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Wyckofftrading

DXY - 4H ANALYSIS What is Wyckoff Distribution Cycle? An accumulation cycle is typically followed by what is known as Wyckoff Distribution. Wyckoff Distribution Schematic - After the dominant traders have increased their position during the Wyckoff Accumulation cycle, they will sell off their positions when the asset’s price is high. The Wyckoff Distribution cycle will happen across five phases. 1. Preliminary Supply (PSY) - This phase typically occurs after a prominent price rise. Dominant traders will sell off large portions of their positions resulting in an increase in the trading volume. 2. Buying Climax (BC) - The increased supply causes retail traders to begin taking up positions. This demand causes the price to continue rising. Dominant traders can sell off th eir positions at a premium price. However, this phase relies on high demand from retail traders so that the selling off by dominant traders does not bring down the asset’s price. 3. Automatic Reaction (AR) - The end of the BC phase is marked by a price drop. This happens as fewer traders are buying up positions even though there is still a large supply available. The increased number of sell orders or supply causes the price to drop. It will eventually reach the AR level which is the lower price boundary of the Wyckoff Distribution Cycle. 4. Secondary Test (ST) - In this phase, the price rises back to the BC range. This is where traders are testing the balance of supply and demand. The top price of this test occurs when there is more supply than demand. As the price reaches the BC price range, less trading will occur. 5. Sign of Weakness, Last Point of Supply, Upthrust After Distribution (SOW, LPSY, UTAD) - The SOW occurs when the asset’s price falls near or below the initial boundaries of the respective Wyckoff Distribution Cycle. This occurs when there is more supply than demand and signals price weakness. Following the SOW is the LPSY. In this phase, traders are testing the support of the asset’s price at these lower levels. There may be a small rally, but any rallies will be difficult as the result of either too much supply or too little demand. The last possible phase is the UTAD, which is just what it sounds like. This phase of the Wyckoff Distribution Cycle is not guaranteed to occur, but if it does, it will typically occur near the end of the overall cycle. The asset’s price will increase as a result of increased demand and push the upper price boundary of the entire cycle. Conclusion - The Wyckoff Market cycle is hotly debated in crypto circles. Some claim that the signs involved in a Wyckoff Accumulation can be seen in the market changes for certain crypto assets, and others disagree. Regardless, understanding the potential causes occurring in the market is helpful. Learning about methodologies that other traders use can prepare you for making your own trading decisions
CAPITALCOM:DXYShort
by PAFXLTD
4
GOLD - 1H BUY PROJECTION Accumulation Phase Selling Climax (SC) - Selling Climax is a pattern in Accumulation phase characterized by a sharp selloff. It takes place before the Preliminary Support or PS. It indicates that selling pressure has reached a stage in which panic selling by the public will be absorbed by Big Institutional players or Smart money traders. Automatic Rally (AR) - An automatic Rally is an up move that forms after the Selling Climax in the Accumulation phase. The underlying buying interest causes the prices to rally higher, but quickly prices will fall back after making a new high. The highest point of this rally will become the Resistance of the Accumulation range. You can see the example of Automatic Rally or AR in the Image. Secondary Test (ST) - The Secondary Test formation happens after an Automatic Rally. It’s caused by the long covering process of Public Investors, which brings the price back to the area of Preliminary Support. Often prices will bounce back after touching the Preliminary Support indicating the presence of Buying Interest. Springs - Springs are nothing but shakeouts that happens within the Accumulation phase. The prices will fall below the Preliminary Support of the trading range only to reverse back above the trading range within a short time period. (Often referred to as False Breakout) Springs are caused by Big Players to mislead the Public and acquire more shares at a lower price. It influences uninformed traders and investors to sell their shares at a lower price, as they expect a further fall in stock prices. You can see the example of Springs in the Image. Sign of Strength (SOS) - The Sign of Strength takes place after the Spring Pattern, indicating a bullish sentiment in the market. Sign of Strength can form like a normal pullback or minor consolidation at the Resistance level of the Accumulation range. It’s a confirmation that Sellers have lost momentum and prices will continue to rise on the upside. Most of the time SOS looks like a breakout setup which is often followed by a sharp rally on the upside. Take a look at the Image to understand SOS
OANDA:XAUUSDLong
by PAFXLTD
MARUTI SUZUKI| Wyckoff Events and Phases explained 🎯Wyckoff developed a price action market theory which is still a leading principle in today's trading practice. The Wyckoff method states that the price cycle of a traded instrument consists of 4 stages – Accumulation, Markup, Distribution, and MarkDown. 👉TEXTBOOK EXAMPLE Accumulation Schematic: Wyckoff Events and Phases👈 And this is the accumulation stage - 1) PS— Preliminary Support, where substantial buying begins to provide pronounced support after a continued down-move. - Volume increases and price spread widens, signaling that the down-move may be approaching its end. 2) SC—Selling Climax, the point at which widening spread and selling pressure usually in high point 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 an SC , reflecting the buying by these large interests. 3) AR—Automatic Rally, which occurs because intense selling pressure has greatly decline. - A wave of buying easily pushes prices up. - The high of this rally will help define the upper boundary of an accumulation. 4) ST—Secondary Test, in which price revisits the area of the SC to test the supply/demand. - If a bottom is to be confirmed, volume and price spread should be decline as the market approaches support in the area of the SC . - It is common to have multiple STs after an SC . 5) SOS—Sign Of Strength, a price advance on increasing spread and relatively higher volume . 6) LPS—Last Point Of Support, the low point of a reaction or pullback after an SOS. 7) BU/LPS- Backing up to an LPS means a pullback to support that was formerly resistant, on diminished spread and volume .
NSE:MARUTIEducation
by rimsonlobo
IS this Accumulation Or Re Distribution?From 17th to 21st Aug was Clear Buying Climax .. WE know the Down Trend Started . The Question for us.. Is this Accumulation Or Re Distribution ? For Novice like me.. Its just not clear. I can sort of trade the UT and Springs.. JUST need to be more sure if the Trading Range is Too Narrow.. After a few UTs and STs we can be more assured . In case of BreakOuts in any direction we need to study the Volumes on BO and on Tests. Another Critical point for us : Do we trade the Larger Distribution Phase Or the Shorter Accumulation Phase . Distribution Phase is Already Established and we are fully Aware. The Smaller Trading Zone -- We are rightly Uncertain . If Prices just go up from current small congestion WITHOUT sufficient " CAUSE " then --- this is just STs of Distribution Phase . So Extended SIde Ways is CAUSE ... Quick V Type recovery UNLESS it shows great SOS to cross the August BC is Just STs and a trap for novice traders.
NSE:HINDALCO
by CASubodhSharma