BTC – Wyckoff analysis – looks promising
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Hi Traders!
Today we have prepared for you analysis based on Wyckoff analysis.
Objective of the Wyckoff method is to improve market timing when establishing a position. Trading ranges (TRs) are places where the previous trend (up or down) has been halted and there is relative equilibrium between supply and demand. Institutions and other large professional interests prepare for their next bull (or bear) campaign as they accumulate (or distribute) shares within the TR. In both accumulation and distribution TRs, individuals are actively buying and selling depending on the trend (bull – they are buying; bear – they are selling)
Phase A – we can observe stopping of the downtrend. Up to this point supply was dominant up to selling climax (SC) followed by preliminary support (PS). Once these intense selling pressures have been relieved, an automatic rally (AR), consisting of both institutional as well as individual demand for shares.
Phase B - institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (couple of months), and involves purchasing shares at lower prices and checking advances in price with short sales.
Phase C - The stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to increase. “Spring price” is a price move below the support level of the TR established in phases A and B that quickly reverses and moves back into the TR. It is an example of a bear trap because the drop below support pretends to be downtrend. In reality, though, this marks the beginning of a new uptrend. In Wyckoff's method, a successful test of supply represented by a spring (or a shakeout) provides a high-probability trading opportunity. A low-volume spring (or a low-volume test of a shakeout) indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position.
The appearance of a SOS shortly after a spring or shakeout validates the analysis. LP stands for last point of support.
Phase E - the stock leaves the TR, demand is very strong, and the uptrend is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived. New, higher-level TRs consisting of both profit-taking and acquisition of additional shares (“re-accumulation”) by large operators can occur at any point in phase E. These TRs are sometimes called “stepping stones” on the way to even higher price targets.
We fell in love with this pattern and this approach. Now everything is much clearer.
Future is bright. Stay patient at least for another month. Till that time we should be in the uptrend.
Guys, how do you find this approach? Do you find it helpful?
Please do comment and like if you like our job.
HUGS!
WBM Team
Today we have prepared for you analysis based on Wyckoff analysis.
Objective of the Wyckoff method is to improve market timing when establishing a position. Trading ranges (TRs) are places where the previous trend (up or down) has been halted and there is relative equilibrium between supply and demand. Institutions and other large professional interests prepare for their next bull (or bear) campaign as they accumulate (or distribute) shares within the TR. In both accumulation and distribution TRs, individuals are actively buying and selling depending on the trend (bull – they are buying; bear – they are selling)
Phase A – we can observe stopping of the downtrend. Up to this point supply was dominant up to selling climax (SC) followed by preliminary support (PS). Once these intense selling pressures have been relieved, an automatic rally (AR), consisting of both institutional as well as individual demand for shares.
Phase B - institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (couple of months), and involves purchasing shares at lower prices and checking advances in price with short sales.
Phase C - The stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to increase. “Spring price” is a price move below the support level of the TR established in phases A and B that quickly reverses and moves back into the TR. It is an example of a bear trap because the drop below support pretends to be downtrend. In reality, though, this marks the beginning of a new uptrend. In Wyckoff's method, a successful test of supply represented by a spring (or a shakeout) provides a high-probability trading opportunity. A low-volume spring (or a low-volume test of a shakeout) indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position.
The appearance of a SOS shortly after a spring or shakeout validates the analysis. LP stands for last point of support.
Phase E - the stock leaves the TR, demand is very strong, and the uptrend is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived. New, higher-level TRs consisting of both profit-taking and acquisition of additional shares (“re-accumulation”) by large operators can occur at any point in phase E. These TRs are sometimes called “stepping stones” on the way to even higher price targets.
We fell in love with this pattern and this approach. Now everything is much clearer.
Future is bright. Stay patient at least for another month. Till that time we should be in the uptrend.
Guys, how do you find this approach? Do you find it helpful?
Please do comment and like if you like our job.
HUGS!
WBM Team
Note
Phase D: Given that we are correct in our analysis, we should follow dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume, and reactions (LPSs) on smaller spreads and diminished volumes. LPSs in this phase are generally excellent places to initiate or add to profitable long positions.Note
SOS—sign of strengthNote
ST—secondary test. It is common to have multiple STs after a SC.
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