Every trader needs a trade that produces. One that they can rely on and take with no hesitation. For me, that trade is the Wyckoff Spring. As long as i don’t have a raging bear trend or serious SOW in the background, I look to take this trade every time it comes up. Is it perfect? Of course not, nothing is. But it is as close to perfect as i can get in this trading game, and that makes it my bread & butter trade.
Here’s one that set up wonderfully today:
- A – The market became over sold from the reaction off the Globex highs.
- B – A test. Note the reduced Weis Wave volume on the test. This is exactly what you want to see in a test.
- C – Demand enters (see the Weis Wave) and the downtrend channel breaks.
- D – Buyers get aggressive and produce a higher high.
- E – A dip under the lows of A & B. Market finds no further supply. It springs. Buy.
- F – An excellent response to the spring. We can expect a new leg up above the previous swing high.
The above shows the characteristics of a solid spring setup. I’ve been trading this setup for over a decade. It is the one trade (along with it’s downside sibling, the upthrust) that I always look for. Hopefully, you do, too. As David Weis says, “you can make a living trading nothing but springs and upthrusts.” And, he’s right. If you are new to Wyckoff and would like to put this trade setup into your arsenal, you might be interested in my two-hour tutorial on the spring setup. Yes, it is two hours on just one trade setup — a decade’s worth of understanding — explaining everything I know about the trade. You can learn more about it here: Wyckoff Spring Tutorial.
Hi,
After wave C, we have down move with reduced volume (lower than wave B). It is no supply, too.
Why not buy here?
Good question. Yes, the wave down after C is on light volume and shows no supply. I would not take a trade in here because price has slipped back into the middle of the small trading range between the low of B and high of C. There is no edge there because at the time we wouldn’t know if it was going to continue to B or lower or run up. E is a much clearer place to take the trade as lower prices have been rejected. It’s easy to see in hindsight, but consider this: if you did enter long at that location you would be happy with the rally to D, but then it pulls straight back, likely stopping you out. Getting stopped out is aversive. Your mental state then might be to stand aside because you have made a loss. The spring is missed and the real profits given up. We really want to wait until the edge is in our favor. Otherwise we are taking random trades, which not only have no edge but can affect our psychology. This in turn, adversely affects our trading. A cycle of negativity is created which can be hard to break. Making random trades like this are never a good idea.