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Strategies & Market Trends : Trader J's Inner Circle
NVDA 198.50+5.5%3:19 PM EST

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To: Lou Weed who wrote (56156)5/7/2024 12:25:32 PM
From: E_K_S   of 56532
 
AI Perplexity.com defines "The Wyckoff Method". Interesting how this was derived in the early 1900's

The Wyckoff Method is a technical analysis approach developed by Richard Wyckoff (1873-1934) to identify and capitalize on the manipulations of large traders in the stock market 1 3. Wyckoff, who started as a stockbroker at age 15 and became a Wall Street celebrity by 25, observed the trading activities of dominant market participants and developed his method based on the premise that stocks move in predictable cycles 1.The Wyckoff Method is based on three fundamental laws 2:
  1. The Law of Supply and Demand - Price moves in the direction of higher supply or demand 1 2
  2. The Law of Cause and Effect - A significant price movement must be preceded by a period of accumulation or distribution 1
  3. The Law of Effort versus Result - The amplitude of price movement is proportional to the effort expended 1 2
Wyckoff's approach involves analyzing supply and demand through examination of price and volume on bar charts and point and figure charts 3. He conceptualized the "Composite Man" - a hypothetical large trader who manipulates the market to the disadvantage of uninformed retail traders 3. The goal is to identify when the Composite Man is accumulating or distributing shares to time entries and exits accordingly 3 4 5.The Wyckoff Method is universal and can be applied across different markets and timeframes 2. It remains relevant today as a framework for identifying trends, selecting promising stocks, and projecting price targets 3. Traders who master the method may achieve above average success rates, though results can be subjective 1.
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