I’m back from South East Asia and Australia – what a great trip! We had pretty special live events in Singapore, Kuala Lumpur, Malaysia, and Sidney. It was one of the very best times I’ve had in my trading career. Although I am glad to be home, I really can’t wait to go back and reconnect with all the terrific traders I met.
One of the themes I focused on in the teaching events was trading four Wyckoff setups. These – with the addition of one other setup – are the trade setups I look for day in and day out. In fact, they are all I trade. I have only five trade setups in my trading plan. It is all anyone needs.
One of those setups is the Wyckoff Spring. It is one of my favorites because it happens frequently across all time frames and in all markets. It’s easy to spot. They often take off like a rocket, though sometimes they are tested before moving higher.
The key to understanding the Spring is to recognize that lower prices get rejected. After dipping underneath support, no supply is found. Buyers see this and come into the market aggressively. This is what pushes price up, often dramatically.
Check out the chart attached to this post. Yesterday (daily chart), lower prices underneath the September 26th low were rejected and the market sprang up from there. As is often the case with a Spring, we had good follow-through today.
Although the September 26th low was the key level on the daily chart, the longer-term intraday chart had it’s own Spring setup and foretold the action on the daily chart. We see this on the 45,000 Tick Chart where the market became oversold and then sprung off the October 10th low. You can see the lack of supply highlighted by the Weis Wave. This one got tested. Note the low volume on the test. Nice!
Today’s trading action was ‘picture-perfect’ for the Spring trader. The 3,000 Tick Chart is a good one to use on strongly trending days like today. It highlights two Springs. The first one got you in just after the US session opened. The second one occurred later in the morning. This one was tested.
Finally, a totally different market has a good Spring setup initiated today. This is EWY – the South Korea ETF. I like the gaping action. A shake out last week and a break-away today.
Springs are a wonderful gift from the Wyckoff Method. From today’s charts, you can see how well they work. (Rummage through my blog and you will find other posts on the Wyckoff Spring, as well.) One of the things I like about them is that they get you into the market close to the ‘danger point,’ so you have good control over money/risk management. Like any good trade setup, they do take some effort and understanding to trade well. If you want to learn more about how to trade them, click the link below. It will take you to an in-depth, two hour tutorial I did solely on the Spring setup. I discuss everything I know about this trade setup here:
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