Wyckoff Method

What you will learn

Supply & Demand

Price rises when demand exceeds supply and falls when supply exceeds demand. Everything else is just reading which side is in control.

Cause & Effect

The time spent building a range (the cause) determines the size of the move that follows (the effect). Wider bases fund bigger trends — measured with Point & Figure counts.

Effort vs. Result

Volume is effort, price movement is result. When huge volume produces little progress, the move is being absorbed and a reversal is near.

Accumulation

Smart money absorbs supply from weak hands at low prices within a sideways range. Volume increases on rallies and decreases on pullbacks. Ends with a Spring (shakeout below support) and Sign of Strength.

Markup

Price breaks out of the accumulation range with expanding volume. Higher highs and higher lows form. The public notices the trend late and starts buying. Back Up the Creek (BUEC) retests the breakout level.

Distribution

Smart money unloads positions to the retail public at high prices. Similar to accumulation but in reverse. Ends with an Upthrust After Distribution (UTAD) and Sign of Weakness. Range-bound price action at highs.

Markdown

Price breaks down from the distribution range. Lower highs and lower lows. The public panics and sells at the lows — exactly when smart money is accumulating again. Back Up the Ice (BUTI) retests the breakdown.

Preliminary Support (PS)

First significant buying attempt after a prolonged downtrend. Volume picks up and spread widens — but the decline is not yet stopped. Signals the end of the markdown phase may be near.

Selling Climax (SC)

Intense, high-volume panic selling with wide spread. Price closes well off the lows. Marks the exhaustion of sellers and the end of the markdown. The widest down bar of the move.

Automatic Rally (AR)

Sharp bounce after the SC as short sellers cover positions. Volume may be high but decreases toward the end. Defines the top of the accumulation trading range.

Secondary Test (ST)

Price returns to the area of the SC with diminished volume and narrower spread. Confirms that supply is being absorbed and selling pressure has diminished.

Spring

A shakeout below the support of the accumulation range. Traps short sellers and absorbs remaining supply. Low volume on the break = bullish spring. High volume = potential failed spring. Highest-probability entry point.

Back Up the Creek (BUEC)

A pullback to the breakout level after price has left the accumulation range. Volume decreases on the pullback, confirming that supply is exhausted. The classic entry point for traders who missed the Spring.

Sign of Strength (SOS)

A strong price advance on expanding volume, moving from the Spring back up through the range. Confirms that institutions are ready to mark up prices and that accumulation is complete.

LPS — Last Point of Support

A higher low after the Sign of Strength, retesting broken resistance as support. The lowest-risk long entry of the accumulation.

PSY — Preliminary Supply

First significant selling into an uptrend; large players begin to offload. Price still rises but the advance slows.

BC — Buying Climax

Euphoric, high-volume buying that marks the top of the range. The public buys aggressively while smart money sells into the demand.

UT — Upthrust

A push above resistance that fails and closes back inside the range, trapping breakout buyers.

Upthrust After Distribution (UTAD)

False breakout above the resistance of the distribution range. High volume, but price closes back inside the range. A bear trap that allows institutions to sell more into retail buying demand.

Sign of Weakness (SOW)

Sharp price decline on high volume after distribution. Moves from the UTAD back down through the range on wide spread. Confirms smart money has fully distributed and markdown is beginning.

LPSY — Last Point of Supply

A lower high after the Sign of Weakness, retesting broken support as resistance. The lowest-risk short entry of the distribution.

The Composite Operator

Wyckoff's central concept: a single hypothetical entity representing all large institutional operators (banks, funds, market makers). Reading the market as the CO's deliberate campaign — not random noise — is the key mindset shift.

Accumulation Campaign

The CO quietly buys over weeks or months, absorbing available supply without triggering a rally. They use news, fear, and volatility to shake out weak retail holders and acquire shares at low prices.

Distribution Campaign

After a successful markup, the CO offloads their entire position to retail traders who believe the uptrend will continue. The public's greed and FOMO are exploited to sell at peak prices.

Effort vs. Result

Compare effort (volume) to result (price spread). High volume + small price move = absorption (strong hands absorbing supply). High volume + large price move = conviction and follow-through expected.

No Supply

Narrow spread down bars on very low volume during an uptrend or within an accumulation range. Indicates that supply has been exhausted — a bullish signal confirming the underlying demand.

No Demand

Narrow spread up bars on very low volume during a downtrend or within a distribution range. Indicates that demand has dried up — a bearish signal confirming the underlying supply.

Climactic Volume

Extremely high volume at a price extreme (Selling Climax or Buying Climax). Signals exhaustion of the dominant force. A key warning that a reversal or prolonged consolidation is imminent.