What is the Wyckoff Method?
Wyckoff Method
Forex Trading Glossary
Quick Answer: The Wyckoff Method studies accumulation and distribution cycles using price, volume, and structure to anticipate market turning points.
What is the Wyckoff Method?
The Wyckoff Method is a classic market analysis framework that studies accumulation and distribution phases through price, volume, and market structure. It maps how smart money builds and unloads positions.
Core Wyckoff Concepts
- Phases: Markets rotate through accumulation, markup, distribution, and markdown cycles.
- Composite operator: Analyze price as if a single large operator is guiding flows.
- Price-volume relationship: Volume confirms or rejects the narrative at support and resistance.
Label the Structure
Mark preliminary support, spring, test, and sign of strength events on your chart. The labels help you anticipate the next phase.
Applying Wyckoff to Forex
- Use volume proxies such as tick volume or futures data to validate the story.
- Combine Wyckoff phases with order flow or sentiment tools for confirmation.
- Align entries with breakouts from the trading range after a successful test.
- Manage trades by comparing current price action to historical Wyckoff schematics.
Related Terms
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