Expert Chaslau Koniukh
  • Companies
  • Global investment
  • Investors
  • Terminology
  • Economy
  • Stock Market
  • World exchanges
  • Tech and Marketing
Wyckoff's methods
Market terminology

Wyckoff Methods: overview of market processes from the Richard Wyckoff concept

13.04.2021
2 min read

Wyckoff Methods: trends in market development

Despite sharp jumps and grand collapses, all processes in the market have their own pattern. It was described in the early 20th century, and this mechanism is still relevant today. Many traders use Wyckoff methods to understand how the market will behave at this or that moment.
The methods are named after their author – Richard Wyckoff, who after a long work on the stock exchange wrote a textbook on trading on the market, and showed his way of analyzing the situation. His theory was based on three indicators: the volume of a deal, as well as the cost of opening and closing it.
In the 30s, Wyckoff’s method was considered revolutionary. Richard made predictions about what would happen on the stock exchange, and they were a huge success with traders. The basis of his concept was the balance theory. It means that the market always wants to achieve a balance of supply and demand. If there is a bias in one direction or the other, then quotes will fall or rise in order to level the proportion. These fluctuations in turn create different trends, which will depend on what is now prevailing in the market.
Wyckoff has identified three trends – upward, downward and horizontal or lateral. The first one is created when the bulls have taken stable positions, and supply is inferior to demand. The upward trend is traced by a number of signs, for example, each minimum will be higher than the previous one, and each maximum is higher than the previous one.

Wyckoff's methods

A drop in value is considered when a strong bearish market and demand is lower than supply from sellers. A downward trend is seen when the lows with each new case are smaller, as well as each high that is lower than the previous one.
In the case of a horizontal trend, there are no sharp movements and the price does not exceed either the upper or lower limits. The highs and lows are located in almost the same area. These periods are called accumulation and distribution zones, and are recorded after strong trends when the market completes large transactions. At the moment, you should not make abrupt attempts to break out, but wait for the activation of volume. If the latter starts to grow, it means that the trend has increased.
The accumulation zone comes after the price corridor is formed, when the downtrend is over. At this time, traders close the position and keep the value at a certain level. Its decline is almost impossible due to high demand.
When the growth is over, the supply zone begins. Positions are fixed in this case, and there is a large volume of assets for sale.

Tags: Market terminology
0
Previous Post Rabobank investment bank considered the actions of the Central Bank of Poland Next Post Freedom Finance analyst: investment in mutual funds is becoming more and more popular

You Might Also Like

soft market
Market terminology
Soft market: its impact on sellers and buyers
31.01.2023
Factoring and forfeiting
Market terminology
Factoring and forfeiting: business benefits
25.10.2020
dead cat bounce-2
Market terminology
The “dead cat bounce” pattern: what it is and the benefits of the strategy
27.02.2022
The concept of financial management-1
Market terminology
The concept of financial management in terms of the investment horizon
18.05.2022
benchmark is an indicator
Market terminology
Benchmark as an asset selection tool
22.05.2025
KST indicator
Market terminology
Features of using the KST indicator for stock trading
10.07.2023

Popular Posts

  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Analysts: Egypt’s economy to continue falling in 2023
  • Field of activity of the American Monsanto Company Corporation

Editor's Picks

Chaslau Koniukh
Analytics

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Spokesperson
17.08.2020
Expert Chaslau Koniukh
Analytics

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Spokesperson
18.06.2020
expert Chaslau Koniukh
Analytics

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Spokesperson
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh
Analytics

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Spokesperson
16.05.2020

Popular Posts

  • Ingeborg Mootz: a woman who became a stock player at the age of 75
  • Li Ka Shing: How can success be achieved without money and education?
  • Skolkovo analysts: the Russian energy market is suffering losses
  • Businessman Chuck Feeney: the man who gave the world Duty Free
  • Analysts: Egypt’s economy to continue falling in 2023
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Instagram

© 2024 CHASLAU KONIUKH. ALL RIGHTS RESERVED. Expert in marketing and project management, international investments, financial analyst.

Menu

  • Biography
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Economy
  • Market terminology
  • Stock Market
  • World exchanges
  • Tech and Marketing
  • Analytics