Edit: In the text inside OBV, there is a mistake, it was meant to be written "to last ST". Sorry for the mistake!
An objective of the Wyckoff Method of technical analysis is to improve
market timing when establishing a speculative position in anticipation of a
coming move where a favourable reward/risk ratio exists to justify taking
that position. Trading Ranges (TRs) are places where the previous move has
been halted and there is relative equilibrium between supply and demand.
It is here within the TR that campaigns of accumulation or distribution
develop in preparation for the coming move. It is this force of accumulation
or distribution that can be said to build a cause which unfolds in the
subsequent move. The building up of the necessary force takes time and
because during this period the price action is well defined, trading ranges
present particularly good trading opportunities with potentially very
favourable reward/risk parameters. To be successful, however, we must be
able to correctly anticipate the direction and magnitude of the coming
move out of the trading range. Fortunately, Wyckoff offers us some
guidelines and models by which we can examine a trading range.
For more about it click the source: http://www.hankpruden.com/MTWyckoffSchematics.pdf
Inspired by CapnOscar's linked chart below.
An objective of the Wyckoff Method of technical analysis is to improve
market timing when establishing a speculative position in anticipation of a
coming move where a favourable reward/risk ratio exists to justify taking
that position. Trading Ranges (TRs) are places where the previous move has
been halted and there is relative equilibrium between supply and demand.
It is here within the TR that campaigns of accumulation or distribution
develop in preparation for the coming move. It is this force of accumulation
or distribution that can be said to build a cause which unfolds in the
subsequent move. The building up of the necessary force takes time and
because during this period the price action is well defined, trading ranges
present particularly good trading opportunities with potentially very
favourable reward/risk parameters. To be successful, however, we must be
able to correctly anticipate the direction and magnitude of the coming
move out of the trading range. Fortunately, Wyckoff offers us some
guidelines and models by which we can examine a trading range.
For more about it click the source: http://www.hankpruden.com/MTWyckoffSchematics.pdf
Inspired by CapnOscar's linked chart below.
