Wyckoff points of entry (phases and Wyckoff events)
Wyckoff points of Entry: Phases, Wyckoff events, Actual Entries
BO of BU
SS Reaction
BU or SSTR
LPS
LPS or Tests
LPS or attempt
to Spring
Phases of Entry: Points of Entry: Actual Entries:

Phase |C| #3 Spring Close of bar returning to a TR
Test of a #2 Spring or a Shakeout Reversal of Test’s down-swing
Last Point of Support (LPS) Reversal of LPS down-swing
Phase |D| Sign of Strength Bar on a SOS Rally Intra bar Breakout or a Bar Close
Last Point of Support (LPS) Reversal of LPS down-swing
Back-Up (BU) Reversal of Ph |C+D| if in a TR
Phase |E| Breakout (BO) of BU Breakout
Stepping Stone Trading Ranges (SSTR) Phases |C + D + early E|
SWING TRADE MANAGEMENT:
WYCKOFF-BASED STOP-LOSS
TECHNIQUES

Stop-Loss techniques: Wyckoff Stop-Loss
Commitment
Stop-Loss
Wyckoff Stop-Loss (SL):

Main idea: After price commits above previous resistance, move SL below prior support two levels down.
Commitment line: Moves up every time there is a breakout of the most recent resistance
Stop-Loss line: Moves up below a second support level every time the commitment line moves up
Cons: Wyckoff did not clearly define support levels in relation to stop-loss placement. This approach could lead to a premature exit if
you place the SL too close to price. Sometimes this could be late in a trading range, which is not an efficient exit or use of capital
Stop-Loss techniques: Additional SL ideas
SBar
Trend lines Moving Averages Significant Bars (SBar)

Raise stop-loss with the rise Use Moving Averages as a Move SL to the lows of SBars with
of a line of least resistance natural trailing stop-loss every commitment to upside
TRADE MANAGEMENT OF A
SWING TRADE: SWITCH
TECHNIQUE

Swing Trade Management: Switch of SL from lower to higher time frames
WEEKLY
Exit
SBar
Moving Stop-loss
POE #2
CHoCH
POE #1
Exit
Original Stop-loss
Optimal Swing Trade
POE #2: Phase D, BU TR, Spring

Last SBar down is reversed
Stop-loss below significant low
POE #1: Phase C, Spring + Test

Last SBar down is reversed
Stop-loss below significant low
Phase C Phase D

Case Study: MNST Optimal Swing Trades (18) – Intraday POE
TREND Exits - TM
POE- TM
CAUSE - Selection
Momentum
Supply Absorption and Higher Lows - Readiness

POE=28.50, SL=26.50, Risk=$2
Ave. Exit=$40, Ave. Profit=$11.50
Reward/Risk=11.50/2=5.75
For intraday POE and Daily Exit:

Reward/Risk=12.35/0.30=41!!!
How do we achieve a higher Reward/Risk ratio?

Case Study: MNST Optimal Swing Trades (19) – Intraday POE
Stock opens Stock opens Both Stock opens Stock opens Stock opens Stock opens Stock opens Stock opens up stronger
up weaker up stronger market and up stronger up with the up with the up in line up stronger than the market and the
than the than the stock gap than the gap, but the gap, but the with the than the first 30 minutes are
market – no market, but down at market, but first 30 first 30 market. market, but stronger – execute intraday
reason to there is no open and there is no minutes are minutes are Only one there is no POE, hold through the day
trade it entry signal the stock entry signal weaker than weaker successful entry signal and keep original intraday
intraday. after the creates a after the the market – than the intraday after the SL in place.
The price first 30 lower low – first 30 no intraday market – no trade is first 30
should be minutes of skip minutes of POE intraday possible, but minutes of
tested on trading intraday trading POE no switch to trading
the Daily entry as Daily
chart. Daily test
has failed.
POEs
Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9
Phase C on Daily! – Start looking for intraday POE for an Optimal Swing Trade
POE=27.65, SL=27.35, Risk=$0.30 (instead of $2); Ave. Exit=$40, Ave. Profit=$12.35; Reward/Risk=12.35/0.30=41
What does it mean for a $100k portfolio?
If your risk aversion level is only at 0.25%=$250 per position, you will be able to buy $250/0.30=833 shares or commit $23,032 of your capital. Your profit, after
converting to Daily and Weekly stop-losses and with average exit at around $40, will be $12.35*833=$10,288 or 10.3% in 122 days. You are risking $250 to gain
over $10k. Your biggest risk is an overnight gap down. Imagine a 20% gap down from POE price of $27.65. The loss will equal 833*$5.53=$4,607 or 4.6% of equity.
If your risk aversion level is at 1%=$1,000, you will be able to buy $1,000/0.30=3,333 shares or commit $92,158 of your capital. Your profit, after converting to
Daily and Weekly stop-losses and with average exit at around $40, will be $12.35*3,333=$41,163 or 41.2% in 122 days. Your biggest risk is still a gap down.

WYCKOFF EXIT POINTS

Wyckoff Exit Points
Exit
Question:
Look at the chart and identify potential Wyckoff exit points
Wyckoff Exit Points
BC ST
AR
Phase A
Q: Why are we only

discussing exits in Phase |A|?
Change of Leadership
Phase for Exit: Exit Points: Actual Exits:

Phase |A| Exit by a Stop-Loss (SL) Touch of SL or close below a SL
Evidence of BC (Spread, Velocity, Volume) On climactic bar
Change of Character Reaction (CHoCH or AR) CHoCH Bar
Break of a trend and/or change of Leadership Close below trend line for both
Exit on Secondary Test Rally (ST) Reversal of ST Rally near Resistance
EXERCISE: SKX

Exercise: SKX (1.1)
We are here on 2/11/15

Questions to answer:
1. Is there a prior Institutional Interest and Participation?
2. Is the Footwear group exhibiting leadership?
3. Was and is SKX a leading stock in the Footwear group?

Exercise: SKX (1.2)
Question to answer:
1. Compare the structures and strength of peers

Exercise: SKX (1.3)
1. What is the long-term structure for SKX? Trend or consolidation?
2. What is the direction of the intermediate trend?
3. Where is the position of SKX in the intermediate trend?

Exercise: SKX (1.4)
1. What is Wyckoff labeling for the last consolidation?
2. What are the Supply and Demand signatures?
3. What does Relative/Comparative Strength analysis suggest?
4. Is there a POE and, if yes, then where is the SL level? If not, then what needs to happen first?
2
1
3 4

STOP
FOR
DISCUSSION

Exercise: SKX (2.1)
1. Is there an Institutional Interest and Participation?
3. Is SKX a leading stock exhibiting leadership?

Exercise: SKX (2.2)
4. Is there a POE and, if yes, then where is the SL level? If not, then what needs to
happen first?

STOP
FOR
DISCUSSION

Exercise: SKX (3.1)
3. Is SKX a leading stock exhibiting leadership?

Exercise: SKX (3.2)
1. What is Wyckoff labeling since the last consolidation?
4. Is there a POE and, if yes, then where is the SL level? If not, then what needs to happen first?

STOP
FOR
DISCUSSION

Exercise: SKX (4)
1. Draw a trend channel
2. Show the movement of the Stop-Loss
3. Discuss the gap action in late July

Q&A session
THANK YOU AND HAPPY TRADING!!!

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
1. 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.
A: It was one of the leading groups in late 2014, losing its leadership in a
stepping stone consolidation.
A: Yes!

Question to answer:
1. Compare the structures and strength of peers
SKX has been trending up and is in a possible intermediate stepping stone SHOO has increased more than seven-fold since uptrend started in 2009. The
consolidation. Look for structural entry points if relative strength allows. last leg up produced ~47% annualized return, showing slowing momentum.
CROX has been trading in consistent range and is not exhibiting any strength.
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. Copyright © 2015 Wyckoff Associates, LLC. All Rights Reserved.
1. 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.
2. What is the direction of the intermediate trend?
A: Up
1. Where is the position of SKX in the intermediate trend?
A: Stepping Stone trading range. Possible Re-accumulation.

1. What is Wyckoff labeling for the last consolidation? UA UA
A: see labeling on the chart. Possible Phase C AR
2. What are the Supply and Demand signatures? LPS
A: Supply is contracting, Demand is increasing on a breakout move – bullish. SC ST ST LPS
A: RS is starting to outperform in a stepping stone structure
4. 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.
2
1
3 4

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.
A: Very much so.
A: Yes!

SOS
UA UA
BU
AR
LPS
ST in Ph. B LPS
SC ST
A: see labeling on the chart. Phase D.
A: Supply is contracting even further, Demand is consistent and contracting with prices
advancing – bullish.
A: RS is in an established uptrend.
4. 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.

A: Yes, price is steadily going up and there is no selling pressure from big
interests.
A: Very much so.
A: Yes!

SOS
UA UA
AR BU
LPS
LPS
SC ST ST
A: see labeling on the chart. Phase E.
A: Supply is insignificantly increasing, yet the prices are holding – Effort slightly increases, but no
Result -- bullish.
A: RS is in an established uptrend.
4. 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.

Solution Slide: SKX (4)
1. Draw a trend channel
Overbought
2. Show the movement of the Stop-Loss
3. Discuss the gap action in late July
A: The gap could be an exhaustion move up
into an overbought area indicating at least a
Moving possible start of a change of character.
Stop-loss
Original Stop-losses

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December 17, 2016

SWING TRADING USING THE WYCKOFF

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HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN

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2. Your definitions of a swing trade

3. General Characteristics of an Ideal swing trade

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

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5. Synchronicity with the market trend (“Which direction”)

7. Market trend definitions (STEP #1)

8. Selection process using Stockcharts.com features (STEP #2)

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10. Selecting swing trading candidates based on structural analysis (STEP#4)

11. Supply and Demand Confirmation (STEP#5)

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12. Swing Trading Tactics and Trade Management (STEP#6) (“How”)

13. Case Study Exercise

14. Q&A session

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Swing Trade #1 Swing Trade #2 Swing Trade #3

Notes: Swing Trade #3

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Risk Management and Reward/Risk Optimization

Local RS Outperformance - Selection & Leadership

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Question: How do we know WHAT stock to select,

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

Any stepping stone Any stepping stone trading

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Sequence of Change for Accumulation:

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Sequence of Change for Distribution:

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Question: What is the current market trend?

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