What is Richard Wyckoff theory of accumulation and distribution?

The Richard Wyckoff Theory of accumulation and distribution focuses on supply and demand for a stock, cause and effect, and the law of effort for a stock. Here are the five steps to the Wyckoff Method strategy for stock selection and trade entry: 1.

What is Wyckoff distribution?

The Wyckoff distribution follows an accumulation cycle. There are five parts of the wyckoff distribution phase: the “Preliminary Supply”, the “Buying Climax”, the automatic reaction, the secondary test, the spring, and SOW, LPSY, UTAD.

What is the Wyckoff accumulation cycle?

The Wyckoff Accumulation cycle is when dominant traders manipulated the market to take positions away from retail traders. Having gained this strong position, these dominant traders would then sell off their positions during the Wyckoff Distribution cycle. Wyckoff recommended the following five-step process to help traders make decisions.

How does Wyckoff's law work?

Wyckoff's “cause” can be measured by the horizontal point count in a Point and Figure chart. The “effect” is the distance price moves corresponding to the point count. This law's operation can be seen as the force of accumulation or distribution within a trading range, as well as how it works itself out in a subsequent trend or movement up or down.