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Wyckoff method

An approach built on reading the relationship between price, volume and time to infer whether large operators are accumulating or distributing.

Richard Wyckoff's framework, developed in the early twentieth century, is organised around three laws: supply and demand determine direction, effort-vs-result reveals whether a move is genuine, and cause built in a range determines the extent of the effect that follows.

The method describes market cycles as four phases: accumulation, markup, distribution and markdown, with specific events inside each range such as the selling climax, the secondary test, the wyckoff-spring and the sign of strength.

It is more disciplined than most pattern systems because it demands that volume confirm price, and it keeps attention on structure rather than indicators. Its weakness is the same as all discretionary frameworks: phase labels are assigned with hindsight, and different analysts read the same range in opposite ways.

Related: wyckoff-accumulation, wyckoff-distribution, effort-vs-result, composite-operator, accumulation

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

A range beside a trendOne chart swinging between a flat floor and ceiling, another stepping upwards inside a pair of sloping lines.Range-boundresistancesupportprice bounces between two levelsTrendingthe trend channelhigher highs and higher lowsA range has two flat edges; a trend has two sloping ones.
Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.

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