The Wyckoff method

The Wyckoff method is a five-step method of market analysis.

1. Determine the present position and probable future trend of the market. Then decide how you are going to play the game. Use bar charts and point-and-figure charts of market index.

2. Select stocks in harmony with the trend. If you are playing the game long, select stocks which you believe are stronger than the market. If you are not sure about an individual issue, drop it. Use bar charts of individual stocks.

3. Select stocks with cause that equals or exceeds minimum objective. Choose stocks that are under accumulation or reaccumulation. Use point-and-figure charts of individual stocks.

4. Determine the stocks’ readiness to move. Rank stocks in order of your preference. Use bar charts and point-and-figure charts of individual stocks.

5. Time your commitment with a turn in the stock market index. Put your stop-loss in place and relax. Then follow through, until you close out the market position. Use bar charts.

The Wyckoff method has stood the test of time. Over 100 years of continuous development and usage have proven the value of the Wyckoff method for use with stocks, bonds, currencies, and commodities around the globe. This accomplishment should come as no surprise because, as the Wyckoff method reveals the “real rules of the game.”

Before you can master the Wyckoff method, you must firmly embrace the fact that it is a judgmental method. To gain skill in making judgments, the trader needs experience in a variety of different case situations steered by accurate and intelligent guidelines. Remember,the market is more organic than mechanistic, and the artistry applied by the technical trader is important. Nonetheless, this five-step procedure can help the technical trader orient his thinking and organize his learning.