Wyckoff Theory
Understanding market cycles through accumulation and distribution phases.
Who Was Richard Wyckoff?
Richard Wyckoff (1873-1934) was a stock market authority and pioneer of technical analysis. His method focuses on understanding the relationship between price, volume, and time to identify institutional activity.
>The Composite Man
"Think of the market as being controlled by one mind."
The Four Market Phases
Accumulation
Smart money buys
Markup
Price rises
Distribution
Smart money sells
Markdown
Price falls
Phase Analysis
First sign of buying interest after a downtrend
Panic selling with high volume, marks the low
Short covering creates a bounce
Price retests the SC low on lower volume
Strong move up on high volume
Final pullback before markup begins
Wyckoff Trading Rules
Law of Supply & Demand
Price moves based on supply/demand imbalance
Law of Cause & Effect
The longer accumulation, the bigger the move
Law of Effort vs Result
Volume should confirm price movement
Success Tips
- • Always analyze volume alongside price
- • Look for effort vs result divergences
- • Be patient for phase confirmations
Common Mistakes
- • Forcing patterns where they don't exist
- • Ignoring the broader market context
- • Not waiting for Spring/UTAD confirmation
>Wyckoff Wisdom
"All fluctuations should be studied as if they were the result of one man's operations."