Full Wyckoff Analysis:
Distribution Range Analysis:
Phase A: We left the previous accumulation range that can be seen on the left around mid-April. Markup coincided with the announcement of a UK general election coming up on June 8th. The Point And Figure (P&F) TP projection for this range is marked at the top of this chart in the blue box. It's centre point is marked with a green line (50 fib). This was hit exactly - to the pip. It then gave the typical automatic reaction followed by an upthrust. This gave a confirmation of the trend stopping and a new consolidation range forming - typical behaviour after a markup/down target has been hit.
Phase B: Generally, small net movements on relatively reduced volume - this is easier to see when using Renko based Weis Wave cumulative volume analysis. This phase has built the cause.
Phase C & D: These two phases are not 100% clear cut from each other due to flash crash action. The crash itself being a short order from the top of the range so far, actually gave away what smart money were trying to do - short from the top because this is distribution (fat finger?). It then came up now and again before being sent back down as short orders were being built. Then, once enough positions were built, the market just shot down with no 'last point of supply'.
Phase E: We are now currently in markdown.
Entries Analysis:
Generally speaking, a good scale in point after a range, is it's retest. However, as you can see, there is another support line below the bottom of the range in a thinner and more transparent dashed line. Therefore, it stands to reason that either of these two may be tested before marking down towards the target. This is why I have placed two entries. This increases risk, but for me, the probability of this being distribution is high enough for me to accept that risk.
TP Analysis:
Wyckoff methodology employs point and figure charts to calculate the target from the range. The target is a function of the cause build and range size. This has been posted in a full separate chart with it's own explanation:
www. tradingview .com/chart/GBPUSD/kF32ARYi-GBP-USD-Short/
I would like to see the market tank on June 8/9th on the day that the election results are released - smart money may use this as an excuse to drop the market. During markdown, I would also like to scale into the trade towards the target below.
Stop Loss Analysis:
For me, a SL is placed in such a position that, if it were hit, it means that the market is then headed in that direction in a significant way. In this case, for the distribution to reverse (seems unlikely enough for me to take the short) it would have to make it's way back through the range where all the smart money's short orders are from. Hence, SL is placed in this position. For some, the size of the SL may be too much. This is understandable. For those in this boat and that still would like to short, an entry may be made at their own discretion if they see price travel towards the potential retest and drop successfully, or, if they see signs of shortening upthrusts on low volume indicating a sign of weak up moves.
Q.E.D.
Updates will be posted.
Questions welcome.
Distribution Range Analysis:
Phase A: We left the previous accumulation range that can be seen on the left around mid-April. Markup coincided with the announcement of a UK general election coming up on June 8th. The Point And Figure (P&F) TP projection for this range is marked at the top of this chart in the blue box. It's centre point is marked with a green line (50 fib). This was hit exactly - to the pip. It then gave the typical automatic reaction followed by an upthrust. This gave a confirmation of the trend stopping and a new consolidation range forming - typical behaviour after a markup/down target has been hit.
Phase B: Generally, small net movements on relatively reduced volume - this is easier to see when using Renko based Weis Wave cumulative volume analysis. This phase has built the cause.
Phase C & D: These two phases are not 100% clear cut from each other due to flash crash action. The crash itself being a short order from the top of the range so far, actually gave away what smart money were trying to do - short from the top because this is distribution (fat finger?). It then came up now and again before being sent back down as short orders were being built. Then, once enough positions were built, the market just shot down with no 'last point of supply'.
Phase E: We are now currently in markdown.
Entries Analysis:
Generally speaking, a good scale in point after a range, is it's retest. However, as you can see, there is another support line below the bottom of the range in a thinner and more transparent dashed line. Therefore, it stands to reason that either of these two may be tested before marking down towards the target. This is why I have placed two entries. This increases risk, but for me, the probability of this being distribution is high enough for me to accept that risk.
TP Analysis:
Wyckoff methodology employs point and figure charts to calculate the target from the range. The target is a function of the cause build and range size. This has been posted in a full separate chart with it's own explanation:
I would like to see the market tank on June 8/9th on the day that the election results are released - smart money may use this as an excuse to drop the market. During markdown, I would also like to scale into the trade towards the target below.
Stop Loss Analysis:
For me, a SL is placed in such a position that, if it were hit, it means that the market is then headed in that direction in a significant way. In this case, for the distribution to reverse (seems unlikely enough for me to take the short) it would have to make it's way back through the range where all the smart money's short orders are from. Hence, SL is placed in this position. For some, the size of the SL may be too much. This is understandable. For those in this boat and that still would like to short, an entry may be made at their own discretion if they see price travel towards the potential retest and drop successfully, or, if they see signs of shortening upthrusts on low volume indicating a sign of weak up moves.
Q.E.D.
Updates will be posted.
Questions welcome.
Comment:
EDIT: I seem to have published the idea in the 'long' category. This is a mistake and should say short (in line with the trade shown and explained).