Wyckoff Logic

[Caseynotes]

Wyckoff accumulation - distribution simplified ...

[Mercury]

That all looks eminently sensible @Caseynotes and roughly confirms to EWT and other similar cycle theories.  I do use the concept of an "Ice Line" when identifying a breakout from a consolidation such as the Accumulation of Distribution phase when I can't find another charting method (e.g. H&S neckline).  I particularly use an ice line off a double top/bottom, which fits the theory above well.  It would be interesting to see this on some actual markets in long term time-frames to see how well it tracks.  I suspect that the theory diagram is idealised so recognising the pattern on real market data would be open to interpretation, as everything is of course.  I would expect such real markets examples to map onto a classic EWT analysis and Charting analysis such that the the Accumulation and Distribution zones represent end of Bulls & Bears phases, which will conform to either a 1-5 motive or A-B-C retrace  (as trend channels) and depending on the time-frame each consolation phase (H&S, Triangle etc) will either be preparatory to a new major trend or a continuation of the existing overall trend.   So net, no surprise to me, this theory fits well with EWT and Trend Following rather than as an alternative.  Just a different way of saying the same thing and seeking to do the same thing, which is profit from a trend and/or trend change.

The only problem (if problem it is, maybe just health warning...) is the notion of the "logic".  While it makes sense I have often observed that the markets can at time exhibit illogical behaviour, the over-exuberance of bubbles for example, which may still conform to the pattern but in a hard to fathom and observe way.  What would this pattern look like on Bitcoin for example?  The Accumulation phase is clearly there (I called it incubation phase on my recent post) but the Distribution phase would be far from classic I imagine, hence the need for interpretation.

[Caseynotes]

It would have been impossible for Elliott not to have been aware of Wyckoff's work when devising his EWT @Mercury.

Here's a link to Wyckoff's 'The Day Trader's Bible'  published in 1919.

Revised 1999

https://wyckoffsmi.com/wp-content/uploads/2016/01/Day-Traders-Bible-My-Secrets-to-Trading-In-Stocks-1919.pdf

[Mercury]

Oh completely agree @Caseynotes, that is what makes it all so interesting to me.  If several people (or the market players in general) come up with different models using different logic but all conforming to the same market movements over the long term then, to me, it means there is validity to analysing these markets using said models.  Really matters little which ones (or combinations in my case) one uses so long as one understands how they can be used in context to support a trading idea.  But of course one must back test and practice using the models/theories within a methodology for both recognising and executing a trading idea.

[Mercury]

Accepting they may influence each other of course!

[Caseynotes]

That's true @Mercury, Wyckoff was a contemporary of, and just as famous back in the day, as Charles Dow and Wyckoff himself took Dow theory and expanded on it. So many modern models and theories have the same root origin.