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Knowledge Base

This knowledge base is a free resource for traders and investors to get to know the Wyckoff basics and to interact with other traders in our forum.

Richard D. Wyckoff began his career at the dawn of Wall Street when he was only 15 years old.  He began as a runner for a brokerage firm and within a few short years, launched his own brokerage company.  In a position to watch his clients trade and invest, he became dismayed at the average person’s lack of understanding about how the stock market worked.  He found that most relied on rumor, tips, and were especially vulnerable to news and media.  Wyckoff realized that the vast majority of traders and investors had little understanding of how the market really worked.

Wyckoff started a magazine initially called the “Ticker” and later renamed as the “Magazine of Wall Street.”  In it, he sought to provide subscribers with the best investment advice he could find.  As the magazine matured, Wyckoff had thousands of subscribers across the country.  Through brokerages using Wyckoff’s stock recommendations as their own, many more traded his stock recommendations.  Wyckoff has so many followers, in fact, that his stock selections often moved a stock’s price. 

Through conversations, interviews and research of the successful traders of his time, Wyckoff developed a methodology he traded personally, wrote about in his magazine, and later taught.  Wyckoff worked with and studied all of the great traders of his day: Jessie Livermore, E. H. Harriman, James R. Keene, Otto Kahn, J. P Morgan, Jay Gould, and many other large operators of the day. Through his work with these large traders and the inside information he learned regarding their methods and maneuvers, he realized that much can be read of the large operators by careful study and analysis of a stock’s price and volume.  By piecing together the methods he learned of the large operators with the daily record of price bars and volume, Wyckoff recognized that an educated eye could read the market by its own action and determine with good probability its likely next move.   

His principles have withstood the test of time.

Wyckoff's research and active trading led him to an understanding of many market principles.  He was, in fact, the first to identify the principle of support and resistance.  He described how selling climaxes and buying climaxes were actually events where large quantities of stock are transferred from the public to strong hands and mark the turning point of the trend.  He was the first market analyst to describe a sequencing of events that are detectable in all markets across all time frames.  Through his own hard-won experiences, he advocated assessing risk and reward for each trade, the placement of stop-losses at all times, the importance of controlling the risk of any particular trade, and to trade with the “line of least resistance,” i.e., the trend.  Wyckoff taught all traders to view the market as a professional and evolved the concept of the "Composite Operator" to help the average trader assess the market from the eyes of the "Smart Money." 

Although Richard Wyckoff died in 1934, he left a legacy for all traders that is as fresh and relevant today as it was nearly 80 years ago.  The principles he first discovered have been refined over the past eight decades by great traders and educators such as Robert G. Evans, George King, and Dave Mathys – all devoted Wyckoff students and teachers of the method through Wyckoff Associates, an educational organization established by Wyckoff to further his work. 

More recently, David Weis and Tom Williams have contributed to the Wyckoff Method and helped to bring it into the 21st Century.  Weis adapted Wyckoff’s techniques to the modern active trading of the electronic intra day markets.  Williams, a retired syndicate (hedge fund) trader, successfully computerized many of the Wyckoff principles in his Volume Spread Analysis and the TradeGuider software.  Standing squarely on the shoulders of these giants, Gavin Holmes and Gary Dayton – students of Williams and Weis, respectively – along with business partner Richard Bednall continue the Wyckoff heritage through RichardWyckoff.org.