Richard Wyckoff

Richard Wyckoff is often known as one of, if not the, forefather of technical analysis for stock trading. Of course the principles apply to any traded market – stocks, futures, commodities, etc. His work is based on three laws – supply vs demand, effort vs result, and and cause and effect.

To be a Wyckoffian trader doesn't involve the use of oscillators or moving averages. Those indicators all lag the market. To trade in the Wyckoff style is to truly learn to read the tape by studying price action and its relationship to volume, and how these interact with areas of support and resistance.

Point and figure charts are also used in the Wyckoff method. This is where we get our count for potential moves. This is the cause and effect. Trading in a range builds "cause," which is often proportional to the "effect," which is the move out of the trading range.

Comments are closed.