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Wyckoffmethod

APP Potential Spring - Waiting for backtestEyeballing APP here. On the daily we have three drives of classic bullish divergence on the MACD indicating price action reversal. So far, the price has indeed rallied. If APP can successfully backtest that $49.86 previous all-time low close here in late march, then I'll take a long with the chance for a very nice April/May return. Also, the sellers failed to push the price down to the bottom of that descending channel. Further signalling a greater chance of a reversal and eventual breakout to the upside. Entry: None yet, need a successful backtest of the spring.
NASDAQ:APPLong
by MediumOfEscape
Bitcoin Wyckoff AccumulationAs the Crypto bullrun possibly comes to end, there have been suggestions of a third run to 72k - marking the wyckoff distribution pattern and the retest of the All Time High (69K) and then back down. However, with Bitcoin and Ethereum rejecting 200MA's and 200EMA's on the 1D / 4Hour charts with weak buying volume, this is becoming less and less likely a possibility. That coupled with higher interest rates and the stock market falling, we could be in for a tough few months, with Bitcoin ranging between 30K and 48K. I have noticed a possible accumulation pattern that could be taking place as we speak (please see the chart and explanation below). Our Daily SELL indicator suggests we SHORT, so we went SHORT at 41.8k to hold until the low 30's. Suggestions of Bitcoin going lower than 28.8K is probably exaggerated - there are some very big players in the market right now such as Microstrategy, Grayscale, Tesla who's average is higher than this. You can bet manipulation will hold Bitcoin above this price and we will never go lower than 28.8K (UNLESS there is a Great Depression). Early 2023 should mark the start of Phase C/D - 1 year BEFORE the next halving, usually a point where smart money accumulates the most coins. I also imagine the Fed's inflation problem is going to start becoming more of a problem again, with higher interest rates not having the same effect it has in 2022. Here is a detailed explanation of Wyckoff accumulation and the levels as shown on the chart: Phase A: Phase A marks the stopping of the prior downtrend. Up to this point, supply has been dominant. The approaching diminution of supply is evidenced in preliminary support (PS) and a selling climax (SC). These events are often very obvious on bar charts, where widening spread and heavy volume depict the transfer of huge numbers of shares from the public to large professional interests. Once these intense selling pressures have been relieved, an automatic rally (AR), consisting of both institutional demand for shares as well as short-covering, typically ensues. A successful secondary test (ST) in the area of the SC will show less selling than previously and a narrowing of spread and decreased volume, generally stopping at or above the same price level as the SC. If the ST goes lower than that of the SC, one can anticipate either new lows or prolonged consolidation. The lows of the SC and the ST and the high of the AR set the boundaries of the TR. Horizontal lines may be drawn to help focus attention on market behavior, as seen in the two Accumulation Schematics above. Sometimes the downtrend may end less dramatically, without climactic price and volume action. In general, however, it is preferable to see the PS, SC, AR and ST, as these provide not only a more distinct charting landscape but a clear indication that large operators have definitively initiated accumulation. In a re-accumulation TR (which occurs during a longer-term uptrend), the points representing PS, SC and ST are not evident in Phase A. Rather, in such cases, Phase A resembles that more typically seen in distribution (see below). Phases B-E generally have a shorter duration and smaller amplitude than, but are ultimately similar to, those in the primary accumulation base. Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend (see Wyckoff Law #2 – “Cause and Effect”). In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing shares at lower prices and checking advances in price with short sales. There are usually multiple STs during Phase B, as well as upthrust-type actions at the upper end of the TR. Overall, the large interests are net buyers of shares as the TR evolves, with the goal of acquiring as much of the remaining floating supply as possible. Institutional buying and selling imparts the characteristic up-and-down price action of the trading range. Early on in Phase B, the price swings tend to be wide and accompanied by high volume. As the professionals absorb the supply, however, the volume on downswings within the TR tends to diminish. When it appears that supply is likely to have been exhausted, the stock is ready for Phase C. Phase C: It is in Phase C that the stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to be marked up. As noted above, a spring is a price move below the support level of the TR (established in Phases A and B) that quickly reverses and moves back into the TR. It is an example of a bear trap because the drop below support appears to signal resumption of the downtrend. In reality, though, this marks the beginning of a new uptrend, trapping the late sellers (bears). In Wyckoff's method, a successful test of supply represented by a spring (or a shakeout) provides a high-probability trading opportunity. A low-volume spring (or a low-volume test of a shakeout) indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position. The appearance of a SOS shortly after a spring or shakeout validates the analysis. As noted in Accumulation Schematic #2, however, the testing of supply can occur higher up in the TR without a spring or shakeout; when this occurs, the identification of Phase C can be challenging. Phase D: If we are correct in our analysis, what should follow is the consistent dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, as well as reactions (LPSs) on smaller spreads and diminished volumes. During Phase D, the price will move at least to the top of the TR. LPSs in this phase are generally excellent places to initiate or add to profitable long positions. Phase E: In Phase E, the stock leaves the TR, demand is in full control and the markup is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived. New, higher-level TRs comprising both profit-taking and acquisition of additional shares (“re-accumulation”) by large operators can occur at any point in Phase E. These TRs are sometimes called “stepping stones” on the way to even higher price targets. And here are the terms related to what you see in the chart: GLOSSARY: PS—preliminary support, where substantial buying begins to provide pronounced support after a prolonged down-move. Volume increases and price spread widens, signaling that the down-move may be approaching its end. SC—selling climax, the point at which 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. AR—automatic rally, which occurs because intense selling pressure has greatly diminished. A wave of buying easily pushes prices up; this is further fueled by short covering. The high of this rally will help define the upper boundary of an accumulation TR. ST—secondary test, in which price revisits the area of the SC to test the supply/demand balance at these levels. If a bottom is to be confirmed, volume and price spread should be significantly diminished as the market approaches support in the area of the SC. It is common to have multiple STs after a SC. Note: Springs or shakeouts usually occur late within a TR and allow the stock’s dominant players to make a definitive test of available supply before a markup campaign unfolds. A “spring” takes price below the low of the TR and then reverses to close within the TR; this action allows large interests to mislead the public about the future trend direction and to acquire additional shares at bargain prices. A terminal shakeout at the end of an accumulation TR is like a spring on steroids. Shakeouts may also occur once a price advance has started, with rapid downward movement intended to induce retail traders and investors in long positions to sell their shares to large operators. However, springs and terminal shakeouts are not required elements: Accumulation Schematic 1 depicts a spring, while Accumulation Schematic 2 shows a TR without a spring. Test—Large operators always test the market for supply throughout a TR (e.g., STs and springs) and at key points during a price advance. If considerable supply emerges on a test, the market is often not ready to be marked up. A spring is often followed by one or more tests; a successful test (indicating that further price increases will follow) typically makes a higher low on lesser volume. SOS—sign of strength, a price advance on increasing spread and relatively higher volume. Often a SOS takes place after a spring, validating the analyst’s interpretation of that prior action. LPS—last point of support, the low point of a reaction or pullback after a SOS. Backing up to an LPS means a pullback to support that was formerly resistance, on diminished spread and volume. On some charts, there may be more than one LPS, despite the ostensibly singular precision of this term. BU—“back-up”. This term is short-hand for a colorful metaphor coined by Robert Evans, one of the leading teachers of the Wyckoff method from the 1930s to the 1960s. Evans analogized the SOS to a “jump across the creek” of price resistance, and the “back up to the creek” represented both short-term profit-taking and a test for additional supply around the area of resistance. A back-up is a common structural element preceding a more substantial price mark-up, and can take on a variety of forms, including a simple pullback or a new TR at a higher level.
INDEX:BTCUSD
by reiiss7
8
XDB Long at $0.25Price action for XDB from March 14, 2022 to the present has been pretty remarkable. From a Wyckoffian perspective, we observe a hyperdermic distribution after the buying climax (BC) on March 23. The red arrows point to volume spikes. In these 3 instances they illustrate heavy selling. It’s possible that we have observed a local selling climax (SC) on April 7. If it was a SC, it’s likely the price will enter a trading range. The first level of significant resistance is around $0.34; this corresponds to the price level at which the last significant amount of selling started. I have opened a long position at $0.25 and expect the price to pause around $0.34. Wyckoff abbreviations: preliminary supply (PSY), buying climax (BC), automatic reaction (AR), sign of weakness (SOW), last point of supply (LPSY), selling climax (SC). This is not financial advice. I am not your financial advisor. This is my opinion.
Long
by Eightchains
4
BTC Potential Sign of Weakness in Re-DistributionThis chart builds on my previous ideas that I’ve shared regarding the BTC price since October, 2021. It appears that the BTC price has been observed in descending stepping-stone horizontal Wyckoff re-distribution trading ranges. The down trend was stopped on Jan 22, 2022 with a selling climax (SC) and the BTC price entered an upward sloping re-distribution trading range (to be confirmed or to fail). Since the BTC price was in a down trending environment from Nov 10, 2021 to Jan 22, 2022, our bias for the current trading range should be in favor of Wyckoff re-distribution, although we should be open to the possibility that the volume and price will demonstrate that our bias was incorrect and that the current trading range was, in fact, Wyckoff re-accumulation. With regard to the more recent price action, we likely have observed a shakeout (SO)/sign of weakness (SOW) in potential Phase D of Wyckoff re-distribution. If this is correct, then we will likely observe upward price movement back into the trading range for a last point of supply (LPSY) event followed by the price breaking the trading range support to the downside. The other possibility is that we have observed a SO/Spring event. If this is correct, then we will observe a sign of strength (SOS) rally. The upper and lower boundaries of the trading ranges are given by the solid black dotted lines. Significant bars, which help define important areas of support and resistance, are given by the blue shading. The blue arrows point to volume spikes. Wyckoff abbreviations: automatic rally (ARa), automatic reaction (ARe), buying climax (BC), secondary test (ST), upthrust (UT), failed upthrust (FUT), last point of supply (LPSY), shakeout (SO), sign of weakness (SO), Phase A (Ph A), Phase B (Ph B), Phase C (Ph C), Phase D (Ph D), Phase E (Ph E). This is not financial advice. I am not your financial advisor. This is my opinion.
BITSTAMP:BTCUSDShort
by Eightchains
2
VET Sign of Strength RallyThe VET price had been observed in a horizontal re-accumulation trading range from Jan 22, 2022 to Mar 27, 2022. The VET price exited this re-accumulation trading range with the SOS rally. I will make a long entry at the BU/LPS event (around $0.07) and take profit around the next resistance cluster around $0.10. The upper and lower boundaries of the re-accumulation trading range are given by the horizontal black lines. Blue arrows mark volume spikes. Wyckoff abbreviations: automatic rally (AR), change of character (CHoCH), sign of weakness (SOW), failed upthrust (FUT), selling climax (SC), sign of strength (SOS), back up (BU), last point of supply (LPS). This is not financial advice. I am not your financial advisor. This is my opinion.
Long
by Eightchains
5
Learning Wyckoff Distribution as RedistributionThe purpose of this idea is to give beginner analysists a introduction to some key principles and methodology used in understanding the movement of price within markets. One of those key principles is Market Phases, and we also use the Wyckoff Method to help us understand these Market Phases further. ------------------------------------------------------------------ What is Wyckoff Method & Intro to Distribution ------------------------------------------------------------------ "One objective of the Wyckoff method is to improve market timing when establishing a position in anticipation of a coming move where a favorable reward/risk ratio exists. In accumulation, the shares purchased outnumber those sold while, in distribution, the opposite is true. The extent of accumulation or distribution determines the cause that unfolds in the subsequent move out of the TR ." Wyckoff Theory & Schematics give us clues to which probable direction the price may head out of the horizontal moving price structure. Reaccumulation is the continuation of Accumulation whilst Redistribution is the continuation of Distribution. ------------------------------------------------------------------ Distribution ------------------------------------------------------------------ I have attached a cutout from "Stocks & Commodities V.32:8 (14-18): The Composite Man's Bull Market Campaign by Pruden, Fraser, Bogomazov for educational purposes. In this picture, described is the characteristics of Wyckoff Distribution In a Distribution Trading Range two of the key characteristics are the UTAD (Upwards Thrust & Distribution) above the Trading Range, and the SoW's Signs Of Weakness's with strong volume at the bottom end of the range, trapped buyers above the trading range. Distribution is one of the 4 Market Phases which we will learn about at the end of the the writeup. ------------------------------------------------------------------ Redistribution ------------------------------------------------------------------ After Distribution, Comes Redistribution. Where after a extended down move, a repeated sideways movement occurs which leads to another downwards thrust. By using the characteristics and schematics to identify Distribution we can also identify Redistribution using the same methodology. This also works with Accumulation & Reaccumulation, by looking for the characteristics of Accumulation inside Reaccumulation. (Read further to understand this concept) So as you can see on the CELR Chart the characteristics almost match the picture Distribution identically, we can see at the Upper Range every time a breakout occurs it is quickly shut down by sellers indicating a strong presence of Supply. Eventually the UTAD occurs where buyers are trapped which is then followed by the price cascading down. The only difference is that this is a potential Redistribution instead of Distribution. Redistribution is something many analysts struggle with and can be difficult to identify. ------------------------------------------------------------------ Using Market Phases to gain further understanding of the Market Direction: ------------------------------------------------------------------ The four Market Phases are. Accumulation Reaccumulation Distribution Redistrubution Market Phases explained further: (Dont Miss This Idea If You Are A Beginner!) (Additonal Infographic) ibb.co Now looking at the LONG TERM chart for CELR, we can see the current trading range of the Above idea (Marked in orange on the current chart below) is potentially Redistribution. ------------------------------------------------------------------ Further Reading & Similar Ideas ------------------------------------------------------------------ Learning Wyckoff Redistribution: Learning Distribution: For more information check out Stockcharts.com, Wyckoff Introduction & Tutorial for beginners. school.stockcharts.com Distribution Schematic: school.stockcharts.com ------------------------------------------------------------------ Final Thoughts ------------------------------------------------------------------ By using the Wyckoff Methodology to look deeper into our Trading Ranges we can potentially have more clues in successfully identifying the 4 Market Phases described above. So far our clues are showing us this current trading range on CELR may be showing weakness and probability of lower prices. Unless CELR manages to get back above the 0.075c area with strong Buying volume lower prices are probable here. If found the idea insightful you can show your appreciation by sharing it or giving it a like, feel free to leave your thoughts and criticisms in the comments and thank you for reading!
Short
by Worth_The_Ri5k
1
Introduction to Wyckoff : Is DOGE ready to breakout?1. Who is “Wyckoff”?: ----------------------------------------------------------- Richard Demille Wyckoff (November 2, 1873 – March 7, 1934) was considered one of the five “titans” of technical analysis, along with Dow, Gann, Elliott and Merrill. At age 15, he took a job as a stock runner for a New York brokerage. Afterwards, while still in his 20s, he became the head of his own firm. He also founded and, for nearly two decades wrote, and edited The Magazine of Wall Street, which, at one point, had more than 200,000 subscribers. Wyckoff was an avid student of the markets, as well as an active tape reader and trader. He observed the market activities and campaigns of the legendary stock operators of his time, including JP Morgan and Jesse Livermore. From his observations and interviews with those big-time traders, Wyckoff codified the best practices of Livermore and others into laws, principles and techniques of trading methodology, money management and mental discipline. Wyckoff's research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. Wyckoff also has techniques he believed offered advantages when markets were rising or falling (bullish and bearish). Wyckoff offered a detailed analysis of the "trading range", a posited ideal price bracket for buying or selling a stock. One tool that Wyckoff provides is the concept of the Composite Operator , another is Volume based analysis . 2. Who is the Composite Operator / The Composite Man?: ----------------------------------------------------------- “…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2) Based on his years of observations of the market activities of large operators, Wyckoff taught that: The Composite Man carefully plans, executes and concludes his campaigns. -The Composite Man attracts the public to buy a stock (financial asset) in which he has already accumulated a sizable line of shares by making many transactions involving a large number of shares, in effect advertising his stock by creating the appearance of a “broad market.” -One must study individual stock charts with the purpose of judging the behaviour of the stock and the motives of those large operators who dominate it. -With study and practice, one can acquire the ability to interpret the motives behind the action that a chart portrays. Wyckoff and his associates believed that if one could understand the market behavior of the Composite Man, one could identify many trading and investment opportunities early enough to profit from them. Many traders and investors who follow the Wyckoff Method treat the Composite man as a real entity, for Cryptocurrency holders this might be seen as a whale who controls the price. In the case of DOGE, we are treating Elon Musk as the controller of Doge lurking in the shadows, we dont want to be on the wrong side of the Composite Mans campaign. Wyckoff himself did not find it necessary to define a importance between the Composite man being an imaginary being, a creation of one's own mind or a real entity, but defined an importance towards “Thinking” like the Composite Man, by thinking like a “Large Operator” we change our Psychology. But what does this mean? In the book titled, “The Compound Effect” by Darren Hardy (Founder of Success Magazine) there is a section titled “Find Your Fight” in Chapter 3, in this section Darren describes how hate is often as strong as a motivating force as love, but why is this relevant? A person who is in love may do crazy things, but so will a person who is consumed by hate, as both are powerfully motivating forces. By creating a “Enemy” (Someone to hate) our mindset changes to a defensive manner, we are now in “Battle” with our Enemy. Here is a quote from the book, which is one of my favorite's: “Contrary to social correctness, it can be good to hate. Hate disease, hate injustice, hate ignorance, hate complacency, and so on. Sometimes identifying an enemy lights your fire. Some of my greatest motivation, determination, and dogged persistence came when I had an enemy to fight. In history, the most transformation stories and political revolutions came about as a result of fighting an enemy. David had Goliath, America had the British. Luke had Darth Vader…” And as traders; we have The Composite Man… In this example on DOGE we could think of Elon Musk himself as the Composite Man, as he is one of the major influencers driving the price of this Cryptocurrency. A great article on the Composite Man can be located here for further education: www.wyckoffanalytics.com 3. Wyckoff Schematics ----------------------------------------------------------- A trading range (Sideways Movement, Zig Zag) shows us an equilibrium between buyers and sellers, and the Wyckoff Theory & Schematics give us clues to which probable direction the price may head out of the horizontal moving price structure. Each Trading Range can be an important Phase in the larger Market Cycle, giving us potential clues and hints within the overall trend. The Wyckoff Schematics help us identify the different between Accumulation and Distribution Trading Ranges (Or Re-accumulation or Redistribution) - In a Trading Range the price Zig Zags up and down until eventually a breakout occurs, using the Wyckoff Accumulation Schematic we can see there are some clues in the similarities of the chart and the schematic that tell us Dogecoin may be ready to at least test of the upper bounds of the Trading Range. It is important to note that most Trading Ranges start with obvious characteristics (and they can be slanted and still work well, although hard to identify to some, the first characteristics of the Trading Range (TR) help us identify that we are now moving in a sideways trend, we will delve into these characteristics below,: When paired with the Wyckoff 9 Buying and Selling Tests (Visit my Mastering the Wyckoff Method post linked below to learn more) - the Wyckoff Schematics are a great tool to help measure potential entries, exits, risk and to read the price movement in general. By splitting the TR (Trading Range) into 3 parts; Support - Resistance and the Middle Range (50%) we can easily measure risk and generate low risk trading ideas, the trading range can almost be seen like a map or a layout for our trades. There are four types of Trading Ranges: Accumulation , Re-Accumulation , Distribution & Redistribution. In this idea we are going to cover the first two ranges which are the bullish ones. The Five Phases : By splitting our Schematics into 5 key phases, the characteristics become easier to recognize and identify. We also know the optimal place to enter our trade so we have a lesser probability of our stop loss being hit when entering a trade via the Wyckoff Method. Remember this when moving forward in this section. Each Trading Range is Analysed in 5 key phases: Phase A: The trading range (TR) is created (example above) Phase B: The Supply & Demand of the TR is tested Phase C: Deviation outside TR or Final point before reversal Phase D: The new trend begins Phase E: The trend continues In phase D & E, the obvious “Change of Trend” is evident, refer to this infographic below and you can see how a trend contains Higher Highs, Higher Lows (HH, HL) or Lower Lows, Lower Highs (LL, LH), which is usually represented by the SOS & LPS characteristics (Sign of Strength & Last Point of Support). We can clearly see the different phases on the chart of DOGE. This is one of the rare examples that does match up to a "Wyckoff Schematic" perfectly, but that does not mean that every single trading range will fit the schematic, each range is to be treated unique, although many have recognizably similar characteristics. A Wyckoff Schematic is not a chart pattern, it is a system that is used to analyze a financial asset (or assets) that is inside a TR (Trading Range) which allows us to make a educated decision and risk calculation based on the current characteristics we see on the TR, a TR may not look like the below linked "Schematics" but may still have all the characteristics of that said Schematic, try to keep a open mind when using this concept. Considering that most of the Crypto markets are green/bullish right now its only logical to assume that DOGE has actually completed its Phase C and has started Phase D, which will be confirmed by a strong volume up move from the 0.5 (50% aka Middle) of the Trading Range. Accumulation : --------------------------------- In accumulation, the shares purchased outnumber those sold. There are roughly 9 characteristics that help us identify that we may be inside of an Accumulation Range: 1. PS (Preliminary Support) the first Support area that was lost, creating the upper bound of the TR. 2. SC (Selling Climax) the climactic action that is bought up quickly creating the lower bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large selling volume, but no further downside. 3. AR (Automatic Rally) a low volume, quick reaction visiting the other side of the TR, usually indicating short covering. 4. ST (Secondary Test) a secondary test of the initial Demand Area created by the SC. 5. Spring (Fake Out) & Test or LPS (Last point of Support). Spring is usually a great example of Effort vs Result. Spring is then confirmed by a test of Support. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 6. JAC (Jump Across the Creek) the Creek is an imaginary line created by the previous downtrend (similar to a Moving Average), we want to see the price “Jump” across the creek. 7. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 8. SOS (Sign of Strength) is an abnormally large volume signature upwards price movement which confirms the Spring or LPS. 9. BU/LPS (Back Up / Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner. The SOS & LPS together form the Basis of a Uptrend, see this image for reference: ibb.co . The final LPS before leaving the Trading Range should start the Uptrend. The LPS can sometimes move to the 50% of the Trading Range. We should then enter the Mark Up phase as described at the start of this article. Remember; Accumulation is the Cause, Markup is the Effect. We can clearly see on the chart that DOGE matches the Accumulation Schematic #2 linked below. We can clearly see we have gone through two key phases on DOGE, and are at least at Phase C if not Phase D which leads me to the conclusion that Dogecoin is about to enter (or will be entering) the Mark Up phase quite soon. If it pushes towards the resistance with a abnormally large volume bar the SOS (Sign of Strength) will be confirmed. Examples & Links : Accumulation Schematic #1: school.stockcharts.com In this schematic, the Spring is located in the end of the TR, showing trapped sellers. Accumulation Schematic #2: school.stockcharts.com In this schematic, there is no Spring action, instead the price starts moving upwards from the LPS Area (Last Point of Support), the Spring (in this case, ST) is located at the middle of the TR, showing trapped buyers. Example of Accumulation #1 Analysis (Click image, press play to see the result!): Example of Accumulation #2 Analysis: Re-accumulation : --------------------------------- After Accumulation, comes Re-Accumulation. Where after a extended upside move, a repeated sideways movement occurs which leads to another extended upside move. Re-Accumulation is known also as a Trend Continuation. The characteristics are almost identical to Accumulation, except the previous price movement leading up to the trading range is upwards : Here are the characteristics explained : 1. PS (Preliminary Supply) the first selling area creating the Trading Range. 2. BC (Buying Climax) the climactic action that is sold up quickly creating the upper bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large buying volume, but no further upside. 3. Shakeout (Fake Out to the downside trapping sellers) (I have marked this as SC, to simplify the process as a Shakeout is quite similar in its characteristic. 4. AR (Automatic Rally) a low volume, quick reaction visiting the other side of the TR, usually indicating short covering. 5. ST Area (Secondary Test Area) a secondary test of the initial Demand Area created by the Shakeout. 6. Spring (Fake Out) or LPS (Last point of Support) A Spring occurs when price falls underneath the Trading Range, triggering stop losses and usually inducing investors to Panic Sell, (this is the most profitable area to buy). Spring is then confirmed by a test of Support. Spring is usually a great example of Effort vs Result. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 7. JAC (Jump Across the Creek) is when the price “Jumps” across the Trading Range, giving us a final clue before the breakout occurs. The “Creek” is an imaginary line formed from the projected path of the previous price swing highs, this can be used similar to a Moving Average. 8. SOS (Sign of Strength) is an abnormally large volume signature upwards price movement which confirms the Spring or LPS. 9. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner. The SOS & LPS together form the Basis of a Uptrend, see this image for reference: ibb.co . The final LPS before leaving the Trading Range should start the Uptrend. The LPS can sometimes move to the 50% of the Trading Range. We should then enter the Mark Up phase as described at the start of this article. Re-accumulation = Cause, Mark Up = Effect Inception: Accumulation as Re-accumulation : Did you know that you can use Accumulation as Re-Accumulation? I can already sense the future comments coming... "But wait, what?! That doesnt make sense, Accumulation is found after a downtrend!" So let me explain.. As I stated above, Wyckoff Schematics are not a chart pattern, they are a system to identify the characteristics and generate a trading opportunity from a range. I repeat this sentence because by using a more open minded perspective we can clearly see that Re-Accumulation in this sense (Reference the original DOGE chart above and compare with below) it actually fits the characteristics of both Accumulation & Re-accumulation- that's because Re-accumulation can appear as Accumulation (Just as Wyckoff Redistribution can appear as Distribution, learn more about this by visiting the link below this article "Mastering the Wyckoff Method".) In the image below we can see that MANAUSDT looked like Accumulation Schematic #2, yet was actually Re-accumulation due to the previous uptrend. Examples & Links : Traditional Re-accumulation Schematics: ibb.co (Credit: Roman Bogomazov / www.wyckoffanalytics.com) Example of Traditional Re-accumulation #2 Analysis: (Press Play!): Failure of Schematic : --------------------------------- Wyckoff based trades can also fail. It is also important to note that Wyckoff Schematics are not a guarantee, as with any trade or investment they can fail aswell. In this example below (Click+Press Play!) we can see that the Accumulation on BATUSDT did have a strong breakout, but never entered into a correct markup phase and then "failed" when the price came back inside of the TR (Trading Range): 4. Conclusion: ----------------------------------------------------------- Not only does the Wyckoff Method teach the novice Investor/Trader the techniques, foundations and methods needed to analyze the market, it also helps create a system and mindset towards observing and timing the market, which allows the trader to be much more rationalized and organized in their train of thought as well as much more risk averse. By using the Wyckoff based analysis on Dogecoin we can clearly see this token has potential for more upside, although we do need to be cautious as a significant pullback on Bitcoin could easily “Fail” the “LPS” action of the TR (Trading Range) in the original analysis image above, if that occurred then the best move is to wait it out and see how the buyers react to the lower prices. What would a successful accumulation breakout look like on DOGE? Well lets look at the historic chart of DOGE here, we can actually see that we made quite a similar Accumulation Trading Range earlier, in 2019, breaking out with a clear SOS and LPS in 2021. That Accumulation was the start of the Mark Up Phase which now leads up to todays current chart (check the top right, that's us now!). So if this Accumulation is valid, we are looking for DOGE to visit the 0.20 cent area in the shorter term time frame, pushing against the Trading Range with a strong sign of buying volume hinting breakout. This could then lead to the beginning of a new Mark Up Phase. Learn more about the Wyckoff Method: ----------------------------------------------------------- If you truly want to master your knowledge in this spectacular method, then I highly recommend you visit my idea (Click on the image below): Mastering the Wyckoff Method, where I cover almost all of the popular techniques used by Wyckoff (Including Distribution & Redistribution) and explain to you how you can apply these concepts on your charts, you don't want to miss this idea below! www.tradingview.com You can also subscribe to my Trading view profile for regular Wyckoff based updates. I hope you enjoyed my explanation of the Wyckoff Method - Thank you and if you found this writeup insightful, educational and informative. Don't forget to subscribe to my Trading view profile for regular Wyckoff based updates. Like & Comment so others can also potentially see and benefit from this post, if you wish to see these concepts in action, I recommend visiting my signature as well.
Long
by Worth_The_Ri5k
DOT Sign of Strength RallyThe DOT price has been observed in a horizontal re-accumulation trading range from Jan 21, 2022 to the present. The DOT price is pushing up against the trading range resistance in what appears to be an SOS rally. I will make a long entry in this presumed SOS rally (around $21.5) and take profit around the next resistance cluster around $28. I may add to the position at the BU/LPS. The upper and lower boundaries of the re-accumulation trading range are given by the horizontal black lines. Blue arrows mark volume spikes. Wyckoff abbreviations: automatic rally (AR), change of character (CHoCH), sign of weakness (SOW), failed upthrust (FUT), selling climax (SC), sign of strength (SOS), back up (BU), last point of support (LPS), last point of supply (LSPY). This is not financial advice. I am not your financial advisor. This is my opinion.
KRAKEN:DOTUSDLong
by Eightchains
3
Mastering The Wyckoff Method of Technical Analysis Introduction: ----------------------------------------------------------- In the time period of April in 2021 Bitcoin reached its local high of roughly US $65,000 per coin, shortly after when May came along many social channels quickly lit up with the now infamous “Wyckoff Distribution Schematic” (This was one popular video that described it here: www.youtube.com), and shortly after BTC came crashing down back to the $30,000 region playing this schematic almost perfectly. I myself was trading Bitcoin using the Wyckoff Method at this time, and I was introduced to a plethora of new traders and investors trying to understand the complicated Wyckoff method, but the fact of the matter was, many were sharing or educating others in incorrect ways to use this method. From this day I took more of an interest in educating others in the Wyckoff Method, and below I am going to pick apart, introduce and help you master some of the key concepts used in this method of analysis. Bitcoins Chart March-May 2021 Read more about the Crash in 2021: www.aljazeera.com Who is “Wyckoff”?: ----------------------------------------------------------- Richard Demille Wyckoff (November 2, 1873 – March 7, 1934) was considered one of the five “titans” of technical analysis, along with Dow, Gann, Elliott and Merrill. At age 15, he took a job as a stock runner for a New York brokerage. Afterwards, while still in his 20s, he became the head of his own firm. He also founded and, for nearly two decades wrote, and edited The Magazine of Wall Street, which, at one point, had more than 200,000 subscribers. Wyckoff was an avid student of the markets, as well as an active tape reader and trader. He observed the market activities and campaigns of the legendary stock operators of his time, including JP Morgan and Jesse Livermore. From his observations and interviews with those big-time traders, Wyckoff codified the best practices of Livermore and others into laws, principles and techniques of trading methodology, money management and mental discipline. Wyckoff's research claimed many common characteristics among the greatest winning stocks and market campaigners of the time. Wyckoff also has techniques he believed offered advantages when markets were rising or falling (bullish and bearish). Wyckoff offered a detailed analysis of the "trading range", a posited ideal price bracket for buying or selling a stock. One tool that Wyckoff provides is the concept of the Composite Operator , another is Volume based analysis . Who is the Composite Operator / The Composite Man?: ----------------------------------------------------------- “…all the fluctuations in the market and in all the various stocks should be studied as if they were the result of one man’s operations. Let us call him the Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.” (The Richard D. Wyckoff Course in Stock Market Science and Technique, section 9, p. 1-2) Based on his years of observations of the market activities of large operators, Wyckoff taught that: The Composite Man carefully plans, executes and concludes his campaigns. -The Composite Man attracts the public to buy a stock (financial asset) in which he has already accumulated a sizable line of shares by making many transactions involving a large number of shares, in effect advertising his stock by creating the appearance of a “broad market.” -One must study individual stock charts with the purpose of judging the behaviour of the stock and the motives of those large operators who dominate it. -With study and practice, one can acquire the ability to interpret the motives behind the action that a chart portrays. Wyckoff and his associates believed that if one could understand the market behaviour of the Composite Man, one could identify many trading and investment opportunities early enough to profit from them. Above excerpt from: school.stockcharts.com Many traders and investors who follow the Wyckoff Method treat the Composite man as a real entity, for Cryptocurrency holders this might be seen as a whale who controls the price. Wyckoff himself did not find it necessary to define a importance between the Composite man being an imaginary being, a creation of one's own mind or a real entity, but defined an importance towards “Thinking” like the Composite Man, by thinking like a “Large Operator” we change our Psychology. But what does this mean? In the book titled, “The Compound Effect” by Darren Hardy (Founder of Success Magazine) there is a section titled “Find Your Fight” in Chapter 3, in this section Darren describes how hate is often as strong as a motivating force as love, but why is this relevant? A person who is in love may do crazy things, but so will a person who is consumed by hate, as both are powerfully motivating forces. By creating a “Enemy” (Someone to hate) our mindset changes to a defensive manner, we are now in “Battle” with our Enemy. Here is a quote from the book, which is one of my favourites: “Contrary to social correctness, it can be good to hate. Hate disease, hate injustice, hate ignorance, hate complacency, and so on. Sometimes identifying an enemy lights your fire.Some of my greatest motivation, determination, and dogged persistence came when I had an enemy to fight. In history, the most transformation stories and political revolutions came about as a result of fighting an enemy. David had Goliath, America had the British. Luke had Darth Vader…” And as traders; we have The Composite Man… A great article on the Composite Man can be located here for further education: www.wyckoffanalytics.com Wyckoff's "Five Step Approach": ----------------------------------------------------------- The Wyckoff Method involves a five-step approach to stock selection and trade entry, which can be summarized as follows: 1. Determine the present position and probable future trend of the market. Determine what the current characteristics of the price structure and Supply & Demand are, (are we in a Uptrend, Downtrend or Sideways) by getting a general idea of the Price Structure, Sentiment & Supply and Demand we can determine if we want to be in a long or short trade, or no trade at all, and what the probable future direction of the market may be. Refer to Section “Market Phases & Cycles” below to understand this further. 2. Select stocks in harmony with the trend. In an uptrend, select stocks that are stronger than the market. By selecting assets moving with the Primary Trend, we are increasing chances of success. (For example, if the dominant asset in Crypto, Bitcoin is on a strong uptrend is it fair to assume that you are going to have more success trying to long other Cryptocurrencies which are highly “correlated” and likely to follow in that direction. Financial Assets that “decorrelate” and show stronger increases during uptrends and smaller decreases on pull backs may be showing signs of being stronger then the market as a whole (long position), for shorts we are looking for Assets that are showing weakness and stronger decreases then the market as a whole. 3. Select stocks with a “cause” that equals or exceeds your minimum objective. Every action, has a reaction, every cause, has an effect, this statement basically means that if you are going to enter the market and take a position, look for assets that have a rational and reasonable cause for you to reach your target objective. A great example is using Price Target Measurements when trading Chart Patterns, each Chart Pattern is the cause, and the Price Target is the effect. If there is a Cause, but no Effect, then it is a potential sign of weakness. Please see “Wyckoff Laws” below for more information. 4. Determine the stocks' readiness to move. Use a pre determined system to determine how close assets are to entering the Mark Up or Mark Down Phases. Find the right system to see when a asset is about to Uptrend or Downtrend. Use the 9 Buying & Selling tests, aswell as the Wyckoff Schematics explained below to understand this concept further. 5. Time your commitment with a turn in the stock market index. Financial Markets are highly correlated, this means that we want to be timing our investments and trades with the Leading Market Assets or Index’s (A Index is basically a grouping of the Top Stocks or Companies in that Industry, for example, SP500, AU200). Why do we want to time? Lets use Bitcoin as a example. Sometimes Bitcoin is almost correlated to 80-90% of the Stock Market, that means the price moves almost in sync, so by watching the price movements and analyzing the Stock Market we can also get clues on the direction of the asset we are trading. If Bitcoin is moving up, but the Stock Market is heading down, and the correlation is HIGH, we can assume that the upside move may not be likely to continue. Market Phases & Cycles: ----------------------------------------------------------- According to Wyckoff, the market can be understood and anticipated through detailed analysis of supply and demand, An idealized schematic of how he conceptualized the large interests' preparation for and execution of bull and bear markets is depicted in the figure above. The time to enter long orders is towards the end of the preparation for a price markup or bull market (accumulation of large lines of stock), while the time to initiate short positions is at the end of the preparation for price markdown. Also note the different Phases of the Market. Before we continue below, please click on the image below for my basic introduction to Market Phases & Cycles, which is an important topic to have an understanding of before continuing onto Wyckoff Schematics. This is also relevant to understand Cause & Effect mentioned below. Notice how each Cause has an Effect! To simplify the concept - Markets move in cyclical patterns, with a full cycle usually having Accumulation > Reaccumulation > Distribution >Redistribution, there can also be Micro trends within the cycle. Uptrends (HH, HL), Downtrends (LL, LH) and Sideways movements form the price structures which make up the Phases of the market, which in turn create the Cycles. Three Laws of Wyckoff ----------------------------------------------------------- Wyckoff Analysis is fundamentally based off the Three Laws of Wyckoff, which can be found and recognized across many different types of Analysis, the Laws help give insight to our analysis and choice of buying/selling. 1. Supply vs. Demand --------------------------------- Wyckoff states when demand is greater than supply, prices rise, and when supply is greater than demand, prices fall. When sellers outweigh the buyers, the market is dominated by Supply, a large supply of an asset to sell, means greater selling pressure and a higher probability of a decrease in price. A sign of Demand (Buying Pressure) is a shortage of Supply, in a Cryptocurrencies case it would mean that the demand of buyers on exchanges outweighs the supply available for purchase on exchanges. As the amount up for purchase quickly falls to a low number the greed of participants drives them to want to pay higher prices for an asset. When buyers outweigh sellers, the latter occurs with a higher probability of increase in prices. A sign of Supply (Selling Pressure) is a shortage of Demand, in a Cryptocurrencies case it would mean that the demand of buyers on exchanges under weighs the supply available, institutional investors and funds hold majority share of the SUPPLY and with no interest in buying from the retail participants we see investors (sometimes impatient or fearful) become sellers in anticipation of there being no increase in price in the short term (relative to their perspective). Using this secondary chart below, we can clearly see the "Demand (Green)" and "Supply (Red)" areas of Siacoin SC. We can see that both the Demand & Supply areas are respected and have strong reactions, and with patience we will see if the dominating factor on Siacoin right now is Supply or Demand, but considering some of the points I will go into below so far its looking like it is shifting into the favour of demand currently with a visit to the 0.5 (50%) of the Trading Range. Take note of the small abbreviations at the start of the TR (Trading Range) for now - see Wyckoff Schematics section later. Other ways to analyze Supply & Demand in Cryptocurrencies are more literal - for example you can literally go onto the Blockchain and see the wallets of coins, how many each holds, what % of the Supply is owned by Siacoin itself, the amount of wallet holders, I will not go into this type of analysis in a detailed manner as it is not my expertise. 2. Effort vs. Result --------------------------------- Wyckoff states that every effort should lead to a result in the financial markets. Here is a example of a “Effort Vs Result” in a Trading Range (Parallel Channel) using Volume & Price Analysis (Please Click the Image, for Further Educational Idea) This statement is applied to our charts by using data on Trading Volume. When we see abnormally large trading volume at key areas on the chart, we can usually expect a continued move in that direction, if the Effort produces no result though, that abnormally large trading volume can give us a sign that the participants betting on the market to move in that direction have not gathered enough momentum to do so (Marked in Light Blue), which leads to them being trapped (Marked in Dark Blue) and then a reverse in the opposite direction in price (Marked in Purple). Effort Vs Result can also be interpreted in a number of ways, lets analyse the above Siacoin SC chart using this concept: In the first image, the Trading Range is created, once at the lower range, volume decreased (this was not just a singular occurrence, with the whole Crypto market having similar low volume and "choppiness" but within this low volume area we can see there was two larger red volume bars, these two bars showed us a increase in sellers in this area, (An effort) but no Result (further Decrease on the next candles) this gives us a sign that the sellers may not be the dominant force now (A “Divergence) leading us to test the previous dominant force area above as supply. This then led us to test the upper Trading Range, where the exactly same thing happened in the opposite. In the 3rd image, we can finally see that the effort of the buyers is now leading to zero result, the trading range is starting to drag out and the volume of sellers is dropping off, in a REAL breakout the volume should continue to increase with the prices. We can see below that never happens here. As the images progress the Supply is obviously Dominant. This leads us to the current chart, where we can see that now the sellers are losing momentum and the buyers have just stepped in. (See the volume?) In the current trading range on SC (Siacoin) we can see quite a lot of abnormally large green bars at the upper range, this shows us that even though a large amount of buyers did in fact come into play here, the upper ranges dominant force was the Supply, and prices then headed towards the lower range.We are now in the process of “Testing” that lower range for Demand. So far the circled Red Bars (in the First chart, the original chart of this post) show us the sellers may be trapped locally. 3. Cause vs. Effect --------------------------------- Wyckoff states that every cause in the market leads to a proportional effect. The market has phases, such as Accumulation, Reaccumulation, Distribution and Redistribution. Each phase should have a "Effect" to match the cause, Accumulation has a Markup, aswell as Reaccumulation, And Distribution and Redistribution are followed by a Mark Down. The phase is the cause, the mark up is the effect. Click on this link for a quick infographic on the Market Phases (Consider each phase as a Cause) which then should have an Effect (Mark Up or Mark Down Phase), this creates the “Market Cycle” and all markets move in cycles: ibb.co This is similar to how a Bull Flag has a target measurement (Mark Up) and a Bear Flag has a target measurement for the downside (Mark Down). For more information on Flag Patterns click the below image, notice on the bottom right picture how the Flag has a measurement which is represented by a extended line, the previous line and the Flag is the Cause, the extended line pointing upwards is the Effect in this case: In this case, if we see a breakout to the upside of this current trading range on SC Siacoin (the Cause) we can assume the Effect will be a strong breakout above the range leading to Mark Up Phase, otherwise the Cause has no Effect, in this situation meaning the range might fail and break downwards. This is similar in a way to Effort vs Result explained earlier, For every Effort, there should be a Result, for every Cause, there should be an effect. Wyckoff Schematics ----------------------------------------------------------- A trading range (Sideways Movement, Zig Zag) shows us an equilibrium between buyers and sellers, and the Wyckoff Theory & Schematics give us clues to which probable direction the price may head out of the horizontal moving price structure. Each Trading Range can be an important Phase in the larger Market Cycle, giving us potential clues and hints within the overall trend. The Wyckoff Schematics help us identify the different between Accumulation and Distribution Trading Ranges (Or Reaccumulation or Redistribution) - In a Trading Range the price Zig Zags up and down until eventually a breakout occurs, using the Wyckoff Accumulation Schematic we can see there are some clues in the similarities of the chart and the schematic that tell us Siacoin may be ready to at least test of the upper bounds of the Trading Range. It is important to note that most Trading Ranges start with obvious characteristics, which we will delve into further below, the first characteristics of the Trading Range (TR) help us identify that we are now moving in a sideways trend: When paired with the Wyckoff 9 Buying and Selling Tests - the Wyckoff Schematics are a great tool to help measure potential entries, exits, risk and to read the price movement in general. There are four types: Accumulation , Reaccumulation , Distribution & Redistribution. And each Trading Range is Analysed in 5 key phases: By splitting our Schematics into 5 key phases, the characteristics become easier to recognize and identify.Remember this when moving forward in this section. Phase A: The trading range (TR) is created (example above) Phase B: The Supply & Demand of the TR is tested Phase C: Deviation outside TR or Final point before reversal Phase D: The new trend begins Phase E: The trend continues In phase D & E, the obvious “Change of Trend” is evident, refer to this infographic below and you can see how a trend contains Higher Highs, Higher Lows (HH, HL) or Lower Lows, Lower Highs (LL, LH); we will come back to this soon: 1. Accumulation : --------------------------------- In accumulation, the shares purchased outnumber those sold. There are roughly 9 characteristics of an Accumulation Range: 1. PS (Preliminary Support) the first Support area that was lost, creating the upper bound of the TR. 2. SC (Selling Climax) the climactic action that is bought up quickly creating the lower bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large selling volume, but no further downside. 3. AR (Automatic Rally) a low volume, quick reaction visiting the other side of the TR, usually indicating short covering. 4. ST (Secondary Test) a secondary test of the initial Demand Area created by the SC. 5. Spring (Fake Out) & Test or LPS (Last point of Support). Spring is usually a great example of Effort vs Result. Spring is then confirmed by a test of Support. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 6. JAC (Jump Across the Creek) the Creek is an imaginary line created by the previous downtrend (similar to a Moving Average), we want to see the price “Jump” across the creek. 7. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 8. SOS (Sign of Strength) is an abnormally large volume signature upwards price movement which confirms the Spring or LPS. 9. BU/LPS (Back Up / Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner.The SOS & LPS together form the Basis of a Uptrend, see this image for reference: ibb.co . The final LPS before leaving the Trading Range should start the Uptrend.The LPS can sometimes move to the 50% of the Trading Range. We should then enter the Mark Up phase as described at the start of this article. Remember; Accumulation is the Cause, Markup is the Effect. Examples & Links : Accumulation Schematic #1: school.stockcharts.com In this schematic, the Spring is located in the end of the TR, showing trapped sellers. Accumulation Schematic #2: school.stockcharts.com In this schematic, there is no Spring action, instead the price starts moving upwards from the LPS Area (Last Point of Support), the Spring (in this case, ST) is located at the middle of the TR, showing trapped buyers. Example of Accumulation #1 Analysis (Click image, press play to see the result!): Example of Accumulation #2 Analysis: 2. Reaccumulation : --------------------------------- After Accumulation, comes Reaccumulation. Where after a extended upside move, a repeated sideways movement occurs which leads to another extended upside move. ReAccumulation is known also as a Trend Continuation. The characteristics are almost identical to Accumulation, except the previous price movement leading up to the trading range is upwards : Here are the characteristics explained : 1. PS (Preliminary Supply) the first selling area creating the Trading Range. 2. BC (Buying Climax) the climactic action that is sold up quickly creating the upper bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large buying volume, but no further upside. 3. Shakeout (Fake Out to the downside trapping sellers) (I have marked this as SC, to simplify the process as a Shakeout is quite similar in its characteristic. 4. AR (Automatic Rally) a low volume, quick reaction visiting the other side of the TR, usually indicating short covering. 5. ST Area (Secondary Test Area) a secondary test of the initial Demand Area created by the Shakeout. 6. Spring (Fake Out) or LPS (Last point of Support) A Spring occurs when price falls underneath the Trading Range, triggering stop losses and usually inducing investors to Panic Sell, (this is the most profitable area to buy). Spring is then confirmed by a test of Support. Spring is usually a great example of Effort vs Result. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner, with multiple LPS forming the Higher Lows that make up the basis of a market trend. 7. JAC (Jump Across the Creek) is when the price “Jumps” across the Trading Range, giving us a final clue before the breakout occurs. The “Creek” is an imaginary line formed from the projected path of the previous price swing highs, this can be used similar to a Moving Average. 8. SOS (Sign of Strength) is an abnormally large volume signature upwards price movement which confirms the Spring or LPS. 9. LPS (Last Point of Support) occurs when price revisits the recent Demand (Support) area, usually a former Resistance. The term may be used in a plural manner.The SOS & LPS together form the Basis of a Uptrend, see this image for reference: ibb.co . The final LPS before leaving the Trading Range should start the Uptrend.The LPS can sometimes move to the 50% of the Trading Range. We should then enter the Mark Up phase as described at the start of this article. Reaccumulation = Cause, Mark Up = Effect Examples & Links : It is important to note that Reaccumulation can appear as Accumulation, in the image below we can see that MANAUSDT looked like Accumulation Schematic #2, yet was actually Reaccumulation due to the previous uptrend. And in this example Reaccumulation looked exactly like Schematic #1 of Accumulation! Reaccumulation Schematic #1: ibb.co In this schematic, the Spring is located at the end of the TR, showing trapped sellers. Reaccumulation Schematic #2: ibb.co In this schematic, the ST (or Spring) is located at the middle of the TR, showing trapped buyers. Traditional Reaccumulation Schematics: ibb.co (Credit: Roman Bogomazov / www.wyckoffanalytics.com) Example of Traditional Reaccumulation #2 Analysis: (Press Play!): 3. Distribution : --------------------------------- Above we learnt that in accumulation, the shares purchased outnumber those sold while, in distribution, the opposite is true. The shares sold outnumber those purchased. In a Distribution Trading Range two of the key characteristics are the UTAD/UT (Upwards Thrust / Upwards Thrust & Distribution) above the Trading Range, and the SoW's Signs Of Weaknesses with strong volume at the bottom end of the range. The start of the trading range should be easily identified by a BC (Buying Climax). The extent of accumulation or distribution determines the cause that unfolds in the subsequent move out of the TR . There are roughly 9 characteristics of an Distribution Range: 1. PS (Preliminary Supply) is the first selling area creating the Trading Range. 2. BC (Buying Climax) is the climactic action that is sold up quickly creating the upper bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large buying volume, but no further upside. 3. AR (Automatic Rally) is a low volume, quick reaction visiting the other side of the TR, usually indicating long covering. 4. ST (Secondary Test) a secondary test of the initial Supply Area created by the BC. 5. SOW (Sign of Weakness) are strong moves to the lower bounds of the Trading Range (or Underneath) with strong volume signature. 6. UT or UTAD (Upwards Thrust) in a UT (Upwards Thrust) a significant amount of buyers enter the market, “Buying the Breakout”, but their Effort, leads to no Result and this variation of a “Bull Trap” is the most significant characteristic of the Distribution TR. A UTAD (Upwards Thrust and Distribution) forms within the middle or end of the Trading Range; there is an obvious lack of Result vs Effort, with abnormally large buying volume signature, yet price fails to get back above this area again. It can look similar to a miniature Trading Range (Distribution). 7. UTAD or LPSY (Last Point of Supply) In Schematic #1 we have the UTAD at the end, in Schematic #2 we have it in the middle (simplified). If the /UT is found in the middle then we are looking for the LPSY to confirm the Resistance, when price revisits the initial Supply area created at the start of the Trading Range, and then successfully decreases from that area. 8. SOW (Sign of Weakness, Fall under the Ice) just like how in Accumulation we Jump Across the creek, in Distribution we do the latter and Fall Under the Ice. SOW (Sign of Weakness) are strong moves to the lower bounds of the Trading Range (or Underneath) with strong volume signature. 9. LPSY (Last Point of Supply) instead of revisiting the initial Supply area created at the start of the Trading Range, in LPSY (Last Point of Supply) revisits the recent Supply (Resistance) area, usually a former Support. The term may be used in a plural manner, with multiple LPSY forming the Lower Highs (LH’s) that make up the basis of a market trend. We should then enter the Mark Down phase as described at the start of this article. Distribution is the Cause, and Mark Down is the Effect. Examples & Links : Distribution Schematic #1: school.stockcharts.com In this schematic, the UTAD is located at the end of the TR, showing trapped buyers. Distribution Schematic #2: school.stockcharts.com In this schematic, the UTAD is located in the middle of the TR, showing trapped buyers. Example of Distribution #1 Analysis (Press Play!): Example of Distribution # 2 Analysis (Press Play!): 4. Redistribution : --------------------------------- After Distribution, Comes Redistribution. Where after a extended down move, a repeated sideways movement occurs which leads to another extended downwards move. Redistribution is also known as a Downtrend Continuation. Redistribution is said to be difficult to analyse, so my general advice is to treat Redistribution as a method to spot an additional Distribution Schematic after a Distribution Schematic and a Mark Down has already occurred previously recently on the chart (Similar to a Bear Flag Pattern after a Distribution). The characteristics are almost identical to Distribution sometimes, except the previous price movement leading up to the trading range is upwards : Here are the characteristics explained : 1. PS (Preliminary Support) the first Support area that was lost, creating the upper bound of the TR. 2. SC (Selling Climax) the climactic action that is bought up quickly creating the lower bound of the TR. It is a strong example of Effort vs Result usually, with abnormally large selling volume, but no further downside. 3. AR (Automatic Rally) is a low volume, quick reaction visiting the other side of the TR, usually indicating long covering + (UT/UA Upwards Thrust / Action) The Upwards Action or Upwards Thrust takes out the Supply above the AR area, before heading back down. 4. ST (Secondary Test) a secondary test of the initial Demand Area created by the SC. 5. UT or UTAD (Upwards Thrust, or Upwards Thrust And Distribution), in a UT (Upwards Thrust) a significant amount of buyers enter the market, “Buying the Breakout”, but their Effort, leads to no Result and this variation of a “Bull Trap” is the most significant characteristic of the Distribution TR. A UTAD is basically a UT (Upwards Thrust) with a Distribution also (miniature Bearish Trading Range) that usually forms within the middle or end of the TR. 6. LPSY + Test (Last Point of Supply) is when price revisits the initial Supply area created at the start of the Trading Range, and then successfully decreases from that area, the test confirmed by tapping the upper Supply Area before heading into the TR again. 7. SOW (Sign of Weakness) *sometimes* with a potential UTAD (Upwards Thrust and Distribution): Signs of Weakness are strong moves to the lower bounds of the Trading Range (or Underneath) with strong volume signature. 8. SOW (Sign of Weakness, Fall under the Ice) just like how in Accumulation we Jump Across the creek, in Distribution we do the latter and Fall Under the Ice. 9. LPSY (Last Point of Supply) instead of revisiting the initial Supply area created at the start of the Trading Range, in this LPSY we are visiting the Supply area created near the bottom of the Trading Range. We should then enter the Mark Down phase as described at the start of this article. Redistribution is the Cause, Mark Down is the Effect. Examples & Links : It is important to note that Redistribution can appear as Distribution just like Accumulation as Reaccumulation as mentioned earlier, here is a example on ETHUSDT: Redistribution Schematic #1: ibb.co In this schematic, the UTAD is located at the end of the TR, showing trapped buyers. Redistribution Schematic #2: ibb.co In this schematic, the UTAD is located in the middle of the TR, showing trapped buyers. Example of Redistribution #1 Analysis (Press Play!): Example of Redistribution #2 Analysis (Press Play!): 5. Failure of Schematic : --------------------------------- Wyckoff based trades can also fail. It is also important to note that Wyckoff Schematics are not a guarantee, more so a system for you to analyse the market and know potential lower risk areas to position your trades. In this example below (Click+Press Play!) we can see that the Accumulation on BATUSDT did have a strong breakout, but never entered into a correct markup phase and then "failed" when the price came back inside of the TR (Trading Range): Nine Buying/Selling Tests: ----------------------------------------------------------- Whereas the three Wyckoff laws provide a big-picture foundation for the Wyckoff method, the nine buying and selling tests are a set of narrower, specific principles to help guide trade entry. These tests help delineate when a trading range is drawing to a close and a new uptrend (markup) or downtrend (markdown) is about to begin. In the book, by Hank Pruden, named "The Three Skills of Top Trading" , as well as the following article by Jack K Hutson the Nine Buying and Selling Tests of Wyckoff are discussed and outlayed similar to the above image: These nine tests can be difficult to understand, or even apply to your charts, so I have summarised them and modernised these tests for a purely candlestick chart and simplified point of view. Alot of analysts beforehand made use of P&F (Point & Figure Charts). At the top of your Tradingview chart, you can see a small icon, if you click it you can see the different types of charts available, we are currently on Candlesticks, Point & Figure is another option that was used for some Wyckoff Analysis, but in my simplified version we are just using Candlesticks: ibb.co Here are my simplified Buying & Selling Tests explained with images 1. Buying Tests : --------------------------------- I am using the chart of ZILUSDT as a example. Wyckoff Buying Tests for Accumulation (Simplified Version) 1. Downside price target complete or close to complete of any previous Bearish Patterns (Bear Flag Pattern used for Target Measurement: www.thepatternsite.com ) 2. PS, SC, and AR/ST on chart (Remember our first chart above, with Supply & Demand? ON the left we can see creation of the trading range with the Selling Climax (SC), Automatic Rally (AR), and Support Test (ST) we also covered this in the chart below (The 2nd below is showing that on ZILUSDT): 3. Bullish Signs (volume or price increases on rallies and diminishes during reactions) 4. Diagonal Resistance Broken 5. Higher lows & 6. Higher highs 7. Asset stronger than the market (more responsive on rallies and more resistant to reactions than the market index or other dominant assets) 8. Base forming (horizontal price line) (It can resemble a Flat Base Pattern: www.thepatternsite.com) 9. Estimated upside profit potential is at least three times the loss if the initial stop-loss were hit (Risk to Reward; 3:1) We can now see we have completed all 9 Buying Tests: And for the final images, we can see that ZIL has a massive upside move, moving to the Mark Up phase from our Buying Tests Analysis: Aswell as starting to complete a larger Accumulation #1 Structure as desribed above. 2. Selling Tests : --------------------------------- I am using the chart of XTZBTC as a example. If you missed it above, dont forget to see the original 9 Selling Tests: ibb.co Wyckoff Buying Tests for Distribution (Simplified Version) 1. Upside price objective complete of any previous Bullish Patterns on higher timeframes, or close to complete (Bull Flag Pattern used for Target Measurement: www.thepatternsite.com ) 2. Bearish Signs (volume decreases on rallies and increases on reactions) 3. Preliminary supply, buying climax (PSY, BC) We also covered this in the chart below (The 2nd below is showing that on XTZBTC): 4. Asset weaker than the market (more responsive than the market on reactions and sluggish on rallies) XTZ was a perfect example of Selling Test #4, as you can see it was much weaker than Bitcoin at the time, which was leading the market. 5. Diagonal Support Broken 6. Lower Highs & 7. Lower Lows 8. Crown forming (It can resemble a ugly Double Top Pattern: www.thepatternsite.com) 9. Estimated downside profit potential is at least three times the loss if the initial stop-loss were hit (Risk to Reward; 3:1), we have now completed all 9 Selling Tests! And for the final images, we can see that XTZBTC has a massive downside move, moving to the Mark Down phase from our Selling Tests Analysis: As well as starting to complete a larger Distribution #2 Structure as described above. Refer to your schematics above if your confused. Conclusion: ----------------------------------------------------------- Not only does the Wyckoff Method teach the novice Investor/Trader the techniques, foundations and methods needed to analyse the market, it also helps create a system and mindframe towards observing and timing the market, which allows the trader to be much more rationalised and organised in their train of thought as well as much more risk averse. By using the Wyckoff based analysis on Siacoin we can clearly see this token has potential for more upside, although we do need to be cautious as a significant pullback on Bitcoin could easily “Fail” the “Spring” action of the TR (Trading Range) in the original analysis image above. What would a successful accumulation breakout look like on Siacoin? Refer to the original chart at the start of the post. I have made a small drawing, describing the characteristics we need to see for this to progress further. You can use that drawing along with the next below to get a rough idea of what a successful breakout will look like, compare with the Accumulation Schematics you studied above. What would a failure of accumulation look like on Siacoin? I will give two examples: 1. Failure of Spring 2. Failure of Phase E (Uptrend) I hope you enjoyed my explanation of the Wyckoff Method - Thank you and if you found this writeup insightful, educational and informative don't forget to hit Subscribe, Like & Comment so others can also potentially see and benefit from this post, if you wish to see these concepts in action, I recommend visiting my signature as well. Other Resources & References: ----------------------------------------------------------- Websites: Wyckoff Analytics: wyckoffanalytics.com Wyckoff SMI: wyckoffsmi.com Videos: Wyckoff Youtube: www.youtube.com Wyckoff SMI Youtube: www.youtube.com Stockcharts.com Youtube: www.youtube.com (I didnt cover volume much in this article, check out the above video for a Volume Tutorial) Articles: school.stockcharts.com school.stockcharts.com school.stockcharts.com www.wyckoffanalytics.com www.wyckoffanalytics.com Magazine of Wall Street Database: (Founded by Wyckoff) shorturl.at Books: www.amazon.com www.amazon.com References: en.wikipedia.org school.stockcharts.com
SEducation
by Worth_The_Ri5k
22
The Laws of Wyckoff: Effort Vs ResultIntroduction: --------------------------------- Richard Demille Wyckoff (November 2, 1873 – March 7, 1934) was considered one of the five “titans” of technical analysis , along with Dow, Gann , Elliott and Merrill. Wyckoff was an avid student of the markets, as well as an active tape reader and trader. He observed the market activities and campaigns of the legendary stock operators of his time, including JP Morgan and Jesse Livermore. From his observations and interviews with those big-time traders, Wyckoff codified the best practices of Livermore and others into laws, principles and techniques of trading methodology, money management and mental discipline. Laws of Wyckoff --------------------------------- Wyckoff Analysis is fundamentally based off the Three Laws of Wyckoff, which can be found and recognized across many different types of Analysis, the Laws help give insight to our analysis and choice of buying/selling. The Three Laws of Wyckoff are: Supply & Demand Effort vs. Result Cause & Effect Law #2: Effort vs. Result --------------------------------- Wyckoff states that every effort should lead to a result in the financial markets. The above example describes the concept of Effort vs Result in a Trading Range (Parallel Channel) using Volume & Price Based Analysis This statement is applied to our charts by using data found on Trading View from the Volume Indicator. When we see abnormally large trading volume at key areas on the chart, such as a defined "TR (Trading Range)" we can usually expect a continued move in that direction, this is called the Breakout of the range. But if buyers cannot gather enough momentum to continue the Breakout action, they may become trapped, and as prices fall back inside of the defined area, their Effort has produced no Result. That abnormally large trading volume can give us a potential sign that the participants betting on the market to move in that direction failed to gather enough momentum to do so (Light Blue), which leads to them being trapped (Dark Blue) and then a reverse in the opposite direction in price (Purple). This kind of Analysis is not just "fixed" to the bottom or top of a Trading Range, Effort vs Result can be interpreted a number of ways, for example in the below image we can see that the Effort in this case was not outside of the range, but a failure from the buyers to hold prices INSIDE the range: --------------------------------- Thank you and if you found this writeup insightful and informative don't forget to hit Subscribe, Like & Comment to show your appreciation. Visit my signature for further education on these concepts in action
CEducation
by Worth_The_Ri5k
1
Chainlink: 3 Bullish Signs#LINK #Chainlink has been dormant and bearish for quite some time. There are a few key things to note: 1. Whales are increasing buying of the token You can visit www.whalestats.com to see the top ETHEREUM wallets and what they are purchasing/holding, many are starting to acquire LINK ---------------------------------------------------------------------------------------------- 2. Selling volume decreasing on the chart with trapped sellers This trading range has been going for quite some time yet the sellers were not able to secure a successful downwards breakout ---------------------------------------------------------------------------------------------- 3. Fitting Wyckoff Schematic quite nicely The Wyckoff Schematics help us identify the different between Accumulation and Distribution Trading Ranges - In a Trading Range the price Zig Zags up and down until eventually a breakout occurs, using the Wyckoff Accumulation Schematic we can see there are some clues in the similarities of the chart and the schematic that tell us LINK may be ready for a test of the upper bounds of the Trading Range.
Long
by Worth_The_Ri5k
8
DOT's accumulation behaviorTaking SC as the boundary to start the interval calculation, DOT has shown many positive volume and price events, the more obvious low-level and huge turnover with effort and causal deviation, and the rush for supply in the second test. After the spring, the price revealed a strong holding behavior, indicating that the floating supply has been largely cleared.We can expect to see a LPS which is the best buying point to test the trend. If it falls below the vertical demand column, it means that the marketmaker still intend to continue to suppress the price and extend the shock range.
Long
by ASTWA