The Wyckoff Method

Reading Supply and Demand

The Wyckoff Method is based on reading the buying and selling in the market, and determining whether it is buyers or sellers who have the upper hand.  Price moves lower or higher based on supply and demand only.  It is this very ability to read the activity of the buyers and sellers—especially the larger ones–-through the chart that underlies the Wyckoff Method.  Likewise, supply and demand is the key factor in the larger moves that develop in the markets.  Wyckoff was the first to characterize and detail areas of accumulation and distribution where long periods of tell-tale buying or selling, respectively, lead to more significant moves in the market, including the major bear and bull markets.  But even in the shorter term Wyckoff is highly relevant.  Market moves will continue as long as there is good fuel (volume) behind them.  When excessive volume or very low volume is behind a move—especially if the move has been running for a while—it can signal the nearing end of that move and be a warning to tighten stops or exit positions.