npatz_2000
Long

WYCKOFF LONG RY

NYSE:RY   ROYAL BK CDA MONTREAL QUE
30 0 0
This is a modified Wyckoff Accumulation long on Royal Bank of Canada, I have been testing this entry for a little while, which is why I haven't published many charts lately. Anyways, basically we look for a Supply Climax ( SC             ), followed by an Automatic Reversal (AR) above the prior swing high, then a Secondary Test ( ST             ) of the SC             level, ideally a Spring ( SP             ) which would be a lower low below the SC             (which offers the best R:R). 2nd type of entry would be a ST             beyond the 50% retracement level, which this isn't. The 3rd, and bare minimum entry (lowest probability of the 3 entries, with generally the worst R:R), is what this entry is, a retracement to the 0.236 to 0.5 level. Then we look for the first up bar on above average volume as our entry, we are 1 day late but the entry price is not far from Thursday's entry price, so we can safely take this price. Initial stop is a close below the swing low. Target is the prior major swing high, which is where the R:R makes these trades worth             taking. The R:R is generally 1:3 or better, as much as 1:10+. Because of this we don't have to succeed too many times to be profitable and can have generally tight stops. When these trades work they tend to work right away.

The reason this setup is the lowest probability is because it is prone to further bearish movement due to the small retracement and has the smallest comparitive R:R, and is an accumulation in a downtrend, rather than a re-accumulation in an uptrend. But when these trades work they rarely give a better pullback entry, so we end up missing the whole move. I would rather take the trade now, then get stopped out on a deeper retracement, then re-evaluate the pattern and possibly re-enter with a better R:R. Good Trading.
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