Wyckoff Accumulation Schematic
Preliminary Support (PS) - We see small signs of increasing number of up bars with spread increasing a little more compared to prior retrace in the down move
Selling Climax (SC): Widening spread and selling pressure usually climaxes and heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom. Often price will close well off the low in a SC, reflecting the buying by these large interests
Automatic Rally (AR): This occurs because intense selling pressure has greatly diminished (see lower spread and volume after the SC). A wave of buying easily pushes prices up (Spread widens), bigger retrace compared to the entire down move.
Secondary Test (ST): Testing near the SC area (sometimes above, sometimes below). I interpret ST's purpose is to start creating a liquidity pool.
Spring: Main purpose is to grab liquidity pool (Stop hunt)
Approaching the SC-AR range, pay attention to the volume. Buyer's interest vs Seller's interest (i.e: Increasing Volume on up bars, decreasing volume on down bars)
Normal Volume vs Spread:
- Big spread with high volume (interest to move)
- Small spread with low volume (lack of interest)
Anomalies:
- Big spread with low volume (fake move)
- Small spread with high volume (absorption)
Things to note:
- Spring: Must take out liquidity (equal lows)
- For a healthy uptrend: Up moves should be supported by increasing volume. Down moves should have decreasing volume (lack of supply)
Selling Climax (SC): Widening spread and selling pressure usually climaxes and heavy or panicky selling by the public is being absorbed by larger professional interests at or near a bottom. Often price will close well off the low in a SC, reflecting the buying by these large interests
Automatic Rally (AR): This occurs because intense selling pressure has greatly diminished (see lower spread and volume after the SC). A wave of buying easily pushes prices up (Spread widens), bigger retrace compared to the entire down move.
Secondary Test (ST): Testing near the SC area (sometimes above, sometimes below). I interpret ST's purpose is to start creating a liquidity pool.
Spring: Main purpose is to grab liquidity pool (Stop hunt)
Approaching the SC-AR range, pay attention to the volume. Buyer's interest vs Seller's interest (i.e: Increasing Volume on up bars, decreasing volume on down bars)
Normal Volume vs Spread:
- Big spread with high volume (interest to move)
- Small spread with low volume (lack of interest)
Anomalies:
- Big spread with low volume (fake move)
- Small spread with high volume (absorption)
Things to note:
- Spring: Must take out liquidity (equal lows)
- For a healthy uptrend: Up moves should be supported by increasing volume. Down moves should have decreasing volume (lack of supply)
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.