Basic Wyckoff Scheme of Distribution - RWM

DISTRIBUTION: The Process by which large operators distribute (sell) their stock
and take their profits. This is the transfer from the strong operators (“strong
hands”) to the retail operators (“weak hands”)

THE ICE - Level of support for distribution or redistribution structures. It is established by the
minimum generated by the Automatic Reaction and by the minimums that can be developed
during PHASE B.
CHoCH - Change of Character. It indicates the environment in which the price will move soon.
The first CHoCH is established in PHASE A where the price moves from an upward trend
environment to a consolidation environment. The second CHoCH is set from the maximum of
PHASE C to the minimum of the SOW in which the price moves from a consolidating
environment to a downward trend environment.

PHASE A - The stop of the previous uptrend

PSY - Preliminary Supply. It’s the first attempt to stop the climb that will ALWAYS fail

BC - Buying Climax. Climate action that stops the upward movement.

AR - Automatic Reaction. The bearish reaction. Bearish movement that sets the minimum
range

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 ST - Secondary Test. Test of the level of demand in relation to climate action. Establishes the
end of PHASE A and the beginning of PHASE B

PHASE B - The Construction of the Cause

UT - Upthrust. Same event as accumulation UA. Temporary breakout of the resistance and re-
entry into the range. This is a test at the maximum generated by the BC.
The mSOW - Minor Sign of Weakness. Same event as ST as SOW of accumulation. Temporary
break of the support and re-entry to the range. This is a test at the minimum generated by the
AR.

PHASE C - Test

UTAD. - Upthrust After Distribution. It is a test in the form of breakout of the maximums of
PHASE A and B.
UTAD test - An upward movement that goes up to check the level of commitment of the buyers.

PHASE D - Bearish Trend Within Range

MSOW - Major Sign of WEakness. Bearish movement originated after the PHASE C test event
that manages to reach the bottom of the range generating a character change.
LPSY - Last Point of Supply These are the decreasing highs we find in the bearish movement
towards support.

PHASE E - Bearish trend out of Range. Succession of SOW and LPSY generating a dynamic of
diminishing maximums and minimums. The downtrend which will lead into the next accumulation
phase, or a redistribution phase.