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This chart is a good example of the importance of remaining bias-free.

Given the parabolic

rise through resistance all the way to 1900, a bias toward the short side would seem to be a
duh. And the first level of support appeared to be 1880. However, if one looks back at tune's
chart, he can see the congestion area between 1880 and 1890 on the 4th and 7th, the
midpoint of which was 1885. Even if he focused on the low to the high on the 7th, he'd still
end up with a midpoint at 1885. Therefore, dropping below 1890 does not necessarily mean
that the long game is over.
Note here that when volume comes in at 0948, price is pulled down. But even though price
continues its slide, volume breaks off dramatically, then works its way higher until 0952. All
this appears to favor the short side. But look at effort and result. As volume rises, the bars get
shorter, and when volume peaks at 0952, price closes well off the low, and buyers are able to
push price higher in the next bar with much less effort; hence the lower volume. Therefore,
throughout this "downmove", buyers are coming into the market, supporting the price, and
even pushing price higher.
Volume then dries up considerably during the upswing after moving price to 1892. The big
volume comes at 1000 and pulls price down almost to 1886. This appears, again, to support
the short side, particularly since sellers are able to move price with little resistance from
buyers (low volume, except for 1000).
Buyers and sellers then go back and forth, and volume does pick up during this exchange.
However, the biggest volume is unable to pull price lower, and the end result is a draw. This is
not good for the short side. At 1008, buyers are then able to push price higher with very little
effort (again, low volume) suggesting that selling pressure is much less than it had been.
During the next segment, buyers are able to keep sellers at bay with relatively little effort
(again, low volume). Next, buyers are able to push price all the way back above 1891, and
though the volume is higher, suggesting that they had to work a little harder, it is not unusually
During the last segment, price drifts back a bit, but volume practically disappears, suggesting
that sellers are done, and it's up to the buyers (note how easily buyers push price higher at

This is only about bars, however, if one can't see them move. If one watches them move in
real time or via replay, he can detect the waves easily. Note here how price dips into each
trough, then rises back out of it, crests, then repeats the cycle again and again, gathering
strength along the way. If sellers had the upper hand, price would not repeatedly recover in
this way.

It should be self-explanatory. The green dots represent most if not all the available entry
points, selection of which depends on the skill, talent, and risk-tolerance of the individual

The pink dot is also a stop, tight because the entry is so late.

How are we to know in advance why and to what extent someone else is prompted to buy or
sell? We cannot know; it is impossible for us to foretell what actuates all of those whose
orders are poured into the vast intake of the Stock Exchange machinery during the day's
But if we study the action of prices; the responses; the speed of the ticker, indicating urgency
or the contrary; the intensity of the buying or selling, as indicated by the volumes; and the
intervals when the volume is heavy or light -- all these in relation to each other -- then we gain
insight or the design and the purposes of those who are dominant in the market situation for
the time being.
All the varying phases of stock market technique may thus be studied and interpreted from
the buying and selling waves as they appear on the tape. From these we form a conclusion
as to the balance of the probabilities. On this we base our commitments.
Richard Wyckoff
First, an overview of yesterday's move and what had been the various potential support

The when and where and how to short has been addressed. What is presented here
addresses what is required as a prelude to today's trading.
Once one has taken the short, there's no need to do anything else other than wait for a test of
support, unless of course the short is stopped out, but, again, that is not the subject here.
Volume can be ignored because without any sort of test, it's irrelevant (as Bearbull explained
so well earlier). Once the first "counter-wave" has completed itself, a supply line can be

When price resumes its decline, volume rises on the downmoves, but even when the first
level of potential support is reached, the volume doesn't even approach climactic. In the
meantime, the supply line can be extended:

Price eventually breaks the supply line, but there's nothing remarkable about the volume, and
price doesn't come anywhere near approaching the previous swing high, much less breaking

Price then resumes its decline and volume becomes climactic. However, even though price
breaks the newly-extended supply line, it does not break the previous swing high. Nor is price
anywhere near the next potential support level of 1970. All of this constitutes continued

Price continues its decline and volume is again "climactic". Even more so. But, again, price
doesn't even come near the supply line, much less the previous swing point:

Price now reaches the next potential support level at 1970. Since the angle of decline is
greater, an additional, more form-fitting supply line is drawn. Volume is again "climactic" and
the "test" is on lighter volume, a seeming classic buy signal given that all of this is taking
place at potential support.
However, even though price breaks this new supply line, it breaches the previous, minor
swing high by only a couple of ticks, and there's no "bullish push". The experienced Wyckoff
trader takes note of all of this and exits his long, if he had taken it at all.

Now we approach the next potential support level, the midpoint of the upmove on the 1st, and
the trader begins paying attention to volume again.
Here the angle of decline increases again and a new supply line is drawn (the experienced
trader knows that as these angles become more acute, the probability of their being broken
increases), but even though volume becomes increasingly "climactic", price doesn't break the
supply line, much less reach the previous swing high. A new element is a general increase in
volume throughout.

We now get to the next level of potential support, and volume is again "climactic". But even
though price breaks the newest supply line, it does not reach the previous swing high, nor
does it break the prior supply line. The effort becomes a new -- though not higher -- swing
high and the previous supply line is extended. Price continues its decline.

Now to the next level of potential support, and we're running out of time. Price hits 1950,
again on "climactic" volume, breaks the supply line and breaches the previous swing high.
This attempt fails, but, this time, price makes a higher low, tries again, and holds above the
previous swing high.

Whether a trader goes long at the test of 1950, at the break of the supply line, at the breach of
the previous swing high, at the higher low, at the second breach of the previous swing high, or
anywhere else inbetween is not Wyckoff's problem. It's up to the trader to decide based on his
sensitivity to and analysis of market forces, on his risk tolerance, and on his skill.
In any case, this is how we begin today (which I'll get to later).
As one might expect after a trend day, particularly one worth so many points and which
represented a substantial failure on the part of bulls, Thursday would not be and was not
about drama.
But assuming that one had no bias toward the day, he would note first that the market was

going to open (the red vertical bar) at or about the midpoint of the 5/1 upmove (1962). This, in
and of itself, would be of secondary importance or less. The fact that that midpoint was on the
same level as the low of the day on 5/6 might help to account for the level at which Thursday
opens, but, again, its not all that important. What is more important is that price does not
retest 1950 and ricochet off 1962, nor does it punch through 1962, test that, then rocket
higher. Rather it just sits there, for an hour and a half, on moderately high but unremarkable
and relatively featureless volume. Therefore, unless the trader wants to manufacture a trade,
theres really nothing to do unless and until support is tested on the one hand, or the nearest
resistance at the midpoint of the previous days downmove (1978) is tested on the other.
The trader, after all, must remember that the proper entry here was at or near 1950 the
previous day. Whether he took the entry or not is irrelevant. The market doesnt care whether
he took it or not. It only knows where he should have taken it. If he didnt take it, he has to
keep in mind that any other entry is second-best, if not third or worse. If he has a strategy for
pyramiding, this may be the time to implement it. If he doesnt, his choices are limited: wait
and gauge the relative strengths of the bulls and bears or go ahead and buy with a very wide

Whether or not one buys the higher low that occurs between 1045 and 1100, one can now
draw a demand line underneath that low, beginning with the previous days low. Note that this
is a demand line, not a trend line. It tracks those levels at which demand enters the market
and stops or turns price. Therefore, whether 17 hours worth of time bars are included or not
is irrelevant. One can use P&F or, as here, he can use CVBs. Since only two points are
needed, the line can be extended toward the EOD.

Once this line is plotted, it can be copied and another, parallel line placed at what has so far
been the swing high. This is also extended toward the EOD so that the trader can monitor the
behavior of price if and when it approaches this line.

Shortly after 1100, price does approach, then push through, this line, becoming overbought
by virtue of having pushed through the line. A few minutes later, it pushes further to the
midpoint of Wednesdays downmove. If the trader were long, should he exit here? Should he
go short? That depends on the trader. But this is where the bears gain the upper hand and
turn price back, not out of the blue, but at the confluence of these two important levels
(compare the time chart to the CVB chart).

Thereafter, price reverses at 1966, though theres no way of knowing that it will, and volume
does not provide a clue until price hits this level a second time, after lunch. Whether one
closes his short and goes long here depends on how confident he is that support is to be
found in this area. But the point of this is not to find trading opportunities per se; it is rather to
gauge the relative strength of bulls and bears. So far, the bulls are in control as shown by the
higher lows.
Price thereafter makes a higher high, again overbought, followed by a higher low. If one is
going to trade this, volume does provide clues at turning points, but a central and perhaps

more important concern is just how far bulls can push price. If it cannot reach the previous
days midpoint, this suggests weakness. On the other hand, if it can get past the midpoint, this
suggests strength, either of which carries implications for the following days trading. This
second higher high at 1400 does push past the midpoint, suggesting strength. And it appears
to make a higher low a half hour later.
However, price now drops below the demand line and is unable to push back through it for
more than a couple of points for more than a few minutes. This represents a change in the
dynamic between bulls and bears which, again, is the point of plotting these lines and
monitoring the relationship of price to them and to the support represented by the previous
days low and the resistance represented by the midpoint of the previous days downmove.
Again, one can trade this and, yes, one can make money with it. But, according to Wyckoff,
the likelihood of doing so is enhanced by being sensitive to this push and pull between
demand and supply and being able to place all of it in the right context. Otherwise, one is
more likely to be making random trades, i.e., gambling.
Here, again, the supply line is drawn first, then a parallel line is plotted underneath to track

1. The purpose behind drawing these lines is not to make the chart look pretty but to draw the
trader's attention to those areas, zones, points, levels, whatever where price action is most
likely to provide trading opportunities. Whether one draws lines, boxes, circles, arrows, or big,
pointy fingers is irrelevant.
2. Once those areas, zones, points, etc are identified, volume becomes largely a non-event,
i.e., one pays attention to it only at those areas, etc where it is most likely to mean
something. That this point is so often overlooked is probably why so many people think
volume is useless.
For example, using the 1m time bar chart I posted earlier, I've blown up the shaded area:

Until price reaches an area where a trading opportunity is most likely to occur, there's no
reason to obsess over the minor ebbs and flows in volume. However, once trading
opportunities are on the horizon, what might be considered directionless activity elsewhere
suddenly becomes important.
Here, for example, when price comes back to 1966 the second time, the fact of the test is
interesting enough. That it cannot make a lower low even with all the volume is even more
interesting. The bullish boost at 1329-30 becomes more important because of what has come
before, as does the volume recession when price pulls back to 1975. When another bullish
boost occurs, beginning at 1352, it is significant, again, because of what has come before.
And when price makes an attempt at a higher high at 1401 and volume isn't there, that again
becomes significant because of what has become before and provides the "classic" doubletop price-volume divergence setup for the short. Without the context, none of this matters,
and volume is little more than traders going about their business. With the context, it becomes
a high-probability short trade.

Wyckoff stresses that, in addition to trend and whatever channels may be formed by apparent
consistency in the intrusion of demand and supply, one must also look to previous areas of
support and resistance, which is what we're doing now. Yesterday there was an upthrust in
the Nasdaq and the Dow. There was also an upthrust of sorts in the SPX, but there've been
so many over the past few weeks that they are forming their own base .
Whatever these thrusts mean in and of themselves does not matter as much as where they
are occurring, i.e., against important, previous support. Therefore, both intraday and EOD
traders would do well to concentrate on how price behaves at this particular juncture.
Trading ranges
The story is not just in the trading ranges nor in just the trend or -- if it forms -- the trend
channel. The trading ranges, or PV "clusters", tell you where traders are finding trades and
where the extremes of each of these zones are. The trend, or "stride", tells you how strong or
weak the overall movement is and also warns you of potential changes in strenghth or
weakness, i.e., changes in momentum.
Here, for example, price struggles to move higher with regard to vertical movement, but it's
also hugging the trend/demand line. It can maintain this course for quite some time, but it
clearly is not as exuberant as it was.

I hope those who are following this understand that the boxes are drawn around areas of
price congestion (and that volume will of course be greater within these areas because that's
where most of the trades are taking place) and that price does not congest in a certain place
simply because I've drawn a box there. In other words, keep the horse before the cart.
Also understand that these charts are dynamic. As the chart tells me over time that one area
is important and another is not so much, I may modify prior boxes or even delete them. It all
fits because of where traders are finding value and where they used to find value.
Given all of that, it's important not to get too wrapped up in the micro. Therefore, I've provided

two charts, one the usual, and another following which shows the major PV congestion zones
within the micro. If that makes any sense.
Those of you who've been following along know that the midpoint of a move was important to
W. Clearly there are good reasons why.

And the three longer-term (12 days +) zones:

The ES has two:

You can thank auction market theory. But I find these easier to read and understand than
Market Profile charts, especially when I'm looking at interactions across time.
I read somewhere recently -- and can't remember where -- having to do with Market Profile, I
believe -- that most experienced traders will avoid trying to catch the tops and bottoms and
focus on "the middle", waiting for confirmations to enter and confirmations to exit. However,
since "the middle" is by definition where most of the trading is going on and is largely nondirectional, there is also a lot of whipsawing in the middle, and that generates a lot of losing
trades. One can sometimes avoid this by widening the stops, but, since the market always
teaches us to do what will lose the most money, this will turn out to be an unproductive tactic.
The safest and generally most profitable trades are found at the extremes. Therefore, you
wait for the extremes. Wyckoff used a combination of events to tell him when a wave was
reaching its natural crest or trough: the selling/buying climaxes, the tests, higher lows/lower
highs, and so on, all confirmed by what the volume was doing and by the effect the volume
had on price (effort and result). As a result of this work and of his exploration of trading
ranges, he developed the concepts of support and resistance along with their practical
application. Auction Market Theory (AMT) takes these investigations into support and
resistance further, an organic definition of support and resistance like Wyckoffs, that is,
determined by traders behavior, not by a calculation originating from ones head or from a
website somewhere. Determine whether you are trending or balancing (ranging,
consolidating, seeking equilibrium, etc), determine the limits of the range (support and
resistance), and youre in business.
The notion of support and resistance has been and is the missing piece for many market
practitioners. One can try to hit what appear at the time to be the important swings again and
again and be stopped out again and again, hoping all the while that once one hits the true
turning point, all the effort will turn out to have been worthwhile and the P&L will change from
red to black. But by waiting for the extremes, one avoids most or all of those losing trades,
and, even more important, avoids trading counter-trend. These boxes -- which are simply a
graphic variation of the Market Profile distribution curve, whether skewed or not, or of the VAP
(Volume At Price) pattern -- are nothing more than a means of locating those extremes. What
I've found more useful about them is that they are encapsulated by time, i.e., the price and
volume ranges have a beginning and an end. This enables me to see at a glance where the
important S&R are, or at least are likely to be. Without them, one ends up with line after line
after line until the S/R plots become a parody of themselves.
All of this can be very confusing to someone whos learned to view the market in a different
way, perhaps less so to someone whos just starting since he has so much less to unlearn.
But backing up to the basic tenets of AMT, as well as to the concepts developed by (and in
some cases originated by) Wyckoff, one can perhaps find a solid footing and proceed from
To begin with, in the market, price is often not the same as value. In fact, one could say that
since the process of price discovery is a search for value, they match only by accident, and
then perhaps for only an instant. Blink and you missed it. Add to this the fact that for all intents
and purposes there is no such thing as value but rather the perception of value. After all,
what is the value of, say, Microsoft or GE or that little stock your stylist told you about? This
state of affairs may seem like a recipe for chaos, but it is in fact the basis for making a market,
that is, reconciling the differences sometimes extraordinarily wide differences in
perceptions of value.
As Wyckoff put it, if a stock (or whatever) is thought to be below value and a trader or group
of traders see a large potential for profit ahead, he/they will buy all they can at or near the
current level, preferably on reactions (or pullbacks or retracements), so they dont overpay. If
the stock is above what they perceive to be value, they'll sell it (or short it), supporting the
price on those pullbacks and unloading the stock on rallies until they are out (or as much out
as they can be before the thing begins its downward slide). This, he writes, is why these
supporting levels and the levels of resistance (a phrase originated by me many years ago),
are so important for you to watch. When price then begins to lose momentum and move in a

generally sideways direction, youve found value (if value hasnt been found, then price
wont stop advancing or declining until it has). Value, then, becomes that area where most of
the trades have been or are taking place, where most traders agree on price. Price shifts from
a state of trending to a state of balancing (or consolidation or ranging), the only two states
available to it.
The trading opportunities come (a) when price is away from value and (b) when price decides
to shed its skin and move on to some other value level (that is, theres a change in demand).
This is also where it gets tricky, partly because demand is ever-changing, partly because
youve got multiple levels of support and resistance to deal with and partly because we trade
in so many different intervals, from monthly to one-tick. If we all used daily charts exclusively,
it would all be much simpler, though not necessarily easier. But thats not the case, so we
must remember always that a trend in one interval say hourly may be a consolidation in
another, such as daily. The hourly may be balancing, but there are trends galore in the 5m
chart. Or the 5s chart. Or the tick chart. Regardless of how one chooses to display these
intervals line, bar, dot, candle, histogram, etc there are multiple trends and consolidations
going on simultaneously in all possible intervals, even if theyre in the same timeframe, even if
that timeframe is only one day (to describe this ebb and flow, Wyckoff used an ocean
analogy: currents, waves, eddies, flows, tides).
To sum up where we are so far, and keeping in mind that there is no universally-agreed-upon
auction market theory, the following elements are, to me, basic, and are consistent with what
I've learned from Wyckoff et al:
1) An auction market's structure is continuously evolving, being revalued; future price levels
are not predictable
2) An auction market is in one of two conditions: balancing or trending.
3) Traders seek value; value is price over time; price is arrived at by negotiation between
buyers and sellers.
4) Change in demand drives change in price.
5) One can expect to find support where the most substantial buying has occurred in the past
and resistance where the most substantial selling has occurred.
Now lets translate all of this into a chart.
I'm sure everyone has noticed that swing highs and lows and the previous days highs and
lows and other /\ and \/ formations can serve as turning points and appear to act as
resistance. However, this type of resistance stems from an inability to find a trade and is
accompanied by low volume*. Price then reverts to an area where the trader finds it easier to
close that trade. That's what provides that ballooning look to the volume pattern A in the
following chart. "Resistance" in this sense, then, refers to resistance to a continuation of the
move, whether up or down.
*Volume may look big at the highs and lows, but the price points are vertical, not horizontal (as they would be in a
consolidation), so the volume or trading activity at each price point is lessr than it would be if the same price were hit
repeatedly (again, as it would be in a consolidation).

Note that you may have more than one "zone of concentration" (this is how jargon gets
started), as in the first balloon. Nearly all the volume is encompassed by the pink lines, but
there is a heavier concentration within the blue lines because of where price spends the
greater part of its time. The volume in the balloon B, however, is more evenly distributed
throughout the zone, partly because price spends so much time in it and partly because it
ranges fairly steadily within it. Instead of rushing to the limits and bouncing back toward the
center, they linger at those limits, the sellers trying to push price lower, the buyers trying to
push price higher. Thus there is more volume at these edges than in balloon A, but buyers
eventually fail in their task as sellers do in theirs, and trading drifts back toward the center,
providing, again, a relatively even distribution of volume throughout the range.
Balloon C is similar to A but much thinner due to the fact that price has made only a single

round trip to the bottom of the range. It lingered a bit in the middle, simultaneously creating
that protrusion in the center of the volume pattern. But volume at each end is thinner than in
B, thinnest at the bottom due to the \/ shape, giving the volume if one is fanciful
something of a P shape.

If price drops through one of these zones, those who bought within that zone are going to be
miffed. Some of these people are going to try to sell if and when price re-approaches that
zone. This is the basis of resistance. There's just too much old trading activity to work through
in order for price to progress unless there is enough buying pressure to take care of all those
people who want to sell what they have, then push price even higher (in which case those
who sold may think they screwed up yet again and buy back what they just sold). However,
those who bought or sold at the outer reaches of these zones will also be disappointed if they
can't find buyers for whatever it is they just bought, not because there's too much volume but
because there isn't enough.
So how does one trade all this? First, you will have to monitor several intervals at the same
time in order to (a) find out what interval you want to trade and (b) where price is within
whatever range or ranges is/are in that interval. For example, if youre most comfortable with
a 5m interval, youll want to check a smaller interval or two to see what price is up to down
there, but youll also want to look at larger intervals, such as the 15m or 60m or even the daily
(Im using time intervals here in order to keep this from becoming even longer than it will be,
but the same approach applies whether youre using range bars, volume bars, tick bars,
candles, lines, etc).
Second, locate the ranges. Box them or circle them or color them or in some other way
highlight them. If you find a range that is wide enough for you to trade (that is, there are
enough points from top to bottom to make a trade worthwhile), get into the range via a
smaller interval in order to find a trend. Perhaps at some smaller interval, price is at the
bottom of that range. That gives you a good possibility for a long (or it may be at the top of the
range, giving you a good possibility for a short).

At this point, you have three options: a reversal, a breakout, or a retracement. If, for example,
price bounces off or launches itself off the bottom of the range (support), trade the reversal
and go long. If instead it falls through support, short the breakout (or breakdown, if you
prefer). If you dont catch the breakout, or you prefer to wait in order to determine whether or
not the breakout was real, prepare yourself to short whatever retracement there may be to
what had been support and may now be resistance.
A more boring alternative is that price is nowhere near the top or bottom of any range that you
can find but rather drifting up and down, aimlessly. No change is occurring; therefore, there is
no trade, or at least no compelling trade. Finding the midpoint of the range may be useful
since price sometimes ricochets off the midpoint, or launches itself off the midpoint if it has
settled there. Such actions represent change since price may be looking for a different value
level. It may come to a screeching halt and reverse when it gets to one side or the other of the
range and return to the midpoint, or it may launch itself through in breakout form and extend
itself into the next range, if there is one, or create a new range above or below the previous
range (in determining which, back off into larger intervals in order to determine whether or not
price is in a range in one of those larger intervals).
This isnt all there is to it, of course, but there are more charts posted in this thread than in
any other, and I hope that enough information and examples are provided in these posts to
enable you to develop a consistently profitable strategy based on these principles.

No. Counting bars doesn't make much sense since they're entirely dependent on the bar
interval you choose. When price stops moving up, or down, and retraces, I then wait to see if
it's going to continue or bounce back and forth. If the latter, that becomes a congestion or a
trading range (if it's tradeable). That earns a box.

re: The Nature of Support and Resistance

That's the drill, as I mentioned in the longer post above and in more detail in the Dailies. The
general idea is to find S&R then trade the extremes, selling R and buying S. The worst chop
is most likely to be found at the midpoint, which in this case is 1415 (and it looks like we're
going to open right there).
OTOH, moves do originate from the midpoint, and the midpoint sometimes acts unexpectedly
as S or R. Seeing this can be frustrating. But if one reviews several dozen charts (or more),
the probabilities for good entries with tight stops are most often found at the extremes.
Note: I should also point out that we'll be opening just above the midpoint of that long upmove
from 5/9. So if price doesn't take off straight out, there may be a lot of jockeying here.

The nice thing about maintaining these boxes is that nobody can hurl accusations of hindsight
analysis. This is more like foresight analysis.
Note that neither could get back to the midpoint of the downmove in each. You can see where
each found resistance. You can also see the ranges they slid through and where each wound
up. I went ahead and drew a box around the activity in the bottom of the NQ since it appeared
to be "congestive".

Where We Are So Far: All of this hindsight chatter about oil serves as an example of the
"Wyckoff way" of trading, that is, a different kind of thinking that focuses on price movement
as a result of imbalances between buying pressure and selling pressure, particularly against
levels or zones of support and resistance, all of which is in turn a manifestation of trader
behavior. Understand the behavior and you understand the illustration, whether on a chart or
on the tape or on or in some other form. Understand the behavior and its illustration and you
are set up to profit from it (one can also profit from this via indicators, chart patterns, "event
trading", and so on, but none of this is pertinent to the Wyckoff approach.
Participants have demonstrated this kind of thinking in their analyses of the price movement
as it wends its way up and down through a continuing series of crests and troughs. These
waves are a language, narrating the behavior of buyers and sellers. And whether participants'
every opinion has been correct or not, they have worked toward understanding the story that's
being told by price movement and its accompanying volume (transactions) and toward
gauging and interpreting the continuous changes in buying and selling pressures with the

intent of finding the line of least resistance.

By doing so, I hope that they have demonstrated that everything one needs to know in order
to make a trading decision is in the price movement, again whether illustrated by chart or
tape. While there are undoubtedly many traders -- retail and professional -- left holding the
bag at tops and bottoms, the Wyckoff trader will not be one of them. He does not allow
himself to be distracted by extraneous information of whatever sort. Price behaves a certain
way (that is, traders telegraph their intentions by their transactions), and he's out or in, as the
case may be. He can wait for moving averages to cross each other or for some other indicator
or news or a particular kind of bar or candle or pattern to signal or confirm an action, but he
doesn't need to, except for personal reasons. None of this is therefore part of the approach.
This has the effect of keeping everything very simple and relatively easy to understand IF one
can focus on the approach at its most elemental until he thoroughly understands it. At that
point, he can play with it as much as he likes, if he chooses to do so. But while those
modifications may alter the approach as he implements it, they do not alter the nature of
the original .
In order to save flipping back and forth, the following chart was posted at the beginning in
order to provide the macro view. It's a typical and ordinary bar chart.

But the waves of buying and selling can be illustrated quite clearly without bars. In fact, for
many Wyckoff traders, they are easier to see with a line.
The tests are the same, the trend is the same, the signals that the trend is over are the same
(see, for example, the inset). A chief difference, however, is that one needn't get entangled in
quandaries over what individual bars "mean" (if anything). One can in fact convert trading
activity (or volume) into a line, depending on his software. Some Wyckoff traders find it even
easier to detect the "pulse" of the market in this way.
As for jargon, nothing special: climaxes, technical rallies, reactions, springboards -- that's
about it. The goal is clarity and simplicity, not obfuscation and complexity.

As I've said elsewhere, price doesn't care about you or about how you care to view it or
illustrate it. It exists independently of your charts and your indicators and your bars. It couldn't
care less if you use candles or bars or plot this or that line or select a 5m bar interval or 8 or
23 or weekly or monthly or even use charts at all.
Therefore, trading by price, or at least doing it well, requires getting past all that and
perceiving price movement and the balance between buying pressure and selling pressure
independently of the medium used to manifest or illlustrate or reveal the activity. For most
people, this requires a perceptual and conceptual shift. Some find this shift relatively easy to
make. Others find it impossibly difficult. If you fall into the latter category, keep in mind that
there are many ways of making money in the market. This particular approach is only one of

No one is asking you to go long, Susana, nor is anyone suggesting that you short. You
said that there was no buying interest. Clearly there is or volume would not be so high.
It is also clear that selling pressure is greater than buying pressure or else price would
not be falling.
And while for every buyer there may be a seller (assuming a completed transaction),
buying pressure is not always equal to selling pressure. If it were, price would never
move. Once you understand that, volume will no longer be "unreadable".

Always remember this: An increase or decrease in volume is significant. Gradual

or sudden increases or shrinkage will assist you in detecting turning points;
determining the trend; when to open or close a trade; when to change your
stops; when a move may be culminating or about to culminate.

They are used merely to emphasize the principle that it is the relative
change in the volume of trading, rather than the mere magnitude of the
daily turnover, that is significant.