Editor's note: Wyckoff Method is also examined in Articles 174, 191, 206. These are progressively deeper, standalone treatments of the same subject.
Encyclopedia Classification
Category: Advanced Trading • Market Cycles • Institutional Behavior
Discipline: Market Psychology • Supply and Demand • Price Structure • Institutional Analysis
Prerequisites
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Article 151 — Market Structure: Understanding How Crypto Markets Actually Move
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Article 153 — Liquidity Analysis: How Markets Hunt Stops, Create Traps, and Move Capital
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Article 157 — Order Flow: Understanding the Battle Between Buyers and Sellers
Related Articles
Market Cycles • Volume Analysis • Accumulation • Distribution • Institutional Trading
Definition
The Wyckoff Methodology is a market analysis framework developed by Richard Wyckoff that explains how large market participants accumulate and distribute assets through repeating market phases.
The methodology attempts to identify:
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Where institutions are buying
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Where institutions are selling
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When trends begin
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When trends end
Beginner Explanation
Many beginners believe markets move because of:
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News
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Random buying and selling
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Indicators
Wyckoff theory suggests markets often move through a cycle created by large participants.
The basic idea:
Large investors accumulate quietly.
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Price rises.
↓
Public investors become excited.
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Large investors distribute positions.
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Price falls.
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