![]() ![]() Higher bottoms within the range is usually considered a signal that the price action is currently in an Accumulation phase. In other words, the process of accumulation is illustrated by a ranging price structure on the chart. Bulls are slowing gaining power and as a result, they are poised to push prices higher.Īlthough the Accumulation stage is related with the bulls gaining authority, the price action on the chart is flat. The Accumulation stage is caused by increased institutional demand. The process of accumulation is the first stage of the Wyckoff price cycle. ![]() The Wyckoff method states that the price cycle of a traded instrument consists of 4 stages – Accumulation, Markup, Distribution, and Mark Down. Wyckoff developed a price action market theory which is still a leading principle in today’s trading practice. These two rules are essential for the information we will discuss next – the Wyckoff Market Cycle theory. It states that since every price move is unique, its analytical importance comes when compared to previous price behavior. The second Richard Wyckoff rule is related to the first one.Price action will never create a move in exactly the same way that it did in the past. The first rule of Richard Wyckoff states that the market never behaves the same way.These two essential rules are paraphrased below. It is essential that we discuss two important rules stated in his book “Charting the Stock Market”. The Wyckoff theory is based primarily on price action and the different cyclical stages the market falls in to. Later, he authored several famous stock trading books, which are still studied by today’s market players. Wyckoff was fascinated by the stock market at an early age, and by the time he was in in his mid 20’s he was able to open up his first brokerage firm. Richard Wyckoff was a famous stock trader and investor who was born in the late 19 th century. Click Here To Download Who was Richard Wyckoff ? Download the short printable PDF version summarizing the key points of this lesson…. ![]()
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