Wyckoff spring setup

This strategy was featured in the July 2008 issue of Active Trader magazine.

Setup:

1. First swing low: A downward reversal of the low price three percent or greater
2. Rally: An upward reversal off the first swing low – a move of the high price greater than or equal to 3 percent
3. Second swing low: Finally, second trough of the low price of 3 percent and greater, that should be lower than the first swing low.
4. The pivot lows must occur within 30 days of each other;
5. The second pivot point (second swing low) should break down through a support level of the lowest low of the last 30 days
   

Strategy Rules:

• Enter long with a stop order at the high price of bar when the second swing low is detected.
• Exit long position after 30 days.